Inflation

[over9k]

I’m not the smartest person around, nor the wisest, but I do enjoy reading everything and making my own opinions ?

View attachment 153242

You are literally talking about yourself.

The very fact that you linked the economist is ipso facto proof that it is you who is in need of advice here.

Who are you going to link me to next, jim cramer?

 

[JohnDe]

Absolute garbage. The idea that you can impose the kind of sanctions that we have on the amount of energy that we have without it creating a significant inflationary effect is absolutely absurd.

That's not to say there aren't other contributors, but the idea that the oil etc sanctions are not a major factor is beyond ridiculous.

Is Inflation Putin’s Fault? | Dominion Funds

dominion-funds.com

 

[over9k]

DOMINION FUNDS ARE NOT SAYING WHAT YOU THINK THEY ARE YOU UTTER ******* MORON

 

[over9k]

Alright, I'm blocking this idiot. If any of you are still dumb enough to actually listen to a single word he says about anything then you deserve everything you get at this point.

 

[Knobby22]

The historical reasons for the inflation surge are now largely irrelevant.
I personally didn't see how the transitory triggers would create intractable inflation but in hindsight it was obvious.

I am more interested in seeing the latest inflation figures, keeping an open mind and trying to see what the future holds.

 

[mullokintyre]

At the risk of being killed or blocked, I remember being on the wrong side of history about 18 months ago when I suggested that the inflation was never going to be transitory, regardless of the reasons for it.
Once price pressures came in on something as basic as energy, it was going to affect everything adversely in terms of price, so the push factors become self fulfilling.
The manufacturers put their prices up because the input costs go up, the logistic people put their costs up because the cost of fuel and DEF has gone up. There are so many flow on effects.
The thing about inflation is that even if it drops back to a "manageable" 2%, the price of the goods affected by inflation rarely drops, at best they stay the same price.
The Joe Public still have to pay the higher rent, the higher heating costs, the higher fuel, the higher travel costs and eventually food costs.
So they look for higher wages to compensate.
And so the cycle goes on.
Most of the big CB's around the world poured money into their economies when the rona virus hit, and eventually this massive increase in money supply was going to cause and sustain inflation. The Biden administration , like virtually every other country is running massive deficits that just keep adding more and more useless fiat currencies, that as they lose their purchasing power, fuels further real inflation.
China is starting to pour money into their staggering economy, so we will see more money coming out of China looking for safer havens in other countries.
For the above reason, plus a few others, I can see house prices being sustained, regardless of interest rates, by people not constrained by rising interest rates, i.e. the cash buyers. Like a few others here on ASF, I have some cash looking around for a better home (literally), and if the right opportunities pop up, I will move.
I have no doubt other will disagree with me, ( I can see you all lining up!) I have no problems with that, but I hope I don't waste my time and others time in arguing about how many angels fit on the head of a pin.
Mick

 

[JohnDe]

"As the February statement on monetary policy makes clear, the supply shock from the pandemic and the energy price spike because of Russia’s war in Ukraine appear to have peaked. But inflation is still high in many advanced economies because of resilient consumer demand and rising labour costs. This means Jim Chalmers cannot point overseas for excuses as the RBA continues to boost rates at home.​

​

"By restoring industry-wide bargaining to drive up wages and intervening in the energy market with price caps and regulation the Albanese government has weakened trust. The tense relations with the RBA and business are a measure of the stakes at play as policymakers navigate the narrow path to curbing inflation without tipping the economy into recession."​

RBA inflation outlook puts government on the rack​

Confirmation on Friday that the Reserve Bank of Australia intends to continue lifting interest rates to dampen inflation leaves the Albanese government in a difficult spot. As the February statement on monetary policy makes clear, the supply shock from the pandemic and the energy price spike because of Russia’s war in Ukraine appear to have peaked. But inflation is still high in many advanced economies because of resilient consumer demand and rising labour costs. This means Jim Chalmers cannot point overseas for excuses as the RBA continues to boost rates at home.

