Reading the tea leaves

[Belbein]

Hey now, gentlemen. Let's not have any more of that being cordial stuff. We can't have that here. Take it somewhere else.

[moosetags]

Hello all. I have been reading this thread with great interest. I am a victim of "New Truck Syndrome". I don't know if it is advancing years or impact of the Pandemic that has brought me here. My tow vehicle history starts in 2005 with a 2005 3/4 ton Quadrasteer Suburban. In 2011, we moved on to a 2011 Silverado 3500. Then in 2018, we traded for a 2018 Silverado 2500. Then two months ago, we again traded for a 2020 Silverado 2500.

"New Truck Syndrome" struck hard in March when we decided to trade for the 2020 with all of its new electronic gizmos. As it turns out, We would much rather have Vivian (the name of the new truck) than cash in the bank or gold bullion under the bed.

As we get deeper into the Pandemic and the resulting economic situation, the "Chicken Little Syndrome" intensifies. Many are screaming that the sky is falling.

Regardless of how things go, we have a new tow vehicle for Lucy. When camping is once again permitted, we are ready to roll.

Brian

[KK4YZ]

Originally Posted by Belbein

Hey now, gentlemen. Let's not have any more of that being cordial stuff. We can't have that here. Take it somewhere else.

I can certainly comply with that request 🤬🤬👿

[Boxite]

Originally Posted by Belbein

Boxite: I'm not sure I understand your point about the aforementioned authorities. Are you saying we should trust Phil Gramm, Wendy Gramm, etc., or should not?


In any case, what I find economists are "good for" is NOT prognostication. That's a media-driven twist. What they are is students of how practical economics work. So they should be relied on like a physicist: to identify what the factors are.


As for applying the factors ... that's on you and me. (And since you're a Hill Country Texan, I know I can rely on you. I'm going to tell my wife that my economic advisor advised me--I mean that hypothetical person--to buy a new truck.)

My message was completely misunderstood apparently.

A previous poster suggested that in an economic downturn you should be investing in gold, aluminum, etc. and, in an apparent effort to lend credulity to their advice, mentioned they were an “economist”.

Those “economist” persons I named (Gramm, Wendy Gramm, Greenspan, Andersen) are known as the worst examples of economic thinking/practices of the 1980’s. (Gramm ...a former “Professor of Economics” at Tx A&M...which should get a UT grad’s attention.... has the reputation of being “the number two person responsible for the economic crisis of 2008 behind only Alan Greenspan.” Wendy Gramm was the chief accountant who participated in the ENRON financial scandal. (It’s why Phil did not run for re-election because he knew opponents would point out Wendy’s involvment.)
On October 14, 2008, Gramm was ranked number seven in its list of the 10 individuals most responsible for the meltdown of the 1980’s and one of twenty-five people who were at the heart of the financial meltdown.

Time Magazine included Gramm in its list of the top 25 people to blame for the economic crisis.)

MY point I thought was clear: You cannot eat gold, etc. In fact, How can anyone even THINK it’s a viable alternative to cash? If you had food, and I wanted to pay you with Gold...HOW WOULD YOU EVEN KNOW IF I WAS PAYING YOU CORRECTLY? Do you have a proper SCALE? Is it in avoirdupois weight? Do you know the difference between TROY weight? Do you know if the golden metal I just gave you is really GOLD? Or if the alloy I gave you is as pure as I claim?
What will you do with the Gold when what you need is gasoline? Or water, or electricity or...???

LAND is what is valuable. It can shelter you, feed you, protect you and it INCREASES in value, while your debt-ridden new truck began deteriorating and losing value the moment you acquired it. Meanwhile that truck will need fuel, tires, maintenance,... how will you get that in a tanked-economy.

If things get really bad, the guy will GIVE you that truck if you’ll just let him and his family live or hunt on your land.

Our fathers and grandfathers (Great Depression survivors) did not buy new trucks every 3 years. They drove what they already had (and which were already paid-for) for many many years.

My 2-sense.

[tjdonahoe]

Originally Posted by Belbein

Assume with me--whether your believe it or not--that we're heading into a recession with runaway inflation. If that's the case, does it make economic sense for some unknown and unnamed hypothetical person to trade in a 2 year old tow vehicle with some equity to trade it in for a new upgraded tow vehicle, knowing that the dollar in 2021, 2022, 2023 etc will be worth a lot less than dollars are now? Particularly given the fact that savings pays 0% and the stock and bond markets are diving?


