I was thinking about investing in some precious metals, as hedge against inflation but looking at the historical prices I probably would be buying a peak right now, so for now I will keep hoarding cash until investment opportunity arise.
I was reading an article about young Americans who had less access to credit cards are now increasingly using “buy now, pay letter” loans. People are confusing their wants with needs, while borrowing at 30% interest. The article gave example of $4,600 debt which requires a $771 monthly payment. Companies like Affirm and Klarna can extend loans as large as $20,000, offering annual interest rates ranging from zero to 36%. The rates depend on the borrower’s standing, payment timeline and the item being purchased.
The large transactions are broken up makes it slightly more palatable, but it’s possible it also incentivizes people to spend more than they would have. No wonder that young generation is worried about future. In words of late George Carlin: “…People spending money they don’t have on things they don’t need. So they can max out their credit cards and spend the rest of their lives paying 18 percent interest on something that cost 12.50. And they didn’t like it when they got it home anyway! Not too bright, folks.”.
For the rest spend a lot of money immediately post pandemic on home improvements, travel, etc and now high inflation is catching up with the consumers. Consumers on both ends of the spectrum—low income and higher income—are reacting to the current volatility they are experiencing, including two major ongoing wars.
Recently I also noticed that at children’s birthday parties, there is a new parent suggestion: parents opening donation page, where all the guest contributing money towards desired present, instead of bringing individual gifts.
Nearly 10 million American children are living in poverty, the most since 2018, according to the latest Census Bureau figures from 2023.
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