Maybe it would be worse but I don't see how raising to 20% is even possible with the state of things today.

I get that, and history shows that to be a good choice, and it's how I used to always invest. I just remember the dot coms, and lost my ass in that, then again in 08 I about got wiped out. Shit with the crap fund choices in one of the 401k's. I am just now about 15% over the high it had reached before 08. I don't want to take another hair cut like that, and I remember in the dot coms, it took meany years to overcome the losses I took in that crash. So if there's a go chance of setting something like that out. I am all for it.

On the topic of 20% int. OMG.... shutter.... No way the fed has the balls for that. Like I have said. I think they will do what they can, till CRASH, and then OMG and start pumping cash back in, and coin toss the market recovers or goes "oh shit the fed can't fix this".  Notice on the last "taper tantrum" the market didn't respond to the fed reversing course and pumping money back in. The market didn't respond and start heading back up till the US gov passed a Trillion dollar stimmy. It could start a bear slide like the dot coms only WITH double digit inflation, and world wide. That's a scary place to be trying to make/keep money.

How is this possible?  The Dow was at 14k before it crashed in 2008.  If you're only up 15%, then you finger fucked.  You bought high and sold low.  There is no other explanation.   The Dow is literally up 300%+ since the 2008 highs.

My portfolio has seen very little downward movement in the last year. I'm still doing pretty good.

Jimmy Carter looks like a genius right now.

The big question is who is this eras Paul Volcker?

Nope... just shit fund choices that seem to loose money even when the market is going up... Like a sp500 index fund that gets 10% when the sp500 gets 15% and charges a fee to do it.... Nope didn't finger funk till about a week ago. Also bone to pick on there funds. I am in them all year, year in year out.... My account up 12% look at the funds reporting and they say it make 16 or 17% WTF, then why didn't I, I was in it the entire time. Oh dates, they used to figure there return, vs dates used to figure my return... Oh and when the market tanks and the sp500 is off 20% they are off closer to 80%. There was so much complaint that they moved to another company to hold and another group of funds to choose.... it isn't any better.

Or I could go with a target date fund that's even worse.... Or bond... PASS.

You know I have to be remembering it worse than it was.... But 08 was BAD. I am going to have to find some old statements and see what funds and how bad. Cause looking at the charts, that just can't be right.... somethings fucky.

You’re not wrong, Nick, but you’re framing is- “Today”. Here’s where I think we’re at:

1) Inflation keeps doing its thing until it levels off and we get a new cost basis, or we get policy error and it keeps ripping.

2) Policy error with more than just the Fed taking its foot off the brakes with taper and runoff + rate increases (i.e. aggressive rate increases and repo limits = hitting the brakes) which would in all likelihood induce a deflationary impulse.

#1 has the potential to be a feedback loop where we could see higher rates until a leveling off with a new cost basis, or new higher rates which could induce a deflationary impulse. Whereas, #2 is straight to deflation (“straight to” being illustrative). So it’s not so much where we’re at today, but where we’re going.

With the geopolitical machinations taking place, easy money policy, helicopter money and supply issues I’m 90/10 we’re getting #1.

Bro, you said you were just now at 15% higher than 2008...

What do you mean exactly by new cost basis ?

I just wonder how the dollar and our economy would survive at 20%. It is a different world then the 70s. Far more debt based, and with the national debt so high I don't see how the government could afford to keep it going. Plus it would probably slow the economy far too much. I do understand the consequences of not doing it as well. Interesting times.

holly shit balls.... I take back what I said, they weren't crap funds they where rockstars... I had recovered (on the 401k) from that 08 crash in less than 2 years, after the crash I moved into 75% small cap aggressive growth 25% sp500. Then several years latter just went with all sp500 and it was up up and away. DAM..... hmmmmm..... A year ago I was going to finger fuck it and move it out. Spidey talked me out of it then... lol and hear we are a year latter. Dam last year was a good year.

I think I have such a bitter hind site view from how bad I lost my ass in other investments in those crashes and about went bankrupt. Looking back thought that 401k, it just kept right on a trucking up up and away.... I would have probably done better if ALL my money had been invested like that..... That's a eye opener.

I did, I was wrong and talking out my ass... Sorry and thanks for catching that. I thought the 401k was crap and didn't follow it that close... looking at it now and just dam... it did better than me...

I was wondering. Your statements didn't seem to match the real world.

