2021 - Is inflation finally back in the conversation?

[elfenix 34,332]

washpark i think you're using deflationary when you mean contractionary. 

[Satoshi 129]

33 minutes ago, elfenix said:

the virus is still in control of the economy. 

Agreed. Two prongs here. One is unvaccinated getting sick and leading to restrictions. Two is vaccinated still altering behavior to avoid any symptomatic infection now that It’s clear they can still catch it. 

[washparkhorn 9,939]

2 hours ago, elfenix said:

washpark i think you're using deflationary when you mean contractionary. 

I was imprecise - I agree. Thank you.

From JPow on July 27:

The rise in prices as the US pulls itself out of the pandemic recession has exceeded the Fed’s forecasts, and led critics to call on the bank to cut back its efforts to boost the economy. Powell made news by acknowledging the central bank could begin slowing purchases of financial assets later this year if employment continues to rise.

We are about to learn how long a rocket maker survives without a rocket

But the lawyer-turned-central banker reiterated that he sees inflation as limited to sectors affected by the pandemic. He also noted that wages are not increasing fast enough to generate inflation worries, and that long-term expectations for prices remain anchored. He got a boost from today’s release of US personal consumption expenditure data, which showed that rate of price increases slowed from June to July.

But his most notable comment about the rising rate of inflation was focused on its opposite trend: That disinflation—slowing price increases—is the real long-term threat to the global economy.

“Since the 1990s, inflation in many advanced economies has run somewhat below two percent even in good times,” Powell explained:

The pattern of low inflation likely reflects sustained disinflationary forces, including technology, globalization, and perhaps demographic factors, as well as a stronger and more successful commitment by central banks to maintain price stability.

While the underlying global disinflationary factors are likely to evolve over time, there is little reason to think that they have suddenly reversed or abated. It seems more likely that they will continue to weigh on inflation as the pandemic passes into history.”

https://finance.yahoo.com/news/fed-chair-jay-powell-real-173008951.html

I hope we are not in the contraction phase of the business cycle, but that may be where this is headed. 

[Satoshi 129]

3 hours ago, washparkhorn said:

I was imprecise - I agree. Thank you.

From JPow on July 27:

The rise in prices as the US pulls itself out of the pandemic recession has exceeded the Fed’s forecasts, and led critics to call on the bank to cut back its efforts to boost the economy. Powell made news by acknowledging the central bank could begin slowing purchases of financial assets later this year if employment continues to rise.

We are about to learn how long a rocket maker survives without a rocket

But the lawyer-turned-central banker reiterated that he sees inflation as limited to sectors affected by the pandemic. He also noted that wages are not increasing fast enough to generate inflation worries, and that long-term expectations for prices remain anchored. He got a boost from today’s release of US personal consumption expenditure data, which showed that rate of price increases slowed from June to July.

But his most notable comment about the rising rate of inflation was focused on its opposite trend: That disinflation—slowing price increases—is the real long-term threat to the global economy.

“Since the 1990s, inflation in many advanced economies has run somewhat below two percent even in good times,” Powell explained:

The pattern of low inflation likely reflects sustained disinflationary forces, including technology, globalization, and perhaps demographic factors, as well as a stronger and more successful commitment by central banks to maintain price stability.

While the underlying global disinflationary factors are likely to evolve over time, there is little reason to think that they have suddenly reversed or abated. It seems more likely that they will continue to weigh on inflation as the pandemic passes into history.”

https://finance.yahoo.com/news/fed-chair-jay-powell-real-173008951.html

I hope we are not in the contraction phase of the business cycle, but that may be where this is headed. 

There’s a lot to dispute in this article imo. 
 

slowing price increases are the real threat long term threat to the global economy? Not even deflation, but inflation coming down? That’s ridiculous. 
 

The only roundabout way I can see that being true is if inflation is too low that we can’t accomplish the financial repression needed to correct our current debt/gdp levels and we have a debt crisis. Is that what he’s referencing? 
 

Also I’d like some clarification here. 
 

“Aging populations in advanced economies create political pressure to support the value of assets like homes and financial securities, which leads to policies that hold down wages.”
 

I wish they’d expand on the cause and effect here. Does the author mean that aging populations that depend on retirement incomes are the reason financial asset values are propped up?
 

They kind of have it backwards. Asset values are propped up by zero percent interest rates and balance sheet expansion by the Fed. This is pretty clear. Also, retirees wouldn’t need to move into higher risk assets and pump their prices if treasuries paid decent interest rates. 
 

And for the next part, how do zero percent interest rates, or other similar policies that boost asset prices (are there others?), hold down wages? I don’t get the connection there. 
 

 

[Updawg 2,286]

Or maybe inheritances flood. Lots of new king ranches and house upgrades done by an inheritance windfall. Big transfer of wealth

[washparkhorn 9,939]

4 hours ago, Satoshi said:

slowing price increases are the real threat long term threat to the global economy? Not even deflation, but inflation coming down?

