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2021 - Is inflation finally back in the conversation?

Reagan1k

By Reagan1k
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Parliament

Parliament 14260

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58 minutes ago, StassneyHorn said:

“It would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years, according to news reports. That would ensnare perhaps 700 taxpayers — or the wealthiest 0.0002 percent”

https://www.nytimes.com/2021/10/25/business/dealbook/democrats-capital-gains-tax.html

Great.  So I'm screwed.  

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Bateshorn
Bateshorn

The only thing more predictable than the GOP running up huge deficits on tax cuts and military spending, is each one suddenly becoming horrified by deficit spending 5 mins after a Democrat is sworn in

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Satoshi

Satoshi 129

Posted
Posted (edited)
15 hours ago, Neonmoon said:

How did you connect Janet Yellen explaining a unrealized capital gains tax bill proposed by members of Congress to the reason it was proposed was to curb inflation?

They want to spend money on infrastructure. They also want to pay for the expenditures. Their proposal is tax the ultra rich. Seems pretty straight forward. 

You think Congress draws up tax provisions in legislation without Treasury input? 
 

I just thought it was a interesting coincidence given that the government is all MMTers now. 
 

6 hours ago, babysdaddy said:

choose your fighter.  Larry coming out with a thread

 

 

 

Summers is obviously a heavyweight whose opinion is valued highly by the establishment. Also, IIRc he has been on the right side of the argument for years as inflation has been muted. So this is noteworthy.

 

 

 

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NotActuallyALonghorn

NotActuallyALonghorn 4976

Posted
Posted
13 hours ago, StassneyHorn said:

“It would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years, according to news reports. That would ensnare perhaps 700 taxpayers — or the wealthiest 0.0002 percent”

https://www.nytimes.com/2021/10/25/business/dealbook/democrats-capital-gains-tax.html

So what you're saying is it is tailored so that it doesn't affect any former presidents?

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Incredulity

Incredulity 11675

Posted
Posted
14 hours ago, StassneyHorn said:

“It would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years, according to news reports. That would ensnare perhaps 700 taxpayers — or the wealthiest 0.0002 percent”

https://www.nytimes.com/2021/10/25/business/dealbook/democrats-capital-gains-tax.html

 

Paywall

can you copy paste this?  

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Trey3216

Trey3216 15347

Posted
Posted
14 hours ago, StassneyHorn said:

“It would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years, according to news reports. That would ensnare perhaps 700 taxpayers — or the wealthiest 0.0002 percent”

https://www.nytimes.com/2021/10/25/business/dealbook/democrats-capital-gains-tax.html

Wait til they have to start selling their stock to pay for the taxes.  Gonna do a real number to index funds when 70% of your S&P 500 fund growth the past few years is in 6 stocks that are gonna get dumped to pay unrealized gains taxes of 700 people.  

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washparkhorn

washparkhorn 9939

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Cathie Wood (intelligent crypto-bull) understands the deflationary headwinds in the economy:

In 2008-09, when the Fed started quantitative easing, I thought that inflation would take off," Wood tweeted in response on Monday. "I was wrong. Instead, velocity - the rate at which money turns over per year - declined, taking away its inflationary sting. Velocity still is falling."

In a lengthy Twitter thread, she argues that the price increases impacting consumers should wind down after the holiday season due to three sources of deflation.

Spoiler

According to Wood, the first source [of deflation] is "technologically enabled innovation" such as artificial intelligence. She notes that AI training costs are dropping 40% to 70% at an annual rate, which she called "a record-breaking deflationary force."

"When costs and prices decline, velocity and disinflation - if not deflation - follow," she added. "If consumers and businesses believe that prices will fall in the future, they will wait to buy buy goods and services, pushing the velocity of money down."

The second source, Wood says, is "creative destruction" as a result of disruptive innovation.

"Since the tech and telecom bust and the Global Financial Crisis in 2008-09, many companies have catered to short-term oriented shareholders who want profits/dividends now," she explains. "They leveraged their balance sheets to pay dividends and buy back shares, ‘manufacturing’ earnings per share. They have not invested enough in innovation and probably will be forced to service their debts by selling increasingly obsolete goods at discounts: deflation."

The final source Wood cites is the over-ordering and stockpiling of goods that have occurred as a result of the COVID-19 pandemic and supply chain bottlenecks.

"Because businesses shut down and were caught flat-footed as goods consumption took off during the coronavirus crisis, they still are scrambling to catch up, probably double- and triple-ordering beyond their needs," she says. "As a result, once the holiday season passes and companies face excess supplies, prices should unwind."

She emphasizes that commodity prices such as lumber and iron ore have already dropped 50% and that the price of oil is  "an outlier and psychologically important."

Wood points out that global demand for oil is below 2019 levels and "unlikely to return to its old high, partly because its price has broken a string of lower highs and is above the $77 hit in 2018, therefore destroying demand."

