Feds keep interest rates

Feds are keeping interest rates the same for now. Highest in 23 years. I feel for folks trying to purchase their first home or any home.
No real reason other then good Ole fashion greed to keep things high. The common working stiff needs a break.
Sarge

In 1972 I shopped around for a 20 yr fixed mortgage. Note I said 20 yr. Good credit, 20% down. Best I could do was 7.25%. Suck it up buttercup. These rates are nothing new!

Interest rates are not high. They are normal. These are the normal rates that existed prior to going to zero and staying there or near there for 14 years to boost debt. Some of us working men are savers, not borrowers and are now earning reasonable interest again.

If the fed keeps interest rates normal, next time the economy needs a boost they can just cut rates, not print money. The fed should follow thier dual mandate and ignore the mob.

Look and see what interest rates where in the late 70-83. Granted items didn’t cost like now but minimal wage was also 2.90 cents Went to 3.10 oh yes interest was 19%

Got to manipulate the market somehow. I always laugh at the money minds. Interest went to 5% market plunged. Some one starts a “rumor” it’s going down to five , same rate and it sets records! Lol

This

6.5 % when I built mine , never cried about it . Refinanced twice and paid off a quarter of a million bucks in ten years but it took a ton of work hours and discipline

What you guys are not taking into account is the initial cost. 20% on a new build that cost 40-50 thousand is much different than 7% on a new home that now costs at a minimum of $250,000, and more than likely $350,000+ depending upon where you live and in many areas is much much higher than that. I don’t know the answer, just it is not the same buttercup. I have no stake in the game, I payed off my forever home years ago…. Just my .02

Exactly !

Yeah, but income to pay mortgages is higher now too.

Household income was 25k on my 50k loan. (Built it myself, or it would have been 100k loan) So 2-4x annual income.

The high cost of a home is a direct result of 14 years of below normal interest rates. It is the law of unintended consequences.

Interest rates are too low

This also affects small business and the ag sector, net income isn’t as easy to come by now in farming as it was in the 60’s and early 70’s, I do believe farmers made more money then.

First home I bought was the cheapest but the highest payment with 16% interest. Rates should be higher based on inflation.

Well, as predicted. Some will love it, some will not. All those gains are being taken away in form or the other. Just depends on your perspective.
I on the other hand wasn't posting my situation. Just stating the news and facts.
Sarge

You can write off interest but you can't write off principle. It would be better to have higher rates and lower prices.

Hard to believe that farmers here are somehow making less. Bright shiny new his/her Duramaxes/Yukon Denali’s every year or two. Bright new shiny trucks and cars are not the teachers, but of the farmers 15-18 year old kids in the school parking lots. I realize that this isn’t Mayberry anymore, but even my elderly parents see that things are skewed out of control… I’m not an economist, and I’d wager there are few if any on this site. Something needs to be done, and I’m not believing that the govt can fix anything. All I’ve ever seen them meddle in has went down the toilet…. Maybe a crash is what is needed and then seize that opportunity to enact change???

Low interest rates have helped create a culture of borrowing and that is for almost anything these days. Being willing or able to borrow large sums probably causes as much or more inflation as all the other "usual suspects".
Credit card debt at an all time high.
Back when we bought our house we could not exceed 25% of our monthly income, rates were 8.5 and we needed 20% down. Three years later interest rates hit 13.5%. Many young working families are trying to buy homes as rent rates are very high. This drives them to compete for houseing which raises prices and with interest rates up over the last couple years we are not seeing the normal lowering of selling prices. What we are seeing is a relatively long window of housig shortages which will put pressure on that market. As we see even more 30 plus year mortgages we are in an era of almost like rent as debts may not be paid off, but some equity gained. Several other countries with limited or expensive housing have several rolled over mortgages on the deed and we may be heading in that direction as well.

Bryce

The consequence of printing money,,,,,,,vote buying



Sadly something like 80% of folks live pay cheque- pay cheque

I have a friend that is President at one of the large national banks. He said Americans debt had quadrupled since November of 2023. People are maxing out CC to live in Bidenomics.....

