Prices, and things to buy now?

[anyfucker]

Looking at the steep price increase in many things, supermarket and elsewhere, I find I have started thinking, what things should be bought now, whether singularly or in quantity. There’s a report for instance that paper will increase in price. I only buy a pack of A4 occasionally; and with books, for me it only comes down to price if the difference is major.

What things should we buy now rather than later? Small supermarket stuff to buy a quantity and things like electronic and computer -type stuff where a big increase could affect buying decisions maybe?

We have two or three people on the forum who seem to be well wired on finances and markets. Do they have any good bets? What things are likely to increase further and substantially?

anything that requires a lot of energy to produce

[mh]

A good time to buy new windows and doors. I got quotes for them back in March. It took some persuading to get any company to even come out and quote. When they did, the prices quoted made me almost vomit. Utter disdain from one salesman when I said their quote was way too high". Apparently discounts and sales are a thing of the past and I'm lucky they are even quoting me as their install backlog was so long.

He called me back last week as they have an Autumn discount offer. I reminded him of his statement to me and then told him we'd given the sale to someone else who understood how to talk to a customer. Prices of the doors and windows aren't any lower, but installation costs are falling.

[Ali Katt]

I agree with mh on windows and doors, especially anything wood related. I can't see the price of wood falling soon.

Bit of a weird one, but possibly storage units, shipping containers etc.

Food wise: anything imported from the EU. Biggest increase I've seen is oil, especially olive oil - you can't buy 500ml bottles for £1 anymore.

Tobacco goes up every year, but it is rising higher than the vat increase.

Probably not a bad idea to stock up on French wines. Biggest increase I've seen though has been on perfume due to import duty.

[Blackpool Rock]

I agree with mh on windows and doors, especially anything wood related. I can't see the price of wood falling soon.

Bit of a weird one, but possibly storage units, shipping containers etc.

Food wise: anything imported from the EU. Biggest increase I've seen is oil, especially olive oil - you can't buy 500ml bottles for £1 anymore.

Tobacco goes up every year, but it is rising higher than the vat increase.

Probably not a bad idea to stock up on French wines. Biggest increase I've seen though has been on perfume due to import duty.

I remember about 15 years ago it went around that people with Diesel vehicles were buying up cooking oil and filling the car / van with it, I also seem to recall Tesco had to limit purchases as the shelves started to run empty.

Some oils were dirt cheap back then especially if you bought the larger 5L or 25L containers but they soon bumped the prices up to stop it happening.
I actually checked the price a few weeks ago and noted that it cost more / Litre than Diesel now

[lillythesavage]

I remember about 15 years ago it went around that people with Diesel vehicles were buying up cooking oil and filling the car / van with it, I also seem to recall Tesco had to limit purchases as the shelves started to run empty.

Some oils were dirt cheap back then especially if you bought the larger 5L or 25L containers but they soon bumped the prices up to stop it happening.
I actually checked the price a few weeks ago and noted that it cost more / Litre than Diesel now

It is still cheaper than diesel by quite some amount, but newer diesel cars do not like it, litre bottles are 1.09 or 1.19 in Lidl.

Newer cars with smaller engines trying to get the same power are built like race engines with high pressure fuel feeds, pumps and sensors can also fail on cooking oil.

Running on it alone is the mistake made, especially in winter, mixed with diesel though it works fine on older diesels.

Beware cheap diesel being offered, a mate bought some for his Mercedes, it melted the injectors after a few miles, my guess is it was kerosene as it burns hotter than diesel.

[Marmalade]

A good time to buy new windows and doors. I got quotes for them back in March. It took some persuading to get any company to even come out and quote. When they did, the prices quoted made me almost vomit. Utter disdain from one salesman when I said their quote was way too high". Apparently discounts and sales are a thing of the past and I'm lucky they are even quoting me as their install backlog was so long.

He called me back last week as they have an Autumn discount offer. I reminded him of his statement to me and then told him we'd given the sale to someone else who understood how to talk to a customer. Prices of the doors and windows aren't any lower, but installation costs are falling.

I don’t know the gold standard in England — Everest probably. But in Scotland there are vast differences. I don’t think there’s any competition in quality with CR Smith. I’ve had several double glazed homes and the massive difference in sound and heat insulation is unbelievable. The cheap stuff is just a damper. The best stuff cuts your heating to a fraction, the heat stays inside so you can switch if off after warming up.  Street noise was non-existent. Luxury interior wood as well.

