The last time inflation was 7%, the fed funds rate was 11.50%. pic.twitter.com/Vgn33mmDcW— zerohedge (@zerohedge) January 12, 2022
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transitory / 40-year high / underreported
- Thread starter Quincy A. Wagstaff
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It's funny how obvious this was to us simple people so long ago. We had thread upon thread of discussion about future inflation back in the summer of 2020. Almost all of us new what was coming. That BoomBoom guy was not a believer that all of the money printing would cause inflation. It was an experiment in MMT and we new what the outcome would be.
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&p=1801859&highlight=Inflation#post1801859
https://forums.sixpackspeak.com/showthread.php?214745-Weekly-Macroeconomic-Discussion
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&p=1801859&highlight=Inflation#post1801859
https://forums.sixpackspeak.com/showthread.php?214745-Weekly-Macroeconomic-Discussion
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The Federal Reserve will likely raise interest rates four times this year and will start its balance sheet runoff process in July, if not earlier, according to Goldman Sachs Group Inc.
Rapid progress in the U.S. labor market and hawkish signals in minutes from the Dec. 14-15 Federal Open Market Committee suggest faster normalization, Goldman’s Jan Hatzius said in a research note.
“We are therefore pulling forward our runoff forecast from December to July, with risks tilted to the even earlier side,” Hatzius said. “With inflation probably still far above target at that point, we no longer think that the start to runoff will substitute for a quarterly rate hike. We continue to see hikes in March, June, and September, and have now added a hike in December.”
https://www.bloomberg.com/news/arti...cts-four-fed-hikes-sees-faster-runoff-in-2022
It will be unpopular, but its worth pointing out who all ran the Senate, House, and Executive Office in the summer of 2020.
Mopes on SPS were predicting dire **** as a result of policies and circumstances being address by those in power at that time.
Being able to accurately identify what is happening due to what reason(s) is pretty damn important since it is so simple to just blame the present for the actions of the past.
The present has plenty of things to be blamed for that are legitimate, to be clear.
Ok, everyone can carry on now.
I don't mean coverage of inflation. I mean CPI is an invalid measure of inflation. True inflation is greater than 7%.
ETA: Since you mentioned zerohedge's tweet, what are your thoughts on 7% CPI with the Fed Funds Rate near zero compared to the last time CPI was 7% in 1982 when the Fed Funds Rate was 11.5%?
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Crossing my fingers that works
And works without recession. Just feels like we've shocked the system too much last 3+ years. Going to take a long time to rebalance (and likely longer than it should due to general resistance to policy in painful, but necessary reactions).
And works without recession. Just feels like we've shocked the system too much last 3+ years. Going to take a long time to rebalance (and likely longer than it should due to general resistance to policy in painful, but necessary reactions).
I concur. CPI number is crap from hedonics and owner's equivalent rent. Unfortunately it's the number we use and your investment decisions should be based off of it.
You won't hear me defending Trump from runaway spending. That said, you remember what hit in the spring and summer of 2020, right?
The decisions made then have been compounded by terrible policy that's been in place since the new year. Plenty of blame to go around here.
Powell was just a little more doveish yesterday. Balance sheet runoff went from a July start to something more ambiguous:
"At some point, perhaps later this year, we will start to allow the balance sheet to run off, and that's just the road to normalizing policy."
https://www.business-standard.com/article/international/powell-says-us-fed-could-start-to-shrink-balance-sheet-later-this-year-122011200079_1.html
Doesn't seem like that big of a difference, but in Fed speak that's a big difference from the harder July timeline he previously stated.
"At some point, perhaps later this year, we will start to allow the balance sheet to run off, and that's just the road to normalizing policy."
https://www.business-standard.com/article/international/powell-says-us-fed-could-start-to-shrink-balance-sheet-later-this-year-122011200079_1.html
Doesn't seem like that big of a difference, but in Fed speak that's a big difference from the harder July timeline he previously stated.
In all the ways that really matter, life was great from January 2016 to March 2020. Prices were down. Employment was up. Food was on shelves. Gas was cheap. Populism was making a comeback (see: Brexit). But the president tweeted mean things and people got so in a twist over it that instead of just not reading twitter, we had leftist openly hoping the economy tanked so that he would't get re-elected. Then, mysteriously, a virus which was created in a lab (remember when that was a right-wing conspiracy theory?) threw the whole world into turmoil. We had fiery but "mostly peaceful" protests/riots all summer.