Question time in federal parliament throughout the week left no doubt that cost of living and interest rates are rightly the priority contest between the major parties. As Peter Dutton cultivates the theme that Labor governments will always equal higher prices, the government is pulling out all stops to push responsibility for future lifts in interest rates on to the RBA and to convince voters the Albanese team represents a responsible pair of hands on the economic levers.

The Treasurer says the inflation challenge is the defining feature of our economy this year and the primary focus of the Albanese government. He says the government’s plan to address inflation has three parts: responsible cost-of-living relief, dealing with supply-chain issues and keeping spending under control.

The RBA gave government a small win, claiming interventions in gas and coal markets had moderated the outlook for energy prices, but the damage there could be long-term loss of revenue as companies recalculate the sovereign risk of doing business in an environment in which longstanding agreements can be changed by government. The bigger question is what impact the government’s industrial relations changes will have on wages and inflation. The government faces new challenges in the Senate following the defection to the crossbenches of former Greens senator Lidia Thorpe, but Employment and Workplace Relations Minister Tony Burke has made clear the government’s intention to push through more changes to industrial relations laws targeting the gig economy.

The big challenge for the RBA and government is to cool spending and avoid the situation where higher wages continue to drive inflation. The RBA noted that wages growth had picked up, particularly in the private sector, and aggregate wages growth was expected to pick up further across the course of the year. Growth in the wage price index is forecast to peak at around 4.25 per cent late in the year. The RBA says as growth in the economy slows, labour market conditions are expected to ease, and wages growth to slow a little and unemployment to rise to 4.5 per cent by mid-2025.

As Tom Dusevic writes on Saturday in Inquirer, Dr Chalmers is talking a big game on fiscal responsibility but the RBA appears unconvinced on the government’s commitment to fiscal repair to return the budget to balance on an ongoing basis. Promised cost-of-living measures and higher wages are inevitably inflationary. Business leaders increasingly are voicing their concerns about the disconnect between the Albanese government’s promises and delivery. By restoring industry-wide bargaining to drive up wages and intervening in the energy market with price caps and regulation the Albanese government has weakened trust. The tense relations with the RBA and business are a measure of the stakes at play as policymakers navigate the narrow path to curbing inflation without tipping the economy into recession.

 

[waterbottle]

At the risk of being killed or blocked, I remember being on the wrong side of history about 18 months ago when I suggested that the inflation was never going to be transitory, regardless of the reasons for it.
Once price pressures came in on something as basic as energy, it was going to affect everything adversely in terms of price, so the push factors become self fulfilling.
The manufacturers put their prices up because the input costs go up, the logistic people put their costs up because the cost of fuel and DEF has gone up. There are so many flow on effects.
The thing about inflation is that even if it drops back to a "manageable" 2%, the price of the goods affected by inflation rarely drops, at best they stay the same price.
The Joe Public still have to pay the higher rent, the higher heating costs, the higher fuel, the higher travel costs and eventually food costs.
So they look for higher wages to compensate.
And so the cycle goes on.
Most of the big CB's around the world poured money into their economies when the rona virus hit, and eventually this massive increase in money supply was going to cause and sustain inflation. The Biden administration , like virtually every other country is running massive deficits that just keep adding more and more useless fiat currencies, that as they lose their purchasing power, fuels further real inflation.
China is starting to pour money into their staggering economy, so we will see more money coming out of China looking for safer havens in other countries.
For the above reason, plus a few others, I can see house prices being sustained, regardless of interest rates, by people not constrained by rising interest rates, i.e. the cash buyers. Like a few others here on ASF, I have some cash looking around for a better home (literally), and if the right opportunities pop up, I will move.
I have no doubt other will disagree with me, ( I can see you all lining up!) I have no problems with that, but I hope I don't waste my time and others time in arguing about how many angels fit on the head of a pin.
Mick

If a better home makes you happy, then you should do it

 

[waterbottle]

A walk down memory lane.

The last soft landing we had was in 2008....

