2021 - Is inflation finally back in the conversation?

[BearSchlong 8082]

Because it's a bubble and people are going to lose their asses.

Grandpa?

[CHIEF 5075]

Here is a good video explaining hyperinflation caused by World events. It explains why we are already seeing it in some markets (real estate and stocks) but not really seeing it yet in the CPI. It also gives tips on using it to your advantage:

CHIEF

[washparkhorn 9939]

Thanks for the video Chief.

1. Before watching it, the audience should understand deflation is always a greater danger than inflation . . . always.

2. Asset bubble ≠ Inflation 

3. We expected supply chain disruptions from Covid would temporarily to increase prices of some goods - again, not classic inflation.

[washparkhorn 9939]

This is the video to start with from Chief's source and then watch the video Chief posted. This video explains the concepts well (and why we didn't have inflation early in Covid).

 

[B00M 6413]

On 4/16/2021 at 7:27 AM, Fudge Nuggets said:

Why isn't that sustainable?  It works out to roughly a 2.5% increase in GDP per year for the next 30 years.  That's far from being uncontrollable.

You promise to keep interest rates near 0%?

[GRHorn 105]

 

[workswithseed 2085]

43 minutes ago, GRHorn said:

 

A man in NY just smiled.

[B00M 6413]

1 hour ago, GRHorn said:

 

This is effectively a tax on the stupid/poor. Fuck every coca cola product

 

[Bozo_Casanova 26429]

Iflation will return someday. That being said, the rising consumer prices we are seeing right now is an optical illusion. 

Laymen's terms

A little deeper

From Roosevelt:
 

Quote

Conclusion

When inflation numbers come out on April 13, they will likely look very high. And measured annually, inflation will probably rise further in the next few months. These headline numbers will be used to argue against the American Jobs Plan and future infrastructure investments, and even to advocate austerity.

But this response will be wrong, for three reasons. First, the high YoY inflation of the coming months will reflect the falling prices of a year ago, whether or not prices are rising more rapidly today. Second, achieving the Fed’s price-stability goals requires a period of above-trend inflation; if inflation, correctly measured, rises modestly in the coming months, that’s a good thing. And third, even if inflation is a genuine problem, scaling back infrastructure investment is not the solution. It might even make the problem worse.

Key word being "modestly"
 

Edited April 19, 2021 by Bozo_Casanova

[GRHorn 105]

7 hours ago, Bozo_Casanova said:

Iflation will return someday. That being said, the rising consumer prices we are seeing right now is an optical illusion. 

Laymen's terms

A little deeper

From Roosevelt:
 

Key word being "modestly"
 

It will be interesting to track. Will it indeed be "transitory" as the Fed's language suggests? IMO continued direct stimulus could be a big part of what tips it further. I'm not arguing against stimulus btw. I just see it as likely to happen.

https://www.cnbc.com/2021/04/16/will-there-be-a-fourth-stimulus-check-what-we-know-so-far.html

[Neonmoon 38129]

10 hours ago, B00M said:

This is effectively a tax on the stupid/poor. Fuck every coca cola product

 

Inflation hurts rich people, creditors, people with capital, lenders. 

It hurts their rate of return over time. 

 

[Reagan1k 3024]

Quote

Marcy Nicholson

(Bloomberg) -- Lumber prices have soared to records. Demand for wood is skyrocketing. The shares of wood suppliers are surging.

And yet, trees themselves are dirt cheap in places like Louisiana, where timber supplies are plentiful.

The so-called stumpage fee, or what lumber companies pay to land owners for trees, for Louisiana pine sawtimber on March 31 was $22.75 per short ton, according to the latest data from price provider TimberMart-South. That’s the lowest since 2011.

An abundance of harvest-ready trees has kept stumpage fees extremely low across the U.S. South, home to half of the country’s production. Meanwhile, lumber futures are up 85% in 2021 because of soaring demand. Sawmills profit from the premium lumber commands over the stumpage fee -- think of it like the lumber crack spread.