But you pay for it, boy do you pay. You need to keep up interest really high to show you’re hooked on the product, validate. And have polite and believable excuses for putting the salesman off. If it’s a big order I reckon you can afford to do that twice. You need to keep him talking, convince him he’s got a sale but [insert “but”]. By his third offer you need to close the deal.

[mh]

I don’t know the gold standard in England — Everest probably. But in Scotland there are vast differences. I don’t think there’s any competition in quality with CR Smith. I’ve had several double glazed homes and the massive difference in sound and heat insulation is unbelievable. The cheap stuff is just a damper. The best stuff cuts your heating to a fraction, the heat stays inside so you can switch if off after warming up.  Street noise was non-existent. Luxury interior wood as well.

But you pay for it, boy do you pay. You need to keep up interest really high to show you’re hooked on the product, validate. And have polite and believable excuses for putting the salesman off. If it’s a big order I reckon you can afford to do that twice. You need to keep him talking, convince him he’s got a sale but [insert “but”]. By his third offer you need to close the deal.

The national companies are rubbish. Local independents have access to the same products, no matter what the national chains imply in the brochures. You can get composite with wood inside, so no maintenance but a solid feel. But I don't want a material that will warp so going composite with high grade thermal barrier filling, steel frame bolted into brickwork, not just a few screws. Blue outside, white inside. Triple glazed glass with faux-lead and coloured glass inserts. Over £2.5K all in, but this is a 1.8m wide space so effectively 2 doors. A good quality standard width white PVC door is £1K now fitted. At least it is in the south of England! I know it will be not far off half the price elsewhere... But if anyone has a recommendation I can still back out.

[Ali Katt]

The national companies are rubbish. Local independents have access to the same products, no matter what the national chains imply in the brochures. You can get composite with wood inside, so no maintenance but a solid feel. But I don't want a material that will warp so going composite with high grade thermal barrier filling, steel frame bolted into brickwork, not just a few screws. Blue outside, white inside. Triple glazed glass with faux-lead and coloured glass inserts. Over £2.5K all in, but this is a 1.8m wide space so effectively 2 doors. A good quality standard width white PVC door is £1K now fitted. At least it is in the south of England! I know it will be not far off half the price elsewhere... But if anyone has a recommendation I can still back out.

Sounds about average nationwide. I know someone who got quoted 10k for a front and back door with fitting. Really famous insulation company, won't say who.

[mh]

Sounds about average nationwide. I know someone who got quoted 10k for a front and back door with fitting. Really famous insulation company, won't say who.

Fucking ouch!  A simple side door for me at the same time as the front has been quoted too, £1k as I said, but the current one has some years left in it.

[anyfucker]

I don’t know the gold standard in England — Everest probably. But in Scotland there are vast differences. I don’t think there’s any competition in quality with CR Smith. I’ve had several double glazed homes and the massive difference in sound and heat insulation is unbelievable. The cheap stuff is just a damper. The best stuff cuts your heating to a fraction, the heat stays inside so you can switch if off after warming up.  Street noise was non-existent. Luxury interior wood as well.

But you pay for it, boy do you pay. You need to keep up interest really high to show you’re hooked on the product, validate. And have polite and believable excuses for putting the salesman off. If it’s a big order I reckon you can afford to do that twice. You need to keep him talking, convince him he’s got a sale but [insert “but”]. By his third offer you need to close the deal.

Which reports Everest being the best of the national companies but there's not much in it
local companies can be better but you'll need to find a good one

[Marmalade]

Which reports Everest being the best of the national companies but there's not much in it
local companies can be better but you'll need to find a good one

Yeah I know. I've not had Everest but have looked at them. I think they both give similar performance. Everest has wider coverage (did Which magazine include CR Smith in the survey do you now?) Everest look good but the luxury solid wood finishes available from CR Smith can be a deciding factor. CR Smith cover Scotland. When I looked into it, I didn't find any smaller local companies that came close to them (or Everest).

[lillythesavage]

Which reports Everest being the best of the national companies but there's not much in it
local companies can be better but you'll need to find a good one

Munster Joinery now operate in the UK, pretty much the go to in Southern Ireland, which areas I am not sure.

