2021 - Is inflation finally back in the conversation?

[TxTower 686]

Has anyone renewed their Electricity contract lately? Rates look some 30-40% higher than one year ago.


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[Snake Diggity 4714]

4 hours ago, Skipper said:

So when does the demand side start getting hit.  Anecdotal but restaurant reservations in Dallas at popular spots seem harder to get than ever, airfare/hotels for summer travel skyrocketing, etc. etc.   Not until middle class maxes out credit cards?  Just curious for those following more closely whether any behavioral changes have started showing up in data.  

I don’t think demand side will truly decline anytime soon, at least as a result of affordability.  Savings rate over the last 2 years points to a lot of reserves even down to the lower middle class.  Most of the stats I’ve seen as evidence of decreased demand are really just businesses not being able to fill orders for so long due to supply shortages that their customers have given up.

[52-80 19377]

1 hour ago, TxTower said:

Has anyone renewed their Electricity contract lately? Rates look some 30-40% higher than one year ago.


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i had a chance to lock in a fixed rate last winter. Got seduced by the cheap variable spot price and went with that contract instead. This winter goddamn spot rate literally 5x. Now that im looking at the fixed options, they had all adjusted to the higher base price. 

[Skipper 6411]

2 hours ago, TxTower said:

Has anyone renewed their Electricity contract lately? Rates look some 30-40% higher than one year ago.


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Pretty sure my contract is up sometime in May.   Not looking forward to that research.

[Immaculate Vibes 114]

On 4/12/2022 at 7:44 AM, Neonmoon said:

 

 

 

[Blotto 24011]

Amazon said Wednesday that for the first time in company history it will charge sellers a 5% fuel and inflation surcharge.

The e-commerce giant said the new fee will begin April 28 and is being imposed because inflation has worsened significantly in recent months.

"In 2022, we expected a return to normalcy as Covid-19 restrictions around the world eased, but fuel and inflation have presented further challenges," Amazon wrote in memo that was provided to CNN by the company. "It is unclear if these inflationary costs will go up or down, or for how long they will persist, so rather than a permanent fee change."

Amazon spokesman Patrick Graham told CNN that the fee surcharge applies only to fee rates paid by sellers that choose to use Amazon's fulfillment services, which include storing, packing and shipping products. Others sellers that do not use Fulfillment by Amazon will not be impacted. News of the surcharge was first previously reported by Bloomberg News.

[Loop 1604 227]

6 hours ago, TxTower said:

Has anyone renewed their Electricity contract lately? Rates look some 30-40% higher than one year ago.


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$7/mcf natural gas. Those rates are likely to increase even more very soon. 

 

[Cheeseweasel 26439]

12 hours ago, Skipper said:

Pretty sure my contract is up sometime in May.   Not looking forward to that research.

Prepare your anus

[Cheeseweasel 26439]

8 hours ago, Blotto said:

Amazon said Wednesday that for the first time in company history it will charge sellers a 5% fuel and inflation surcharge.

The e-commerce giant said the new fee will begin April 28 and is being imposed because inflation has worsened significantly in recent months.

"In 2022, we expected a return to normalcy as Covid-19 restrictions around the world eased, but fuel and inflation have presented further challenges," Amazon wrote in memo that was provided to CNN by the company. "It is unclear if these inflationary costs will go up or down, or for how long they will persist, so rather than a permanent fee change."

Amazon spokesman Patrick Graham told CNN that the fee surcharge applies only to fee rates paid by sellers that choose to use Amazon's fulfillment services, which include storing, packing and shipping products. Others sellers that do not use Fulfillment by Amazon will not be impacted. News of the surcharge was first previously reported by Bloomberg News.

This is Amazon's MO. Fuckers. Buddy of mine owns a warehousing company for pluming supplies and does business with Amazon. They damn near bankrupted him with the amount of bullshit they push on you "after the deal". Finally told them to fuck off.

[WBT 20969]

10 hours ago, Immaculate Vibes said:

 

 

Those guys sound like a real bunch of 2nd derivatives.

[Catpfish 618]

10 hours ago, Loop 1604 said:

$7/mcf natural gas. Those rates are likely to increase even more very soon. 

 

One thing I actually did right.  I signed a 3 year fixed rate in 3/2021 at $08.6 kwh.

