Don’t believe the double speak

This article just came up on Yahoo! Finance “In Aftermath of Rate Cut, Investors Watch Out for Signs of Accelerating Inflation.” Then a couple of sentences down it said “This week investors will be looking for signs that inflation is under control.” Please!  I don’t think we need to see the Wall Street and Government doctored up numbers to know the answer to that question. 

DO NOT believe the inflation numbers that come spewing out every now and then.  Look at the numbers.  In Sept. 2002 a one ounce gold maple leaf coin cost $320.90 U.S. dollars.  Now it is selling at $731 U.S.  Ask yourself, do I pay more now to have a roof over my head than I coughed out ten years ago?  Yes!  Does it cost me more to fill up my car with gas?  Pay my electrical bill?  To heat my house in the winter?  To put food on the table for my family?  Yes, yes, yes, yes, and yes.  Now I think it’s interesting that they decided in their infinite wisdom to remove housing and gas from their inflation index because their numbers were too volatile.  What?  I don’t know about you, but my biggest living expenses are my house and gas for my car and to heat my house and we all know how much those things have risen.  So why aren’t they included in the inflation index calculations?  Yes, fancy t.v.’s and computers, and cell phones are less, but the day to day costs of living that parents have to struggle to pay, these things are more.  University or College?  Through the roof! 

I don’t know how families are managing.  And the thing that really scares me is the fact that most people are just struggling to pay the bills, living month to month, not saving anything for retirement.  I think I read somewhere that the average babyboomer has around $54, 000 put away for retirement!  That is so scary.  The interest one can earn every year on that amount is not even enough to pay the vet and food bill for a small cat.  How is that going to be enough to sustain a person?  And will social security and our pensions be there when we retire?  I wish I could say I believe they will, but I don’t. 

So this is what you have to do.  If you have any credit card debit, pay it off!  Seriously that is an economic killer.  Then if you have any spare cash, pour it into paying off your mortgage.  Now I know a lot of people think, “But no!  I want to have bonds and CD and stocks for security.” But the thing is, on everything you earn with these investments, you have to pay taxes, and with the interest rates and dividend yields at such low levels, you are going to be earning far less in these investment than the interest that is being charged to you on your mortgage.  Or if your mortgage is too difficult to manage, sell it.  Because if you can’t make payments, your going to lose it anyway, and better to be in control of the process and get at least some cash out of it, rather than none when the bank forecloses. 

Oops...I just scrolled back and see that I have gone on rather a long rant.  So rather then continue boring people, I think I’ll stop right here.

Posted by Meg Tilly on Sunday, September 23, 2007 in Chewing the Fat

Page 1 of 1 pages