Another fuel to the housing fire is people fleeing northern / dem cities.They sell a piece of crap house up there for half a million and come to God's country and 500,000 gets you a 4,000 square foot house around here.

I don't think I believe that median home price in 2022. I suspect it is off by about 100 K at least.

BUT............if those numbers are correct they indicate that the price for a house relative to median income was :


Boomers.......income/home price =28 % and interest rates in 1985 were 12.43% 30 year mortgage

Millennials...........income/home price = 16% and interest rates at 7.34 on a 30 year mortgage


But looking at it another way:

Boomers housing cost was about thee times median income and Millennials was about 6 times median income.

You need to look at what a "median" house looks like too. I'd not be surprised that a median house nowadays is 2-3x bigger with much higher end appliances, etc in it. Not many simple 3 bedroom, 1200 sq foot ranches being built.

And then they want to tell us how things should be and not be. Plus, most of them can't drive worth a lick. But I do make a good living off them yanks doing ADC work.
Sarge

here is a chart showing interest rates over the last 50 decades.




another data point
entry level price for Ford F150 in various years,
first number is the MSRP 2nd number is price inflation adjusted.

1948 Ford F1 (First Generation): $1,279 - $13,836.62
1953 Ford F100 (Second Generation): $1,362 - $13,128.14
1956 Ford F100 (Third Generation): $1,577, - $15,087.06
1960 Ford F100 (Fourth Generation): $1,972 - $17,256.28
1967 Ford F-100 (Fifth Generation): $2,237 - $17,433.23
1973 Ford F-100 (Sixth Generation): $2,889 - $17,387.85
1980 Ford F-150 (Seventh Generation): $5,697 - $18,774.76
1986 Ford F-150 (Eighth Generation): $8,373 - $19,587.47
1991 Ford F-150 (Ninth Generation): $11,967 - $22,795.45
1997 Ford F-150 (10th Generation): $17,875.00 - $28,806.05
2004 Ford F-150 (11th Generation): $17,900.00 - $24,781.06
2009 Ford F-150 (12th Generation): $22,000 - $26,714.92
2015 Ford F-150 (13th Generation): $26,615 - $29,198.64

wouldn't I love to be able to buy a new F150 at a price of $18,000.

to K snows point that the median house has also inflated in size and thus price is also true with F150's.
You can't buy anything close to a plain Jane truck anymore.
The manufacturers and the Gov't have inflated the cost with increased equipment/features.

Mean while wages have not kept up.
The 2 most expensive things that most buy are a house and a vehicle.
Both have inflated in size/equipment, this is thanks to Americans, its what we have demanded and also thanks to what our Gov't has mandated.
Inflation is a killer.

How many people do you know that are trying to buy $468,000 houses and can't b/c they only have an income of $75,000? That bar graph is just silly.

This is housing in my area.

My mother in law was getting 13%interest in a money market back in 1981.a buddy of mine bought a boat the same year if I remember right he paid around 19%interest. I told him he wanted a boat alot worse then I did.

I bought my first house in 1986, interest rate on my loan was 11%. I thought that was okay, the house only cost $32K. I remembered that interest rates had been around 20% just a few years earlier.

Interest rates are not bad right now if you look at the over all history of rates. I bought my first place in the mid 80s I think and the rates were 14.2 % for a fixed rate loan with 20 % down. I figured it worked out ok because I got the land cheap as no one wanted to buy at those interest rates. As far as median prices of homes that does not tell me a lot, Its like the average prices of fur sold. Depends on the quality and location of where it comes from and the care that has been taken in put up also damage.. same for a home. People that live in Wy think it is expensive to buy here, until they go to other states and look at property prices. I will say raw land is expensive due to the fact folks like the scenery but dont buy and and think your going to make money farming or ranching most of the state is poor for that, just eye candy to city folks. A lot of places change hands in 3 years or so due to weather, wind, and nothing for the city folks to do and thats good!