Edited April 14, 2022 by Catpfish
re-checked the contract

[UT_OB1 2266]

47 minutes ago, Catpfish said:

One thing I actually did right.  I signed a 3 year fixed rate in 3/2021 at $08.6 kwh.

1) Run extension cords to your neighbors 

2) Charge them 10.0 for elec

3)????

4) Profit

Edited April 14, 2022 by UT_OB1

[TxTower 686]

$7/mcf natural gas. Those rates are likely to increase even more very soon. 
 

Good call. Headed to $8/mcf today. What’s driving the spike in the NG market? LNG exports to Europe? Low domestic inventories? Rampant speculation? Some analysts still have it pegged below $5 in the future.


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[BLKNSTY 290]

Good call. Headed to $8/mcf today. What’s driving the spike in the NG market? LNG exports to Europe? Low domestic inventories? Rampant speculation? Some analysts still have it pegged below $5 in the future.


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we are producing more nat gas today than at any point in our history. US production is up 2.5x since 2012, the last time we had pricey nat gas for any extended period of time. so there’s that nugget.


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[StruggleBus 3922]

This whole inflation thing is still transitory, right?

Edited April 18, 2022 by StruggleBus

[Parliament 14593]

In the same sense that all life on the planet is transitory, yes.

[UT_OB1 2266]

51 minutes ago, Parliament said:

In the same sense that all life on the planet is transitory, yes.

[Snake Diggity 4714]

2 hours ago, StruggleBus said:

This whole inflation thing is still transitory, right?

My understanding is that “transitory” means that it won’t represent a permanent change, and in that sense, I think the bulk of the inflation we’ve seen is transitory, although it may take awhile to iron out.  I still think by the end of the summer things will have leveled off and prices will remain relatively flat for awhile (of course all caveats for various unexpected events apply).  My opinion is that less than half the inflation we’ve seen will stick.

[jimmyjazz 47134]

I think retail pricing on manufactured goods will stick.  What incentive will Ford have to drop their price on an F150?

Commodities should wax and wane as usual.

[Hefeweizen 5444]

14 minutes ago, jimmyjazz said:

I think retail pricing on manufactured goods will stick.  What incentive will Ford have to drop their price on an F150?

Commodities should wax and wane as usual.

Besides the fact that gas will continue to climb in price?  I am definitely going to check mileage per gallon on my next vehicle…

[Snake Diggity 4714]

16 minutes ago, jimmyjazz said:

I think retail pricing on manufactured goods will stick.  What incentive will Ford have to drop their price on an F150?

Commodities should wax and wane as usual.

Certainly not everything will come down.  A lot of prices will just settle and stay that way for a long time.

If “non-transitory” inflation is really 3%, the remainder could take years to iron out.

Edited April 18, 2022 by Snake Diggity

[NotActuallyALonghorn 4999]

Wages aren't going to be walked back easily. Increases in the price of goods due to labor costs are here to stay barring some sort of catastrophic shock.

[tbone_ 14438]

Is it bad that I’m kind of rooting for another 2008?

[Neonmoon 38130]

2 hours ago, tbone_ said:

Is it bad that I’m kind of rooting for another 2008?

Yes. That was bad. 

[tbone_ 14438]

We need a reset.

[TxTower 686]

Is it bad that I’m kind of rooting for another 2008?

Don’t know that a financial meltdown like 2008 is necessary when an old fashioned recession would do the trick. According to Goldman Sachs odds of a recession in the next two yrs have increased to 35%. Fed is behind the curve in tightening and will have a tough time negotiating a “soft landing” w/o tipping the economy into recession.


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[TxTower 686]

DP

[Immaculate Vibes 114]

This was a really good podcast. Touches on inflation which is why I put it here, but really goes in depth on financial repression and what can be expected going forward. 
 

 

[Cheeseweasel 26439]

48 minutes ago, Immaculate Vibes said:

what can be expected going forward.

[workswithseed 2204]

2 hours ago, Cheeseweasel said:

Great movie.

[Shaggy3.0 1695]

5 hours ago, Immaculate Vibes said:

This was a really good podcast. Touches on inflation which is why I put it here, but really goes in depth on financial repression and what can be expected going forward. 
 