Those margins are exploding. The spread between futures and stumpage for Louisiana pine, for example, has more than doubled just this year, topping $1,100 per 1,000 board feet.

Harvest-ready trees exceed sawmill capacity throughout the southern U.S. Since it’s so expensive to transport heavy logs, supplies go to sawmills in the area and the fees are highly localized in the region, where many timberlands are privately owned.

In Alabama, the stumpage fees are slightly higher than Louisiana at $23.34 per short ton. But they’ve barely budged since 2016 and are half the price fetched in 2005.

In the futures market, lumber touched a record $1,326.70 per 1,000 board feet on Monday.

That sent the spread between futures and the Louisiana stumpage fee higher than $1,144 per 1,000 board feet on Monday, based on a calculation that assumes 8 short tons of logs per 1,000 board feet.

By comparison, during the last lumber surge (in the first half of 2018), the spread topped out just above $440.

“If you can source the lumber, you’re making a whole bunch of money right now,” Stinson Dean, chief executive officer of Deacon Lumber Co., said in an interview on Bloomberg Television last week.

The margin calculation is similar to the oil market’s famed crack spread, or the price at which gasoline trades over crude, and doesn’t account for the expense of processing logs into lumber cuts like plywood or two-by-fours.

Lumber Frenzy Drives Up Home Prices as Suppliers Can’t Keep Up

Lower stumpage fees are beefing up profits for sawmills as a frenzy for home-renovation and building has sparked an unprecedented surge in demand for lumber. And mills are cranking it out to take advantage of the unusually high margins, with those in the South running at about 93% of capacity, according to Forest Economic Advisors LLC.

“As soon as the supply disruptions sort themselves out and everything gets back to normal, we expect a major correction in prices,” said Joshua Zaret, a senior analyst at Bloomberg Intelligence. “But right now, if you’re producing lumber in the U.S. South -- or anywhere for that matter, but particularly in the U.S. South, where your log cost hasn’t come up -- it’s very profitable.”

Investors are rewarding the mills. Shares of West Fraser Timber Co., the world’s biggest lumber supplier, have tripled in the past 12 months in Canada trading.

Still, there are signs that margins could start to shrink later this year and into 2022 as sawmill capacity expands and eats into the tree glut.

Forest Economic Advisors estimates capacity for mills in the U.S. South at 23.6 billion board feet. As much as 1.5 billion board feet of new capacity is expected to come online over the next year or two.

(Updates with comment from analyst in 14th paragraph)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

 

 

[GRHorn 105]

 

[washparkhorn 9939]

41 minutes ago, GRHorn said:

 

Velocity of money is an indicator you should be monitoring. 

[Reagan1k 3024]

17 hours ago, washparkhorn said:

Velocity of money is an indicator you should be monitoring.

I've tried monitoring it but it leaves my wife's hands faster that I can see.

[UT_OB1 2213]

On 4/20/2021 at 11:55 AM, Reagan1k said:

 

Yeah, I’ve wondered how much I could make quitting my job and buying one of those portable saw mills.  Sounds reasonable, right?

[Bozo_Casanova 26429]

On 4/19/2021 at 8:02 PM, GRHorn said:

It will be interesting to track. Will it indeed be "transitory" as the Fed's language suggests? IMO continued direct stimulus could be a big part of what tips it further. I'm not arguing against stimulus btw. I just see it as likely to happen.

https://www.cnbc.com/2021/04/16/will-there-be-a-fourth-stimulus-check-what-we-know-so-far.html

For now. 

As for what tips it further, I've been thinking about this a lot lately, and stay with me because I'm still thinking this through. 
I've been very critical of MMT in the past, and still am, because it represents an observational truth and nothing more - that, essentially, a monitarily sovereign country issuing its own fiat currency literally makes the money itself, that government debt is just a form of public equity in the economy, that the only real limit the government has on spending is real resources, and thus, inflation is a symptom of too much medium and not enough to exchange, which can be controlled by using taxes to take money out of circulation. 