Now we have a president who doesn't tweet mean things (which is great for people on twitter I guess). But prices are WAY up. Employment is WAY down. There are supply shortages everywhere. Gas is to the moon. Life is in every way worse. But hey, no mean tweets. We got that going for us, which is nice.
Now we have a president who doesn't tweet mean things (which is great for people on twitter I guess). But prices are WAY up. Employment is WAY down. There are supply shortages everywhere. Gas is to the moon. Life is in every way worse. But hey, no mean tweets. We got that going for us, which is nice.
Yeah...totally Trumps fault. And you should all be very happy. This is only happening because Joe has the economy roaring. Best jobs numbers ever. Most popular president ever. Hopefully they can strike down the filibuster and get that voting law passed so we can stay on this path. We must save the democracy
I didn't think today's report moved the needle very much. It came in at expectations (better than exceeding them). The markets received it well.
Depending on this last wave, it's probably time to start ticking up rates. Honestly, I think they were late on easing bond purchasing. I know the Goldman forecast made headlines with their 4-vs-3 forecast, but the actual increases in rates weren't very material. The CNBC article on the Goldman increase has 15 paragraphs; check out the 14th out of 15:
Depending on this last wave, it's probably time to start ticking up rates. Honestly, I think they were late on easing bond purchasing. I know the Goldman forecast made headlines with their 4-vs-3 forecast, but the actual increases in rates weren't very material. The CNBC article on the Goldman increase has 15 paragraphs; check out the 14th out of 15:
Well, Matt Stoller has gotten the ball rolling by saying it's not government spending or supply chain issues that's driving CPI, but CorPoRaTE PrOFiTZ!!!111!!.
Those evil, evil job-producing corporations.
I am for sure not blaming Trump exclusively. I mentioned the Executive, House, and Senate in that post.
And yeah, I remember what happened in early '20 and continued on.
The current inflation has very little to do with Biden or Trump. It's on the shutdown, which Trump was very hesitant to do, and stimulus which he was thrilled to do. Both would have never been on the table if not for coronavirus.
Here are the exact words I posted in a debate with BoomBoom on July 30th 2020. 18 months ago. Notice the las sentence of when I said inflation was coming.
Inflation is caused by "a more rapid increase in the quantity of money than in output."
In the last 4 months we have increased the money supply by $7 trillion and decreased output by the amount of goods and services produced by 20-30 million. I would call that a rapid increase in the quantity of money. And a decrease in output.
It takes a while for inflation to work to work through the system, but we are already seeing it. Ask anyone that is trying to hire lower wage workers what they are having to do? I bet you can guess.
Workers are getting pay increases. They are getting stimulus, extra unemployment benefits. This is unlike last time. All of the extra money went to upper income earners, corporations, and banks. This caused isolated inflation in there world.
There is more money and less output in the real economy now. And there is no turning back. Higher wages for lower earners are coming. Target, Costco, Best Buy, Starbucks, Amazon and others have mandated it.
The DXY is dropping like a rock, which is a signal of inflation expectations. Imports and commodities are going to cost more. We can get into the semantics of inflation vs price increases good by good, service by service. But the general concept is a dollar is going to be worth significantly less for the average American in 2022-2023 than it is today.
The only way to curb this is through raising interest rates in my opinion. That will encourage saving vs spending. Taxes are not getting raised on lower and middle earners.
I still think it's a ways away. 12-18 months.
Here's the thread. Read through it. Both administrations have added fuel to this fire.
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&p=1801859&highlight=Months%20inflation#post1801859
Here are the exact words I posted in a debate with BoomBoom on July 30th 2020. 18 months ago. Notice the las sentence of when I said inflation was coming.
Inflation is caused by "a more rapid increase in the quantity of money than in output."
In the last 4 months we have increased the money supply by $7 trillion and decreased output by the amount of goods and services produced by 20-30 million. I would call that a rapid increase in the quantity of money. And a decrease in output.
