Money, money, money -- price of cars

I remember when a Ferrari 308GTS was $30K -- and people would gasp at that price for a car.

First car bought with my own money, I'd kept for the whole note, a 45K-used Paseo... was $10K... and defo overpriced to gut a first-time buyer by a sleazy Maui dealer. Remember back when Toyota sold subcompacts that'd be considered microcars today? Tercels were $8K stripped w/ one driver's door mirror in the '80s, complete w/ carburetors and roll-up windows.

Kept that Paseo (early '90s) for 385K. Still got 45 mpg at that mileage, and still had its perfectly-functioning original clutch (remember manual transmissions?)

This Prius was $17K ( $13K trade-in ), and is by far my most expensive purchase -- am a man of small (and relatively modest) pleasures, by modern influencer comparison. Not much chance of owning property here on Maui ever, unless I write a Grammy-winning song or happen upon a diamond the size of my head digging a post hole in the back yard

 

my dad always warned me about inflation. he had seen it up close from 1920 through 2018.

he always advised to buy now and not put off until later, and take take serious note of it when contemplating retirement.
he was big on real estate investment, as was his mother who came to this country in the early 1900's, and left him and his brother several multi family homes and extra buildable lots.

his famous line (which he probably stole from someone) was, 'they aren't making any more land'.

covid changed the world imo, and there's no going back.

 

Inflation is the byproduct of easy money and low interest rates; which the current administration doesn't understand.

You forgot interest rates; a key to affordability. I bought my first house when rates was around 8.75% @ around 90K.

The current administration wants to limit credit card interest rates to 10%, thinking this will stall inflation. WRONG
1. That's regulated by Congress, NOT the president. Something called separation of Powers.
a. If they do that credit card companies and banks will pull back; stop issuing new card and/or stop extending credit limits.
b. They will definitely stop all transactions on all credit card holders with an iffy credit rating to limit losses.
c. Those companies will start laying-off people; 'tightening the belt' - In hopes for TACO.
d. This won't resolve anything and will force most people to file for bankruptcy and the financial system will look like post 2008 housing crisis. I've read that the average household credit card debit it around $6K - people living beyond their means and filling in the holes with a credit cards. I've known $250K household income live paycheck to paycheck - Of course it's someone else's fault for them having to do that.
e. Those loan balances still exist - BIG losses for any financial institutions that try to write them OFF. Someone, GOVERNMENT, will have to bail them out - increasing our current debit load of 38T - weakening and possibly destroying the USD.

Leave Jerome Powell alone; he knows what he's doing and goes by the DATA. Where are those Republican fiscal watch-dogs when Trump added 2T+ to our annual debit load in just a year?????

BTW; Tariff will pay for that. Numbers DON'T LIE............

 

They're not the first.
They will not be the last.
Granted....the current POTUS is an idiot for thinking that 5% interest rate is too high, but it's about 2 points higher than it was when the last idiot was in office - although he was just a meat-puppet for the people behind the throne!

Stupid SHOULD HURT!
THAT KEEPS humans from doing stupid 's' like.....paying $35,000 for a cheaply built hatchback....or ten times that much for a 3 bedroom 2 bath starter home.

The good news about inflation is that it's already knocked a zero off of our effective National debt.
One down.
THIRTEEN to go!

 

He has learned two things:
1. how to manipulate the value of his real estate holdings to get what he wants. What that's not FRAUD; I'm RICH, depending on what balance sheet your looking at - NOT my income tax filings - PLEASE......
2. Don't make any of his ventures look profitable; Creditors will repo.it, if it's generating enough cash or break it apart to be made whole again. Why do you think he can't get Wall Street backing on his projects, those people aren't stupid? That's why his salary varies widely, keeping that venture slightly in the 'red'; so creditors figure out it's better to get something rather than nothing. Sunk-cost fallacy.

 

Yep, experience that first hand in Paraguay. I thought I was being punked or ripped-off when locals told me that with their currency.