That can be workable, because essentially you're paying everyone not to care about the money supply. But that's transitory because it only lasts as long as the government has a monopoly on issuing currency.  The rapid adoption of both public and private blockchain protocols and or basket currencies or even competing fiats as medium of exchange to facilitate transactions challenge that directly. 

IOW - I'm a lot less worried about how government spending impacts the money supply and more worried about the demand for the dollar as a reserve currency and medium of exchange, because that's the only real brake on inflation, whether MMT is correct or not*. 





*It's Bullshit, for what it's worth

 

Edited April 22, 2021 by Bozo_Casanova

[GRHorn 105]

21 minutes ago, Bozo_Casanova said:

For now. 

As for what tips it further, I've been thinking about this a lot lately, and stay with me because I'm still thinking this through. 
I've been very critical of MMT in the past, and still am, because it represents an observational truth and nothing more - that, essentially, a monitarily sovereign country issuing its own fiat currency literally makes the money itself, that government debt is just a form of public equity in the economy, that the only real limit the government has on spending is real resources, and thus, inflation is a symptom of too much medium and not enough to exchange, which can be controlled by using taxes to take money out of circulation. 

That can be workable, because essentially you're paying everyone not to care about the money supply. But that's transitory because it only lasts as long as the government has a monopoly on issuing currency.  The rapid adoption of both public and private blockchain protocols and or basket currencies or even competing fiats as medium of exchange to facilitate transactions challenge that directly. 

IOW - I'm a lot less worried about how government spending impacts the money supply and more worried about the demand for the dollar as a reserve currency and medium of exchange, because that's the only real brake on inflation, whether MMT is correct or not*. 





*It's Bullshit, for what it's worth

 

I’ll start by saying I’m no economist (obviously), but a glaring hole I find problematic with MMT is the idea that you just raise taxes to take money out of circulation and tamp down inflation. It sounds like a great thing to say, but when you spend so much time saying the amount of spending and deficits don’t matter, then politically it’s an almost impossible ask to say now we need to raise taxes. I know they’d be saying it’s to fight inflation, but with prices for goods rising who on Earth is really going to propose and craft legislation that will take money from people. It’s not feasible, unless I’m missing something. Without that I see MMT as essentially endless spending until you get devaluation and high inflation.

[Bozo_Casanova 26429]

43 minutes ago, GRHorn said:

I’ll start by saying I’m no economist (obviously), but a glaring hole I find problematic with MMT is the idea that you just raise taxes to take money out of circulation and tamp down inflation. It sounds like a great thing to say, but when you spend so much time saying the amount of spending and deficits don’t matter, then politically it’s an almost impossible ask to say now we need to raise taxes. I know they’d be saying it’s to fight inflation, but with prices for goods rising who on Earth is really going to propose and craft legislation that will take money from people. It’s not feasible, unless I’m missing something. Without that I see MMT as essentially endless spending until you get devaluation and high inflation.

I'm not defending MMT or your point, but I disagree with your premise here, which is that monetary inflation is the same thing as prices going up. It's not. 

Money isn't really a store of value, but a medium of exchange for goods and services. To be a medium of exchange it has to be durable, fungible, portable, and widely accepted for goods and services. To be widely accepted and fungible, it has to be stable enough, but not so stable that it constrains trade or productivity, which is why we've adopted fiat.  On the other hand, if it's unstable, it loses acceptability, and at that point stops being money, which is why central banks try to maintain a sweet spot of mild inflation. 

And by the way, as long as the Government is running a deficit, raising taxes isn't "taking money from people", but rather, increasing their copay on services they are receiving at well below cost, whether they value those services or not. 
 

Edited April 22, 2021 by Bozo_Casanova

[Neonmoon 38129]

I don’t foresee governments allowing crypto or blockchain or whatever to challenge their control over fiat. There will be attempts for sure, but governments will just issue their own DC, and if other challenges persist, they will just outlaw it. They won’t let monetary policy controls be under-minded. Stability is in everyone’s best interest. 

