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2021 - Is inflation finally back in the conversation?

Reagan1k

By Reagan1k
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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

PilotsError
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torre

torre 1285

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35 minutes ago, Parliament said:

You got a link?  I wanna read the whole thing. 

https://archive.ph/UQJBl

 

Not the OP,  but also interested.   Also,  note below article.

 

George Kent has written extensively on the issue of global hunger, therefore it is unlikely that he will write something positive about the issue, and hence it can be said that the article is satirical.

https://www.opindia.com/2022/07/article-describing-benefits-of-world-hunger-published-by-the-un-goes-viral/

 

 

 

 

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fattyflattie

fattyflattie 4639

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2 hours ago, jimmyjazz said:

Saw some gas prices below $4 today . . . any particular reason for the drop, or just random fluctuation?

Looks to be some institutional profit taking causing a bit of a dip, that’s already gone.  Sams up he road was at 3.89 yesterday and 4.89 for #2.  Cheapest I’ve seen around here. 

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Wulaw Horn

Wulaw Horn 19068

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Saw 3.99 in Conroe yesterday. Also saw 4 cop cars chasing a motorcycle at 100+ miles an hour. Reminded myself never to go to Conroe again after being there. Also, found out they the double Dave’s buffet where I used to go every Sunday evening closed like 10 years ago. Bastards. 

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gsoda3

gsoda3 3252

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On 7/7/2022 at 9:41 PM, jimmyjazz said:

Saw some gas prices below $4 today . . . any particular reason for the drop, or just random fluctuation?

reactions to and frontrunning the fed comments and unemployment #s from last week.  it's the looming specter of a hard landing.  

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Vegas64

Vegas64 673

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Saw this social media post today:

Quote

U.S. consumer inflation in June was up 9.1% year on year - the most since November 1981. The even worse news?

Month-on-month Total CPI and Core CPI both accelerated in June 2022 from May 2022.

This means inflation is not easing -

And the policy implications are significant!

We have been expecting a 75 basis point rate hike in the Fed decision on 27 July and a 50 basis point rate hike in September. 

But after today's eye-popping 9.1% CPI, the whisper of a 100 basis point rate hike on 27 July could increase as the chances rise that the Fed surprises markets to the upside with this month's rate hike.

The Fed has just two priorities as part of its dual mandate
- Full Employment ( #Jobs and #Work are solid with a low 3.6% unemployment rate).
- Low, Stable Prices (Inflation is high and unstable at 9.1%).

Does the Fed have any other mandates other than Full Employment and Low Inflation?

No.

The Fed does not have a mandate for GDP, #equities, #housing, #business investment, the #dollar, #oilprices, #metals, or anything else.

So, while Fed actions may trigger further declines in GDP and a #recession, as long as jobs are solid and inflation is high, the Fed could keep pushing #interestrates higher.


 

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Wulaw Horn

Wulaw Horn 19068

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I read (maybe heard) so lets juts go with "people are saying" that if we still measured inflation today like we did in the 70's that the rate wouldn't be 9.1 it would be something like 15%.  Which, with fuel up 58%, food up 10+ percent, housing up 18 or 19% that's probably what it feels like to the average consumer.  

It's fucking brutal.

One funny thing- I think used cars were at like 8%.  Remember when the administration kept talking about used cars being calculated and driving up the number and that wasn't a big deal b/c most people weren't in the market for a car or they could make due with their old one?  Yeah, now that 8% numbers is actually driving the number down.  Not sure if used car prices are decreasing from where they were a year ago when they were up 33% or if we are just comparing to a higher baseline or not, but yeah, file that under aint that some shit.  

This inflation thing man- it's not a lot of fun.  

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Vegas64

Vegas64 673

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Just now, Wulaw Horn said:

I read (maybe heard) so lets juts go with "people are saying" that if we still measured inflation today like we did in the 70's that the rate wouldn't be 9.1 it would be something like 15%.  Which, with fuel up 58%, food up 10+ percent, housing up 18 or 19% that's probably what it feels like to the average consumer.  