[jeanphillipe]

Really? Crypto? Almost all of these cryptos will go to zero. Most people are holding them at a loss, they have no utility or value beyond utter speculation and risk will remain very much off in markets for many years, I've written on this extensively here on the crypto thread. Personally I'd dump the lot while they have any value , I've shorted these since the turn of the year and done very nicely from that. Good luck to you if you are a fan, but my analysis is you lose most your money, it's amazing how many people try to pick the bottom of the market and think they are getting value on an asset or stock when it's lost 50%+ of its value, they don't actually ask themselves why it has lost that value. It's a flaw in human psychology, they feel what goes down, must go up, but that isn't the case, it's what the market utilises to drain liquidity.

External Link/Members Only

All I need is for it to hit 3 quid. I'll take out half then leave the rest

[Blackpool Rock]

External Link/Members Only

All I need is for it to hit 3 quid. I'll take out half then leave the rest

Gave up watching / listening just before a minute as the talking 2 or 3 times faster than normal was doing my fucking head in 
Classic con trick tactic to bamboozle and confuse people 

So what's the crypto it's actually pushing  Thought it was XRP but just looking at the price it's about 50p so under half what it was a year ago and nowhere near the £3 you mention

[estats]

External Link/Members Only

All I need is for it to hit 3 quid. I'll take out half then leave the rest

Please think about what you are saying, you are needing an asset that only has ever reached above 1.5 for a few months in its entire existence to now reach 3.00, an increase from its current position of over 500%. And by the way, its all time high was reached in an era of such loose monetary policy that we were essentially giving free money away for many people to speculate with at a time when they had nothing to do but speculate from home because of covid.

A lot of clever people saw that as an opportunity to pump some of the biggest ponzi schemes in history and while they are retired in puerto rico having cashed out, a lot of ordinary folk are left holding the bag. But soon even the bag will disappear and they'll have nothing. We'll get years of SEC investigations but the ordinary Joe suckered into the get rich quick dreams will be left bankrupt.

By the way, I think we will get digital currency, but it will be CBDCs. If anyone thinks the central banks will give up control of money given their interventions in the market (as we saw from the BOE into gilts) I think they are misguided. It would only need the FED, BOE, Eurozone to say crypto tokens are a systemic risk to financial stability and were now banned, and goodbye, crypto blows up within 5 minutes.

Under what logic do we think central banks and politicians will sit back and allow the control of money to be removed from them, without them fighting tooth and nail with everything they have or could put into law?

But of course, I could be wrong. Maybe you are right and we get a world based on these coins out there now. It's your hard earn money, I have a view, so do you. I'll continue to short this junk and in my view take your money all day long.

[spiralnotebook]

A nuclear shelter in the back garden.

[jeanphillipe]

Please think about what you are saying, you are needing an asset that only has ever reached above 1.5 for a few months in its entire existence to now reach 3.00, an increase from its current position of over 500%. And by the way, its all time high was reached in an era of such loose monetary policy that we were essentially giving free money away for many people to speculate with at a time when they had nothing to do but speculate from home because of covid.

A lot of clever people saw that as an opportunity to pump some of the biggest ponzi schemes in history and while they are retired in puerto rico having cashed out, a lot of ordinary folk are left holding the bag. But soon even the bag will disappear and they'll have nothing. We'll get years of SEC investigations but the ordinary Joe suckered into the get rich quick dreams will be left bankrupt.

By the way, I think we will get digital currency, but it will be CBDCs. If anyone thinks the central banks will give up control of money given their interventions in the market (as we saw from the BOE into gilts) I think they are misguided. It would only need the FED, BOE, Eurozone to say crypto tokens are a systemic risk to financial stability and were now banned, and goodbye, crypto blows up within 5 minutes.

Under what logic do we think central banks and politicians will sit back and allow the control of money to be removed from them, without them fighting tooth and nail with everything they have or could put into law?

But of course, I could be wrong. Maybe you are right and we get a world based on these coins out there now. It's your hard earn money, I have a view, so do you. I'll continue to short this junk and in my view take your money all day long.

I bought and sold bitcoin in the early days. And it was a kick to the gut everytime it hit new highs.

But from what I understand the major factor is  ripples all time high drop is this court case.

