Inflation

[Chipp]

They say a picture says a 1000 words

 

[divs4ever]

Governments debt levels?

(don't mention them . they are politically painful )

 

[over9k]

Governments debt levels?

Herein lies the issue re: why they won't (can't politically) raise rates. Add private debt on top of it and it's financial armageddon. Think great depression style contraction.

So we ride the inflation horse instead.

 

[Chipp]

Getting that risk of vibe again . US yields pinging and ZQZ2024 down to a implied cut EOY 54bps , Inflation aint beat just yet ...

 

[frugal.rock]

Am I the only one feeling the market is on a pre correction melt-up.
I hate being a scarecrow, but...?

 

[sptrawler]

Am I the only one feeling the market is on a pre correction melt-up.
I hate being a scarecrow, but...?

Yes inflating away debt, basically moves the debt from the Govt to the private sector, where it becomes pass the parcel everyone trying to move their increased costs on to someone else, eventually the music stops nobody wants to pay more.
It is all being kept afloat by subsidies and wage increases, but costs eventually outstrip them, or they are witheld, kaboom, game over.

It isn't as though we haven't been through this sort of period before, the only difference this time is we have China hovering, ready to pick up stranded assetts, the capitalist system overlords will be nervous about that, there has never been a predator around before when we want to reset the system with a recession.
Only my thoughts.

 

[over9k]

Am I the only one feeling the market is on a pre correction melt-up.
I hate being a scarecrow, but...?

Froth coming off. Happens just after the dumb money starts getting fomo.

Gold's a good hedge

 

[over9k]

Markets now pricing two cuts to be more likely than three.

 

[Prepper Pete]

View attachment 174391View attachment 174392

Markets now pricing two cuts to be more likely than three.

Inflation is like mixing VINEGAR with BAKING soda

 

[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.

I wrote the above in January last year.
Inflation , although reduced, has not gone away.
How long does it have to go on before the transitory tag is finally killed off??
We are now into the fourth year of above acceptable levels of inflation.
The following chart came from The White House in which they argued that previous periods of inflationn were supply side driven.
At no stage did they acknowledge there may have been any relevance to the massive monetary stimulus that they themselves create.



Mick

 

[TimeISmoney]

Keep an eye on the US 10 year bond yields, I'd say on par at this stage for 2 cuts or less.

 

[Dona Ferentes]

from a weekly newsletter:

"Capital markets are currently engaged in a recalibration of inflation expectations, with rising commodity prices fuelling anxiety that we may well see a reacceleration in the rate of inflation.

Bond markets need to re-price for all of this, whilst having to digest a new reality of seemingly never-ending fiscal profligacy...

...
....consumer sentiment remains so poor, whilst economists, central bankers and governments keep telling everyone that inflation has gone away.

Maybe it is time we got out of the shopping basket, and the real world, and entered the world of the Wizards on Wall Street.

This means we must talk about bond markets.

And if we are talking about bond markets, then the world’s most important financial benchmark is ...10-year U.S Treasury yields.

For some months I have felt that U.S bond yields were in no-man’s land....

The chart .. looks like it is breaking higher.

Could we see a retest of the 5% yield level that we reached in October 2023?

It is possible.

There is no doubt that the rise in commodity prices is getting the attention of Wall Street, and the bond market.

Furthermore, we know that the market has an avalanche of bond issuance to absorb in the months ahead, if not years ahead.

One could say that we might be just one QRA away from a surge in U.S bond yields.

If you recall it was the large increase in the U.S Treasury Quarterly Refunding Announcement in late July 2023 which alarmed the markets and led to a surge in bond yields.

There are few certainties in life, but one certainty is that the United States is on an unsustainable fiscal path, as is most of Europe. ..."

 

[over9k]

Keep an eye on the US 10 year bond yields, I'd say on par at this stage for 2 cuts or less.



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I'm not betting against stock markets but I'm sure betting against bonds. I've waxed lyrical about how resilient the U.S economy has been and will continue to be against higher rates.

Markets to remain flat and bonds to dump from here IMHO

 

[over9k]

"ai" seems to now be fully priced. Oil, however, has been the real quiet achiever this year (as I showed a few posts back) and that's the one to watch.

 

[over9k]

As an extension of the above point, markets are always looking for the next big thing, for a while it was electric cars, then a.i, will oil be next?

The early rumblings were the entry point for the "a.i" play, we're seeing the rumblings about oil/inflation/bonds right about now. Take that for whatever you think it's worth.

 

[divs4ever]

View attachment 174396

16 hour old article


I'm not betting against stock markets but I'm sure betting against bonds. I've waxed lyrical about how resilient the U.S economy has been and will continue to be against higher rates.

Markets to remain flat and bonds to dump from here IMHO

have only minimal exposure to bonds ( via one LIC )

Greece/Cyrus kept me well back and let all my corporate debt redeem/mature back by 2017

have a small speculative order in for BBOZ ( at discount to the current action )

will the market/banks/bonds be let fail before the US election? ( i suspect , not , despite my desire to scoop up some smashed stocks )

 

[Dona Ferentes]

I hate being a scarecrow, but...?

I'm out standing in my field ??

 

[over9k]

Really gets the noggin joggin

 

[sptrawler]

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Really gets the noggin joggin

As I said a while ago, the Australian Govt has a massive defence spend to fund, a massive cost to transition to renewable energy, a massive debt left over from covid to fund, a massive welfare cost spiral and they are cutting income taxes.

Inflation going down, doesn't really fit in the equation, a reduction in consumer spending, a reduction in the income tax reciepts, a reduction in business tax = catastrophe IMO.

More pump priming is my guess, how long that goes for is the big question, sooner or later it has to pop, how that pop manifests itself is the question. IMO

 

[divs4ever]

View attachment 174410

Really gets the noggin joggin

$10 Trillion won't cut it , they are terribly inefficient

( Russian builds with sledge-hammer - quipped one Russian fighter pilot )
more cheaper and durable armaments

the HUGE question is which strategy is China using ( copy the West , or build so a farm-boy can use it with minimal training )