It's fucking brutal.

One funny thing- I think used cars were at like 8%.  Remember when the administration kept talking about used cars being calculated and driving up the number and that wasn't a big deal b/c most people weren't in the market for a car or they could make due with their old one?  Yeah, now that 8% numbers is actually driving the number down.  Not sure if used car prices are decreasing from where they were a year ago when they were up 33% or if we are just comparing to a higher baseline or not, but yeah, file that under aint that some shit.  

This inflation thing man- it's not a lot of fun.  

I read something last week about how used car prices were going down, but at the same time due to interest rates and inflation, there are more $1000/month car payments than ever before.

I can't even imagine that; our average car payment is around $500/month (I think $500 amounts to $30k vehicle) and that was stressful. I can't imagine $1000/car payment.

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Humble Beast

Humble Beast 258

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Posted
7 minutes ago, Wulaw Horn said:

I read (maybe heard) so lets juts go with "people are saying" that if we still measured inflation today like we did in the 70's that the rate wouldn't be 9.1 it would be something like 15%.  Which, with fuel up 58%, food up 10+ percent, housing up 18 or 19% that's probably what it feels like to the average consumer.  

It's fucking brutal.

One funny thing- I think used cars were at like 8%.  Remember when the administration kept talking about used cars being calculated and driving up the number and that wasn't a big deal b/c most people weren't in the market for a car or they could make due with their old one?  Yeah, now that 8% numbers is actually driving the number down.  Not sure if used car prices are decreasing from where they were a year ago when they were up 33% or if we are just comparing to a higher baseline or not, but yeah, file that under aint that some shit.  

This inflation thing man- it's not a lot of fun.  

 

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Wulaw Horn

Wulaw Horn 19068

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8 minutes ago, Humble Beast said:

 

Thanks.  13%  Fun times! Looks like inflation peaked at about 14% at the end of the 1970's.  So, comparing apples to apples and measuring by the same metrics we are almost there!

I always wondered what it would be like to live in those climates and was always so happy I never had to see it.  It's not good.  Bad economy in my life has always been about employment number.  I'm starting to think inflation is worse than unemployment when you net everything out, but I'm not 100% sure that's true. But way more than I would have considered 18 months ago.  

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Vegas64

Vegas64 673

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5 minutes ago, Wulaw Horn said:

Thanks.  13%  Fun times! Looks like inflation peaked at about 14% at the end of the 1970's.  So, comparing apples to apples and measuring by the same metrics we are almost there!

I always wondered what it would be like to live in those climates and was always so happy I never had to see it.  It's not good.  Bad economy in my life has always been about employment number.  I'm starting to think inflation is worse than unemployment when you net everything out, but I'm not 100% sure that's true. But way more than I would have considered 18 months ago.  

Disagree. Would rather have a job and high prices than not have a job and have moderate prices, in the short term.

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Wulaw Horn

Wulaw Horn 19068

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1 minute ago, Vegas64 said:

Disagree. Would rather have a job and high prices than not have a job and have moderate prices, in the short term.

Sure.  And every individual would make that choice.  The question is more for society. Would we rather have 4% unemployment with everyone paying 13% more for goods, or would we rather have 8% unemployment with everyone paying the same for goods.  I have no idea how to quantify that.  Gut feeling is I'd rather pay a little more to unemployment insurance fund than 13% more on everything. If the question is do I have a job or don't I have a job the answer is blindingly obvious, give me a job. 

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Snake Diggity

Snake Diggity 4620

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3 minutes ago, UTGrad98 said:

So someone tell me why having deflation in 2024 and 2025 to offset this shit is bad. My economic knowledge comes from 1 macro and micro econ course taken in the mid 90s at acc. 