[elfenix 34221]

On 4/17/2021 at 12:17 PM, CHIEF said:

Here is a good video explaining hyperinflation caused by World events. It explains why we are already seeing it in some markets (real estate and stocks) but not really seeing it yet in the CPI. It also gives tips on using it to your advantage:

CHIEF

about that:

 

 

 

[Fudge Nuggets 19184]

On 4/17/2021 at 10:29 AM, BearSchlong said:

On 4/16/2021 at 2:25 PM, Fudge Nuggets said:

Because it's a bubble and people are going to lose their asses.

Grandpa?

Would you be interested in some of these really pretty tulips I have for sale?

[washparkhorn 9939]

TIPS chart from the Fed - as referenced in @elfenix's link:

 

[BearSchlong 8082]

44 minutes ago, Fudge Nuggets said:

Would you be interested in some of these really pretty tulips I have for sale?

No, but feel free to send me Bitcoin, or Ethereum if that's more convenient. 

[GRHorn 105]

On 4/23/2021 at 2:50 PM, Fudge Nuggets said:

Would you be interested in some of these really pretty tulips I have for sale?

https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/
 

[washparkhorn 9939]

https://mishtalk.com/economics/expect-inflation-to-accelerate-heres-8-reasons-to-expect-decelerating-inflation

Nice piece by Mish setting out disinflationary trends:

Spoiler

Contrary to the conventional wisdom, disinflation is more likely than accelerating inflation. Since prices deflated in the second quarter of 2020, the annual inflation rate will move transitorily higher. Once these base effects are exhausted, cyclical, structural, and monetary considerations suggest that the inflation rate will moderate lower by year end and will undershoot the Fed Reserve’s target of 2%. The inflationary psychosis that has gripped the bond market will fade away in the face of such persistent disinflation.

After declining 5.2% in 2020, or the most since World War II, world-wide real per capita GDP is estimated to rise 4.7% in 2021. The United States will perform even better, rising 6.2%, after a contraction of 4.9% in 2020. The U.S. growth rate this year could be the fastest since 1984 and possibly even since 1950 (Chart 1).

Six considerations suggest that such growth is not likely to lead to sustaining inflation. 

Six Reasons to Expect Disinflation

1. Inflation is a lagging indicator, as classified by the National Bureau of Economic Research. The low in inflation occurred after all of the past four recessions, with an average lag of almost fifteen quarters from the end of the recessions. 
2. Productivity rebounds in recoveries and vigorously so in the aftermath of deep recessions. This pattern in productivity is quite apparent after the deep recessions ending in 1949, 1958 and 1982. Productivity rebounded by an average of 4.8% in the year immediately after the end of these three recessions and unit labor costs were unchanged. The rise in productivity held down unit labor costs.
3. Restoration of supply chains will be disinflationary. Supply chains were badly disrupted by the pandemic. Low-cost producers in Asia and elsewhere were unable to deliver as much product into the United States and other relatively higher cost countries. This allowed U.S. producers to gain market share. As immunizations increase, supply chains will be gradually restored. Thus, the pandemic cost the low-cost producers market share which was shifted to domestic producers. The pandemic did far more for domestic firm’s
4. Accelerated technological advancement will lower costs. Another restraint on inflation is that the pandemic greatly accelerated the implementation of inventions that were in the pipeline. Necessity is the mother of invention, as has been demonstrated in earlier crisis situations like wars. Thus, the technology du jour is not the same as the technology of a year ago. This will also serve to act as a restraint on inflation. Much of the technology substitutes machines for people, communication without travel, and work without offices.
5. Eye popping economic growth numbers, based on GDP in present circumstances, greatly overstate the presumed significance of their result. This is where the fallacy of the broken glass comes into play. Many businesses failed in the recession of 2020, much more so than normal. As survivors and new firms take over their markets, this will be reflected in GDP, but the costs of the failures will not be deducted.
6. The two main structural impediments to traditional U.S. and global economic growth are massive debt overhang and deteriorating demographics both having worsened as a consequence of 2020.

