2022 seems to keep popping up in comparisons and bonds provided zero stability in 2022 with huge losses - the retired without pensions like us will struggle - we’re forced early retired and sequence of returns risk is blazing it’s headlights through your honest and factual analysis. if we do end up similarly or worse than 2022, we brace and hope for a quick recovery. I am sad for the small businesses who can’t absorb or afford these increasing energy costs . Thank you for such a comprehensive explanation.
Inflation always hits those on any sort of fixed income the hardest, no matter what the cause. For retirees the difference between stagflation and ordinary inflation is almost always minimal.
If the Strait remains closed and we do find ourselves in the stagflation scenario, what must be understood is that demand destruction is not an option, but a necessity. Quite literally it comes down to basic physics: if physical supply is lowered physical demand must be lowered accordingly to maintain systemic equilibrium.
What this means for consumers: Plan on how to reduce individual demand. Accumulate what can be stored, and be thinking now about what can be eliminated from personal demand to keep the personal budget intact.
People will object to having to do this, and they have a point. No one was looking for this war, and certainly no one was looking for this war at this time. While there is a substantial argument to be made that this war with Iran is the best choice available, given Iran's obsession with nuclear weapons, the costs of the war are still what they are, and several of those costs are still falling on people who had no say about incurring those costs.
Whether President Trump has made that case adequately to the American people is of course a question for political debate.
In the meantime, rising inflation and more rising inflation is headed towards the US economy. People are well advised to plan accordingly.
Thank you for your reply, honesty and encouragement. I'm willing to be even more careful and cut wherever I can (frugality is my nature growing up poor and living paycheck to paycheck), my comfort is not as important as eradicating evil - not that that is totally possible but Iran is controlled by evil and I support eliminating their nuclear capabilities. I sensed a parallel to 2022 even before Iran war in your economic reporting and the markets.
Given what I’ve heard about the fanaticism within the upper ranks of the IRGC, I don’t trust that they would adhere to any terms of a peace agreement. I suspect they will say they do, then attack the West within a few months. Peter, any thoughts you’d like to share at this point?
I am reminded of an observation Richard Nixon made about dealing with the Soviet Union: the Soviets could be trusted to keep agreements that were in their best interest to keep.
I would apply the same principle to negotiating with the IRGC. Any agreement with them will work if the IRGC sees it as beneficial to their aims. Any agreement which the IRGC does not see as beneficial they will not keep even a little bit.
In any negotiation, assuming the other party is trustworthy is simply silly. If they could be trusted, there would be no need for negotiation. We only negotiate with people with whom we are in conflict. That negates any thought of trust.
2022 seems to keep popping up in comparisons and bonds provided zero stability in 2022 with huge losses - the retired without pensions like us will struggle - we’re forced early retired and sequence of returns risk is blazing it’s headlights through your honest and factual analysis. if we do end up similarly or worse than 2022, we brace and hope for a quick recovery. I am sad for the small businesses who can’t absorb or afford these increasing energy costs . Thank you for such a comprehensive explanation.
Inflation always hits those on any sort of fixed income the hardest, no matter what the cause. For retirees the difference between stagflation and ordinary inflation is almost always minimal.
If the Strait remains closed and we do find ourselves in the stagflation scenario, what must be understood is that demand destruction is not an option, but a necessity. Quite literally it comes down to basic physics: if physical supply is lowered physical demand must be lowered accordingly to maintain systemic equilibrium.
What this means for consumers: Plan on how to reduce individual demand. Accumulate what can be stored, and be thinking now about what can be eliminated from personal demand to keep the personal budget intact.
People will object to having to do this, and they have a point. No one was looking for this war, and certainly no one was looking for this war at this time. While there is a substantial argument to be made that this war with Iran is the best choice available, given Iran's obsession with nuclear weapons, the costs of the war are still what they are, and several of those costs are still falling on people who had no say about incurring those costs.
Whether President Trump has made that case adequately to the American people is of course a question for political debate.
In the meantime, rising inflation and more rising inflation is headed towards the US economy. People are well advised to plan accordingly.
Thank you for your reply, honesty and encouragement. I'm willing to be even more careful and cut wherever I can (frugality is my nature growing up poor and living paycheck to paycheck), my comfort is not as important as eradicating evil - not that that is totally possible but Iran is controlled by evil and I support eliminating their nuclear capabilities. I sensed a parallel to 2022 even before Iran war in your economic reporting and the markets.
Given what I’ve heard about the fanaticism within the upper ranks of the IRGC, I don’t trust that they would adhere to any terms of a peace agreement. I suspect they will say they do, then attack the West within a few months. Peter, any thoughts you’d like to share at this point?
I am reminded of an observation Richard Nixon made about dealing with the Soviet Union: the Soviets could be trusted to keep agreements that were in their best interest to keep.
I would apply the same principle to negotiating with the IRGC. Any agreement with them will work if the IRGC sees it as beneficial to their aims. Any agreement which the IRGC does not see as beneficial they will not keep even a little bit.
In any negotiation, assuming the other party is trustworthy is simply silly. If they could be trusted, there would be no need for negotiation. We only negotiate with people with whom we are in conflict. That negates any thought of trust.
Wise comment!