"On the supply side, ESG (environmental, social, and governance) mandates have forced energy companies to shift capital spending from mature fossil fuels to nascent renewables. Meanwhile, banks have deprived fracking companies of funding after their near-death experience in 2020," she concludes. "In response to the near quadrupling of oil prices since the low last year, electric vehicle adoption has accelerated, sowing the seeds of a serious oil price decline longer term."

Tesla CEO Elon Musk responded to Wood's thread, writing "I don’t know about long-term, but short-term we are seeing strong inflationary pressure." Though Dorsey didn't issue a formal reply, he retweeted Musk's tweet.

Wood responded to Musk's tweet with a separate thread, writing that, while she is open to dialogue, she believes "the powerful and converging deflationary forces associated with AI, energy storage (EVs!), robotics, genomic sequencing, and blockchain technology will bend the curve."

https://www.msn.com/en-us/money/other/cathie-wood-elon-musk-weigh-in-on-jack-dorsey-hyperinflation-tweet/ar-AAPZ5i6

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ChiTownDoc

ChiTownDoc 21154

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Posted (edited)

The economy is running too hot!  The economy is running too cold!

 

As long as we stay with a decent number of people on both sides I'm buying Jamie Diamond's goldilocks quote which is aging quite well at this point.  I've been a maniac about finding every shekel I could get to invest.  I tapped into everything including lines about 8 months ago.  I won't pull out now but I really don't have much else to throw at this fire.  But I'm a crackhead with UPRO etc maxed the fuck out.  I guess the plus side is even a 25% pullback leaves most of us in the green after the run we've had.  The bad news is I won't have anymore firewood on that massive pullback.  

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gsoda3

gsoda3 3263

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1 hour ago, Cheeseweasel said:

So...stagflation?

 

stagflation = stagnation + inflation.  by all accounts we have a growing economy even factoring in the reopening bounce. 

 

24 minutes ago, washparkhorn said:

Snap GDP numbers from the Atlanta Fed look like shit:

gdpnow-forecast-evolution.gif?h=360&w=65

Nasty set-up for a financial sector addicted to $120 billion a month welfare payment from the Fed and negative interest rates.

we'll see, they've been well off since last year (understandably).  

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jimmyjazz

jimmyjazz 45978

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52 minutes ago, gsoda3 said:

we'll see, they've been well off since last year (understandably).  

Yeah, a forward-looking projection (duh) based solely on past data is incapable of factoring in extraordinary circumstances.  We're kinda in the middle of extraordinary circumstances.

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UT_OB1

UT_OB1 2224

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Posted
6 hours ago, jimmyjazz said:

Yeah, a forward-looking projection (duh) based solely on past data is incapable of factoring in extraordinary circumstances.  We're kinda in the middle of extraordinary circumstances.

God I hope not. How about final turn, home stretch, or even the last lap?  

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DonkeyCigars

DonkeyCigars 143

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18 hours ago, Cheeseweasel said:

Yeah, outside of a few people hording TP, businesses aren't "over-ordering" and "stockpiling". We are ordering more than usual, but that's because it takes us 3 months to get us what usually took 3 weeks. 

https://www.theatlantic.com/technology/archive/2021/10/stop-shopping-global-supply-chain-shipping-delays/620465/

"Worried About the Supply Chain? Stop Shopping."

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Passive Aggressive Coach

Passive Aggressive Coach 87

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I just refinanced my house 2 mos ago. I knew rates won't ever be this low again. I still remember my dad talking about his 16% interest rate on our 1st house as a kid. The rate hikes are coming. Also, took out a loan against my life insurance for my business. BTW thats a financial hack I wish I knew about before.

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StruggleBus

StruggleBus 3922

Posted
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On 10/25/2021 at 9:28 PM, StassneyHorn said:

“It would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years, according to news reports. That would ensnare perhaps 700 taxpayers — or the wealthiest 0.0002 percent”

https://www.nytimes.com/2021/10/25/business/dealbook/democrats-capital-gains-tax.html

No. Fuck no. Don’t allow this bullshit under any circumstance. You know what happens once they successfully do it to the ultra rich. Not interested.

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tbone_

tbone_ 14128

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I think the concern is that it doesn’t just stay with the Uber wealthy, just like income tax didn’t stay temporary. Give them an inch and they’ll quickly take miles and miles.

Taxing unrealized gains also seems weird because what if those values decline and the un realized gain decreases? Does the tax payer get a refund?

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StassneyHorn

StassneyHorn 6616

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29 minutes ago, StruggleBus said:

If your best argument in support of this idea is “it doesn’t effect you (currently)” it’s probably a really, really shitty idea. 

If you can’t show examples to support your slippery slope argument,you're probably just giving a really, really shitty ideaological hot take that won’t AFFECT you. Ever. 

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Satoshi

Satoshi 129

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Posted
1 hour ago, StassneyHorn said:

If you can’t show examples to support your slippery slope argument,you're probably just giving a really, really shitty ideaological hot take that won’t AFFECT you. Ever. 

The initial 1913 income tax was 1% on the highest earners. Just the tip. Next. 
 

 

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