[GRHorn 105]

2 hours ago, washparkhorn said:

https://mishtalk.com/economics/expect-inflation-to-accelerate-heres-8-reasons-to-expect-decelerating-inflation

Nice piece by Mish setting out disinflationary trends:

  Reveal hidden contents

Contrary to the conventional wisdom, disinflation is more likely than accelerating inflation. Since prices deflated in the second quarter of 2020, the annual inflation rate will move transitorily higher. Once these base effects are exhausted, cyclical, structural, and monetary considerations suggest that the inflation rate will moderate lower by year end and will undershoot the Fed Reserve’s target of 2%. The inflationary psychosis that has gripped the bond market will fade away in the face of such persistent disinflation.

After declining 5.2% in 2020, or the most since World War II, world-wide real per capita GDP is estimated to rise 4.7% in 2021. The United States will perform even better, rising 6.2%, after a contraction of 4.9% in 2020. The U.S. growth rate this year could be the fastest since 1984 and possibly even since 1950 (Chart 1).

Six considerations suggest that such growth is not likely to lead to sustaining inflation. 

Six Reasons to Expect Disinflation

1. Inflation is a lagging indicator, as classified by the National Bureau of Economic Research. The low in inflation occurred after all of the past four recessions, with an average lag of almost fifteen quarters from the end of the recessions. 
2. Productivity rebounds in recoveries and vigorously so in the aftermath of deep recessions. This pattern in productivity is quite apparent after the deep recessions ending in 1949, 1958 and 1982. Productivity rebounded by an average of 4.8% in the year immediately after the end of these three recessions and unit labor costs were unchanged. The rise in productivity held down unit labor costs.
3. Restoration of supply chains will be disinflationary. Supply chains were badly disrupted by the pandemic. Low-cost producers in Asia and elsewhere were unable to deliver as much product into the United States and other relatively higher cost countries. This allowed U.S. producers to gain market share. As immunizations increase, supply chains will be gradually restored. Thus, the pandemic cost the low-cost producers market share which was shifted to domestic producers. The pandemic did far more for domestic firm’s
4. Accelerated technological advancement will lower costs. Another restraint on inflation is that the pandemic greatly accelerated the implementation of inventions that were in the pipeline. Necessity is the mother of invention, as has been demonstrated in earlier crisis situations like wars. Thus, the technology du jour is not the same as the technology of a year ago. This will also serve to act as a restraint on inflation. Much of the technology substitutes machines for people, communication without travel, and work without offices.
5. Eye popping economic growth numbers, based on GDP in present circumstances, greatly overstate the presumed significance of their result. This is where the fallacy of the broken glass comes into play. Many businesses failed in the recession of 2020, much more so than normal. As survivors and new firms take over their markets, this will be reflected in GDP, but the costs of the failures will not be deducted.
6. The two main structural impediments to traditional U.S. and global economic growth are massive debt overhang and deteriorating demographics both having worsened as a consequence of 2020.

Some good points. I’d offer the obvious counterpoint that the size and scope of monetary stimulus this recession was unprecedented, including direct stimulus. 

[DonkeyCigars 144]

When discussing the current earnings season, Bank of America wrote: "The number of mentions of ________ during earnings calls rose sharply, more than tripling YoY per company so far, the biggest jump in our history since 2004." What word goes in the blank?

 

 

Inflation.

[GRHorn 105]

On 4/27/2021 at 7:14 PM, GRHorn said:

Some good points. I’d offer the obvious counterpoint that the size and scope of monetary stimulus this recession was unprecedented, including direct stimulus. 

I should’ve said fiscal stimulus. Monetary side is zero rates and monetizing the debt. 

