Inflation

[sptrawler]

It must be starting to hurt, when the SMH starts to get onboard, with the negative comments.

While the RBA nudges the brake, a reckless Labor pumps the accelerator

Two reasons why the RBA will have to hike rates again, and soon

When the RBA board next meets, I believe there’s a better-than-even chance it will raise rates for the first time in nine months to 4.6 per cent.

www.smh.com.au

 

[sptrawler]

This is the elephant in the room IMO, the Governments can't just keep giving lump sum rebates forever, sooner or later the electricity cost has to hit the bottom line of everything.
Plus we are converting everything over to electrical powered, so it is kind of a compounding affect, that hasn't seemed to have been recognised from an infaltionary context.
Just my two cents worth.

Power prices to surge amid sluggish rollout of clean energy: UBS

Wholesale power prices could be almost 50 per cent higher than last year, the investment bank’s analysts warn, as renewables project development has stalled.

www.afr.com

The sluggish buildout of clean energy generation will drive up wholesale power prices far more than expected by the end of the decade, leaving households with little chance of bill relief beyond this year’s pause.

Analysts at UBS now expect prices to peak at $104 per megawatt hour by 2029, 20 per cent higher than this year’s forecast and almost 50 per cent more than 2023

 

[TimeISmoney]

This is the elephant in the room IMO, the Governments can't just keep giving lump sum rebates forever, sooner or later the electricity cost has to hit the bottom line of everything.
Plus we are converting everything over to electrical powered, so it is kind of a compounding affect, that hasn't seemed to have been recognised from an infaltionary context.
Just my two cents worth.

Power prices to surge amid sluggish rollout of clean energy: UBS

Wholesale power prices could be almost 50 per cent higher than last year, the investment bank’s analysts warn, as renewables project development has stalled.

www.afr.com

The sluggish buildout of clean energy generation will drive up wholesale power prices far more than expected by the end of the decade, leaving households with little chance of bill relief beyond this year’s pause.

Analysts at UBS now expect prices to peak at $104 per megawatt hour by 2029, 20 per cent higher than this year’s forecast and almost 50 per cent more than 2023

I wish the Canberra coat seat warmers would get on with resolving the problem rather than arguing for weeks on end about future power generation. The rest of Australia is suffering while they throw slurs at each other and finger point. If general business worked like this nothing would get done.

 

[divs4ever]

I wish the Canberra coat seat warmers would get on with resolving the problem rather than arguing for weeks on end about future power generation. The rest of Australia is suffering while they throw slurs at each other and finger point. If general business worked like this nothing would get done.

you need to read an old Australian novel , Power without Glory ( by Frank Hardy , if i remember correctly )

sure it is about things decades ago , BUT the more things change ......

creating methane is what they do best ( a close second comes red tape )

 

[over9k]

And this is how your basket of goods and the abs's basket of goods produce different inflation numbers.

 

[divs4ever]

View attachment 179792

And this is how your basket of goods and the abs's basket of goods produce different inflation numbers.

no wonder they want to ban Tik Tok blatant Chinese election interference

 

[over9k]

remember the RBA needs to crush demand ie leave the masses dirt-poor , to beat inflation

Partially. If there's a supply-side issue then the supply side needs to be improved. Rate hikes actually reduce supply as well, they just reduce demand more.

Rate rises are a very blunt instrument.

Most of the top 4 bank predictions for IR have been woeful over the past few years.

What the rba should be doing and what it is are two very different things.

The thing is where is the money coming from that's making prices inflate?

Not that simple. Yes it's a factor, and printing cash can (will) cause a short term spike, but inflation should come back down once you turn the printers off.

The fact that it hasn't tells you that there's more going on.

house prices are way overpriced

And this is the one thing that they (and we all know who "they" are) will do anything to keep high.

From the latest RBA figures, we can see t it all began with the massive injection of funds post covid.

Again, this will explain a short term spike. If it were this simple then turning the printers off would return things to normal and it hasn't. There's more to it.

An issue in Australia is we have a lot of structural inefficiencies and bottlenecks

This. But it's not just for aus, there's a lot of structural global issues creating supply problems and they are not going to go away.

Govt can only increase the tax take from the consumers, or from the miners, there really isn't any other taxable sector as there is minimal manufacturing.

The only thing left is inheritance tax and that's political suicide. The only way they'd even begin to get that passed would be for it to apply as a small percentage to large estates, which would raise some revenue but not nearly enough.

bracket creep

This, I suspect, is what they're actually trying to do without telling the public that it's what they're trying to do.

It's what I'd do.

 

[over9k]

Meanwhile:


The last batch of hotter-than-expected data has done this.

 

[mullokintyre]

The cost of freighting goods and raw materials around the globe is always going to be red into final prices.
Container freight rates have been rising rising are now at the highest rate on record.



A quick look at the Baltic Dry Index sees a pattern of of a rising chanel.

Mick

 

[over9k]

Another reason why they won't hike.

 

[divs4ever]

View attachment 180283

Another reason why they won't hike.

nobody surveyed me .. i could get that figure done to 70 no problem

but i still think they have to hike

they need at least 5% before they start cutting to do anything meaningful ( cuts earlier will just be absorbed by currently stressed companies )

 

[Knobby22]

View attachment 180283

Another reason why they won't hike.

If sentiment falls and people close their wallets they won't need to hike.

 

[divs4ever]

If sentiment falls and people close their wallets they won't need to hike.

not enough pain yet for that to happen , the economy is still bouyed by faint ( and false hope )

you can tell that by the effect of 'flapping jaws' , still has

 

[JohnDe]

The cost of freighting goods and raw materials around the globe is always going to be red into final prices.
Container freight rates have been rising rising are now at the highest rate on record.

View attachment 180230

A quick look at the Baltic Dry Index sees a pattern of of a rising chanel.
View attachment 180229
Mick

A lot of shipping companies are taking the long way around, avoiding the Red Sea and the Taiwan Strait.

 

[over9k]

If sentiment falls and people close their wallets they won't need to hike.

Kind of. That'll pummel the demand side but does nothing to improve supply.

As showed before, things like container rates continue soaring regardless.

 

[over9k]

NZ holds at 5.5. NZ is smart.

 

[BossMan.]

My bet, writing this here so I can say I said it.

USA stays to high for to long, employment cracks, USA goes into a recession, fed chases its tail down with cuts, hard landing

 

[mullokintyre]

My bet, writing this here so I can say I said it.

USA stays to high for to long, employment cracks, USA goes into a recession, fed chases its tail down with cuts, hard landing

I tend to agree with you @BossMan.
Mick

 

[qldfrog]

I tend to agree with you @BossMan.
Mick

I think the problem has no palable solution: either default or hyperinflation .
In the meantime, feds are just gifting taxpayer money to their bank mates, and probably getting as much as they can until either Trump stops the merry go round, or the whole show collapses
My bet is on hyperinflation,which does not mean that even with benign rates well below cpi, a depression can be avoided.
If anyone remembers the 1970s/1980s, inflation, unemployment....and in some countries low rates..not here..

 

[mullokintyre]

I think the problem has no palable solution: either default or hyperinflation .
In the meantime, feds are just gifting taxpayer money to their bank mates, and probably getting as much as they can until either Trump stops the merry go round, or the whole show collapses
My bet is on hyperinflation,which does not mean that even with benign rates well below cpi, a depression can be avoided.
If anyone remembers the 1970s/1980s, inflation, unemployment....and in some countries low rates..not here..

Contrary to popular belief, Trump was always part of the system, the so called swamp.
He benefitted from it, got his start because of it, made his money from it, and only bagged it when it suited him.
Mick