Why would you expect deflation then?  Best I can guess the only way deflation would occur is if the Fed is overreacting, in which case they would very likely reverse course and go back to QE to address unemployment which would head off deflation.  Deflation would only happen in the event that rates go way up, dramatically tempering demand, but somehow unemployment stays very low.  Which I guess to your point, should be a good thing.

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UTGrad98

UTGrad98 2271

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And can someone explain to me why bond yields are dropping on this news? Do the markets think we will have a recession first and therefore the fed will stop raising rates earlier than we all think. Am I right to think the 2 year is based on where the market think rates will end up in the short term? 

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UTGrad98

UTGrad98 2271

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4 minutes ago, Snake Diggity said:

Why would you expect deflation then?  Best I can guess the only way deflation would occur is if the Fed is overreacting, in which case they would very likely reverse course and go back to QE to address unemployment which would head off deflation.  Deflation would only happen in the event that rates go way up, dramatically tempering demand, but somehow unemployment stays very low.  Which I guess to your point, should be a good thing.

Not expecting deflation. More like the fed actively seeking deflation. 

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Bozo_Casanova

Bozo_Casanova 26438

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Posted (edited)

The inflation was coming from inside the house

Quote

GDP in 22Q1 was -1.6% annualized, 22Q2 looks to come in at -2% annualized. Yet job growth in 22H1 was superb, averaging 456K/month. How can this be? Are firms hoarding workers despite falling sales because bosses expect a mild downturn or because hiring is so tough? Maybe the GDP data will be revised up or employment data downwards. Otherwise, productivity must be sinking at 6%/year which is historically unprecedented.

High liquidity + not enough stuff to do with it = stagflation 


Many of you have been around long enough to remember when I was still trying to explain basic economic reality. At that time, I repeatedly talked about the risks of tax cutting (or not letting tax cuts expire) during expansions and prolonged periods of low interest rates "loading the gun" for the next recession. Welcome to the utterly predictable future. The crop has failed and the seed corn has been eaten.  
Or, fellas, is it still too soon to tell how these things play out? Will it always be?
@TahoeHorn @Ag with kids @Wulaw Horn @washparkhorn

Edited by Bozo_Casanova
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52-80

52-80 19147

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24 minutes ago, UTGrad98 said:

And can someone explain to me why bond yields are dropping on this news? Do the markets think we will have a recession first and therefore the fed will stop raising rates earlier than we all think. Am I right to think the 2 year is based on where the market think rates will end up in the short term? 

People buying existing bonds as flight to safety

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52-80

52-80 19147

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1 hour ago, Humble Beast said:

 

These are ex-post measurements anyway. So while we’re playing this game, i propose a more representative basket of goods:

 

The Shaggy Index = (a house in round rock, a case of 4loko, and 1 pork chop from Perrys)

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Humble Beast

Humble Beast 258

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37 minutes ago, Bozo_Casanova said:

The inflation was coming from inside the house

High liquidity + not enough stuff to do with it = stagflation 


Many of you have been around long enough to remember when I was still trying to explain basic economic reality. At that time, I repeatedly talked about the risks of tax cutting (or not letting tax cuts expire) during expansions and prolonged periods of low interest rates "loading the gun" for the next recession. Welcome to the utterly predictable future. The crop has failed and the seed corn has been eaten.  
Or, fellas, is it still too soon to tell how these things play out? Will it always be?
@TahoeHorn @Ag with kids @Wulaw Horn @washparkhorn

You almost sound like a sound money advocate 

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Cheeseweasel

Cheeseweasel 26438

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2 hours ago, Vegas64 said:

I read something last week about how used car prices were going down, but at the same time due to interest rates and inflation, there are more $1000/month car payments than ever before.

I can't even imagine that; our average car payment is around $500/month (I think $500 amounts to $30k vehicle) and that was stressful. I can't imagine $1000/car payment.

Paying more and getting less, but if you buy it tomorrow, you'll pay even more and get even less.

Welcome to 1978!

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