[washparkhorn 9939]

57 minutes ago, DonkeyCigars said:

When discussing the current earnings season, Bank of America wrote: "The number of mentions of ________ during earnings calls rose sharply, more than tripling YoY per company so far, the biggest jump in our history since 2004." What word goes in the blank?

Inflation.

Inflate or die.

https://www.lewrockwell.com/2012/07/richard-russell/inflate-or-die/

[Dbeasy 15039]

Schiller announced yesterday that the inflation threat is not real, pointing to spare China factory capacity. IMO that is a terrible argument. When you look at what drives an individuals yearly expenses, stuff from China is only a part of that. 

[washparkhorn 9939]

Spoiler

. . . So, can you generate an inflation in the modern world? Sure, yeah. Easy. Just be an idiot, right? Now, does this apply to the United States? No. That’s where it gets entirely different.

• So, a couple of things to think about (first). So, you mentioned that huge number of 20 trillion dollars (Covid Response worldwide).
  • Well, that’s more or less about two thirds of what we threw into the global economy after the global financial crisis, and inflation singularly failed to show up.
  • All those people in 2010 screaming about inflation and China dumping bonds and all that. Totally wrong. Completely wrong. No central bank that’s got a brass nameplate worth a damn has managed to hit its inflation target of two percent in over a decade.
• All that would imply that there is a huge amount of what we call ‘slack’ in the economy.
• (Also) think about the fact that we’ve had, since the 1990s, across the OECD, by any measure, full employment. That is to say, most people who want a job can actually find one, and at the same time, despite that, there has been almost no price pressure coming from wages, pushing on into prices, to push up inflation.

So rather than the so-called vertical Phillips curve, which most of modern macro is based upon, whereby there’s a kind of speed bump for the economy, and if the government spends money, it can’t push this curve out, all it can do is push it up in terms of prices.

What we seem to actually have is one whereby you can have a constant level of inflation, which is very low, and any amount of unemployment you want from 2 percent to 12 percent, depending on where you look and in which time-period.

All of which suggests that at least for big developed, open, globalized economies, where you’ve destroyed trade unions, busted up national product cartels, globally integrated your markets, and added 600 million people to the global labor supply, you just can’t generate inflation very easily.

Now, we’re running, depending on how much actually passes, a two to five trillion-dollar experiment on which theory of inflation is right. This one, or is it this one? That’s basically what we’re doing just now. Larry’s given it one in three that it’s his one. I’d give it one in ten his one’s right. Now, if I may just go on just for a seconds longer. This is where the politics of this gets interesting.

Most people don’t understand what inflation is. You get all this stuff talked by economists and central bankers about inflation and expectations and all that, but you go out and survey people and they have no idea what the damn thing is. Think about the fact that most people talk about house price inflation. There is no such thing as house price inflation. Inflation is a general rise in the level of all prices. A sustained rise in the level of prices. The fact that house prices in Toronto have gone up is because Canada stopped building public housing in the 1980s and turned it into an asset class and let the 10 percent top earners buy it all and swap it with each other. That is singularly not an inflation.

• So, what’s going to happen coming out of Covid is there will be a big pickup in spending, a pickup in employment. I think it’s (going to be) less than people expect because the people with the money are not going to go out and spend it because they have all they want already. There are only so many Sub-Zero fridges you can buy.
• Meanwhile, the bottom 60 percent of the income distribution are too busy paying back debt from the past year to go on a spending spree, but there definitely will be a pickup.
• Now, does that mean that there’s going to be what we used to call bottlenecks?
  • Yeah, because basically firms run down inventory because they’re in the middle of a bloody recession. Does it mean that there are going to be supply chain problems? Yes, we see this with computer chips.
  • So, what’s going to happen is that computer chips are going to go up in price.
  • So, lots of individual things are going to go up in price, and what’s going to happen is people are going to go “there’s the inflation, there’s that terrible inflation,” and it’s not.
  • It’s just basically short-term factors that will dissipate after 18 months.

That is my bet. For Larry (Summers, deficit hawk) to be right what would have to be true?