 

I'm a Demetri HF subscriber.  Good stuff.  Would recommend.

[Immaculate Vibes 114]

1 hour ago, Shaggy3.0 said:

I'm a Demetri HF subscriber.  Good stuff.  Would recommend.

Sucked me in today and I subscribed to listen to the second half of the above pod. A couple points caught my attention. 

He refers to the changes happening as a regime change in the global financial system. It’s happening against the backdrop of an emerging Cold War between us and China. Investment wise a lot of the old losers will become winners. Companies that reshore capabilities will do better. He cited shipbuilding, manufacturing, chemicals etc.  

He also believes there will be outperformance by value investors. This really makes sense to me. When do you typically see bottoms in markets? When there’s total apathy and nothing could be worse. That’s value investing after 20 years of getting whipped by growth. Value funds shut down. This would’ve been hard to reverse, but the shock to the system that Putin and the sanctions have caused could be the catalyst.

 

The second thing I found very interesting and is more relevant to this thread is his idea of what the second big tipping point would be, the first being Russia invading Ukraine. He’s looking for when China finally lets their currency float. At that point he sees countries having to decide who they want to link up with. He feels pretty strongly that most will stick with the US.  I’m less confident. I believe that a country with harder money will be more trustworthy to a lot of nations.
 

Tin foil hat sidebar here. This would be the perfect time for China to announce they own X tons of gold. They’ve been known acquirers, but haven’t update their holdings in years. If they come out with a monster number that dwarfs us could cause some waves. Something to think about.  

Also he sees these Chinese moves happening sooner than others. The fact that Xi and Putin met before the invasion and Xi presumably signed off on the invasion meant he’s ready to escalate things. They had to know the significance of what Putin was going to do. 

[Immaculate Vibes 114]

 

[Cheeseweasel 26439]

That fish is not convinced.

[Immaculate Vibes 114]

Economy slowing?

 

[phdhorn 6225]

Could be.  Trucking spot market, the biggest indicator of recession in the industry, took a dive in March, triggered by less consumer purchase, which in turn has finally been triggered by the increased costs of - well, everything.  Some of it may be correction since truckers re-tailored their business plan for speed and used more trucks.  So the dropoff in sales (therefore trucked goods) volumes has come down from abnormal amounts during the pandemic.  

But,  March was brutal and what's concerning is that online sales, the buoy during the pandemic, have dropped sharply for 2 months in a row.  See this:

https://www.msn.com/en-ca/money/topstories/analysis-us-trucking-downturn-foreshadows-possible-economic-gloom/ar-AAWyWs2

Whether a deep recession happens will depend on abilities for consumer spending to recover.  But it's troubling that finally, after several months when inflation was bad but spending remained high, that we're seeing that inevitable drop which precedes a recession.  Whether this is what's going on in the spot trucking industry right now remains to be seen.  But Goldman Sachs has it up now to about 40% as with the majority of forecasters.  Markets today are continuing their selloffs over global slowdown worries.

If recession ain't here yet, its barbarians are definitely at the gates.

[Cheeseweasel 26439]

Stagflation. Yikes.

[Wulaw Horn 19585]

On 4/22/2022 at 8:14 PM, Immaculate Vibes said:

Sucked me in today and I subscribed to listen to the second half of the above pod. A couple points caught my attention. 

He refers to the changes happening as a regime change in the global financial system. It’s happening against the backdrop of an emerging Cold War between us and China. Investment wise a lot of the old losers will become winners. Companies that reshore capabilities will do better. He cited shipbuilding, manufacturing, chemicals etc.  

He also believes there will be outperformance by value investors. This really makes sense to me. When do you typically see bottoms in markets? When there’s total apathy and nothing could be worse. That’s value investing after 20 years of getting whipped by growth. Value funds shut down. This would’ve been hard to reverse, but the shock to the system that Putin and the sanctions have caused could be the catalyst.

 

The second thing I found very interesting and is more relevant to this thread is his idea of what the second big tipping point would be, the first being Russia invading Ukraine. He’s looking for when China finally lets their currency float. At that point he sees countries having to decide who they want to link up with. He feels pretty strongly that most will stick with the US.  I’m less confident. I believe that a country with harder money will be more trustworthy to a lot of nations.
 