Not to parse, but the concern is the supply chain that is ramping up for the moon and the demand may not be there. That is a disinflationary event and could lead to massive price pressure downward from over-availability. 

Other than Zero Covid-nations (e.g., China), the World economy is sluggish. The worry is one of the downturns might throw another wrench in the World Economy's gears. I thought we would be normalizing by now, but uncertainty remains.

Semiconductors-Taiwan is the problem I am following. A black swan in the making.  And a supply-chain chokepoint. 

 

Edited September 4, 2021 by washparkhorn

[washparkhorn 9,939]

4 hours ago, Satoshi said:

Also I’d like some clarification here. 
 

“Aging populations in advanced economies create political pressure to support the value of assets like homes and financial securities, which leads to policies that hold down wages.”
 

Let me try to explain -

• When we overvalue assets, less money circulates in the main street economy
• Less velocity = slower growth (the idle wealth issue)
• Slower growth=less demand for labor
• Less demand for labor = downward pressure on wages (and lower labor costs

Basic economics when we strip out the irrelevant rhetoric. I hope it helps. 

That is why we don't see large inflationary effects from the massive money printing. Assets have inflated, not the real economy, and continue to inflate during COVID. Assets have become an inflation sink.

The pain comes if the asset bubbles pop. The Fed has pledged to keep certain asset bubbles in place and wait for the real economy to catch up. That tool does tend to tamp down wage inflation. 

Edited September 4, 2021 by washparkhorn

[elfenix 34,332]

9 hours ago, Updawg said:

Or maybe inheritances flood. Lots of new king ranches and house upgrades done by an inheritance windfall. Big transfer of wealth

we're in the largest intergenerational transfer of wealth that has ever happened. 

[Satoshi 129]

5 hours ago, washparkhorn said:

Let me try to explain -

• When we overvalue assets, less money circulates in the main street economy
• Less velocity = slower growth (the idle wealth issue)
• Slower growth=less demand for labor
• Less demand for labor = downward pressure on wages (and lower labor costs

Basic economics when we strip out the irrelevant rhetoric. I hope it helps. 

That is why we don't see large inflationary effects from the massive money printing. Assets have inflated, not the real economy, and continue to inflate during COVID. Assets have become an inflation sink.

The pain comes if the asset bubbles pop. The Fed has pledged to keep certain asset bubbles in place and wait for the real economy to catch up. That tool does tend to tamp down wage inflation. 

Thanks for clarifying.

Your last paragraph is key. The Fed is openly and actively maintaining asset prices. Thus they are the largest driver of inequality.

They’ve also reached a point where they almost can’t stop. If you look at this trend line, you see what’s going to happen. Any future rate hiking cycles will be small and brief. 

So if monetary stimulus reaches an endpoint (outside of negative interest rates) then you have to go with massive fiscal stimulus in future downturns. Should be inflationary and dangerous to our reserve status given where our debt already stands. This is why you Bitcoin. 

 

[Bookman 4,640]

Inflation may be on the way up but you can refinance for 30-years fixed for nothing! What a great country!

[Satoshi 129]

Missed this a few days ago, but Manchin wants pause on spending package citing inflation and debt concerns. 
 

https://www.wsj.com/articles/manchin-pelosi-biden-3-5-trillion-reconciliation-government-spending-debt-deficit-inflation-11630605657?st=3k8ku60godyh71u&reflink=article_email_share
 

Spoiler

The nation faces an unprecedented array of challenges and will inevitably encounter additional crises in the future. Yet some in Congress have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future. I disagree. 

An overheating economy has imposed a costly “inflation tax” on every middle- and working-class American. At $28.7 trillion and growing, the nation’s debt has reached record levels. Over the past 18 months, we’ve spent more than $5 trillion responding to the coronavirus pandemic. Now Democratic congressional leaders propose to pass the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises. Ignoring the fiscal consequences of our policy choices will create a disastrous future for the next generation of Americans.

Those who believe such concerns are overstated should ask themselves: What do we do if the pandemic gets worse under the next viral mutation? What do we do if there is a financial crisis like the one that led to the Great Recession? What if we face a terrorist attack or major international conflict? How will America respond to such crises if we needlessly spend trillions of dollars today?

 

 

Instead of rushing to spend trillions on new government programs and additional stimulus funding, Congress should hit a strategic pause on the budget-reconciliation legislation. A pause is warranted because it will provide more clarity on the trajectory of the pandemic, and it will allow us to determine whether inflation is transitory or not. While some have suggested this reconciliation legislation must be passed now, I believe that making budgetary decisions under artificial political deadlines never leads to good policy or sound decisions. I have always said if I can’t explain it, I can’t vote for it, and I can’t explain why my Democratic colleagues are rushing to spend $3.5 trillion.
 

Another reason to pause: We must allow for a complete reporting and analysis of the implications a multitrillion-dollar bill will have for this generation and the next. Such a strategic pause will allow every member of Congress to use the transparent committee process to debate: What should we fund, and what can we simply not afford?

