from the REIT's Board.... Lok might "enjoy this one" Warning..data mined from BLS Stats. Don't rec this post....please go to the original & rec that one. KBM (thank you for your time & attnetion).....;o)Industry Discussions / Real Estate Inv. Trusts: REITs URL: http://boards.fool.com/Message.asp?mid=24262309 Subject: Why You Should Fear Inflation Date: 6/23/06 1:12 AM Author: factoids Number: 40307 of 40309 -------------------------------------------------------------------------------- If I had the room in the title - it would be "why you should fear inflation and buy a fair portion of growth REITs, causing reaching for yield while shorting growth will kill you - even in retirement". Jonathan Clement in Thursday's WSJ quoted some stats from the BLS study entitled "100 Years of U.S. Consumer Spending". I have copy and pasted some of the stats from that study below. [and this was a labor entensive effort - - meaning give me a reccomendation or two for the effort]. I think this should be required reading for the constipated, because this would scare that ailment right out of you.The stats: In 1901 yearly household income averaged $750. Annual expenditures for the average U.S. family averaged $769. Of this amount, 42.5% ($327) was allocated for food, 14.0% ($108) for clothing, and 23.3% ($179) for housing. The U.S. population was 76 million. There were 7.2 million owner-occupied housing units in the country, but only 19.0% of U.S. families owned a home, while 81.0%were renters. Grocery store prices in 1901 averaged about 14 cents per pound for round steak or pork chops, 27 cents for a pound of butter, and 13 cents for 5 pounds of flour. By 1919, average family income had more than doubled, to $1,518 (a 102% increase), while household expenditures had increased to $1,434 (an 86% gain). The average U.S. household spent 75.4% more for food ($549), but the household's expenditure share for food had decreased to 38.2%. Spending for clothing had increased 120.4% to $238, but this category represented only 16.6% of total expenditures. Housing was where the significant change took place: spending for housing had increased 86.6%, to $334, although the expenditure share for this category remained 23.3%. The population in the country was 105 million. There were over 10 million owneroccupied housing units in the country. Spending for housing had increased 86.6%, to $334, although the expenditure share for this category remained 23.3%. (The housing expenditure category included costs not only for rent, but also for fuel, light, furniture, and furnishing.) Families who lived in their own homes had a yearly rent (the term used in the Consumer Expenditure Survey) of $176. Families living in apartments or flats paid a yearly rent of $178. Retail prices had almost tripled since 1901. A pound of round steak cost an average of 37 cents, and pork chops, which had cost 13 cents a pound in 1901, averaged 39 cents in 1918. Five pounds of flour cost 34 cents, and consumers paid 58 cents for a pound of butter. By 1936 - in the 15-year period following World War I, average family income had remained flat, rising only $6 to $1,524. Meanwhile, average family expenditures had risen 5.4% to $1,512. These dollars would have purchased $1,387 worth of goods and services in 1918 dollars, compared with the $1,434 that families in 1918 spent, demonstrating the deflationary effect of the Depression on the dollar's value. Food, clothing, and housing occupied a 76.2% share of household spending, a decrease from 1918–19. The expenditure share for housing was 32.0%, which translated into an average annual expenditure of $485. The number of owner-occupied housing units had increased to 14 million. Forty percent of families owned automobiles, almost all of which were purchased secondhand rather than new. Average household expeditures for food was $508. In 1950, with wages double or triple what they had been in 1935. The average U.S. family's income of $4,237 had increased by 178.0% since 1934–36. Average family expenditures during the same timeframe had increased 151.9%, to $3,808. This amount would have purchased $2,171 worth of goods and services in 1935 dollars, reflecting inflationary forces. Nationally, home ownership had increased, with 48% of all families owning their own home. Average annual housing costs were $1,035. Retail food prices had risen sharply from 1934–36 levels. The price of a pound of butter had doubled, from 32 cents to 73 cents. Meat prices also had risen sharply, with a pound of round steak increasing from 28 cents to 94 cents and pork chops from 26 cents to 75 cents per pound. Average household expeditures for food was $1,130. By 1960, average family income in the country was $6,691, 57.9% higher than in 1950. Average family expenditures, $5,390, had increased 41.5% from 1950. This amount would have purchased $4,366 worth of goods and services in 1950 dollars. The U.S. population had surpassed 179 million, a gain of 19.0% from 1950. More than