Personally I'd like to see it go higher. I'm not one for taking loans, so I don't have any nor plan to have any in the near future. I would however like to see prices at the grocery store stop rising, as my wage surely is not rising as quickly as they are.

Overall, I guess I agree with Dirt and Steven. I think 5-6% would be a good place for the rate to stay permanently, and until inflation is steadily below that 2% mark, I think it should be higher than that. Just my 1 cent... not sure it's worth 2, lol.

7.5 is better than 10. When we built our house we locked in at 5 and were tickled to death. Refied at 2.75 couple of years back, and I regret not borrowing the max offered and invested in land. Debt doesn't seem to phase most people now days. Our priorities are all screwed up. Yes house prices are higher now, but there are a lot more people than in the 80's so the old supply and demand comes into effect. One of the biggest differences is what people consider necessities compared to the 80's?? Get rid of that cell phone bill, data bill, tv bill and people would have $3-500 more a month. In the 80's we didn't spend $1000's on fixing up the houses like now. Priorities, necessities, and common sense will prevail.

Making that interest on the national debt interesting, having to print money more often now to stay afloat. Servicing our debt is now than we spend on the entire Dept. of Defense, the DOD spends ALOT of money.

I might have believed you until you got to the 'driving' part. Ive seen the pictures on the news when you get an inch of snow in the south...Looks like every Johnny reb in the south sitting in the ditch or upside down.

If we ever get snow. Haven't for years here. Probably what your seeing is black ice dummies. North or South. Folks don't learn. Even with floods.
My buddy owns a flatbed tow truck. He likes bad weather. Makes thousands in a few days after major storms.
Heck, I even thought about getting my own truck and getting in on the action. But heck, repo jobs are more exciting like I used to do on my nights off. But I have really enjoyed sleeping at night instead of 12 hour all nighters.
Sarge

A new work truck payment is around $1300+/month now. Rent/mortgage is $1700-2500/month here.

What matters is that our young middle class working men just starting out can't both pay for a place to live and drive a dependable truck at the same time. Especially if they drive for work and need a dependable one. A new truck can't really be worked on anymore by the working man (same with tractors); especially the new diesels with all the DEF and Regen crap.

I don't care what the interest rates go to. It can go to through the roof or back to zero for all I care; as its trick fake money anyway. What matters is whether our children can make it. The powers that be have created a system to take out the middle man and small farmers and small business owners. Our children will be indentured servants at best; the way this is going, they'll all be "owing their souls to the Company Store" i.e bankers and .Gov. All by design.

Sounds like a lot of poppycock to me. Lot of problem seems to be young men want to start out in a 5000 sq ft house and drive a brand new diesel truck that they dont need...they want what their parents have but their parents worked 40 years to get it. You keep telling your kids they are doomed to nothing and thats likely what they'll have. Still tell my kids that this is Merica' and there are great opportunities out there but they have to be willing to wake up early and work hard. Guess its a difference of whether the glass is half full or half empty. To each their own.

I call BS, but yeah, I guess so to each his own.

I suggest you go try to make a living with nothing but your back and work ethic TODAY and find a dependable truck and place to live all with your paycheck.

Here,
Acreages less than 5 is now 20K/acre minimum. Places with road frontage and close to a utility line are $35K plus.

So lets say a young man works in the oilfield and wants to buy a little place to build a barndo house. ~ 1200 sq. feet.

He buys two acres - 40K
He gets a pole through the utility company for power -5K (if close)
Needs water. If in country, drill a well.- 30K
Got to have a driveway to get builders to where they are going 5-10K
Gonna have to get a permit from the county to tie into the road and possibly a culvert for specs 5K.

So he's nearly at 100K already just for the two acres here anyway.

Now lets build a house..........