It takes a while for inflation to work to work through the system, but we are already seeing it. Ask anyone that is trying to hire lower wage workers what they are having to do? I bet you can guess.
Workers are getting pay increases. They are getting stimulus, extra unemployment benefits. This is unlike last time. All of the extra money went to upper income earners, corporations, and banks. This caused isolated inflation in there world.
There is more money and less output in the real economy now. And there is no turning back. Higher wages for lower earners are coming. Target, Costco, Best Buy, Starbucks, Amazon and others have mandated it.
The DXY is dropping like a rock, which is a signal of inflation expectations. Imports and commodities are going to cost more. We can get into the semantics of inflation vs price increases good by good, service by service. But the general concept is a dollar is going to be worth significantly less for the average American in 2022-2023 than it is today.
The only way to curb this is through raising interest rates in my opinion. That will encourage saving vs spending. Taxes are not getting raised on lower and middle earners.
I still think it's a ways away. 12-18 months.
Here's the thread. Read through it. Both administrations have added fuel to this fire.
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&p=1801859&highlight=Months%20inflation#post1801859
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That first post of mine wasnt specifically meant for you, but its definitely for you. You seem to think that results track in real time with who is in the Oval Office. My kids understand that isnt correct, how do you still think its how this all works?
Low prices, high employment, stock growth- all that was happening before Trump and it continued for the first few years. He didnt make it happen. At the same time, he didnt make the covid stoppage happen either, that is just an event that occurred while he was in charge.
Decisions by both sides of Congress as well as the Executive Office largely placed us where we are now. Congress was run on one side by Democrats and one side by Republicans, to be clear.
LOL at Brexit being viewed as good. That was a half decade of pure shitshow and a recent survey showed 14% think the transition was better than expected. And remember- what was expected was dirt low, to be clear. 86% of respondents think it has gone as expected(which was poorly) or worse.
Also, do you know what populism is? We didnt move towards populism between 2016 and 2020. The divide between have and have not grew exponentially. The swamp wasnt drained, political elites still dominated policy decisions, and the well funded benefitted. It was faux-populism because it was empty claims and promises.
It has to be part of it.
S&P operating margins are increasing despite higher labor costs and supply chain issues. I won't spin it dramatically like the talking heads would, but there is definitely some opportunistic pricing going on - mostly due to people having the money to pay the higher prices. I guess some people would call that gouging, but as long as there's no monopoly, most would just call that demand.
S&P operating margins are increasing despite higher labor costs and supply chain issues. I won't spin it dramatically like the talking heads would, but there is definitely some opportunistic pricing going on - mostly due to people having the money to pay the higher prices. I guess some people would call that gouging, but as long as there's no monopoly, most would just call that demand.
I didnt say its totally Trump's fault. I actually cited both Democrats and Republicans as overseeing this issue.
Just curious what that means for real estate market? We moved during this crazy time and sold high but had to sell high. We might actually move again this year if the right opportunities come up but I'm hoping the real estate market doesn't drop out this year
There's so much fail in this post I don't know where to start.
You can debate whether it was right or wrong for Trump to pull out of the Paris Accords, or roll back numerous regulations, or make moves to gain energy independence, or cut taxes for small business owners. But what you can't debate is that those moves, among others, had an instant, immediate positive impact on the economy. You try to debate it, like most dishonest political hacks, but there are no metrics to support your claims.
Dishonest political hacks like yourself like to talk about the economic recovery under Obama as if we all weren't there experiencing it - living through it. The difference between people like me and people like you is that I don't have to wiat to get the pravda talking points to know who's to blame and what's going on - I have a brain and the discernment to be able to see things for myself.
I don't think you have much to worry about assuming you're staying in the same market.
It's never going back to pre-COVID.
It's never going back to pre-COVID.
There's always opportunistic pricing, and if people are going to pay it, they're going to charge it. The market dictates that.
There's no doubt that labor costs, shipping costs, and everything else has gone up, directly due to things like supply chain issues, work force shortages, and the like. But increased corporate costs is not the same thing as increased corporate profits, which Stoller claims is the driving force behind CPI and accounts for at least 60% of it. That's just an idiotic take.
If there's one chart that tells you what you need to know about residential real estate, it's this one:
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