Inflation

[divs4ever]

I've been saying europe's done for for a while.

that was my assessment also

cheers

 

[qldfrog]

that was my assessment also

cheers

And fully agree, Ukraine being just the coup de grace....

 

[divs4ever]

And fully agree, Ukraine being just the coup de grace....

i thought that was the Brexit aftermath when the voters worked the UK Parliament had no intention of obeying the referendum outcome and EU voters started to wonder about their representatives, and Ukraine is just the distraction/waste dump for antique weapons

i still can't work out why Serbia thinks it needs to be in the EU , nothing but a bunch of starving parasites are left there , broke , stupid and obnoxious .

 

[wayneL]

i thought that was the Brexit aftermath when the voters worked the UK Parliament had no intention of obeying the referendum outcome and EU voters started to wonder about their representatives, and Ukraine is just the distraction/waste dump for antique weapons

i still can't work out why Serbia thinks it needs to be in the EU , nothing but a bunch of starving parasites are left there , broke , stupid and obnoxious .

It is essentially the Sovietisation of Europe. Collectivists just can't let the idea go, no matter how many times it fails.

 

[over9k]

Collectivists

Is that what you call them?

I use a different C word.

 

[wayneL]

Is that what you call them?

I use a different C word.

Plural of a four letter word?

 

[over9k]

Plural of a four letter word?

Let's just say it isn't "cocks".

 

[sptrawler]

German house prices are worse than anaemic.
View attachment 163036
Mick

The German and EU housing market isn't the same as the Australian market, so it is hard to draw conclusions, based on our situation.
A mate went out with a Swiss lady a long time ago and I asked her why the Swiss have such low home ownership, when they are highly paid and affluent, she said it was because it was more tax advantageous to not pay it off.

Here is an article on the German housing market, it's important to keep the apples with the apples, in Australia the Government makes it attractive tax wise to have an investment property.
In a lot of European countries, the tax break is given to the owner occupier, they can claim their interest as a deduction.
Germany has a lot of social housing and home ownership is only mid 40%, whereas in Australia it is mid 60%.

Reasons for the low homeownership rate in Germany

Germany has the second lowest share of homeowners of all OECD countries. This is driven by housing policies that produce incentives to rent. New studies show that alternative policies could increase the homeownership rate and reduce wealth inequality.

www.bundesbank.de

 

[sptrawler]

Anyone who thinks inflation is flatlining here is dreaming IMO.

 

[wayneL]

The German and EU housing market isn't the same as the Australian market, so it is hard to draw conclusions, based on our situation.
A mate went out with a Swiss lady a long time ago and I asked her why the Swiss have such low home ownership, when they are highly paid and affluent, she said it was because it was more tax advantageous to not pay it off.

Here is an article on the German housing market, it's important to keep the apples with the apples, in Australia the Government makes it attractive tax wise to have an investment property.
In a lot of European countries, the tax break is given to the owner occupier, they can claim their interest as a deduction.
Germany has a lot of social housing and home ownership is only mid 40%, whereas in Australia it is mid 60%.

Reasons for the low homeownership rate in Germany

Germany has the second lowest share of homeowners of all OECD countries. This is driven by housing policies that produce incentives to rent. New studies show that alternative policies could increase the homeownership rate and reduce wealth inequality.

www.bundesbank.de

There are also different tenancy laws which give tenants much more security of tenure. There is much more reason to regard your property as home over there, than here.

The only real security of tenure in this country, beyond the lease term (and in some circumstances even less), is to enter into an iniquitous contract known as a mortgage.

... Unless of course you have the cash.

 

[divs4ever]

It is essentially the Sovietisation of Europe. Collectivists just can't let the idea go, no matter how many times it fails.

yes at least China went over to study the collapse of the Soviet Union to try to do Communism better

but power is addictive ( and usually corrupts later on )

 

[divs4ever]

Anyone who thinks inflation is flatlining here is dreaming IMO.

from my experiences in the '70s/'80s it comes in waves as the poor and workers try to catch-up the businesses try to recover the extra wage costs , which sparks more wage rises

Keating ( as much as i dislike him ) pulled a deft trick with compulsory saving ( super )

i am not sure the current batch of leaders could do something similar ( with relative success )

 

[sptrawler]

from my experiences in the '70s/'80s it comes in waves as the poor and workers try to catch-up the businesses try to recover the extra wage costs , which sparks more wage rises

Keating ( as much as i dislike him ) pulled a deft trick with compulsory saving ( super )

i am not sure the current batch of leaders could do something similar ( with relative success )

Yes super did a lot of things, it basically put a couple of pay rises into savings that couldnt be touched, which help break the spiral and it also reduced our banks reliance on overseas borrowing as we didnt have a great savings base here.
The current problem is, the Government is inflating away its debt, but it is just kicking the can down the road for a bigger recession IMO. Having said that there isnt many ways the Govt can pay down its debt, other than raise taxes, or increase inflation to increase the tax take, but it does increase the gap between rich and poor.

 

[over9k]

For anyone wondering, the phenomenon of inflation driving wage (and everything else) increases that then leads to increased tax revenue is called "bracket creep".

 

[mullokintyre]

The Durable Goods Orders bounced in August.
Unfortunately, that bounce was entirely do to the now standard downward revision of the Durable Goods Orders in July.
From Zero Hedge

Thanks to a large downward revision for July (from -5.2% MoM to -5.6% MoM - the largest drop since the COVID lockdowns), preliminary August durable goods orders rose a marginal 0.2% MoM (vs -0.5% MoM exp).

Looking under the covers, we find more noise in this time series with orders ex-transports rose 0.4% MoM (+0.2% MoM exp), thanks to a big downward revision in July (+0.4% to +0.1%).

Additionally, we note that the value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, soared 0.9% last month after a revised 0.4% decline in July.

Core Capital Goods Orders have been downwardly revised 5 of the last 6 months...

Past revisions have become the norm in the US financial stats these days, and almost exclusively downward.
This will not end well.
Mick

Edited to add that the figures are in nominal dollars.
If one takes into account the inflation rate, things look even worse.

 

[over9k]

Yeah, I've seen headlines of them thinking about rejigging how they calculate employment (unemployment) numbers too.

 

[mullokintyre]

OZretail sales came in below the consensus forecasts.(surprise surprise).

So despite all the influx of migrants, both temporary and permanent, retail sales are at best weak.

The question is, will this fall in retail sales really bring down inflation?
Will it force retailers to discount heavily to remove inventory?
I suspect not, but we will just have to wait and see.
Mick

 

[sptrawler]

For anyone wondering, the phenomenon of inflation driving wage (and everything else) increases that then leads to increased tax revenue is called "bracket creep".

Add to that increased GST take on just about everything and bingo keep it rolling baby, we will have this debt paid off before you all end up in a cardboard box, well we hope so.

 

[divs4ever]

(surprise surprise).

SHOCKED i tell you , totally shocked ( sarcasm )

but i did what i could ( to bring retail spending down )

time will tell if discounts start to increase in retail world ( i think extra inflation pressures will make that difficult especially if more businesses keep closing/failing )

 

[over9k]

Add to that increased GST take on just about everything and bingo keep it rolling baby, we will have this debt paid off before you all end up in a cardboard box, well we hope so.

Not being funny here, if I was in charge, it's how I would deal with it. I've even stated as such on this forum.

It's quite possibly (probably) why they're so hesitant to actually get inflation under control.