Slabwork here is minimum of $15/square foot now - 18K without any carports are flatwork
Framing cost is about $12/square foot if you want to not be able to communicate with your framers. Much more if you need them to speak English - 14.4K
Plumbing- 15K
Electrical - 10K
HVAC/Heating/Cooling - 10K
Propane Tank - $1500
Sheetrock - 9K
Flooring/tile - 12K
Insulation - 7K
Countertops - 5K
Painting - 9K
Cabinets - 10K
Septic - 8K
Trim guys- 3K
Tin roofing/siding - 5K

Materials Lumber -40K
Windows/Doors - 3K
Appliances - 3K
Fixtures - 2K
Countertops/tubs -3K
Flooring materials- 2K
Trim doors and Trim - 2K
Tile- 2K
Faucets, showers, sinks, - 2K

Total Cost for 2 acres and a 1200 sqft house conservatively here is about $.296,500 So he will need a down payment of 20% so roughly $59,300K.

Since he is working in the oil field he had to have a dependable truck - $1500/month minimum.
He also has to be living somewhere, so lets say hes living in a camper trailer at an RV park for $500/month.

He's lucky, a hard worker, and in his late twenties. Probably making $30-35/hour. So say he works 40 hour weeks and never takes a break or day off his total annual income for the year without taxes is between $62,400 - 72,800.

It will cost more than half his annual salary just for the down payment.

Once he gets done with the down payment, he can make the decision to pay ~$2400/month for 15 year mortgage or ~ $1870/month for 30 year mortgage.

That's just the cost of a decent truck and a place to live. No bills or family. Yes; its certainly achievable, but the cost of everything has skyrocketed. Gas, groceries, insurance, bills, etc.


.

Well some of us are doing exactly that now so what's the issue? Maybe it's what you consider a dependable truck? I think mine is dependable I drove 127 mile home this morning and back 127 mile to work tonight. I consider that dependable. But it's not new or pretty.
It's a 97 2wd ranger with pillow in the dip in the driver's spot in the hole in the bench seat and the little of remaking head liner hanging down. Shopped around picked it up a 3 years ago for 3200 with 52 k miles on it. At 69k miles the motor blew so I had a rebuilt put in a long with a bunch more preventative thing spending another 5 k .
It's not pretty it's not fancy no cup holders, no tape or cd player just am fm radio ac heat and crank Windows.

Sure I have probably about 10k in it but I don't have 1300 a month In payments, high license plates insurance. I drove a Honda Accord I picked up for just over 3 k for 3 years before that. Not having payments allowed me to save and have cash on hand for replacement and any repairs. Plus having thousands left over.
It's not fancy or pretty but it's practical. Yes I can buy a 70 k or more truck with my income and very little debt but I don't want one it's a wast of money. Money I could put back for retirement or other investments.

Yes thing are more expensive now and it stinks BUT today's young people want not need more than they can afford and want to live on credit. The same people that don't want to work overtime, a 2nd job or side business are often those complaining about being broke. They tend to want it now without the work or savings to get it .

They may have to rent a crap hole and have a roommate fro a while to save money. I rented an old falling down shack in the stick because it was cheap when I was young. I didn't rent the higher dollar apartments or house that looked nice. Sure I soen more money and time due to driving but it was much cheaper even though less convenient.

Interest rates are lowered than they should be people are just in shock after so long with artificially low rates.

The worst part is I thing things are going to get a lot tougher and people can't handle the pain we have now.


I think your low on the septic cost unless it it with no field bed. Last price I got was 21k.

Why does a new guy starting out have to have a new house, what's wrong with buying an older home? Same thing with a truck or car? Then maybe after saving for a few years and pay raises start thinking about upgrading one at a time. That's the way I started out and probably most of the guy's on here did the same. And definitely working overtime or a second job, there's help wanted signs everywhere. Most young guy's just don't have the drive now a days to put the extra effort in to make the difference of getting ahead. Dog me if you want but it's worked for me & most of the old-timers.

My first house was 38,500@ 13.08 interest,I believe if i would have stayed in it for 30 years,
it would have cost 160,000.00 to pay off.
But sold it 5 years later and doubled my money.

X2...not sure why Op and so many others think young folks should be starting out in new houses or new vehicles. I keep hearing oil fields and dependable trucks. Got news for you, everyone with any type of job outside the home needs a dependable vehicle....but that doesnt equate to new truck. Again, too many young folk wanting what their parents have but it took them 40 years of work and saving to get. Quite frankly, with no disrespect meant towards Chancey, I think that type of mentality is part of what is hurting this country by driving debt and putting young folks in a position to fail.