 I'm not having faith in it going to the moon but if they win this  court case there has to be one more spike and if that hits 3 quid. I'm pulling out half my money. 

[Clitheroelad]

I work in the logistics game, someone sent me an email asking if they could source hot water bottles. I imagine that will be a hot seller (excuse the pun) this winter.

A few people I overheard yesterday were complaining that the price of logs have gone up unsurprisingly. There does seem to be very weird shortages these days.  I was in Toolstation and I overheard the sales lady saying that they have been unable to source carbon monoxide alarms for months due to shortages in the supply chain.  This could just be a Toolstation issue however.

Lots of people are having wood burners or multifuel burners installed, hence the price of logs and coal has shot up. HETAS registered fitters are making hay and fitting costs have rocketed, as has the cost of stoves. Carbon Monoxide alarms are in short supply for the same reason. People think it will be cheaper to heat this way than use gas or electricity

[Moby Dick]

Maybe a little late, the horse has already bolted but chips are in high demand.

I like curry sauce on mine 

[lillythesavage]

Lots of people are having wood burners or multifuel burners installed, hence the price of logs and coal has shot up. HETAS registered fitters are making hay and fitting costs have rocketed, as has the cost of stoves. Carbon Monoxide alarms are in short supply for the same reason. People think it will be cheaper to heat this way than use gas or electricity

You really cannot blame people for taking a step backwards when the steps forward have been rushed and ill thought out with huge costs to the end user  . Most of which ends up in shareholders bank accounts and not in investment for the future.


The alarms are being recommended by central heating engineers too.

I have had 3, albeit ones I know well, look into changing my boiler, all 3 said if it is not broke do not fix it, but fit an alarm.

They said the savings are not worth the effort and cost, no new boiler will last as long as the one I have and when it did break down, said if I can find the parts and they will fix it, which I did the same day, delivered the next day.

It was a single unit that replaced every major part of the boiler, control unit, regulator and burner, unless the pipes break there is fuck all else to go wrong except the timer/on/off switch.

[king tarzan]

Before buy items in bulk, check and see what the use by date is, other wise, it might end up a pointless purchase

🤜🦊🦊🦊🦊🦊🤛

[estats]

I bought and sold bitcoin in the early days. And it was a kick to the gut everytime it hit new highs.

But from what I understand the major factor is  ripples all time high drop is this court case.

 I'm not having faith in it going to the moon but if they win this  court case there has to be one more spike and if that hits 3 quid. I'm pulling out half my money.

I'm not arguing with the case crypto is a tool of speculation. Anything can be something to speculate on, wheat, coffee, oil, gold, stocks, houses, etc,etc.

I'm arguing crypto is actually a very volatile tool of speculation with actually no utility and therefore no bottom in the value it can fall, and it is never pumped as a tool of speculation but always "it will be x,y,z" that is the classic sign of the ponzi scheme. It encourages the worst kind of trading, often without risk management and the sadness is it involves a lot of people pumping vested agendas to inexperienced and young traders who stand to lose most of their money (many have already lost a lot, I think the latest stat was 60%+ of people who own cyrpto currently do so at a loss).

[jeanphillipe]

You keep saying it has no utility and yet it does. Banks already use it.

Have a read of this.

External Link/Members Only

[lostandfound]

Expensive consumer good which you like but which are discretionary purchases. For me, as a runner, I've been buying running kit at larger than usual discounts, because most people can choose to put off buying an expensive pair of trainers, so the sellers are currently overstocked. Once they've cleared that stock overhang I expect prices to jump and stay high.

[Marmalade]

Practically everything is, or is about to, it seems, increase in price.

As far as I can see that goes for larger items, electrical goods and so on, right down to a tin of custard.

The exceptions are probably, as just pointed out, things where manufacturers are overstocked. So if it’s something you need or can afford, buy it.

Lower priced white goods and all “every saving devices” are going fast, even at almost double the price they were a couple of years ago.

With smaller items we easily tend not to notice increases. I use Prime, and they have a separate “Morrisons” basket for food items. I tried it once just out of interest but never used the check out (I couldn’t find enough worth buying to reach the minimum free delivery).  It kept sending me almost daily price increases of everything until I deleted it. The other day I was clearing out a cupboard and found an old Tescos receipt. I scanned through the prices looking at how cheap things were “back then”.  Only afterwards did I look at the date. It was December 2021!