I, for one, won’t support a $3.5 trillion bill, or anywhere near that level of additional spending, without greater clarity about why Congress chooses to ignore the serious effects inflation and debt have on existing government programs. This is even more important now as the Social Security and Medicare Trustees have sounded the alarmthat these life-saving programs will be insolvent and benefits could start to be reduced as soon as 2026 for Medicare and 2033, a year earlier than previously projected, for Social Security. 

 

Establishing an artificial $3.5 trillion spending number and then reverse-engineering the partisan social priorities that should be funded isn’t how you make good policy. Undoubtedly some will argue that bold social-policy action must be taken now. While I share the belief that we should help those who need it the most, we must also be honest about the present economic reality. 

Inflation continues to rise and is bleeding the value of Americans’ wages and income. More than 10.1 million jobs remain open. Our economy, as the Biden administration has correctly pointed out, has reached record levels of quarterly growth. This positive economic reality makes clear that the purpose of the proposed $3.5 trillion in new spending isn’t to solve urgent problems, but to re-envision America’s social policies. While my fellow Democrats will disagree, I believe that spending trillions more dollars not only ignores present economic reality, but makes it certain that America will be fiscally weakened when it faces a future recession or national emergency.

In 2017, my Republican friends used the privileged legislative procedure of budget reconciliation to rush through a partisan tax bill that added more than $1 trillion to the national debt and put investors ahead of workers. Then, Democrats rightfully criticized this budgetary tactic. Now, my Democratic friends want to use this same budgetary tactic to push through sweeping legislation to make “historic investments.” Respectfully, it was wrong when the Republicans did it, and it is wrong now. If we want to invest in America, a goal I support, then let’s take the time to get it right and determine what is absolutely necessary.
 

Many in Washington have convinced themselves we can add trillions of dollars more to our nearly $29 trillion national debt with no repercussions. Regardless of political party, elected leaders are sent to Washington to make tough decisions and not simply go along to get along.

For those who will dismiss my unwillingness to support a $3.5 trillion bill as political posturing, I hope they heed the powerful words of Adm. Mike Mullen, a former chairman of the Joint Chiefs of Staff, who called debt the biggest threat to national security. His comments echoed the fear and concern I’ve heard from many economic experts I’ve personally met with.

At a time of intense political and policy divisions, it would serve us well to remember that members of Congress swear allegiance to this nation and fidelity to its Constitution, not to a political party. By placing a strategic pause on this budgetary proposal, by significantly reducing the size of any possible reconciliation bill to only what America can afford and needs to spend, we can and will build a better and stronger nation for all our families.

 

[washparkhorn 9,939]

1 hour ago, Satoshi said:

Missed this a few days ago, but Manchin wants pause on spending package citing inflation and debt concerns. 
 

https://www.wsj.com/articles/manchin-pelosi-biden-3-5-trillion-reconciliation-government-spending-debt-deficit-inflation-11630605657?st=3k8ku60godyh71u&reflink=article_email_share
 

  Reveal hidden contents

The nation faces an unprecedented array of challenges and will inevitably encounter additional crises in the future. Yet some in Congress have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future. I disagree. 

An overheating economy has imposed a costly “inflation tax” on every middle- and working-class American. At $28.7 trillion and growing, the nation’s debt has reached record levels. Over the past 18 months, we’ve spent more than $5 trillion responding to the coronavirus pandemic. Now Democratic congressional leaders propose to pass the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises. Ignoring the fiscal consequences of our policy choices will create a disastrous future for the next generation of Americans.

Those who believe such concerns are overstated should ask themselves: What do we do if the pandemic gets worse under the next viral mutation? What do we do if there is a financial crisis like the one that led to the Great Recession? What if we face a terrorist attack or major international conflict? How will America respond to such crises if we needlessly spend trillions of dollars today?

 

 

Instead of rushing to spend trillions on new government programs and additional stimulus funding, Congress should hit a strategic pause on the budget-reconciliation legislation. A pause is warranted because it will provide more clarity on the trajectory of the pandemic, and it will allow us to determine whether inflation is transitory or not. While some have suggested this reconciliation legislation must be passed now, I believe that making budgetary decisions under artificial political deadlines never leads to good policy or sound decisions. I have always said if I can’t explain it, I can’t vote for it, and I can’t explain why my Democratic colleagues are rushing to spend $3.5 trillion.
 

Another reason to pause: We must allow for a complete reporting and analysis of the implications a multitrillion-dollar bill will have for this generation and the next. Such a strategic pause will allow every member of Congress to use the transparent committee process to debate: What should we fund, and what can we simply not afford?

I, for one, won’t support a $3.5 trillion bill, or anywhere near that level of additional spending, without greater clarity about why Congress chooses to ignore the serious effects inflation and debt have on existing government programs. This is even more important now as the Social Security and Medicare Trustees have sounded the alarmthat these life-saving programs will be insolvent and benefits could start to be reduced as soon as 2026 for Medicare and 2033, a year earlier than previously projected, for Social Security. 