I'm NOT asking (for this hypothetical person) anything about whether debt is good, or whether the markets will rebound, or whether b)this would happen or that might happen, or any of that other stuff. I'm asking only what I asked, trying to figure out if you assume recession > inflation > dollars worth less > loans paid in inflated dollars are a smart thing now.

.......no....keep it

[AKmtnpilot]

Boxite is correct. Land is valuable. Belbein, the OP can park his brand new truck and trailer on it and watch all the poor broke people walking by.

[Papa smurf]

I will give you the same answer the Dalai Lama, whose title translate to «*Ocean of wisdom «* gave when he was asked what is the meaning of life : I don’t know.
The question you are asking only you can answer. Trust your good judgment and then whatever you do would be the good thing to do.

[Mollysdad]

Originally Posted by BayouBiker

it's only wise if what you buy continues to be in high demand. Gold, aluminum and most commodities, yes.

Markets are so controlled, the free market no longer exists. I watched precious metals, listening to the experts. "It should...there's a shortage..." But it doesn't.
Some prices are the same they were 10 years ago.
My plan is to avoid debt.
"Yeah, but you could mortgage your house and use that as a downpayment on an apartment building, then leverage the apartment for the condo development and you'll be king."
Sorry, I'm not playing. I sleep well.

[10MG3e]

Is there something different about the new truck you want/need? If so, and assuming that your financial status is stable and you plan to keep the new truck for the long haul, I think that is reasonable. You can probably get 0% financing for 84 months right now and if you wait until August/September, you can probably find a 2020 model with a significant discount on top of that. If you definitely plan to go ahead, I would look the second or third week in August. There might be some even bigger incentives as you approach the last day of the month.

[rgwatkin]

Now is the time not to be in cash but hard assets; gold/precious metals, precious gems, collectables, or real estate. Hard assets always have inherent value where cash or cash investments do not.

[SMKovalchik]

Originally Posted by Belbein

Assume with me--whether your believe it or not--that we're heading into a recession with runaway inflation. If that's the case, does it make economic sense for some unknown and unnamed hypothetical person to trade in a 2 year old tow vehicle with some equity to trade it in for a new upgraded tow vehicle, knowing that the dollar in 2021, 2022, 2023 etc will be worth a lot less than dollars are now? Particularly given the fact that savings pays 0% and the stock and bond markets are diving?


I'm NOT asking (for this hypothetical person) anything about whether debt is good, or whether the markets will rebound, or whether this would happen or that might happen, or any of that other stuff. I'm asking only what I asked, trying to figure out if you assume recession > inflation > dollars worth less > loans paid in inflated dollars are a smart thing now.

Seems it’s the old “want vs need”.

[Alan 117]

Unless you bought the wrong truck that is not safe pulling your AS a 2 year old truck is a new truck. I bought a new truck 2 years ago and I’m having fun dialing this thing in to be the ultimate AS puller.
I tend to buy a truck about every 15 years so, I’m a bit odd.

[markdoane]

Originally Posted by rgwatkin

Now is the time not to be in cash but hard assets; gold/precious metals, precious gems, collectables, or real estate. Hard assets always have inherent value where cash or cash investments do not.

Hard assets may have inherent value. But the value is neither constant or guaranteed.

Hard assets are susceptible to price manipulation known as "bubbles".

[TravelNew20]

In the current environment “if it's not broke … do not fix it”. If you can pay CASH for it & have appropriate emergency funds then maybe. My limited experience in retirement is to be debt-free 1st & then buy toys…
Note: The ever expanding Federal Debt will lead to inflation (probably severe) one day. The next few years will depend on if any other country wants to buy our T-Bills. The last few sales the Fed Reserve was the only buyers… Currently we are the “cleanest of the dirty shirts” with respect to other western nations & are the worlds reserve currency. But this level of debt (if not curtailed) will destroy the future of your children & grandchildren.

[Mollysdad]

Hard assets are terrible investments if the goal is to stay ahead of inflation. I just checked, Silver is $16.62 /oz. today. Guess what it was 15 years ago? About the same. All the experts who claim there's shortage just want to sell you some. If it's so great, why are they selling? 10 Years ago it spiked to $40/oz. but we all held because it was on it's way to $80, right? It came right back down.
As far as owning something of value to pass on to heirs, it's great.