[Gordon Bennett]

When the £1000 Personal Savings Allowance was introduced in 2016 most folks ceased paying interest on their easy access cash savings. Mainly cos interest rates were, and remained, pathetically low. You'd have to squirrel away nigh on £250,000 to get £1000 interest per annum.

However, with rates on the rise that £1000 allowance suddenly doesn't look so generous. Think my Chase savings account is now paying 2.1% and that's sure to creep up going forwards. Could reach a stage where a relatively measly £30K of savings results in tax being due.

I therefore expect some folks will need to be looking at ISAs or moving money into partner's name if they want to avoid tax man hiving off some of their savings interest as tax.

[king tarzan]

Practically everything is, or is about to, it seems, increase in price.

As far as I can see that goes for larger items, electrical goods and so on, right down to a tin of custard.

The exceptions are probably, as just pointed out, things where manufacturers are overstocked. So if it’s something you need or can afford, buy it.

Lower priced white goods and all “every saving devices” are going fast, even at almost double the price they were a couple of years ago.

With smaller items we easily tend not to notice increases. I use Prime, and they have a separate “Morrisons” basket for food items. I tried it once just out of interest but never used the check out (I couldn’t find enough worth buying to reach the minimum free delivery).  It kept sending me almost daily price increases of everything until I deleted it. The other day I was clearing out a cupboard and found an old Tescos receipt. I scanned through the prices looking at how cheap things were “back then”.  Only afterwards did I look at the date. It was December 2021!

I'm a big fan of chocolate custard..
And yep increase
But what the heck

[estats]

You keep saying it has no utility and yet it does. Banks already use it.

Have a read of this.

External Link/Members Only

I think you need to consider and understand means of exchange vs utility. I think there are over 10000 cryptos.

A bottle top can be used as a means of exchange, or a plastic bag, it doesn't mean it has a fantastic utility. But, infact at least a plastic bag you can use to carry items, and people collect bottle tops for an artictic reason (as collectables).

Please, therefore, beyond a financial instrument of a means of exchange, or a tool of speculation, explain what is the utility of bitcoin, or any crypto?

I'll give you an example, Gold is both a means of exchange (it pegged our monetary system for many years), it still is used as payment in many parts of the world, but it also has a very high utility in producing jewellery, some manufacturing, etc. It is also in short supply.

Please now use that to explain crypto to me, what is its utility?

[estats]

When the £1000 Personal Savings Allowance was introduced in 2016 most folks ceased paying interest on their easy access cash savings. Mainly cos interest rates were, and remained, pathetically low. You'd have to squirrel away nigh on £250,000 to get £1000 interest per annum.

However, with rates on the rise that £1000 allowance suddenly doesn't look so generous. Think my Chase savings account is now paying 2.1% and that's sure to creep up going forwards. Could reach a stage where a relatively measly £30K of savings results in tax being due.

I therefore expect some folks will need to be looking at ISAs or moving money into partner's name if they want to avoid tax man hiving off some of their savings interest as tax.

This is once again about foresight and goes to the reason why so many will be in trouble with mortgage payments.

I have always maxed out my ISA limits every year. "Oh but you could do better in normal savings" people would say. Those people did not have the knowledge or desire or time to understand interest rates below 1% was a freak abnormality, far from the norm.

Most markets are mean reverting, and the actual average interest rate in the UK between 1970 to now is 7%.

When I talk about positioning yourself correctly, this is a simple example. If you understood low interest rates wouldn't last, if you understood QE, if you realised during CV-19 we shrunk supply but stimulated demand, you would have realised and positioned for the fact interest rates would return towards mean. I now face paying zero tax on six figure sums of liquid capital, those not positioned correctly would have to pay thousands in tax per year on such sums.

But you cannot position AFTER the fact. Understand, be smart, position correctly.

[Blackpool Rock]

This is once again about foresight and goes to the reason why so many will be in trouble with mortgage payments.

I have always maxed out my ISA limits every year. "Oh but you could do better in normal savings" people would say. Those people did not have the knowledge or desire or time to understand interest rates below 1% was a freak abnormality, far from the norm.

Most markets are mean reverting, and the actual average interest rate in the UK between 1970 to now is 7%.