Tin foil hat sidebar here. This would be the perfect time for China to announce they own X tons of gold. They’ve been known acquirers, but haven’t update their holdings in years. If they come out with a monster number that dwarfs us could cause some waves. Something to think about.  

Also he sees these Chinese moves happening sooner than others. The fact that Xi and Putin met before the invasion and Xi presumably signed off on the invasion meant he’s ready to escalate things. They had to know the significance of what Putin was going to do. 

Pessimism about the world throwing in with China is bullshit alarmism imo. They are dishonest and cheats and they lack transparency and honesty necessary to be a global reserve economic standard. There’s nothing the markets hate more than dishonesty and opaque conditions. Certainty is the gold standard and they fail at that in a much more systematic way than we do. We are still the worlds tallest midget. 

[Wulaw Horn 19585]

My wizards of smart say declining numbers on inflation through June (July report) rising from there and peaking in October, after which we will see that as the peak spot for inflation and housing related interest rates, along with a recession beginning Q4 2022 or Q1 2023. 

[gsoda3 3362]

5 minutes ago, Wulaw Horn said:

Pessimism about the world throwing in with China is bullshit alarmism imo. They are dishonest and cheats and they lack transparency and honesty necessary to be a global reserve economic standard. There’s nothing the markets hate more than dishonesty and opaque conditions. Certainty is the gold standard and they fail at that in a much more systematic way than we do. We are still the worlds tallest midget. 

that's why china's into making offers people can't refuse.

[Wulaw Horn 19585]

3 minutes ago, gsoda3 said:

that's why china's into making offers people can't refuse.

It’s a house of cards that cannot last with a fundamentally unjust ruling system predicated upon repression and lies, while also being a huge ticking demographic time bomb. They can’t even feed their own people and we are supposed to take them seriously as transplanting us as the worlds economic North Star?  

[Incredulity 11875]

2 hours ago, Wulaw Horn said:

It’s a house of cards that cannot last with a fundamentally unjust ruling system predicated upon repression and lies, while also being a huge ticking demographic time bomb. They can’t even feed their own people and we are supposed to take them seriously as transplanting us as the worlds economic North Star?  

 

They pull into Rio with an Aircraft Carrier Strike Group in 2035 and say, "try to stop us".

[Wulaw Horn 19585]

57 minutes ago, Incredulity said:

 

They pull into Rio with an Aircraft Carrier Strike Group in 2035 and say, "try to stop us".

Which is a good argument for our continued investment in military, especially a blue water Navy. We kick everyone's ass at projecting power around the world.

It always irritates me to see conservatives rub their pussies and gnash their teeth over China. We are the ideological group that believes in the supremacy of America over the commies. We are the party that deified RR talking about consigning the commies to the trash heap of history.  Now we are afraid to compete with the Chicoms?  Cmon Man.   

[gsoda3 3362]

3 hours ago, Wulaw Horn said:

It’s a house of cards that cannot last with a fundamentally unjust ruling system predicated upon repression and lies, while also being a huge ticking demographic time bomb. They can’t even feed their own people and we are supposed to take them seriously as transplanting us as the worlds economic North Star?  

they don't have to beat us that way.  i think they have a plan to slowly choke us out.  they've been stockpiling everything from currency and metals to food.  and i think they're going to make a move with russia after the war winds down.  maybe, just maybe, the BRI wasn't as much to get their products out as much as it was to take resources in.

[Wulaw Horn 19585]

4 minutes ago, gsoda3 said:

they don't have to beat us that way.  i think they have a plan to slowly choke us out.  they've been stockpiling everything from currency and metals to food.  and i think they're going to make a move with russia after the war winds down.  maybe, just maybe, the BRI wasn't as much to get their products out as much as it was to take resources in.

Cool. Let them have their hoarder mind set.  We can go ahead with an abundance mind set.  We will kick their ass. We don't need to do anything other than going back to being America and believing in abundance and believing that anything is possible.  The last great breakthrough in technology that made us even more filthy rich came from fucking silicon. We have solar, nuclear, wind, water, desalination, continued computer and electronic shit, batteries, all sorts of other shit that we could come up with breakthroughs to change the world.  Hell, we invented fracking and fucking punched the idea of peak oil right in the balls and unlocked energy independence.  What we don't do based upon our natives we attract people like Elon Musk and half of India to come over and make a go of solving all the problems of the world.  That starts here. Because we have the freedom to pursue shit like that.  We have the reward system in place to get filthy rich if you solve one of those problems, we have the hot and slutty blondes that abound that men take as trophies when they win those things, and we have the populace of highly educated, semi educated and dolts but dolts that know how to get a job done with a lack of supervision that other places just don't have.

