Australian (ASX) Stock Market Forum

Inflation

Jump to new
The annual inflation rate for August comes in at 6.8%.
This is down from the 7% in July.
Good news we think inflation has peaked.
Not so fast.
From ABC News
The slight fall in the annual inflation rate from July to August was mainly due to a decrease in prices for automotive fuel," he said.

In the year to August, the data show inflation for food and non-alcoholic beverages increased by 9.3 per cent.

Prices rose sharply across most food categories, led by fruit and vegetables, which jumped from 9.1 per cent inflation in June to 18.6 per cent in August.

However, overall, the annual rate of inflation — according to the monthly data — slowed down a little bit between July and August.
Click to expand...
With the addition of fuel excise back into fuel, there is a 28 cents a litre increase from now until the next time they dump it.
So it will be difficult to see other items decreasing sufficiently to overcome the fuel excise inflationary boost.
The ABC blotted their copy book with the last statement of the report.

It comes after the Reserve Bank began cutting interest rates in May.
Click to expand...
I could have sworn they started increasing rates since May.
Mick
 
mullokintyre said:
The annual inflation rate for August comes in at 6.8%.
This is down from the 7% in July.
Good news we think inflation has peaked.
Not so fast.
From ABC News

With the addition of fuel excise back into fuel, there is a 28 cents a litre increase from now until the next time they dump it.
So it will be difficult to see other items decreasing sufficiently to overcome the fuel excise inflationary boost.
The ABC blotted their copy book with the last statement of the report.


I could have sworn they started increasing rates since May.
Mick
Click to expand...


As is happening in he US with the change in core CPI being higher than the headline. Seems to be a global phenomenon....
 
We could start seeing stimulatory responses from other CBs eg. BoE. Alot of commentators think that the Fed has already gone too far. Japanese Gov. now starting to buy yen too.
A high USD makes inflation much more difficult to control for all importers, so its inevitable.
 
waterbottle said:
A high USD makes inflation much more difficult to control for all importers, so its inevitable
Click to expand...
This is definitely something that could begin to play a part in central bank policies over the coming months.

While there is also a case to be made that the Fed has reached peak hawkishness, they have been adamant in sticking with tighter policy until inflation comes down. So we could possibly see some central banks explore other avenues to stimulate their currencies and tackle the issue of "importing inflation".
 
I wonder how many of the members here are old enough to remember the GFC, the Tech crash, the Twin Towers pullback, the big crash of 87, the oil crisis of the 70's etc etc etc.
If you are willing, history is a great teacher, and it also demonstrates the charlatans of the world.
The people giving advice, tips, sure fire money winners, 5 tech stocks that will make you a millionair etc etc, are NOT doing this to help others make money.
They are doing it to make money for themselves.
Its important to always keep that in mind.
History has shown that CB's of almost every persuasion have in the past been late to react, both on the upside and the downside.
Overshoot is probably not something that is taught in economics these days.
But I am planning my near term investing trading around this principal.
Although there are signs that some economies are slowing down, it does not mean that inflation is also slowing down.
I expect that signs of inflation will be with us for some time, as the effects of so many of the levers that have been pulled are yet to show up in inflation figures. The UK and China are moving down the path of more QE, and the Biden administration is running deficits like forever.
These only fuel inflation , not ease it.
The push for a Universal basic Income will become an avalanche if the dems remain in control of both houses of use admin after the November mid terms..
That will require more QE, not less.
I fully expect that most economies will be pushed into recession as the economies contract, and only then will most CB's start to ease rates, and they will ease them to far the other way.
I do not have a time frame for any of this, I have lost faith in modelling of most systems, they have too many unknown variables.
I have been slowly easing into the 3% coupon bonds, the GSBE47.
As they don't mature till 2047, i can think more long term.
They have fallen as much as 20% from their issue price, so it really means that the 80 bucks purchase price gives me an effective yield of 3.5%
Which is still better than the 2.5% i get on my "high Interest account " within NABTRADE.
If the RBA keeps increasing rates, they will hopefully fall further in price, so I will be able average down.
When the recession hits, and the RBA is forced to decrease rates, the price will rise again.
I will still be getting an effective 3.5% interest on my bonds, plus I may have capital gains.
These bonds hit 145 back in 2020, when interest rates were so low and before the market started pricing in rate hikes.
there are other Bonds such as GSBG33 which offer a coupon yield of 4.5%, but although they have come off in price, are still 10% above the face value, so it brings the effective yield down to 4 .1% with less chance of the CG.
Mick
 
Euro inflation now 10%! Above market consensus of 9.7% and despite oil prices being below pre - invasion prices.

Is it possible to see a situation where the Euro zone ends up in a hyperinflation situation and the rest of the world ends up manages to control inflation? What would that world be like?
 
Worth a watch.

Charlie Munger (former Chairman of The Daily Journal Corporation and Vice Chairman at Berkshire Hathaway) has predicted a recession based on the high inflation in 2022. But how do we invest in the resulting stock market crash? Is Warren Buffett style value investing the way to go? And what are Charlie's tips to help us make money in during the recession?
Click to expand...


 
waterbottle said:
Euro inflation now 10%! Above market consensus of 9.7% and despite oil prices being below pre - invasion prices.

Is it possible to see a situation where the Euro zone ends up in a hyperinflation situation and the rest of the world ends up manages to control inflation? What would that world be like?
Click to expand...
Even more/basically all russian energy getting cut off.
 
JohnDe said:
Worth a watch.




Click to expand...

will this be a 'recession ' ( i suspect we have been in a recession for moths already )

i am trying to work out a strategy for something much worse , maybe something so bad a new definition will be needed

what would normally be good strategies , are being strangled and hamstrung by political policies
 

Similar threads

M
Cooling Australian Property Market Signals Economic Trends
Replies
1
Views
946
Joe Blow
Joe Blow
tech/a
Retirement-Semi Retirement, (Tech/a personal study) implementation and discussion.
2
Replies
25
Views
2K
qldfrog
qldfrog
Uncle Festivus
When will the Great Financial Ponzi end?
2 3 4
Replies
69
Views
4K
divs4ever
divs4ever
greggles
Causes of market corrections/crashes
Replies
10
Views
2K
divs4ever
divs4ever
wayneL
The future of... The future?
Replies
3
Views
734
qldfrog
qldfrog
Top