If we hit the traditional 4-5%, the US gov would not be able to pay for anything but debt service.  No social security or medicare, no gov't paychecks, nothing for the big guy or ex presidente's offices.  Nada.

So what you’re saying is, invest in banks, because they’re going to make money on both sides of the coin.

Cost basis is much easier to illustrate with RE.

I bought my home in 2020 for $50k less than it’s worth currently. My cost basis for my home is lower than every other dipshit that moved into Powell 1mo after I closed on it.

Now, as inventory churns, people make more money, interest rates change etc., the economy as a whole will work itself to a new cost basis with inflation or deflation. In economic theory it’s equilibrium on a Supply/Demand chart and that’s the best way to illustrate it. It’s simplistic in that form and ignores a lot of complexity and nuance, but it’s a good place to start.

To your point about rates, it’s all relative. Do I see 20%? Not anytime room, so probably not at all, which means I agree with you. However, that’s policy dependent, geopolitics dependent, etc. and very far down the road. I think we depress/deflate first.

Also, are commodities and other factors of production the main cost driver while assets take a hit? That’s another good question to ask. Something has to balance. “Equilibrium” is a thing.

Not if they don't get bailed out again... and they shouldn't have been last time.

I had a thought: Storage stocks.

In an up and down market people move - whether upgrading or downgrading. And they have A LOT of shit. People like to hold onto their shit and not let it go. And when they move - it goes into storage; whether temporarily or not. In fact a stagnant economy is usually bad for storage businesses because people generally know how much shit they can actually put in their house. If the market goes down, they will sell the house. BUT BY GOD WE CAN'T GET RID OF G'MA'S CHINA CABINET. And it goes into storage.

08 storage got raped just FYI.

The first chart with "not a bubble" is sarcastic. Everyone recognizes the .com and housing market bubbles, now that we've known they have burst. The financial media and the permabulls never see the bubble they are in. This bubble will eventually pop--I don't know when--it could be tomorrow or 100 years from now, but all bubbles find a pin.

By any traditional metric, general equities are extremely overpriced. The US stock market has no business being 266% the GDP. Historically, fair value has been about 40-60% of GDP. It is not a coincidence that the SP500 has such a high correlation to the Fed balance sheet. I'll have to search for the source again on this, but the correlation is so high that it is statistically proven. This is why the Fed and .gov are in a box. They can either stop "not QE" and raise rates, and crash everything but save the dollar; or they can continue "not QE" to keep asset prices elevated, but sacrifice the purchasing power of the dollar. Historically, governments and central banks have chosen to continue to save the markets and asset prices.

The European ammonia chart is a direct result of failed European politicians. The production of ammonia is incredibly energy intense. Well, Europeans seem to hate cheap plentiful energy, so ammonia prices are skyrocketing. The down streams effects of higher energy costs will be: higher ammonia prices, which leads to farmers either not planting as much or not planting at all, which will lead to higher food prices, which means some people around the world will starve, there will be less disposable income to buy iPhones every year, etc. But as we have seen, people can only afford so much before things collapse or there is mass civil unrest. You saw it in Egypt and now in Kazakhstan. People take to the streets when they spend about 40% of their earnings on food and energy.

I suspect the Fed is about right here: https://youtu.be/fPKqb1jYve4?t=2922

(discussing the .com bubble)

The Fed is either filled with incompetent people or liars.

I forget which Fed chair said this, but there was an answer to a question about a bubble and the Fed chair's response was "we see what you see." That's about as close as we'll ever get to the Fed admitting they blew bubbles and there is no way out of it. Now's it's just open mouth operations to convince people everything is okay.

Yes.

When it comes to housing, transport and communication. Storage is a bill you can put off.

The Fed isn't going to be able to raise rates substantially. Everything in the financial sector is predicated on "free" money. Without it, all the grifters in the financial sector, including the parasite banks, go bust. The Fed can't offset the 20% increase in the money supply so we're going to end up with 20% real inflation. Since the Fed can't raise rates to even a 10% level without turning us into Zimbabwe, we're pretty much toast as far as losing purchasing power with inflated dollars. If the debt keeps going up due to profligate spending, and hyper-accelerated by the Fed even going to 5% rates, eventually we get to Zimbabwe territory anyway. I don't see a recession happening, I see stagflation happening. And, I've seen this movie before.

Buy new truck & boat now or wait for final collapse in x years?

I've seen from fifty to over three hundred percent increase in my business related items.