 

Establishing an artificial $3.5 trillion spending number and then reverse-engineering the partisan social priorities that should be funded isn’t how you make good policy. Undoubtedly some will argue that bold social-policy action must be taken now. While I share the belief that we should help those who need it the most, we must also be honest about the present economic reality. 

Inflation continues to rise and is bleeding the value of Americans’ wages and income. More than 10.1 million jobs remain open. Our economy, as the Biden administration has correctly pointed out, has reached record levels of quarterly growth. This positive economic reality makes clear that the purpose of the proposed $3.5 trillion in new spending isn’t to solve urgent problems, but to re-envision America’s social policies. While my fellow Democrats will disagree, I believe that spending trillions more dollars not only ignores present economic reality, but makes it certain that America will be fiscally weakened when it faces a future recession or national emergency.

In 2017, my Republican friends used the privileged legislative procedure of budget reconciliation to rush through a partisan tax bill that added more than $1 trillion to the national debt and put investors ahead of workers. Then, Democrats rightfully criticized this budgetary tactic. Now, my Democratic friends want to use this same budgetary tactic to push through sweeping legislation to make “historic investments.” Respectfully, it was wrong when the Republicans did it, and it is wrong now. If we want to invest in America, a goal I support, then let’s take the time to get it right and determine what is absolutely necessary.
 

Many in Washington have convinced themselves we can add trillions of dollars more to our nearly $29 trillion national debt with no repercussions. Regardless of political party, elected leaders are sent to Washington to make tough decisions and not simply go along to get along.

For those who will dismiss my unwillingness to support a $3.5 trillion bill as political posturing, I hope they heed the powerful words of Adm. Mike Mullen, a former chairman of the Joint Chiefs of Staff, who called debt the biggest threat to national security. His comments echoed the fear and concern I’ve heard from many economic experts I’ve personally met with.

At a time of intense political and policy divisions, it would serve us well to remember that members of Congress swear allegiance to this nation and fidelity to its Constitution, not to a political party. By placing a strategic pause on this budgetary proposal, by significantly reducing the size of any possible reconciliation bill to only what America can afford and needs to spend, we can and will build a better and stronger nation for all our families.

 

Take it to the cloak room, please. Thanks.

[elfenix 34,332]

On 9/4/2021 at 8:24 AM, Satoshi said:

Thanks for clarifying.

Your last paragraph is key. The Fed is openly and actively maintaining asset prices. Thus they are the largest driver of inequality.

They’ve also reached a point where they almost can’t stop. If you look at this trend line, you see what’s going to happen. Any future rate hiking cycles will be small and brief. 

So if monetary stimulus reaches an endpoint (outside of negative interest rates) then you have to go with massive fiscal stimulus in future downturns. Should be inflationary and dangerous to our reserve status given where our debt already stands. This is why you Bitcoin. 

 

username checks out

[Satoshi 129]

36 minutes ago, washparkhorn said:

Take it to the cloak room, please. Thanks.

Why? I think I’ll leave it. Thanks. 
 

Inflation is influenced by monetary policy controlled by unelected bureaucrats and economic/fiscal policy controlled by elected officials. We’re allowed to discuss the Fed ad nauseum but not economic stimulus packages in congress?  Please. Add to that the fact that I actually had no comment.
 

I just thought it was noteworthy that an important Senator is citing inflation in the WSJ. That has reach  

 

[washparkhorn 9,939]

6 hours ago, Satoshi said:

Why? I think I’ll leave it. Thanks. 
 

Inflation is influenced by monetary policy controlled by unelected bureaucrats and economic/fiscal policy controlled by elected officials. We’re allowed to discuss the Fed ad nauseum but not economic stimulus packages in congress?  Please. Add to that the fact that I actually had no comment.
 

I just thought it was noteworthy that an important Senator is citing inflation in the WSJ. That has reach  

 

Manchin is doing what Manchin is doing to preserve his seat in West Virginia - and because his Patrons pay him to take these positions. There is no economic theory undergirding his actions. He is enjoying getting his ass kissed by Big Hats. 

It's political GR/MuyFrito/Succotash. 

Edited September 6, 2021 by washparkhorn
I don't know why you want to fuck up another board with your political bullshit, you are what you are.

[workswithseed 2,110]

20 minutes ago, washparkhorn said:

Manchin is doing what Manchin is doing to preserve his seat in West Virginia - and because his Patrons pay him to take these positions. There is no economic theory undergirding his actions. He is enjoying getting his ass kissed by Big Hats. 

It's political GR/MuyFrito/Succotash. 

Sounds that you're sore on the subject.

[Neonmoon 38,130]

7 hours ago, Satoshi said:

Why? I think I’ll leave it. Thanks. 
 

Inflation is influenced by monetary policy controlled by unelected bureaucrats and economic/fiscal policy controlled by elected officials. We’re allowed to discuss the Fed ad nauseum but not economic stimulus packages in congress?  Please. Add to that the fact that I actually had no comment.
 