When I talk about positioning yourself correctly, this is a simple example. If you understood low interest rates wouldn't last, if you understood QE, if you realised during CV-19 we shrunk supply but stimulated demand, you would have realised and positioned for the fact interest rates would return towards mean. I now face paying zero tax on six figure sums of liquid capital, those not positioned correctly would have to pay thousands in tax per year on such sums.

But you cannot position AFTER the fact. Understand, be smart, position correctly.

I know the 70's was a decade of turmoil and high inflation etc but a 7% average seems very high when it's been so low for so long and the economy has been relatively stable for the last 30 years of the 50 year timespan.

I always like to take a look at the historical graphs and amazingly the 7% is correct though this graph doesn't appear to be stating the figure but the link I clicked did
External Link/Members Only.

I think many people perhaps get a bit mixed up between interest rates and inflation rates which have only really gone and stayed low in the last 30 years since 1993
External Link/Members Only

I think this is why it's such a shock for people now in that it's been so low and stable for so long, many younger people won't remember how shit things were in the 70's

[lillythesavage]

I know the 70's was a decade of turmoil and high inflation etc but a 7% average seems very high when it's been so low for so long and the economy has been relatively stable for the last 30 years of the 50 year timespan.

I always like to take a look at the historical graphs and amazingly the 7% is correct though this graph doesn't appear to be stating the figure but the link I clicked did
External Link/Members Only.

I think many people perhaps get a bit mixed up between interest rates and inflation rates which have only really gone and stayed low in the last 30 years since 1993
External Link/Members Only

I think this is why it's such a shock for people now in that it's been so low and stable for so long, many younger people won't remember how shit things were in the 70's

The 70,s I remember were nothing like now  , life was going on, no mention of food banks, starving cold people, the old mans business was thriving and did not have a care in the world through my teens and into the 80,s  .

Bought my first house early 80,s, did not like where it was, so bought another in London without selling the first beforehand, no recollection of interest rates being prohibitive or being scared of heating the house, filling the car or even thinking about the price of food.

Though the council were not thinking up ways to take your disposable income if you dared to drive a car, many more pubs than now were thriving, nightclubs were affordable, take away food was not the norm and there was not a load of Apps that supposedly make life easier, while training you to pay them and if you wanted something you went to buy it if you could afford it, not on tick.

As @Estats says, it is cheap credit and being persuaded you need the latest tech all the time, need all these things that supposedly make your oh so busy life easier, at a fee, being persuaded you can afford what you really cannot, is where the problems have stemmed from.

Give me the 70,s over today anytime. At least the politicians seemed to be honest 

[sir wanksalot]

The 70,s I remember were nothing like now  , life was going on, no mention of food banks, starving cold people, the old mans business was thriving and did not have a care in the world through my teens and into the 80,s  .

Bought my first house early 80,s, did not like where it was, so bought another in London without selling the first beforehand, no recollection of interest rates being prohibitive or being scared of heating the house, filling the car or even thinking about the price of food.

Though the council were not thinking up ways to take your disposable income if you dared to drive a car, many more pubs than now were thriving, nightclubs were affordable, take away food was not the norm and there was not a load of Apps that supposedly make life easier, while training you to pay them and if you wanted something you went to buy it if you could afford it, not on tick.

As @Estats says, it is cheap credit and being persuaded you need the latest tech all the time, need all these things that supposedly make your oh so busy life easier, at a fee, being persuaded you can afford what you really cannot, is where the problems have stemmed from.

Give me the 70,s over today anytime. At least the politicians seemed to be honest 

Life was simpler but also domestic finances too.

No Sky TV, no streaming subscriptions like Netflix, no broadband, no gym memberships, no smart phone tariffs, no deliveroo (people would rarely eat out). When you start adding all that up then that's a significant outlay each month for what many people now consider to be essentials.

[Blackpool Rock]

Life was simpler but also domestic finances too.

No Sky TV, no streaming subscriptions like Netflix, no broadband, no gym memberships, no smart phone tariffs, no deliveroo (people would rarely eat out). When you start adding all that up then that's a significant outlay each month for what many people now consider to be essentials.