The average American has been conditioned to make about a million choices over the coarse of their life- it just doesn't happen in the rest of the world like that- even in Europe- just due to the prosperity and options we have. That makes them autonomous and valuable in  a way that other places don't have value in their workforce.  We will be the creative engine driving progress over the world over the Chicoms b/c of all those things. They can stockpile food while we make breakthrough after breakthrough to grow more.  Gold doesn't mean shit from a practical standpoint.  They can't choke us out as long as we continue to innovate.  I would line up to bet everything I have and own on us beating them at that game. 

[Incredulity 11875]

37 minutes ago, Wulaw Horn said:

Which is a good argument for our continued investment in military, especially a blue water Navy. We kick everyone's ass at projecting power around the world.

It always irritates me to see conservatives rub their pussies and gnash their teeth over China. We are the ideological group that believes in the supremacy of America over the commies. We are the party that deified RR talking about consigning the commies to the trash heap of history.  Now we are afraid to compete with the Chicoms?  Cmon Man.   

I agree with everything you have said on this page.

A showdown with China is decades away, but they definitely want it.

[Hozz 1035]

Peter Zeihan's books are recommended reading for anyone that wants to be talked off the ledge regarding China as a threat to the US.  Dude seems pretty sharp and his books are very easy reads.

[Wulaw Horn 19585]

14 minutes ago, Hozz said:

Peter Zeihan's books are recommended reading for anyone that wants to be talked off the ledge regarding China as a threat to the US.  Dude seems pretty sharp and his books are very easy reads.

What’s the thesis?  

[Immaculate Vibes 114]

5 hours ago, Wulaw Horn said:

Pessimism about the world throwing in with China is bullshit alarmism imo. They are dishonest and cheats and they lack transparency and honesty necessary to be a global reserve economic standard. There’s nothing the markets hate more than dishonesty and opaque conditions. Certainty is the gold standard and they fail at that in a much more systematic way than we do. We are still the worlds tallest midget. 

 

1 hour ago, Wulaw Horn said:

Which is a good argument for our continued investment in military, especially a blue water Navy. We kick everyone's ass at projecting power around the world.

It always irritates me to see conservatives rub their pussies and gnash their teeth over China. We are the ideological group that believes in the supremacy of America over the commies. We are the party that deified RR talking about consigning the commies to the trash heap of history.  Now we are afraid to compete with the Chicoms?  Cmon Man.   

I don’t think people are afraid to compete with China. Most people see it as inevitable. I think escalation will happen sooner than most which is why I really want our other entanglements to wrap up asap. 
 

I go back and forth on how this will all end vs China. (Btw I expect it all to be settled in 10 years or less)

Incomplete list of advantages as I see them off the top of my head. 
China- population

financial situation (certain sectors do have high debt, but their reserve situation enviable)

natural resources esp rare earths (but not energy)

Social cohesion (forced or not)

USA-military (largest budget in world)

large energy and food producer 

technological innovator/open society (especially in Bitcoin etc that China abandoned) @Brisketexan

global influence (waning?)

On net looking at those I see us at a pretty significant advantage. What bugs me as I look at it is the historic precedent that exists since the emergence of western capitalism. The ending of a big debt cycle typically ends in a chaotic fashion. There are a lot of unknown unknowns that could affect how it turns out. And financial primacy isn’t retained by one country on both sides of these events. 
 

It’s no surprise that I wish were in better financial footing heading into such a turbulent time. That is our Achilles heel and it has mattered historically. 
 

One possible outcome that could be different than past resets is we could end up with a multipolar financial system instead one reserve currency due to the lack of transparency and dishonesty that you cited that is built into the CCP. 

[Wally Fairway 5674]

I couldn't find the supply chain thread, but those problems are part of the inflationary push. And they are coming back, if shipping container bottlenecks are any indication.