I just thought it was noteworthy that an important Senator is citing inflation in the WSJ. That has reach  

 

We understand how monetary policy works. The angle your posting is political. Take it to CR. 

[Satoshi 129]

1 hour ago, washparkhorn said:

Manchin is doing what Manchin is doing to preserve his seat in West Virginia - and because his Patrons pay him to take these positions. There is no economic theory undergirding his actions. He is enjoying getting his ass kissed by Big Hats. 

It's political GR/MuyFrito/Succotash. 

 

9 minutes ago, Neonmoon said:

We understand how monetary policy works. The angle your posting is political. Take it to CR. 

Gentlemen, the title of the thread asks if this is the year that inflation is back in the conversation. This is another prominent example of it being in the conversation, due to the less than transitory inflation we’ve experienced. 
 

I give zero fucks whether he means what he says or not. But it shows the level of consciousness inflation is currently reaching in our society.

[XYZ 2,154]

2 hours ago, washparkhorn said:

Manchin is doing what Manchin is doing to preserve his seat in West Virginia - and because his Patrons pay him to take these positions. There is no economic theory undergirding his actions. He is enjoying getting his ass kissed by Big Hats. 

It's political GR/MuyFrito/Succotash. 

Shove your economic theory up your ass.

[washparkhorn 9,939]

2 hours ago, workswithseed said:

Sounds that you're sore on the subject.

Where Joe Manchin farts has no bearing on data. 

• We need the bauxite to flow, which is another possible supply chain choke point.
• Oil going down will help (thanks big oil). 
• Nobody said it was gonna be easy. We are climbing out of a crater. More stimulus turning off (human side of the ledger). 
• Taiwan is a potential black swan.
• China is saber rattling. 

[washparkhorn 9,939]

13 minutes ago, XYZ said:

Shove your economic theory up your ass.

Mises doesn't want to go there. 

Edited September 7, 2021 by washparkhorn
We are talking about inflation. The data is the best evidence. Don't get distracted by the politics.

[elfenix 34,332]

mises wasn't an economist.

[washparkhorn 9,939]

8 minutes ago, elfenix said:

mises wasn't an economist.

Perhaps not your misses, but my mises (Ludwig Von Mises) certainly practiced the dark art. He was converted after reading Carl Menger’s Principles of Economics.

Would you like to know more? 

https://fee.org/articles/ludwig-von-mises-the-man-and-his-economics/

 

Edited September 7, 2021 by washparkhorn

[elfenix 34,332]

17 minutes ago, washparkhorn said:

Perhaps not your misses, but my mises (Ludwig Von Mises) certainly practiced the dark art. He was converted after reading Carl Menger’s Principles of Economics.

Would you like to know more? 

https://fee.org/articles/ludwig-von-mises-the-man-and-his-economics/

 

he's not an economist because he's a praxxer.  in fact, he's the biggest praxxer of them all, rejecting reality in favor of arguing from some theoretical ubermensch in his own head. 

Edited September 7, 2021 by elfenix

[washparkhorn 9,939]

8 minutes ago, elfenix said:

he's not an economist because he's a praxxer.  in fact, he's the biggest praxxer of them all, rejecting reality in favor of arguing from some theoretical ubermensch in his own head. 

That's helpful, thank you.

He went off the austrian rails at the end.

I am interested in his later musings and how he may have evolved as mixed economies came to the forefront. 

[staboner 4,984]

On 9/4/2021 at 3:16 PM, washparkhorn said:

Let me try to explain -

• When we overvalue assets, less money circulates in the main street economy
• Less velocity = slower growth (the idle wealth issue)
• Slower growth=less demand for labor
• Less demand for labor = downward pressure on wages (and lower labor costs

Basic economics when we strip out the irrelevant rhetoric. I hope it helps. 

That is why we don't see large inflationary effects from the massive money printing. Assets have inflated, not the real economy, and continue to inflate during COVID. Assets have become an inflation sink.

The pain comes if the asset bubbles pop. The Fed has pledged to keep certain asset bubbles in place and wait for the real economy to catch up. That tool does tend to tamp down wage inflation. 

thanks for the posts wash

for me - its trying to figure out when/where a government will allow some normal levers to come around, i.e. recession and actual failure. I was hoping for down under but doesn't appear that way as its a double boomer sandwich down here. i am afraid the '08 housing crisis was the last time we semi saw something like that (at least in the US)

the screwing of the younger generations for the sake of the boomers to not give a flying fuck about the future is just what it is, is

 

 

 

 

Edited September 7, 2021 by staboner

[Parliament 14,292]

I'm gonna neg rep a whole buncha you guys if you don't settle down.  So help me God 

.