It was funny when I got back home and converted Paraguayan pesos back to dollars. The Latina behind the counter, didn't realize Mils in Spanish was thousands - added too many zero to the conversion. I didn't want her to get fired and corrected her. She did speak Spanish, don't know if she was illiterate - doubtful since this was in one of largest banks in this country.

 

At the tail end of the 1980s, the mortgage on our 'starter' house was 9.75%. And I was very happy to get under 10%!

Some years later, after losing a bidding war on a 'better' home that we watched being built -- with significantly better construction than most other new construction in the neighborhood -- I figured out that housing was more expense than investment, especially at our property tax rates. And more $pace would encourage acquisition of more toy$, when we already had more than enough toys to fill the available time. So we stayed put, with improvements. The savings channeled into the stock market has performed far better than the local real estate market, allowing earlier retirement.

Not just remembering stick shifts, but still driving them. 2/3rds of our household's fleet are still manual transmissions, with original clutches. Until my first Prius, we are all-manual, my RAV4 PHEV now holds the only non-stick space in the stable.

Some inflation is good for economic growth, as it encourages people and businesses to consume and spend and invest now, instead of stashing cash away under the mattress where it doesn't contribute to the national economy.

But keeping it stable and slow enough to not be painful, is hard for all administrations of all political persuasions.

 

That's why the Fed is suppose to be independent of political influence. Their job is to manage the USD monetary system; because most international trade is settled in USD. An unstable USD will force other countries to move away from USD denominated transactions; your already seeing that now with the rise of BRICS. IMHO; if the USD is no longer tethered as the international settlement currency, you'll see hyper inflation, based on our huge debit load. Kinda like maxing out your credit card, so nobody is willing to take-on that risk anymore. China, Japan and some EU nations are already dumping billions of US Treasuries into the markets. Economic warfare, due to the current administrations actions. It's slow, but we will feel the pain later.
Nobody asks the right questions or wonder why the USD is among the stronger currencies accepted around the world. Why do you think we can get 76 rubles for $1 USD.....

 

The broader question if you've traveled some is:
Where is a $100 USD note NOT accepted, and where IS a 100 Yuan note accepted, or to a lesser extent, a 100 Euro note?
Petrol is purchased with Petrodollars....for a pretty good reason, and nearly 100 out of 100 people could not name more than two BRICS members even with the aid of the acronym, and China and India are NOT the best of neighbors.....

Economies are flattening out and I'm worried about the debt bomb too but, evidently the rest of the world sees our administrations for what they are:
Temporary.

Meet the new boss.
Same as the old boss.

 

BTW; I see your point, but you should be carrying smaller, unmarked denominations - even most banks in foreign counties shy away from $100 notes, because they are counterfeited and it's a loss limiter for them
.
We take it for granted; but if your traveling internationally - You need to be carrying either USD or Euros as cash; if you want to be able to exchange it for local currency. In the past decade; the Chinese RMB and internationally connected ATM cards has been making inroads. I've opened up a segregated bank account that's connected to an international ATM card and withdraw/exchange local currency that way. No currency exchange fees and always at today's market rates. I've traveled with other people from other countries that have to do a currency exchange dance. They need to move from their currency to either USD or Euros; because most banks won't recognize a small island nations' currency. They need to rely on rip-off airport currency exchange booths.
IMHO; creating an isolated account for international travel is essential. You can always transfer money into it from your main account. If that account somehow gets hacked, you only lose whatever is in that account - NOT your life savings. File the paperwork to try retrieve the stolen amount. Use credit cards as buffers to thief, though most goods are on a cash basis in developing countries

YMMV.

 

If you read some of the business and financial news, you might notice some movement away from the USD as universal currency. And some withdrawal of foreign investments from the U.S. financial market, moving elsewhere.

In 2025, U.S. economic growth and stock markets under-performed global figures.

Sounds like a U.S.-centric view.

It was interesting to visit a country sandwiched in between them, a few months ago. A country keeping a very wary eye on one neighbor, and tying its trade and pegging its currency to the other neighbor.