No Recession, But… https://www.bloomberg.com/news/articles/2007-12-19/no-recession-but

 

[Smurf1976]

I personally didn't see how the transitory triggers would create intractable inflation

Things I always bear in mind:

Energy is the master resource. Some form of energy is an input to every economic activity so if it gets more costly, so does everything. Whatever's being done, there's some sort of fuel or power involved somewhere.

Labour is likewise a master resource. Nothing happens of significance without at least some labour input.

Land and capital are also key inputs. Not necessarily in the short term, they aren't constantly consumed like labour and energy, but there's not much that doesn't require land or capital as such.

Now if we had a disruption to energy supply, shut down a good portion of the labour force for an extended period, made it difficult through regulation to develop land and either crashed or hiked the cost of capital then that would produce some "interesting" results. That is, of course, exactly what's happened.

 

[over9k]

Might try FNGD and SOXS...

Did you buy?

 

[CityIndex]

Aussie wage data for Q4 printed weaker-than-expected at 3.3% YoY (exp 3.5%). AUD/USD pushed lower in the initial reaction to the news.

Market pricing overnight signalled increased expectations for a 50ps at the Fed's March meeting, and if today's AU data supports the idea of a less hawkish RBA, it could increase the downside risk for AUD/USD

All trading involves risk, but with FOMC Minutes also due early tomorrow morning, it will be interesting to see how the pair trades over the rest of the week.

 

[waterbottle]

Did you buy?

Bought FNGD, chickened out of SOXS

 

[waterbottle]

Aussie wage data for Q4 printed weaker-than-expected at 3.3% YoY (exp 3.5%). AUD/USD pushed lower in the initial reaction to the news.

Market pricing overnight signalled increased expectations for a 50ps at the Fed's March meeting, and if today's AU data supports the idea of a less hawkish RBA, it could increase the downside risk for AUD/USD

All trading involves risk, but with FOMC Minutes also due early tomorrow morning, it will be interesting to see how the pair trades over the rest of the week.

RBNZ hiked 50bps, no signs of them letting up.

 

[CityIndex]

RBNZ hiked 50bps, no signs of them letting up.

It added to the selling pressure on AUD/NZD. Suffice it to say that it wasn't the best 30 minutes for the Aussie Dollar in the context of this pair.

 

[divs4ever]

Is Inflation Putin’s Fault?​

Large sections of populations in the developed world now face a ‘cost of living crisis’, as their incomes are not keeping up with inflation in energy, food, and other living expenses.
Share on

NO ! it was the carefully thought out ( according to Seymour Hirsch ) sanctions placed on Russia ( and Belarus )

that did the damage

also the total miscalculation of Russian economic resilience , as well as the understanding that China already considers itself in an economic war with the collective West

and of course there is the inconvenient theory that national governments create inflation mostly by maintaining a deficit sending policy ( printing excess currency )

having lived through the '70s ( as a teenager/young adult ) one lesson springs to mind

those who do not remember history are doomed to repeat it

 

[JohnDe]

NO ! it was the carefully thought out ( according to Seymour Hirsch ) sanctions placed on Russia ( and Belarus )

that did the damage

also the total miscalculation of Russian economic resilience , as well as the understanding that China already considers itself in an economic war with the collective West

and of course there is the inconvenient theory that national governments create inflation mostly by maintaining a deficit sending policy ( printing excess currency )

having lived through the '70s ( as a teenager/young adult ) one lesson springs to mind

those who do not remember history are doomed to repeat it

Plus, it looks like we have reached the peak of the effects of Covid and Russian oil sanctions -

"As the February statement on monetary policy makes clear, the supply shock from the pandemic and the energy price spike because of Russia’s war in Ukraine appear to have peaked. But inflation is still high in many advanced economies because of resilient consumer demand and rising labour costs. This means Jim Chalmers cannot point overseas for excuses as the RBA continues to boost rates at home.​

"By restoring industry-wide bargaining to drive up wages and intervening in the energy market with price caps and regulation the Albanese government has weakened trust. The tense relations with the RBA and business are a measure of the stakes at play as policymakers navigate the narrow path to curbing inflation without tipping the economy into recession."​

RBA inflation outlook puts government on the rack​

Confirmation on Friday that the Reserve Bank of Australia intends to continue lifting interest rates to dampen inflation leaves the Albanese government in a difficult spot. As the February statement on monetary policy makes clear, the supply shock from the pandemic and the energy price spike because of Russia’s war in Ukraine appear to have peaked. But inflation is still high in many advanced economies because of resilient consumer demand and rising labour costs. This means Jim Chalmers cannot point overseas for excuses as the RBA continues to boost rates at home.