[Satoshi 129]

non fire walled 

https://ca.finance.yahoo.com/news/china-releases-oil-reserves-combat-131820334.html?guccounter=1&guce_referrer=aHR0cHM6Ly9kdWNrZHVja2dvLmNvbS8&guce_referrer_sig=AQAAAEHIp9W_HHR-QX1itWV24sI0Ba4NMZUetSsmbv5vVvf9qlUYWlM0EGRFc4-FtFL9HERXsd2Tot2BDWSITg60rOX7jBhDahvtPtka3JbxqJZ5tTtk7lfKm17GRA3YCvoNziY-AgU8jpXBR7UKisb_FWQKzrHqPVb7TegZpB_wyE4t

 

[Neonmoon 38,130]

ECB tapers a little, but not calling it a taper.

https://www.usnews.com/news/business/articles/2021-09-09/europe-could-see-less-stimulus-but-its-not-a-taper-yet

[Satoshi 129]

 

[Guest]

On 9/3/2021 at 1:41 PM, washparkhorn said:

Slows growth (disinflationary drag).

Example - how does one grow a business dependent on semiconductors when semiconductors are not flowing from Taiwan (the world's major supplier)?

We are having major outages in my industry. Sales up 4% over last year, however.

Price increases scheduled for October.  Relatively big ones.

Edited September 12, 2021 by slorch

[Laxtonto 12,114]

12 hours ago, slorch said:

We are having major outages in my industry. Sales up 4% over last year, however.

Price increases scheduled for October.  Relatively big ones.

It’s going to be a blood bath the next few months of inflation prints. Had a talk with both university advisory boards I am on (both in Supply Chain and in IT) the past week and across the board, across all sectors, they are all looking serious price increases on materials that are being passed on to the consumer. Most industries  have already “eaten” as much as they can with trying to maintain market share and customer loyalty by keeping prices as stable as possible during COVID, and they are at the point that they either pass on the price hike or think about getting out of certain sectors.

 

And the scary part is no one is really talking about the major issues we are seeing on both price increases and availability in raw food processing and production. There is already major prices increase in many raw proteins (most grocery stores are trying to mask this visually by providing smaller portions at the familiar price points) at your local grocery store. Don’t forget prior to COVID we had massive flooding in the Midwest, and we are going to keep dealing with a reduction in production, which COVID has made even worse. 
 

We have already seen this in household goods (the ever shrinking number of sheets on a paper towel roll or in a box of dryer sheets as an example), but if this then happens with raw food staples the whole thing will pop at once to the average consumer and escalate in a hurry.

I think I’m at around 15% YOY in my grocery bills the last 4 months or so, and it will get way worse before it’s going to get better.

 We can argue all we want about blame later, but all I can say is be prepared for what is coming.

[workswithseed 2,110]

33 minutes ago, Laxtonto said:

It’s going to be a blood bath the next few months of inflation prints. Had a talk with both university advisory boards I am on (both in Supply Chain and in IT) the past week and across the board, across all sectors, they are all looking serious price increases on materials that are being passed on to the consumer. Most industries  have already “eaten” as much as they can with trying to maintain market share and customer loyalty by keeping prices as stable as possible during COVID, and they are at the point that they either pass on the price hike or think about getting out of certain sectors.

 

And the scary part is no one is really talking about the major issues we are seeing on both price increases and availability in raw food processing and production. There is already major prices increase in many raw proteins (most grocery stores are trying to mask this visually by providing smaller portions at the familiar price points) at your local grocery store. Don’t forget prior to COVID we had massive flooding in the Midwest, and we are going to keep dealing with a reduction in production, which COVID has made even worse. 
 

We have already seen this in household goods (the ever shrinking number of sheets on a paper towel roll or in a box of dryer sheets as an example), but if this then happens with raw food staples the whole thing will pop at once to the average consumer and escalate in a hurry.

I think I’m at around 15% YOY in my grocery bills the last 4 months or so, and it will get way worse before it’s going to get better.

 We can argue all we want about blame later, but all I can say is be prepared for what is coming.

[Upgrayedd 5,818]

Can someone explain to me please why, with all the inflation boogie-men, the 10-year remains at 1.34%?

[Satoshi 129]

19 minutes ago, Upgrayedd said:

Can someone explain to me please why, with all the inflation boogie-men, the 10-year remains at 1.34%?

If I had to go out on a limb I’d guess that it’s the Fed monetizing debt to the tune of $80B in treasuries a month. 
 

1 hour ago, Laxtonto said:

 

 

And the scary part is no one is really talking about the major issues we are seeing on both price increases and availability in raw food processing and production. There is already major prices increase in many raw proteins (most grocery stores are trying to mask this visually by providing smaller portions at the familiar price points) at your local grocery store. Don’t forget prior to COVID we had massive flooding in the Midwest, and we are going to keep dealing with a reduction in production, which COVID has made even worse. 
 

We have already seen this in household goods (the ever shrinking number of sheets on a paper towel roll or in a box of dryer sheets as an example), but if this then happens with raw food staples the whole thing will pop at once to the average consumer and escalate in a hurry.

I think I’m at around 15% YOY in my grocery bills the last 4 months or so, and it will get way worse before it’s going to get better.

 We can argue all we want about blame later, but all I can say is be prepared for what is coming.

