What the Inflation of the 1970s Can Teach Us Today | WSJ

Recently, the U.S. inflation rate reached a 13-year high, triggering a debate about whether the country is entering an inflationary period similar to the 1970s. WSJ’s Jon Hilsenrath looks at what consumers can expect next. Photo: Alexander Hotz

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#WSJ #Inflation #Economy

[NicholasBall]

The system is failing as a result of both government and federal policy. In the next days, the banking crisis would have to be epic and gigantic for the FED to decide not to raise interest rates. This won't happen; an increase and a crash are coming. There will be more negative portfolios this 2nd half of 2024 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?

[adamestrada]

increased losses for portfolios this quarter are predicted by market drops, skyrocketing inflation, a major interest rate hike by the Fed, andI rising treasury rates. How can I profit from the volatile market right now? I'm still considering whether to sell my million dollar bond and stock account.

[matturner]

Economists and business leaders are voicing concerns at the start of 2023 that the year could be a difficult one. JPMorgan Chase & Co. Chief Executive Jamie Dimon said that the Federal Reserve may need to raise interest rates to 6% to fight inflation, higher than the peak level between 5% and 5.5% in 2023 that most Fed officials penciled in after their December meeting. Although I read an article of people that grossed profits up to $500k during this crash, what are the best stocks to buy/short now or put on a watchlist.

[marianparker]

The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse is near.

[cstnfacu]

If this is gonna be a revival of the 70s, at least give us back classic rock.

[hit]

I’m surprised to see a comment section so educational and polite without it being so toxic

What a breath of fresh air

[darssmare]

How can you cover this topic and at no point compared the public and private debt now versus at the end of '60 and '70!?! Who wrote the text for this clip? Is just a brief description of what is going on with absolutely no thinking or questioning. Can the rates be increased, what would be the consequences, etc.

[anthonymathias]

Inflation at 8.5% is manipulated inflation number. Real inflation is 16%.How is it different from the 1970s.

[madkap]

Inflation also directly depends on people's beliefs and expectation on inflation. If more news channels talk about inflation, more people will assume that we are heading in for high inflation periods, more they will act accordingly and will contribute to actual inflation

[andrechandon]

6:45 "The Fed says it stays committed to its long held stance that today's inflation is temporary". Apparently this video was made in July 2021, it would be interesting to hear what the people in this video have to say now in June 2022.

[gandhikumar]

At least it is easier to own a house in 1970s

[Dave-ywwc]

The CPI back then also included energy and food prices. They changed how inflation is reported back in the 80s. True inflation this year is at about 7-8% if you count energy and food as they use to. True inflation is well over 5% this year. The government just cooks the numbers for political reasons in modern times.

[miawhitlock]

Inflation hits people a lot harder than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of. It's not surprising negative market sentiment is so high now. We really need help to survive in this Economy. The fin-Market;s have underperformed the U.S. economy as fear of inflation hammers the prices of stock;s and bonds. My portfoliio of $250k is down to $192k any recommendation;s to scale up my return;s during this crash will be highly appreciated.

[energyexecs]

...Being born in California in the year 1957 is where I experienced the 1970s Stagflation. I remember those dark days. I moved out of my parents home to go to college - worked at night and went to college in the day. Split the rent with my buddy. I was okay as a young single guy but I knew my parents were going through a lot with my younger sisters and brothers. I am glad I was not a burden to them and helped out where I could.

[maxmeier]

My real worry is the cost of housing. I am still confused about how housing costs are even integrated in calculating the inflation index. It seems not at all, at least I cant explain, how housing, be it sales prices or rental prices, has seen exponential increases in just the last 10 years, but allegedly inflation hasnt changed at all up until recently. It just doesnt make any sense that probably the single biggest factor in everyone's regular expenses has increased dramatically, but it doesnt show up in inflation. Where I live, a european city about citizens, prices have probably doubled over the last 10 years. Obviously income hasnt. Yet, we are told inflation was somewhere lower than 1% each year. It seems absolutely rigged, especially considering that today about 33% of the median income goes to housing costs!

[meetadiu]

1970s US did not have large scale cheap manufacturing setup outside.

[Countstep]

As recession fears mount on Wall Street and inflation remains
well above the Fed's 2% target, some of the top commentators in
markets, business, and economics have been sounding off on just
how bad they think the next downturn might be - and how far
stocks may have to fall. I need ideas and advice on what investments
to make to set myself up for retirement, my goal is to have a portfolio
of at least $850k at the age of 60

[slovokia]

The big difference between 1980 and now is that now the US federal debt is roughly four times the size in relation to the economy than it was in 1980. This means that when the Federal Reserve raises interest rates to control inflation, the effect on the US budget deficit is much higher than it was then. If the Fed loses control of inflation the US government will have a severe budget crisis. At that point we will enter a monetary regime known as fiscal dominance. The Fed is playing with fire right now - let’s hope we don’t all get burned.

[drmode]

Raise interest rates! We see it in housing, where an whole generation will never be able to own a home unless their parents pay for it.

[stacywilson]

Awesome! your potential seems timeless.* Understanding your financial needs and chalking out a plan remains the smart way to prepare for the unexpected. 11yrs in investing space and extremely pleased with the decision I made.The good news is — it’s not too late, I'll suggest you find a mentor or someone with experience guide you especially in this recession.