Question time in federal parliament throughout the week left no doubt that cost of living and interest rates are rightly the priority contest between the major parties. As Peter Dutton cultivates the theme that Labor governments will always equal higher prices, the government is pulling out all stops to push responsibility for future lifts in interest rates on to the RBA and to convince voters the Albanese team represents a responsible pair of hands on the economic levers.

The Treasurer says the inflation challenge is the defining feature of our economy this year and the primary focus of the Albanese government. He says the government’s plan to address inflation has three parts: responsible cost-of-living relief, dealing with supply-chain issues and keeping spending under control.

The RBA gave government a small win, claiming interventions in gas and coal markets had moderated the outlook for energy prices, but the damage there could be long-term loss of revenue as companies recalculate the sovereign risk of doing business in an environment in which longstanding agreements can be changed by government. The bigger question is what impact the government’s industrial relations changes will have on wages and inflation. The government faces new challenges in the Senate following the defection to the crossbenches of former Greens senator Lidia Thorpe, but Employment and Workplace Relations Minister Tony Burke has made clear the government’s intention to push through more changes to industrial relations laws targeting the gig economy.

The big challenge for the RBA and government is to cool spending and avoid the situation where higher wages continue to drive inflation. The RBA noted that wages growth had picked up, particularly in the private sector, and aggregate wages growth was expected to pick up further across the course of the year. Growth in the wage price index is forecast to peak at around 4.25 per cent late in the year. The RBA says as growth in the economy slows, labour market conditions are expected to ease, and wages growth to slow a little and unemployment to rise to 4.5 per cent by mid-2025.

As Tom Dusevic writes on Saturday in Inquirer, Dr Chalmers is talking a big game on fiscal responsibility but the RBA appears unconvinced on the government’s commitment to fiscal repair to return the budget to balance on an ongoing basis. Promised cost-of-living measures and higher wages are inevitably inflationary. Business leaders increasingly are voicing their concerns about the disconnect between the Albanese government’s promises and delivery. By restoring industry-wide bargaining to drive up wages and intervening in the energy market with price caps and regulation the Albanese government has weakened trust. The tense relations with the RBA and business are a measure of the stakes at play as policymakers navigate the narrow path to curbing inflation without tipping the economy into recession.
Click

 

[divs4ever]

i can't see how the ' Russian contribution ' could be considered as 'peaked ' when Russia has barely initiated any retaliatory trade restrictions ( like say sending it's entire diamond exports via India instead of the current majority are India bound )

Russia has the option of being very selective on where it will export to , and have a little flexibility of imports as well ( say the improved trade with Iran )

i am watching to see if Russia will increase gold for commodities swapping ( some African nations might appreciate that )

PS thanks for reminding me i have another useless git as my current local member ( to add to a long list of electoral disappointments in the past )

 

[JohnDe]

i can't see how the ' Russian contribution ' could be considered as 'peaked ' when Russia has barely initiated any retaliatory trade restrictions ( like say sending it's entire diamond exports via India instead of the current majority are India bound )

Russia has the option of being very selective on where it will export to , and have a little flexibility of imports as well ( say the improved trade with Iran )

i am watching to see if Russia will increase gold for commodities swapping ( some African nations might appreciate that )

PS thanks for reminding me i have another useless git as my current local member ( to add to a long list of electoral disappointments in the past )

Energy prices have peaked, because of a mild European winter, contingency plans for electricity production seem to be working, consumers have reduced energy consumption, other sources of energy have come on board, and natural gas prices have dropped in Europe.

 

[over9k]

demand side going