Inflation

[divs4ever]

Cautiously in my view.

I’m always wary of investing in something where the underlying reason is politics.

Just needs someone to shoot Putin and things could change real quick.

careful what you wish for

Putin gets a LOT of internal criticism as a softie , and the Duma is chockers with former intelligence officers ( not even ordinary military )

Medvedev is tagged as the next closest to a dove and he invaded Georgia . no softly softly a full on tank assault ( and he is isn't even ex-military )

change indeed , but will it be the change desired

 

[qldfrog]

And an interesting map of fertilizer production collapse in europe dated end of last month.this imho means that we can expect sharply falling production of cereal next year...hum inflation is not over nor government collapsing unger hungry protesters...
Bread and circus to keep them happy...
We have circus, clown of Kiev, Greta , a funeral and some good soccer or basket games, even tiktok or reality shows..but will we have bread?

 

[over9k]

Inflation numbers in, 8.3% year on year vs estimated 8.1, +0.1 on the month vs estimated -0.1, futures all flipped from +1 to -2 in response, growth plays all slaughtered, swaps now fully priced another 75 point rise at the next meeting, energy still up/looking like the only thing that'll be in the green or at least the best of a bad bunch for the day, all in all, energy still the play.

Looking like a beautiful dip buy as the open's going to be a massacre.

 

[over9k]

Cautiously in my view.

I’m always wary of investing in something where the underlying reason is politics.

Just needs someone to shoot Putin and things could change real quick.

From what I've read, putin shall we say "took care" of anyone likely to do that years ago.

 

[over9k]

Green normally means good.

 

[over9k]

Energy down ~1% on the day, nasdaq down nearly 4%.

 

[waterbottle]

Complete carnage....

 

[qldfrog]

Complete carnage....

From our friend Ducati

A new bright world ahead all honey and lollypop
I do not think so.
Inflation here to stay unless we go to double digit IR..and we will not.

 

[waterbottle]

Well the CME fed watch tool is now quoting a 34% chance of a 100bps hike given the new inflation figures

 

[qldfrog]

Well the CME fed watch tool is now quoting a 34% chance of a 100bps hike given the new inflation figures

As long as rate below inflation,it is not effective so unless we eeach 9 ot 10% ...and this takes balls as it hurts .
no way it will happen so the next step is hyperinflation fiat collapse
We are living again the nightmare of the Weimar republic in Germany, 100y later and we should pray it will not end the same
Weak government, economic crisis and start of inflation.
Imho just the consequences of unsolved GFC . Australia is sadly on the same train

 

[Telamelo]

Recent 23/07/2022 article below I found interesting..​

​

"Russia cuts rates sharply as inflation outlook improves"​

Russia’s central bank has cut interest rates in a surprise move that it said was in response to a slowdown in inflation & an improved GDP forecast. The decision to cut rates to 8 per cent on Friday, from 9.5 per cent in June, suggests that the central bank believes Russia is weathering the storm of western sanctions imposed over its invasion of Ukraine better than it had feared.

Subscribe to read

www.ft.com

 

[qldfrog]

Recent 23/07/2022 article below I found interesting..​

​

"Russia cuts rates sharply as inflation outlook improves"​

Russia’s central bank has cut interest rates in a surprise move that it said was in response to a slowdown in inflation & an improved GDP forecast. The decision to cut rates to 8 per cent on Friday, from 9.5 per cent in June, suggests that the central bank believes Russia is weathering the storm of western sanctions imposed over its invasion of Ukraine better than it had feared.

Subscribe to read

www.ft.com

That is a bit old..so maybe obsolete now?

 

[mullokintyre]

I keep going back to the "transitory inflation" meme that was so prominent in utterances from both the US fed and the whitehouse.
Our own experts here in AUS as well as those in the Eu all followed the same line.
That has been blown out of the water big time.
The only question then is this consensus of failure a result of complete incompetence or complete deliberate scamming by the powerful elites?
It doesn't really matter which one is true, we are still F%^5ed.
Mick

 

[InsvestoBoy]

I keep going back to the "transitory inflation" meme that was so prominent in utterances from both the US fed and the whitehouse.
Our own experts here in AUS as well as those in the Eu all followed the same line.
That has been blown out of the water big time.
The only question then is this consensus of failure a result of complete incompetence or complete deliberate scamming by the powerful elites?
It doesn't really matter which one is true, we are still F%^5ed.
Mick

For you to believe that inflation is not transitory, you must believe that everything, everything, is going to keep going up in price at the same pace it has been for the last 1.5 years.

If prices settle at the current high level for the next year, inflation will be 0%. Hopefully that is obvious.

So do you believe that or not?