The educational system preaches entitlement on a daily basis and way too many parents facilitate it.

Must be much fancier new trucks than I buy if they are over $1300 a month. Holy cow!

Guessing he is including insurance, tabs, etc or the truck is a big 3/4 or 1 ton diesel. A $60k truck on 48 month loan with no down payment would be $1,250/mo not including interest, insurance, tabs, etc. I’m always jealous of of all the folks down south who can buy a vehicle and plan to keep it for 20 years with minimal problems cause the dang thing isn’t rusted out in 10-15 years. Gonna be searching out southwest in a couple years for a new used van for the wife and a nice 90s 4x4 Chevy with no rust and likely high miles and just put a new crate motor in.

As far as the interest rate, the worst part is it’s been so low so long that most younger folks seem to think that’s the reality and how it’s supposed to be. I don’t envy those purchasing a house at current rates compared to 7 yrs ago when they were nothing, but it could (and probably will be) worse. As John Chagnon pointed out in another post, it’s sure nice to see 4.5+% return on any money in CDs and high rate savings accounts compared to the almost zero for over a decade. I know, it’s not keeping up with inflation, but still.
Happy trapping! ScottW

I was pointing out that the interest rate affects more than just home mortgage rates it also affects operating loans, with all the new stuff my first question is it paid for but, as far as making money per acre is less also the inputs are higher so the losses are higher when they happen, back then you could make a good living on 320 acres of crop land today you need close to 3000 to do the same and as far as running old equipment the problem is manufacturers are discontinuing parts for the older machinery forcing people to buy newer equipment.

No one wants to sacrifice today for tomorrow ,, untold opportunity out there to build a great life ,, just gota work for it same as always,, Wasnt easy when i started out either ,, Has grown past my, and wife highest dreams ,, gota have the newest, biggest around no wonder the money doesnt go far enough ,, Takes years to build a life ,, Anyone younger than 50 has never seen high interest ,, spoiled

I'll take low prices and high interest rates over high prices and low interest rates any day.

If we are all in agreement that interest rates must increase to fix the issue, then why doesn't Powell raise them to 1980's levels?

Inflation is at anualized 3.15 percent. Actually c.d.s at 4 to 5 percent are above inflation which was normal prior to 2008.

Maybe dirt going by the posted numbers but on what I'm buying it's 30 to 60 %. So I don't believe the #s posted for some reason.

Because he is trying to walk a tightrope between killing inflation and causing a recession.

I believe they are doing fairly well for the situation they are in. I too think rates need to stay at this level for longer and maybe even a bit higher. That is why I believe they are now discussing a reduction in QT. If they cut the rate of QT in half it has a similar affect to reducing rates without actually doing that. They will still be reducing their balance sheet but not injecting new money into the system. In essence they are still reducing liquidity but at a slower rate.

The Fed is very concerned about causing credit markets to freeze up due to a lack of liquidity in the system. At the same time they can keeps rates at this level and hope it keeps a lid on the labor and housing markets.....which seems to be happening slowly.

The mystery that no one can solve is........what they call the R* (R star) rate. That is what is the rate that produces neither inflation nor recession. ..........in other words what rate is neither restrictive nor accommodative ? Loose versus tight money.

As Dirt said way up this thread we are just getting back to what used to be"normal" before 2008.

The "real" interest rate is somewhere in the 2.5- 3% range right now. That is the nominal rate( 5.25-5.50) minus the rate of inflation....lets say 3 for the sake of discussion.

Here is a chart of 1 year REAL interest rates going back to 1984. As you can see we are just approaching the levels that prevailed for many years.


The question that no one asked Powell two days ago is........If the economy is doing well, and if credit and labor markets are doing OK, and if inflation is declining ..............why lower interest rates ?