[SPS Tools]

When I retired (‘99) my wife wanted to pay off the mortgage. Our financial advisor talked us out of it, noting that our $s we’re doing better in the market than the mortgage interest.
Then came the crash of ‘02. He changed his tune as clients tried to extract cash from a declining market to cover their monthly mortgage payments.

The only threat of inflation I see is when the Feds crank up the presses to cover their extravagant spending habits. Free money for everybody leads to $100/loaf of bread.

[DavidsonOverlander]

Anyone relying on Air Forums for financial advice is already lost!

[Belbein]

Originally Posted by Boxite

My message was completely misunderstood apparently.

Must be your accent.

Originally Posted by Boxite

Those “economist” persons I named (Gramm, Wendy Gramm, Greenspan, Andersen) are known as the worst examples of economic thinking/practices of the 1980’s. (Gramm ...a former “Professor of Economics” at Tx A&M...which should get a UT grad’s attention.... has the reputation of being “the number two person responsible for the economic crisis of 2008 behind only Alan Greenspan.” Wendy Gramm was the chief accountant who participated in the ENRON financial scandal. (It’s why Phil did not run for re-election because he knew opponents would point out Wendy’s involvment.) On October 14, 2008, Gramm was ranked number seven in its list of the 10 individuals most responsible for the meltdown of the 1980’s and one of twenty-five people who were at the heart of the financial meltdown.

That's what I thought you meant, but I wasn't sure (that accent again). I could not agree more wholeheartedly with you on these people.

I'm not a chicken little, and I've been saying since 2016 to my fellow travelers (no, not the ones with airstreams) that our country has survived terrible diseases and terrible disasters and even terrible political movements, so the ship will right itself. Now, I'm not so sure that any of that is NECESSARILY true. Which is why I asked this question … I'm truly worried. Not that being worried keeps the piano from falling out of the sky and crushing you.

[Belbein]

I don't mean to be argumentative but I don't agree. I mean, why not rely on my Airbuddies' ideas about the economy when people rely on them for legal and scientific advice? :-) But seriously, it seems to me that what matters isn't the economy itself, but what people are feeling about the economy, because those feelings are what drives the ability to recover vs. the descent into depression. It's kind of like the crowd-sourced betting markets that gather the sort of general gestalt attitude of the population. I think people here are mostly really smart and really engaged, even if they're wrong about … well, that's another post at another time.

[Belbein]

Originally Posted by Boxite

My message was completely misunderstood apparently.

Must be your accent.

Originally Posted by Boxite

Those “economist” persons I named (Gramm, Wendy Gramm, Greenspan, Andersen) are known as the worst examples of economic thinking/practices of the 1980’s. (Gramm ...a former “Professor of Economics” at Tx A&M...which should get a UT grad’s attention.... has the reputation of being “the number two person responsible for the economic crisis of 2008 behind only Alan Greenspan.” Wendy Gramm was the chief accountant who participated in the ENRON financial scandal. (It’s why Phil did not run for re-election because he knew opponents would point out Wendy’s involvment.) On October 14, 2008, Gramm was ranked number seven in its list of the 10 individuals most responsible for the meltdown of the 1980’s and one of twenty-five people who were at the heart of the financial meltdown.

That's what I thought you meant, but I wasn't sure (that accent again). No politics in this, but I find the grammarians despicable, for many reasons. The &L Crisis and the Enron scandal and etc. ad nauseum are just some of the reasons.



MY point I thought was clear: You cannot eat gold, etc. In fact, How can anyone even THINK it’s a viable alternative to cash? If you had food, and I wanted to pay you with Gold...HOW WOULD YOU EVEN KNOW IF I WAS PAYING YOU CORRECTLY? Do you have a proper SCALE? Is it in avoirdupois weight? Do you know the difference between TROY weight? Do you know if the golden metal I just gave you is really GOLD? Or if the alloy I gave you is as pure as I claim?
What will you do with the Gold when what you need is gasoline? Or water, or electricity or...???

LAND is what is valuable. It can shelter you, feed you, protect you and it INCREASES in value, while your debt-ridden new truck began deteriorating and losing value the moment you acquired it. Meanwhile that truck will need fuel, tires, maintenance,... how will you get that in a tanked-economy.

If things get really bad, the guy will GIVE you that truck if you’ll just let him and his family live or hunt on your land.

Our fathers and grandfathers (Great Depression survivors) did not buy new trucks every 3 years. They drove what they already had (and which were already paid-for) for many many years.

My 2-sense. [/QUOTE]