A Winters Express opinion column
By Charley Wallace
One thing about getting older is that it is harder to be surprised. We’ve had a great run in the stock market with steady economic growth, low interest rates and no inflation. Old people have been through tough economic times like this before, several times, so don’t believe anyone when they tell you that this time is different. History does repeat itself.
I try not to look at my retirement account, but I can’t help myself. It isn’t a pretty picture. Young people can keep adding to their retirement accounts and count on years of savings to help support a nice retirement. As we get older, these down cycles in the stock market can be a little unnerving. Having a permanent tenant with a teacher’s pension and my social security puts us in an enviable position. It is a good time to be retired. Life is good.
Let me add a little perspective about inflation. When we bought our current home in 1977, the interest rate was 9.25 percent for a 30 year fixed loan. Over the years we refinanced a time or two. I think the last time was at 5.25 percent, which I thought was the lowest interest rates would ever go.
In 1981, we bought a Chevy Citation, which might have been the worst built car in history. We financed it through the dealership at 21 percent. I remember paying it off as fast as I could, but it still took me almost two years. In 1981 you could walk into First Northern Bank and get over 15 percent on a one year CD.
President Carter had no clue how to control inflation and was replaced by President Reagan. President Reagan was convinced that if you drive up unemployment, inflation would drop. He was right, but the economy took a dive, along with the stock market.
We now have a Federal Reserve Bank making decisions on interest rates and it is raising them at the fastest level since Jimmy Carter was President. I still have a variable loan that was at 5.75 percent last week. That was before the Feds raised interest rates by .75 percent, so I’m watching my mailbox to see what First Northern’s adjustment will be. This will be another loan that I will work on to pay off as fast as possible.
There has been a lot of local discussion about the number of new homes being built in Winters, and I’ll admit that there were a lot of new homes constructed over the past 10 years. Last week, the Sacramento Bee listed eight homes being sold in Winters. The lowest priced home was on Ramos Drive (a new home) at $632,500. The highest priced home was on Vasey Street at $777,000. All of the homes were in the new subdivision on the northwest side of town.
I’ll wait six months and give you an update on how many homes sold in Winters and for how much. I am a betting man, and will bet a glass of local beer/wine that the real estate market will take a dive on both number of homes sold and the price. Let me know if you want to accept my wager at email@example.com.
Remember that I am about 90 percent retired and kept the Winters Printing Company going to give me something to do every week. Six months ago I walked into my paper supply warehouse in Sacramento and the shelves were empty. Looking at the shelves of the warehouse was like looking for toilet paper last year. I was shocked, and Ken, behind the counter, told me that he didn’t think it would get any better for six months. Well, he was right. Now the shelves are about 70 percent full and looking good.
I picked up a load of paper last week, but I noticed on my invoice that regular business envelopes that used to cost $28.50 per thousand were now $40.50 per thousand. Some paper products were close to my last order, but NCR (carbonless paper) was up almost 70 percent. I told Ken that something was wrong with the pricing, but he just shook his head and said it was correct. I decided that I was glad that I could find the inventory that I needed, thanked Ken and left.
Hang on to your wallet, because I don’t think things will change for the better any time soon.
Have a good week.