Yes i've said for a long time that people's expectations are perhaps a bit too high and they are possibly a bit too reliant on someone coming to bail them out.
Years ago if you didn't have the money then you didn't have it and families lived in "Poverty" but compromised on what they had whereas nowadays you constantly hear about whatever group "needing more help".
People used to put a jumper on until it got really cold at which point you would heat 1 room, these days people seem to think they should be able to heat an entire house so they can lounge around in short sleeves mid winter and the latest wide screen TV and £1K+ phone is essential 

Now i do think that it's a good expectation for the average wealth / living standard of the population to gradually improve over time but it strikes me that people don't seem very resilient these days 

[Marmalade]

In the 70s you were also more likely to smoke, believe in god, get married, stay married, less likely to go to university or go abroad for holidays, and more likely to die younger.

On the upside you probably listened to better music. 

[king tarzan]

In the 70s you were also more likely to smoke, believe in god, get married, stay married, less likely to go to university or go abroad for holidays, and more likely to die younger.

On the upside you probably listened to better music. 

Manufactured bands really shitty music

[lillythesavage]

Life was simpler but also domestic finances too.

No Sky TV, no streaming subscriptions like Netflix, no broadband, no gym memberships, no smart phone tariffs, no deliveroo (people would rarely eat out). When you start adding all that up then that's a significant outlay each month for what many people now consider to be essentials.

Yep, and you paid for what you used after you had used it, for power. Now we just hand over access to our bank accounts for them to help themselves  They had to employ meter readers too, another saving they have made by getting us to do it.

I do not use Apps but guess they are the same too, just help themselves to a registered account when you use them 

I can manage to find the time to do my own shopping too 

Should be fun if the Ruskies start a cyber war and hack a few apps.

[king tarzan]

Life was simpler but also domestic finances too.

No Sky TV, no streaming subscriptions like Netflix, no broadband, no gym memberships, no smart phone tariffs, no deliveroo (people would rarely eat out). When you start adding all that up then that's a significant outlay each month for what many people now consider to be essentials.

I'm a old skool Boyz will be Boyz type man..
Most of the above, apart from phones as I consider expensive rubbish

[Ali Katt]

In the 70s you were also more likely to smoke, believe in god, get married, stay married, less likely to go to university or go abroad for holidays, and more likely to die younger.

On the upside you probably listened to better music. 

Better films as well ... the number of truly great films from the last 20 years you can count on both hands.

[Marmalade]

Better films as well ... the number of truly great films from the last 20 years you can count on both hands.

I keep wondering if Covid & Netflix have killed cinema.
Edinburgh's flagship cinema, the Filmhouse has closed. It was due to have a fabulous new custom-built location particularly to welcome the annual Edinburgh International Film Festival. That festival, which has run since 1947, has now closed as well.

Netflix movies are cheaper to make and don't have to be good -- just good enough to keep people on the couch instead of going out to the cinema.

I don't think the steady stream of copycat blockbusters has helped either. They are expensive to make. That means they are expensive to show: and as cinemas charge a standard price it costs the same to see Batman Yet Again as it does to see a mildly entertainingly pleasant (but original) Woody Allen movie that didn't have or need $$$$$$$ of special effects.

[estats]

I know the 70's was a decade of turmoil and high inflation etc but a 7% average seems very high when it's been so low for so long and the economy has been relatively stable for the last 30 years of the 50 year timespan.

I always like to take a look at the historical graphs and amazingly the 7% is correct though this graph doesn't appear to be stating the figure but the link I clicked did
External Link/Members Only.

I think many people perhaps get a bit mixed up between interest rates and inflation rates which have only really gone and stayed low in the last 30 years since 1993
External Link/Members Only

I think this is why it's such a shock for people now in that it's been so low and stable for so long, many younger people won't remember how shit things were in the 70's

Thanks, at least you have shown the self-reflection to think it is wrong, but actually look at the information and realise it is correct. Most markets tend to revert to mean.

But I think you diagnose the thinking and problem very well. People now think 7% interest rates are extreme, WRONG, the last decade of 1% has been the extreme period, 7% is more the normality. And we face a stark choice between high interest rates making people with debt much poorer, OR holding interest rates lower than they NEED to be, in which case inflation will make everyone poorer. There are no good outcomes over the next years, possibly even this decade.

Think of all the misallocation of capital that has happened as we have lived through the abnormality of low interest rates, people who should have had mortgages, companies that exist on borrowing alone, unsecured debts, fianancial institutions who have used excessive margin and haven't hedged risk. The pain we go through to get back to a normalised interest rate will be very difficult for many, many people.

