Inflation and Interest Rates Like the 70s-80s Again?

Inflation and interest rates in the late 70s and early 80s grew rapidly.  I remember gas prices doubling, interest rates rising, and gold and silver hitting new highs.  Inflation reached 13%.  Mortgage rates reached as high as 17% in my area.   When mortgage rates dropped, I felt lucky to get a mortgage at 12% in the early 80s.  I was also able to get a 5 year CD at 14%.  The 20 year treasury bond yielded 15%.

The stock market suffered also.  The Dow hit 1000 in 1972, fell 50% and didn't reach 1000 again until 1982.

Will the 70s - 80s happen again?  Right now, it looks probable but not certain.  To reduce market risk, I'm keeping a large proportion of our investments in short term money market funds.  I'm holding back on buying additional stocks and bonds to wait for the direction of interest rates.

For more on Crossing Generations, check back every  Thursday  for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

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Massive Inflation of Groceries is Confirmed for Our Household

Last week, my spouse complained to me, for the first time, about how much she was spending on our groceries and how much she saved by buying items on sale.     Her main point was, "I used to spend X on groceries.  Now, I'm spending 4X for the same purchases!"

My spouse has always been a "buy want I want and not look at the price" grocery shopper.   She has not complained about prices even though they have been rising since 2020 and COVID.  Not any more.  She is noticing and complaining.

When my spouse notices the difference in prices, it has be really big change.

For more on New Beginnings, check back Sunday for a new segment.

This is not financial nor inflation advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Future Inflation

The year is 2024.

A loaf of bread cost $20.    Gas is $12/gallon.   Interest rates are 7%.

President Biden is running for re-election, saying "Inflation is transitory."    Jay Powell is the Fed Chair and says, "Inflation is transitory."

My nephew and niece are expecting their 15th stimulus check and will vote for Joe Biden, as they did in 2020.  

They tell me, "Inflation is transitory."

For more on Crossing Generations , check back Thursdays for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC