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July 2022 President's Message

     It’s official! The first half of 2022 is now behind us. The current zeitgeist in the housing market mostly relates to inflation. This reminds me of a book I read a few years ago called The Tuttle Twins and the Creature from Jekyll Island. This is just one book of a series that are meant to teach kids about the principles of a free society. This book talks about the Tuttle twin’s grandparents taking them to a movie. They overhear grandpa complaining about how expensive everything is and how movies were 50 cents when he was a kid. Grandpa talks to grandma about the creature from Jekyll Island stealing his money. The kids overhear them and are worried about this monster. Long story short, grandpa and grandma are on a fixed income, and the creature from Jekyll Island is really a representation of a group of people that control the money supply, which in turn affects inflation. 

     When the money you make doesn’t outpace inflation, you become poorer and poorer. This can happen to people on a fixed income, or even working people where wages are not outpacing inflation. In the real world, the group of people that control the money supply is the Federal Reserve. Just a few days ago, Federal Reserve Chair, Jerome Powell, spoke at the European Central Bank Forum in Sintra, Portugal. During the forum, Powell stated, “I think we now understand better how little we understand about inflation.” He also eluded that supply chains were to blame, and not once mentioned the trillions of dollars of stimulus money pumped into the economy and the fact that the Feds continued to buy mortgage-backed securities and US Treasuries up until 3.5 months ago.
     It is quite scary to think that the Federal Reserve doesn’t have a solid plan to combat inflation. At the end of the day, it is all out of our hands. The best advice I can give you in this market is to be ready. Build up your emergency fund in the event we do have another recession. Try your best to pay off high-interest debt and avoid getting into new consumer debt if possible. The past has shown that mortgage rates come down during a recession, so get your finances in order now. Even if you do not have children, I highly recommend you read this short, comic-style book, The Tuttle Twins and the Creature from Jekyll Island. It is very relatable to what is going on today.

Mahalo,

Daryn Ogino

Smart Money Hawaii - President, NMLS #278557

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