half of U.S. families were homeowners, with annual expenditures on housing being $1,588. Families spent proportionately less for food despite rising retail prices. One pound of round steak cost $1.06, up 12 cents from 1950. The price of a pound of pork chops had risen 11 cents to 86 cents per pound. More Americans (73%) owned automobiles, and they paid more for their cars. Average household expeditures for food was $1,311. By 1972 the average family income in the United States was $11,419, an increase of 70.7 percent from 1960–61. The average U.S. household had an after-tax income of $9,731, having allocated 14.8% of income for taxes: $1,399 in Federal income taxes, $234 in State and local income taxes, and $55 in personal property and other personal taxes. The market value of the average household's financial assets was $7,094. Average household expenses were $8,348, an increase of 54.9% from 1960–61. This sum would have purchased $5,972 worth of goods and services in 1960–61 dollars. Most Americans [58.8%] owned their home (33.4% having a mortgage and 25.3% having no mortgage), while 36.8% were renters. The estimated market value of the average family home was $14,283, which translated into an estimated monthly rental value of $100. Average annual housing expenses were $2,551. Some 80.1% of U.S. families owned at least one auto. These households spent $784 (9.5% of their expenditures) to buy and finance their autos. Additionally, they spent $750 (9.1%) on auto operating expenses. Average household expeditures for food was $1,596. By 1984 average family income in the country had risen to $23,464, an increase of 105.5% since 1972–73. The average U.S. family had an after-tax income of $21,237, having allocated 9.5% of income for taxes: $1,733 in Federal income taxes, $431 in State and local income taxes, and $63 for other taxes. Average household expenditures, $21,975, had grown 165.7%. This amount would have purchased $8,790 worth of goods and services in 1972 dollars. Compared with 1972–73, the share for food had decreased to 15.0 percent ($3,290), while clothing had declined to 6.0% ($1,319), and housing had held steady at 30.4% ($6,674). Among U.S. families, 63% owned their own home (38% with a mortgage and 25% without a mortgage), while 38% were renters. The estimated market value of the average home was $47,269, and its estimated monthly rental value was $292. In 85% of households, there was at least one automobile, with an average yearly cost for transportation of $4,304. Average household expeditures for food was $3,290. By 1996-1997 the average family income in the country had risen to $38,983, an increase of 66.1% since 1984–85. Average household expenditures, at $34,312, had grown 56.1%, over the same period. This sum would have purchased $22,646 worth of goods and services in 1984 dollars. In terms of home ownership status, 64% of Americans owned their home (38% with a mortgage and 26% without a mortgage), while 36% of households were renters. The estimated market value of the average home was $74,835, which translated into an estimated monthly rental value of $521. Some 85% of U.S. families owned at least one vehicle, the average family owning 1.9. These families allotted 18.7% ($6,420) of their total spending for transportation, with 8.1% ($2,775) for the purchase of vehicles; 3.2% ($1,090) for gasoline and motor oil; and an additional 6.3% ($2,145) on other vehicle expenses, including financing and maintenance costs. Average household expeditures for food was $4,750. By 2002-2003, the average family income in the country was $50,302, an increase of 29.0% from the mid-1990s. Average household expenses, $40,748, had grown by 18.8% from the mid-1990s. This amount would have purchased $35,827 worth of goods and services in 1996 dollars. Of total spending on housing, the average U.S. family allotted 58.8% ($7,859) for shelter, 20.6% ($2,749) for fuels and utilities, 9.3% ($1,243) for household operations and supplies, and 11.2% for furnishings and equipment. Two-thirds of U.S. households (67%) owned their home (41% with a mortgage and 26% without a mortgage), while 33% rented. The estimated market value of the average home was $114,522, and its estimated monthly rental value was $735. Some 88% of U.S. families owned at least one motor vehicle, with the average family owning 2.0. These households allotted 19.1% ($7,770) of their total spending for transportation expenses, with 9.1% ($3,699) for the purchase of vehicles; 3.2% ($1,285) for gasoline and motor oil; and 5.9% ($2,400) for other vehicle expenses, including financing and maintenance costs. Average household expeditures for food was $5,357.------------- end of clippings from the BLS article ------------------ If I am going to constantly preach GROWTH, then I should at least occasionally give the reason for that motivation. I think I have done that now. Thank you for your time and attention.Factoids a.k.a Bob
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