 

Yeah protein inflation is so high that a WH spokesman came out at a briefing and said if you exclude that actually food inflation is not that bad. If it’s being addressed specifically then you know it is bad. I’d link the video but it would be quite upsetting to some people. 

[washparkhorn 9,939]

2 hours ago, Upgrayedd said:

Can someone explain to me please why, with all the inflation boogie-men, the 10-year remains at 1.34%?

I know that you know that you answered your own question. bravo. 

[Parliament 14,292]

12 hours ago, Laxtonto said:

And the scary part is no one is really talking about the major issues we are seeing on both price increases and availability in raw food processing and production. There is already major prices increase in many raw proteins (most grocery stores are trying to mask this visually by providing smaller portions at the familiar price points) at your local grocery store. Don’t forget prior to COVID we had massive flooding in the Midwest, and we are going to keep dealing with a reduction in production, which COVID has made even worse. 

Corn prices are as high as they were in 2014, beans the same, spring wheat 2012 I think.  They're up because...all commodities are up?  Dunno. 

[Laxtonto 12,114]

50 minutes ago, Parliament said:

Corn prices are as high as they were in 2014, beans the same, spring wheat 2012 I think.  They're up because...all commodities are up?  Dunno. 

Corn, wheat, and beans all took a beating with the massive flooding that hit the Midwest in 2018. COVID them made many of the smaller farms fold in the US that were in duress from the previous few seasons. Now we are seeing other countries get impacted with the same level of internal chaos from a production standpoint and so we are seeing a steady climb globally. Will it continue through the winter? Who knows, but I am of the mind that it might be worth doing some serious research total sq mi of crop usage and average yields to confirm that we are just making less at a time that we are at a minimum consuming the same amount if not more. My guess is yes, and it will be partly driven by inflation and partly driven by consistent availability.

What I am really curious is not price increases in relation to inflation but shortages and outages due to to supply chain shock. As we see a yo-yo in availability I am curious who takes the hit from the consumer and what secondary impact that will have on the market. As an example KR (Kroger) hit their all time high on the 2nd of Sept. What happens in 2 month when they just can't keep their shelves looking full because GIS (General Mills) can't keep up with production due to lack of raw inputs and labor? GIS has been on a steady slide as it is. Do they see a bigger hit in relation to the hit KR will take?

Lots of interesting things to look at, but I got a feeling we are going to see a wild run to the end of the year.

[Satoshi 129]

34 minutes ago, Laxtonto said:

Corn, wheat, and beans all took a beating with the massive flooding that hit the Midwest in 2018. COVID them made many of the smaller farms fold in the US that were in duress from the previous few seasons. Now we are seeing other countries get impacted with the same level of internal chaos from a production standpoint and so we are seeing a steady climb globally. Will it continue through the winter? Who knows, but I am of the mind that it might be worth doing some serious research total sq mi of crop usage and average yields to confirm that we are just making less at a time that we are at a minimum consuming the same amount if not more. My guess is yes, and it will be partly driven by inflation and partly driven by consistent availability.

What I am really curious is not price increases in relation to inflation but shortages and outages due to to supply chain shock. As we see a yo-yo in availability I am curious who takes the hit from the consumer and what secondary impact that will have on the market. As an example KR (Kroger) hit their all time high on the 2nd of Sept. What happens in 2 month when they just can't keep their shelves looking full because GIS (General Mills) can't keep up with production due to lack of raw inputs and labor? GIS has been on a steady slide as it is. Do they see a bigger hit in relation to the hit KR will take?

Lots of interesting things to look at, but I got a feeling we are going to see a wild run to the end of the year.

Speaking of Kroger, ceo sees inflation for rest of 2021 a bit higher than they predicted at beginning of year. But “still manageable”. 
 

 

[Satoshi 129]

 

[washparkhorn 9,939]

tomorrow is a big day for actual inflation data.

[Parliament 14,292]

8 hours ago, Laxtonto said:

Corn, wheat, and beans all took a beating with the massive flooding that hit the Midwest in 2018. COVID them made many of the smaller farms fold in the US that were in duress from the previous few seasons. Now we are seeing other countries get impacted with the same level of internal chaos from a production standpoint and so we are seeing a steady climb globally. Will it continue through the winter? Who knows, but I am of the mind that it might be worth doing some serious research total sq mi of crop usage and average yields to confirm that we are just making less at a time that we are at a minimum consuming the same amount if not more. My guess is yes, and it will be partly driven by inflation and partly driven by consistent availability.

 

2018 corn production was the 3rd highest on record:

 

(And note 2021 projection is to be 2nd best ever.

2018 soybeans were a record, and 2021 forecasted to be the 2nd best ever: 

 

2018 wheat crop WAS down.  You're definitely right there.  I cant' find a chart, but wheat had a rough go of it this year.  Drought in the north:

Although down from the peak, 2018 net farm income was the best in 4 years.  

 

I'm not looking to argue a tangent, but you're wrong on some base assumptions. 