That we would have to have the institutions, agreements, labor markets and product markets of the 1970s. We don’t. So, I just don’t actually see what the generator of inflation would be.

We are not Turkey dependent on capital imports for our survival with a currency that’s falling off a cliff. That is entirely different.

That import mechanism, which is the way that most countries these days get a bit of inflation. That simply doesn’t apply in the U.S.

So, with my money on it, if I had to bet, it’s one in 10 Larry’s right, rather one in 3.

https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Dangerous_Idea

Edited May 1, 2021 by washparkhorn

[elfenix 34221]

i read that whole thing in blyth's voice

 

edit: i had not played the youtube video at that point

edit2: mark's podcast https://podcasts.apple.com/us/podcast/mark-and-carrie/id1477483752

Edited May 2, 2021 by elfenix

[unoriginal 55]

Quote

Billionaire Warren Buffett is joining the long list of executives saying serious levels of inflation are starting to take hold as the U.S. economy roars back from the COVID-19 downturn.

 

https://finance.yahoo.com/news/warren-buffett-we-are-seeing-substantial-inflation-and-are-raising-prices-220539307.html

[GRHorn 105]

35 minutes ago, unoriginal said:

 

https://finance.yahoo.com/news/warren-buffett-we-are-seeing-substantial-inflation-and-are-raising-prices-220539307.html

Good thing it’s transitory 

[Chapo 104]

Whats the easiest way to play hyperinflation? I supposed that buying TIPS wouldnt be enough

[Johnny Chimpo 478]

1 hour ago, Chapo said:

Whats the easiest way to play hyperinflation? I supposed that buying TIPS wouldnt be enough

Purchase stocks in commodity producing companies. Oil, industrial metal miners, and agricultural commodity producers / processors. I’m long ADM, RIO, CVX and XOM. 

[washparkhorn 9939]

10 hours ago, GRHorn said:

Good thing it’s transitory 

So you like Buffett for his views on transitory inflation, while his partner, Munger, says Crypto is "contrary to the interests of civilization."

Good luck with that.

Edited May 3, 2021 by washparkhorn

[ChiTownDoc 21133]

10 hours ago, Johnny Chimpo said:

Purchase stocks in commodity producing companies. Oil, industrial metal miners, and agricultural commodity producers / processors. I’m long ADM, RIO, CVX and XOM. 

People got out of oil way too fast.  Have had CVX, XOM, OKE since early pandemic and w those dividends you hold.  
Oh and on topic, we will see some inflation but that’s fine.  In today’s global economy if one country needs to print a lot of money they’ll get smashed with inflation but if all the major currencies/countries are in the same boat I don’t see it happening.  It’s all relative.  

[GRHorn 105]

2 hours ago, washparkhorn said:

So you like Buffett for his views on transitory inflation, while his partner, Munger, says Crypto is "contrary to the interests of civilization."

Good luck with that.

I trust their eyes and what they’re seeing in the economy. 
 

Anyone who takes their views seriously on anything tech related is making a mistake. 

[Reagan1k 3024]

12 hours ago, Chapo said:

Whats the easiest way to play hyperinflation? I supposed that buying TIPS wouldnt be enough

Ammunition and sports trading cards, according to my most recent Uber driver.

[CHIEF 5075]

5 hours ago, Reagan1k said:

Ammunition and sports trading cards, according to my most recent Uber driver.

Ammunition and a whiskey still. That's my plan.

CHIEF

[GRHorn 105]

 

[washparkhorn 9939]

https://mishtalk.com/economics/yellen-spooks-markets-with-fed-like-comments-rates-may-have-to-rise-somewhat

“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Ms. Yellen said when asked if the economy could handle the kind of robust spending that the Biden administration is proposing. 

“I think that our economy will grow faster because of them,” Ms. Yellen said of the proposed investments, such as research and development spending.

 

GR - good faith question here - based on your book of business, are you hoping for a market crash to propel crypto higher?  When you have a moment, how would a market crash affect crypto? 