Sorry it's so small

Thank you Sir! Really appreciate your explanation White; makes sense. Chancey

trouble is that the 2 previous years were 6.5 and 7.0. So a dollar item goes from $1 to $1.06, then $1.14 the following year and in the last year with inflation at "only" 3.15 it goes to $1.18.
So in 3 years the price has inflated 18%.

And the numbers come from the gov't. Myself, I don't trust the gov't numbers, I think they will manipulate them to their advantage as much as they can get away with.

That aside, Yes inflation is going down but all previous inflation is not going away and thus we are inflating a larger previously inflated number every year.

Raising the interest rates is causing disinflation. What many people on these threads seem to want is deflation. People have been taught to think of deflation as always being bad. But is it, really?

In the case of a recession with massive layoffs, when demand falls because people either cannot afford to buy items, or are hesitant to spend due to the state of the economy, the resulting deflation is usually bad for the economy.

But what about what we're seeing now? Where, despite the increases in interest rates, the economy is still sailing along smoothly, partially at least because of technological advances like AI. If demand decreases due to supply increasing because of technological advances (and not because of people losing their income), then is the deflation that results from that still bad?

Debt can be used to make money, but if you don't have debt you don't require as much money. Then you can save and invest, rates won't matter to you when you don't use credit. Piece of mind is worth quite a lot.

Deflation is bad for a debt based economy.

Great for savers

IMHO one of the worst thing to happen to this country was artificially low rates

Why do you think the FED did it Steven?

Dont agree with you on this at all. What's a dependable truck? I drive an old truck and it's been very reliable. Its been paid off for years and Im money ahead because my choice. Maybe don't buy a truck if you can't afford one? Going into big debt for a lifestyle can really hurt you down the road. People get into trouble with instant gratification. The cost if things or time period have nothing to do with it.

Good grief. I said a dependable work truck. Not some vehicle that you can commute back and forth to within a 60 mile radius of your home.

Here, in the oil field, you need a work truck. One that pulls, hauls, and racks up mileage; can put a work bed/welding bed on etc. If you can buy a new one in your area for less than $1300/month, then I should move there, but probably won't be able to work cause there probably ain't no work. Basically three oil fields here in Texas area. Midland/Pecos Area, South Texas, and Northeast Texas/NW LA area.

If you live in the middle of Texas. Its a 5-8 hour drive one way. Then you find a place to live.

I guess things are way, way cheaper where ya'll live. Don't criticize me for telling you the realities of it here.

I pay for everything, and have never missed a payment. Owned and built two homes. Own three work trucks paid for. I make more money now than I have ever made in my life and I'm telling you, that I CANNOT take my current wages and buy my first home that I did years ago. The math don't work.

California, Samsung, Tesla has all moved into Central Texas. Land prices have more than doubled. Dodge RAM 2500 cummins cost have nearly doubled since 2014. So, don't pee down my back and tell me its raining!

I don't know much about working in the oil fields. So school me. If a 22 year old kid moved there today from backwoods Mississippi with his 2002 Ford F-250 Diesel he wouldn't be able to work for lack of a new truck? Would they just not hire him unless he has a new truck?

No. They will hire him in a heartbeat.
But from Jackson, MS to Orla, Texas is about a 14 hour drive and 900 miles. I've done it. Actually, I drove from Orla, TX to Eupora, MS which is further. Sure you can do it in an old beater, but it sucks to be broke down on the side of the road 500 miles from home. No friends to call. I've been there.

Best if the 22 year old gets in with the fields in NW LA. Its about a 5 hour drive from Jackson, MS.
Lots and lots of work there right now.

The two main companies I contract for in that area are SWN and Williams. They are rolling and hiring left and right.
There are others as well but that's the companies I know.

It was a hypothetical question.

I'm 43 years old and have never once owned a car newer than 15 years old. The one I'm driving today is 24 years old. Drifter is a good deal older than me and has also never bought a new car. The one he is driving today is 20 years old. For 15 years straight we drove to the NTA convention every year in one of our trucks, and it was never nearer than 700 miles. I've drove dozens of times from NY to IL, from IL to MS, from MS to NY.... all of which are 13-16 hour one way trips. Do you break down sometimes? Sure. I did once from a convention in IN to home in NY and he did once on a trip from IL to MS. When that happens, you deal with it.