[Satoshi 129]

 

[elfenix 34,332]

26% of the month to month was gas prices, and 15% due to new car prices. i'm reading lowest yoy increase since february.  waiting for the guy to make the target cone graph on reddit.  

 

edit: again from u/integralds

 

 

Edited September 14, 2021 by elfenix

[washparkhorn 9,939]

UK's "Eat Out to Help Out" campaign apparently caused inflation. Quaint. 

https://www.reuters.com/world/uk/uk-inflation-rockets-32-biggest-leap-record-2021-09-15/

"UK inflation has surged to its highest for more than nine years after a record jump in August as restaurant and cafe prices raced higher following last summer’s hefty discounts under the Eat Out to Help Out scheme.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation jumped from 2% in July to 3.2% in August, which is the highest since March 2012.

The ONS said the increase – the largest since records began in 1997 – was due to the discounts seen across the hospitality sector last August under Chancellor Rishi Sunak’s Eat Out to Help Out scheme to boost consumer spending and confidence after lockdown."

Dining must be quite the important market, for the Brits. 

________________________

Speaking of markets, a couple of thoughts on the fictional Purse Market. An update: 

. . . The Purse Market: China crack down on luxury consumables as excessive. This crackdown should lead to an oversupply of personal luxury items - and resulting downward pricing pressure, for luxury items available to the public. What was to be popular in China will cost less in the United States than expected. Is there anything capitalism cannot fix?

TLDR: the Purse market may become a buyer's market during the holidays. Happy hunting you purse fiends. 

______________

Inflation news - Waiting on the 9/22 Fed Decision and outlook. The curtains are drawn. 

Wildcard on data - China's signaling on economic action is muscular and worrisome. Their actions loom on economic outlook and certainty. The Fed tracks the negative externalities of the actions. 

Edited September 15, 2021 by washparkhorn

[UT_OB1 2,224]

On 9/13/2021 at 5:05 PM, Parliament said:

2018 corn production was the 3rd highest on record:

 

(And note 2021 projection is to be 2nd best ever.

2018 soybeans were a record, and 2021 forecasted to be the 2nd best ever: 

 

2018 wheat crop WAS down.  You're definitely right there.  I cant' find a chart, but wheat had a rough go of it this year.  Drought in the north:

Although down from the peak, 2018 net farm income was the best in 4 years.  

 

I'm not looking to argue a tangent, but you're wrong on some base assumptions. 

Soybean is due to quite a few renewable diesel units coming online or under construction. The “food waste” feed stock will mostly be used up by the capacity that come online by 2022. Soybean oil will be used to feed the new units. Some project have already been canceled due to increased feed cost

[washparkhorn 9,939]

Fertilizer prices going up . . . 

"Prices for major fertilizers soared after Ida blew through New Orleans, shutting down plants and causing logistics nightmares for companies trying to ship products. A farm chemical known as diammonium phosphate, or DAP, climbed to the highest since 2008 in the area. Prices for urea, which is nitrogen-based, also spiked. 

Expensive fertilizer adds to the cost of producing food at a time when farmers already see margins stretched thin, with everything from equipment and labor to seeds getting pricier. The hikes for the chemicals, which farmers use to ensure abundant crops, could exacerbate global food inflation.

“Even if Nicholas doesn’t have much impact on fertilizer production, more rain will not be good for logistics in the New Orleans area,” Steve Seay, an analyst with Bloomberg Intelligence, said in an email. “Getting empty barges in place to load fertilizer has been a problem.”'

https://www.bloomberg.com/news/articles/2021-09-15/u-s-fertilizer-prices-soar-as-storms-threaten-main-industry-hub

 

[washparkhorn 9,939]

 

[elfenix 34,332]

On 9/15/2021 at 3:37 PM, washparkhorn said:

 

related:

https://www.popsci.com/technology/record-breaking-container-ships-awaiting-entry/

https://www.wsj.com/articles/u-s-ports-see-shipping-logjams-likely-extending-far-into-2022-11630843202

you're probably going to see a lot of price variation until these supply chain issues can get sorted out.  some of that may mean re-sourcing to get around supply chain backups, which may result in increased prices (if a TV plant moves here it'd be an unwinding of the globalization that has helped tame consumer prices over the last 25 years, for example). 

Edited September 17, 2021 by elfenix

[UT_OB1 2,224]

On 9/17/2021 at 4:19 PM, elfenix said:

related:

https://www.popsci.com/technology/record-breaking-container-ships-awaiting-entry/

https://www.wsj.com/articles/u-s-ports-see-shipping-logjams-likely-extending-far-into-2022-11630843202

you're probably going to see a lot of price variation until these supply chain issues can get sorted out.  some of that may mean re-sourcing to get around supply chain backups, which may result in increased prices (if a TV plant moves here it'd be an unwinding of the globalization that has helped tame consumer prices over the last 25 years, for example). 

We paid ~$2k to have a container shipped here precovid. We are now paying $28k per shipment for the same material. 

Edited September 19, 2021 by UT_OB1