... but concerned enough to be broadening their trade ties and reducing the U.S's share of their economic linkages.

 

Cash? Currency? My 'mileage' is indeed very different.

Still catching up from the Pandemic shutdowns, we set a personal record of 3 (**) major international trips last year. A quite noticeable change from pre-Pandemic times is just how much of the world (at least what we visit) has gone cashless. Electronic payments preferred almost everywhere, just a few small trinket shops needing cash. I still usually obtain some local currency via ATM, but quantity is now smaller than before, and we have needed to become more vigilant about actually using it before the trip ends.


(**) Spouse is older than me, and with our sunset years rapidly becoming visible, we are now in the modes of "you can't take it with you" and "do it while you are still able." Our favorite niche tour outfit just hit their own "not able anymore" health wall and had to retire. Numerous friends from previous trips have either passed, or can no longer travel.

 

Yes, certain countries are cashless and that started about 10-15 years ago. In a certain Asian country, even the street vendors did cashless. I would annoy them by paying cash and as a foreigner wasn't allowed into their cashless system without a local phone number and country ID number. They get kinda peeved, because I look like them. It has change in the last 5 years and they will now allow you to link to our foreign Visa & MasterCard accounts now. It's a great system when you think about it - no more strong-arm robberies; since there's no cash to steal.
Close friends had an in-country family member setup a separate in-country bank account and tied their email account to it. That allowed them to do an international money transfer directly into that bank account and use it as a cashless spending account. Don't have to jump through those hoops anymore.

 

I'm "last hurricane years old" so I always have cash on hand but very rarely carry Benjamins.
We keep a not-stupid amount of broken down US currency for otha emergencies.

I family member wanted advice on a safe for keeping a STUPID amount of cash in the house.
I told him to get a moderately priced safe and bolt it securely into the floor in the bedroom closet and put a snarky note inside.
Then hide the money in {redacted.}
Another friend tried to sell me one of his gold coins that he bought for 'emergencies.'
I told him that I would take $50 worth.
When he told me he couldn't do that, I told HIM that he could probably buy a $1000 loaf of bread or a gallon of gas with it in a REAL emergency but that it was only valuable to a pawn or jewelry shop in its present state - OR another sucker.
Gold CAN be a storage unit for contingent funds, and an insecure and wildly inefficient means of building wealth but it's heavy, not widely exchanged on tha streets, and there's no slot for it in a cash drawer.


My international travel days are at the very least, on pause for now since I'm still in my working years.
I did all of that silliness in my younger years.

 

Yep, I know a few people like that. Told them that if it ever got that bad - Guns, ammo, food, and gasoline would be the only thing worth anything. Not questionable metals or jewelry - you can't eat any of that. It's funny how they frame it as "stored value"; someone isn't thinking things through and assuming there's another sucker that may trade for shiny stuff. Hard assets will retain some value, assuming you can find someone that's willing to trade what you "think" it's worth.
You can always melt the gold down into bullets. That would be it's base worth, if everything goes Mad-Max.....

 

I wish I had bought gold around 2012 when they were hyping it.
But I thought, nah, it can’t go much higher

 

Plenty of other things have outperformed gold. Over that time, even the S&P500 index has done better.

 

I bought My own first car, used in 1977, with My own $$$ ($600) ... 1972 Ford Maverick.

(This is just an example pic of the same car. Mine was the color medium yellow gold)​

 

Agree. "Emergency" depends on how you define it. Years ago bought a little gold for my definition of a likely emergency (hurricane similar or worse than Katrina), localized vs nationwide, a 1 oz bar for a tank of gas or some bread/eggs/MRE's etc. if really really needed. For 'big' emergencies (on a national/global scale involving lots of shots fired in anger), shiny metal basically worthless. Some years ago one of my neighbors had a philosophy of keeping many firearms of different calibers and maintaining at least 1000 rounds of ammo for each caliber "just in case". His thinking in general - if I really need fuel or food or basically whatever in a survival situation, and can't negotiate for it, at least I've got the means to take it.