My situation from IN to NY was particularly bad because my truck was Canadian made and American made drive shafts apparently didn't fit it. I had it towed to a machine shop and they had to make a drive shaft to fit it. Nevertheless, for less money than your monthly truck payment I was on my way again the next day.

Of course, breaking down on the side of the road sucks, but it sucks a lot less than $15k a year truck payments!

I make those drives several times per month. There's only so much you can put into a beater and push it.
Breakdowns cost time and sometimes jobs and money lost. I have to know when I drive 600 miles, that I won't break down.

Trying to digest that statement.

Bad on a macroeconomic level because deflation goes hand in hand with higher interest rates which increases the interest on our national debt?

Bad on a microeconomic level because so many individuals are mired in debt?

Hmm new vehicle never break down? Interesting.

Interest rates are high so don't take out a loan. If your job pays well enough you shouldn't have to. Drive am old truck put payment money in savings for break downs each month then pay for the new truck cash out of the same account in a year and a half maybe 2.

If your truck is required and you wear it out so fast that should be a business expenses figured in and taken out of your check like taxes. Or at the least subtracted along with fuel tools and other things you need to do your job off your income.

Once that's is subtracted your not making as much as you thought. Maybe you would be better off making less at a job that doesn't require so much expense.

I went through this process trying to decide if it was worth the pay cuts and reduction in benefits to take a job close to home. It's humbling to pay attention and see how much money I was actually spending and the wast/useless money that goes along with traveling for work. Just what I spend on fast food and convenient store drinks and snacks was mind blowing.

I'm 43 never bought a new vehicle had a couple a year old though. Currently my every day driver is 27 years old. Two of your payments pays for about all my vehicles expenses in a years. That includes things like tires and oil changes that your new truck will need on top of your payments. I live 127 miles from work so do some driving each year.

It's just a different way of looking and doing things. One of my year old trucks left me broke down more than my 27 year old truck. Also if I get sick, laid off or otherwise reduced income or no income coming in I don't have a big payment over my head. I'm not saying your method is wrong just pointing out there are other ways of doing things and why I prefer them. Years a new truck would be nice, more comfortable, and look nicer. But it won't build my net income any more than my old truck infact it will cost me more. The added comfort is not worth the cost to me let alone the piece of mind knowing if I can't work I don't have payment I have to make. Not having payments and paying interest allows me to save and invest more. That is true reliability to me. I'm retiring one month after my 57th birthday July first 2036. And I will have enough saved and invested to be comfortable and secure. See putting that 10k a year more your paying on that truck in investments will pay off big time vs making bankers rich. I don't like debt because debt ito me is slavery. I still have some debt but have moved from debt slave to indentured servant and soon will be a free man.

New vehicles and their expenses are more about appearances than value ,, Lots of folks need to put up a certain appearance for those around them to massage a self worth thing ,, Im glad some one buys new ones so i can buy used ones , when im done with a truck even the rest of the parts are wore out and they sit around for years then the scrap man gets em ,, Zero interest paid out

Deflation will get you lower interest rates and printed money aka 2008 and 2020.

Thanks Dirt. I was thinking about higher interest rates possibly leading to deflation, not about the Fed lowering rates if deflation is occuring.

But, isn't lower interest rates what a "debt based society" would want?

I'm still confused.

Artificially low rates will definitely increase debt. When rates are below inflation , you would be silly not to take that deal.

Angela, think of it like this, inflation decreases the value of debt. Borrow a dollar today and pay it back with one that is worth less.

Deflation is supposed to increase the value of the dollar so you can buy more goods and services with a dollar.

On a side note I see where the dollar value against other currency has increased the past week not sure how that fits in to the situation.

Deflation is good for a saver. Not so much for a debtor nation.

If the Fed. starts cutting rates 3.5% inflation or greater will be with us for a while.