My personal view is the economy struggles to function with base rates much above 5%. ALL central banks will surrender to inflation and then we get something 10 times worse than we have now. It's going to be a brutal few years, whatever happens, of that I have no doubt.

[petermisc]

I keep wondering if Covid & Netflix have killed cinema.

Cinema was dead long before covid & netflix.  Can't remember the last time I went to the cinema, my local one closed decades ago, my nearest one is now an hour's drive away.  The last time I went it was to a multiplex in London that also closed long before covid.

[estats]

This is literally the million, billion, trillion dollar question.

the BOE are not as transparent as the fed, so lets go with their dot plot on fed funds rate to get read over. That shows as of September 2022 they push to 4-4.5% by the end of 2022, it moves to 4.75-5 in early 2023, remains there for all of 2023 and then is cut 75 basis points in each of the next 3 years to 2.5-3% over the longer run, 2026 and beyond. I suspect the UK would have a similar outlook. We get a slightly different read over into mortgages, this likely means a 6-7% mortgage rate as the norm for the UK, banks are just being very naughty at the moment in front running the predicted rate hikes to protect their balance sheets.

Now the big caveat, we have never beaten inflation until we have interest rates above the inflation number (and todays inflation number is a total underestimation). No one is arguing any western central bank will push interest rates beyond 8% to do that, so the market isn't arguing that the central banks won't HAVE to pivot and cut rates, they are just not sure when. Central banks almost always capitulate on rate rises or currency printing when something breaks in the system. So many have the belief an interest rate much beyond 4% for over a year breaks the system. So the simple point I'm making is don't be surprised if we get to mid 2023 and get a complete reverse in policy because institutions are starting to go bankrupt.

People are entirely missing the point when they comment on interest rates from the 1980s, yes they were a lot higher, but you have to look at the debt burden now vs then, we've had a decade of cheap money and asset bubbles because people have loaded up on debt, the read over to interest rates back in the 1980s to now, id say you have to at least double todays rate and then compare backwards, so todays 6% mortgage rate is equivalent to 12% if you want to compare backwards.

But my real point, as people may have read, is even when central banks pivot, that is worse news. The second we lower interest rates or turn back to the money printing, inflation soars, So either higher interest rates make you poorer, or on the flip side inflation will erode your wealth, there are no good options from here.

My personal view, we probably get a little beyond 4% interest rate for a relatively short period, things start to break, we'll have a major investment bank or institution go bankrupt, the equity market will capitulate, i.e. a stock market further crash from this point and at that point central banks will step in, in a war between them letting the financial system risk major contagion and getting the blame and them thinking sod it lets lose the fight to inflation and let it erode peoples wealth over years and we can blames external factors, they will choose the later. At that point inflation soars and money devalues, we probably then head towards a central bank digital currency as the "saviour" of the system.

Regardless of trying to make predictions, I think the basic take away here, the era of ultra low interest rates and cheap debt is over for a generation.

As we see Bank failures, I just wanted to bring back this topic and the debate I had with many people and the highlighted points from that period, and the position we head towards now. What to buy, you would have seen 15-20% returns in gold over the same period.

[petermisc]

As we see Bank failures, I just wanted to bring back this topic and the debate I had with many people and the highlighted points from that period, and the position we head towards now. What to buy, you would have seen 15-20% returns in gold over the same period.

Since when have supermarkets been selling gold?

[maxxblue]

Since when have supermarkets been selling gold?

I don't think supermarkets have been selling gold - what is your point? 

[alabama1]

I don't think supermarkets have been selling gold - what is your point? 

This is his point 

[maxxblue]

This is his point 

How do you know?

[alabama1]

How do you know?

It's not rocket science, but then again, maybe it is comparable to it for you. Don't let it keep you awake at night. 

[maxxblue]

Firstly, unless he has told you, then you can't possibly know what his point is.

Secondly, I was asking him, not you.

[petermisc]

Firstly, unless he has told you, then you can't possibly know what his point is.

Secondly, I was asking him, not you.

Alabama seems to know exactly the point I was making.  If you don't, then I suggest that you read the OP.

Perhaps we should have stocked up on tomatoes and cucumbers.