 

[bluekelah]

For you to believe that inflation is not transitory, you must believe that everything, everything, is going to keep going up in price at the same pace it has been for the last 1.5 years.

If prices settle at the current high level for the next year, inflation will be 0%. Hopefully that is obvious.

So do you believe that or not?

Its all about money supply . M2 has been flat only since JAN 2022 this year. Which means the past 2 years of massive money supply will feed in to inflation numbers like it always does for next 1.5-2 years.

Which also means inflation will only be 0% if money supply continues to be flat till end of 2024, recession or not. Can the US and by proxy the global economy withstand it till then, without CBs and FED pivoting and printing again when the global recession worsens before we reach end of 2024?? M2 MOney supply chart --> https://fred.stlouisfed.org/series/WM2NS

The only way to quickly combat high inflation as volcker showed is to cap money supply growth and increasing rates to levels way above inflation rate, however that results in a deep recession and pain and high unemployment which no modern gov can withstand, especially with astronomical rates of debt today.

So unless FED does 9 or 10% rates, it is very unlikely inflation goes back to 0% or even 2% target by next year 2023 as all the money created in 2020 and 2021 is still sloshing around in the system.

By the way, real inflation both in USA and globally is probably at the 15-20% level if measured properly like it was measured decades ago. Most major consumer goods / rental/ fuel etc stuff we buy has definitely gone up at least 15-20% if not more, some stuff we buy has gone up even 100% in the past year. We are just lucky we produce a lot of food hence some seasonal food hasnt gone up much.

 

[InsvestoBoy]

Its all about money supply . M2 has been flat only since JAN 2022 this year. Which means the past 2 years of massive money supply will feed in to inflation numbers like it always does for next 1.5-2 years.

Is M2 The Money Behind Inflation? If Not, What Is (Or Isn't)?

Milton Friedman was touring India, and while there he shocked his audience by stating, “Inflation is always and everywhere a monetary phenomenon.” This was 1963, and the audacity of that statement is today understated. Back then, Keynes didn’t just rule there was hardly any opposition to such...

alhambrapartners.com

What *Must* Lie Beyond the M's

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the

alhambrapartners.com

 

[bluekelah]

Is M2 The Money Behind Inflation? If Not, What Is (Or Isn't)?

Milton Friedman was touring India, and while there he shocked his audience by stating, “Inflation is always and everywhere a monetary phenomenon.” This was 1963, and the audacity of that statement is today understated. Back then, Keynes didn’t just rule there was hardly any opposition to such...

alhambrapartners.com

What *Must* Lie Beyond the M's

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the

alhambrapartners.com

"Three-quarters of a year at better than 20% “money” growth would be more than sufficient time and at a way-more-than-sufficient pace for this deluge to have flooded itself all the way completely through any economy and have months ago left behind not just a detectable inflationary signal but more likely a completely unambiguous one."

Snider would be wrong here, it takes at least a year or even up to 1.5-2 years for money supply increases to filter and show up into the real economy as inflation. The money supply increase started showing up after he wrote the second article in march 2021. All the direct fiscal stimulus and check handouts for covid 2020 lockdowns did start to show up a year after.

Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008​

https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html

Have a listen to Prof. Henke. After all he is the one that got it RIGHT to predict 9% inflation this year. And also he gives a timeframe for inflation next year to be calculated at around 6%.

Economist who called 9% inflation has this grim forecast for what's next - Steve Hanke​

65% chance of recession as inflation heats up to 8.6% - Steve Hanke​

 

[over9k]

It's a supply side problem guys.

 

[InsvestoBoy]

Have a listen to Prof. Henke. After all he is the one that got it RIGHT to predict 9% inflation this year. And also he gives a timeframe for inflation next year to be calculated at around 6%.

lol Hanke.

Just another Austrian who has been wrong forever on inflation and everything else.

I remember this joker in May 2008 saying the Fed was flooding the system with liquidity, the dollar would be crushed, inflation would remain high, into the face of the worst liquidity crisis in decades and the start of a massive bond bull market.

Perhaps the interviewer should have asked "sir, considering you have been predicting inflation forever and been consistently wrong, why would any sane person listen to a word you have to say now that it appears your broken clock was right for once?" but I doubt the Prof would dare to appear on such a show.

 

[InsvestoBoy]

Here's one from genius inflation predictor Hanke in 2009 telling investors "inflation will roar back with a vengeance" if the Fed doesn't stop QE and that they should "avoid being suckered into any stock market rallies" and instead "Stick with the Treasury Inflation-Protected Securities (TIPS) that I have been recommending for some time. You should also own some gold, via commodity futures or an exchangetraded fund."

Fed Up

Investors watching the recent rally may think that the Fed has saved the day, but its approach is fraught with danger.

www.forbes.com

LOL