Thanks in advance. I am not sure how this news dovetails into your crypto strategy and would like your insight.  

[GRHorn 105]

1 hour ago, washparkhorn said:

GR - good faith question here - based on your book of business, are you hoping for a market crash to propel crypto higher?  When you have a moment, how would a market crash affect crypto? 

 

I would never hope for a market crash. I’ve never had a big bet on that happening. I don’t root for misery.

We’ve seen how market crashes affect crypto. They’re deflationary and hurt BTC/crypto more so than traditional markets. 

1 hour ago, washparkhorn said:

Thanks in advance. I am not sure how this news dovetails into your crypto strategy and would like your insight.  

Janet Yellen was speaking while still wearing her Fed chair hat. When she mentions rising interest rates it’s pretty clear that she sees more risk to the upside wrt inflation. That’s just another data point that agrees with my thesis that despite all the deflationary pressures you and others have mentioned, that the Fed Reserve will not allow real deflation to occur. They will err to the upside and in fact have said as much. 
 

How does that inform my crypto strategy? I’m preparing for what I expect to happen, not what I want to happen. We have to debase our currency at this point. The Fed will not tighten much, it at all, and the Government will not stop running massive deficits. These factors give a trusted store of value that has a fixed supply massive upside. There are other CR reasons as well but those are stated over there. 

[washparkhorn 9939]

9 hours ago, GRHorn said:

 

Yellen walked it back (or clarified to be generous)

WSJ:

WASHINGTON—Treasury Secretary Janet Yellen said Tuesday she is neither predicting nor recommending that the Federal Reserve raise interest rates as a result of President Biden’s spending plans, walking back her comments earlier in the day that rates might need to rise to keep the economy from overheating.

“I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address it,” Ms. Yellen, a former Fed chairwoman, said Tuesday at The Wall Street Journal’s CEO Council Summit.

Ms. Yellen suggested earlier Tuesday that the central bank might have to raise rates to keep the economy from overheating, if the Biden administration’s roughly $4 trillion spending plans are enacted.

Ms. Yellen’s remarks come as lawmakers debate the merits of the administration’s spending proposals, which many Republicans have said are too costly and risk stoking inflation. Consumer prices jumped 2.6% in the year ended in March, compared with a 1.7% rise in February. And long-term Treasury yields have risen on signs of economic strength and expectations that the Fed will have to raise rates sooner than officials have signaled.

https://www.wsj.com/articles/yellen-says-interest-rates-may-have-to-rise-to-keep-economy-from-overheating-11620151101

[Parliament 14224]

Commodities are viewed as a harbinger of inflation. Well let me introduce you to the December corn futures chart:

 

That's nearly parabolic.  Not ideal. 

[washparkhorn 9939]

Gigantic miss on job numbers. The deflationary headwinds continue.

[ChiTownDoc 21133]

People are scared of the taper.  You can’t time that shit.  Stay all in unless you’re old.  Sure it will pull back 10% and a lot of clowns will say ‘I told you!’ - totally ignoring the fact it’s run 25% since they started clutching their pearls.  

[Reagan1k 3024]

5 hours ago, washparkhorn said:

Gigantic miss on job numbers. The deflationary headwinds continue.

I can't fathom what the economist that put out the estimate / expected number was thinking.  Of course this was going to be a huge miss with a two-comma number.

You can drive down any street and see Help Wanted signs in every window.  Factories are running at a fraction of max production; not because they don't have orders, but because they can't find workers.  Hourly wage positions are offering signing bonuses that would be otherwise unheard of.

Many people don't have a choice and can't return to the workforce until schools, summer programs, and childcare opens back up 100%. 

There are still a large number of people somewhat paralyzed by covid fear, especially in larger cities. 

Still others are content to ride out the expanded unemployment until they expire before reentry.  A lot of employers are now demanding in-person applications because they are overwhelmed by bad-faith online applications submitted only to meet unemployment requirements.