Inflation

[Chipp]

No rate moves in remaining '24 , lock it in

 

[qldfrog]

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

Yes..was

 

[over9k]

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'll take this bet.

 

[waterbottle]

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

History is on your side

 

[Smurf1976]

I think the problem has no palable solution: either default or hyperinflation .

Heard a commentator say recently that the risk of default on US Treasury bonds actually is now being priced higher than the risk of default on some corporate bonds.

That says an awful lot really.

 

[Garpal Gumnut]

I am fortunate in that I don't have to feed a large family, as I did when I was younger.

I watched an American chappie post on X.com today that he found an old receipt from a shopping expedition to Walmart which amounted to $148. He decided to buy the exact same shop and it was $400 and something. I find the Americans prone to exaggeration but it would be interesting to know whether any ASF members with a large family dependent on him or her who has tried a similar exercise and what the sums were.

gg

 

[divs4ever]

Heard a commentator say recently that the risk of default on US Treasury bonds actually is now being priced higher than the risk of default on some corporate bonds.

That says an awful lot really.

good grief , are some of my opinions becoming consensus

now that is scary

 

[over9k]

I am fortunate in that I don't have to feed a large family, as I did when I was younger.

I watched an American chappie post on X.com today that he found an old receipt from a shopping expedition to Walmart which amounted to $148. He decided to buy the exact same shop and it was $400 and something. I find the Americans prone to exaggeration but it would be interesting to know whether any ASF members with a large family dependent on him or her who has tried a similar exercise and what the sums were.

gg

Go back a couple pages gumnut

 

[Garpal Gumnut]

Go back a couple pages gumnut

Thanks mate, @over9k , I'm pleased my short term memory was "adequate !! "

That chap was on ASF, the quote is below.

View attachment 179792

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

gg

 

[Chipp]

Heard a commentator say recently that the risk of default on US Treasury bonds actually is now being priced higher than the risk of default on some corporate bonds.

That says an awful lot really.

That commentator aint letting the truth get in the way of a good story imo . Default on treasury bonds is End of Times and is multiple times less likely than any other type of debt default .

 

[divs4ever]

That commentator aint letting the truth get in the way of a good story imo . Default on treasury bonds is End of Times and is multiple times less likely than any other type of debt default .

would that be a hard default or a soft default

look no further than the antics of Ukraine facing precisely that choice with bonds issued before 2022

the question would be , can the BIS , IMF World Bank and others let the US hard default on some or all of their Treasuries , after all it is one big financial entanglement

many 'unthinkable things' have happened in the last ten years

, without US guarantees , many large institutions would fail also

 

[over9k]

They're not going to default.

 

[Smurf1976]

They're not going to default.

If inflation continues at anywhere near present rates that's a default in practice. Technically it isn't but in practice it is.

 

[divs4ever]

They're not going to default.

well they can't 'temporarily ' close the gold window this time

 

[Chipp]

would that be a hard default or a soft default

look no further than the antics of Ukraine facing precisely that choice with bonds issued before 2022

the question would be , can the BIS , IMF World Bank and others let the US hard default on some or all of their Treasuries , after all it is one big financial entanglement

many 'unthinkable things' have happened in the last ten years

, without US guarantees , many large institutions would fail also

The US fed debt limit was suspended till end '24 quite a while back so effectively the Credit Card Limit doesnt exist till then .

You are correct a hard US default basically makes almost all debt untenable with a snowball effect that is basically " Armageddon "

The #1 trending term on ' X ' would be anarchy

US treasury debt aint defaulting any time soon

 

[Smurf1976]

US treasury debt aint defaulting any time soon

In real terms or nominal?

In nominal terms I agree it's highly unlikely.

In real terms if we don't get inflation down, right down, then it's already happening. Inflation of hard assets and consumer prices has run well ahead of bond yields in recent times.

 

[sptrawler]

https://www.theaustralian.com.au/breaking-news/commonwealth-bank-june-household-spending-index-down-for-renters/news-story/28acc3840419bbb6e114729744b6c908

From the article:

Banking behemoth Commonwealth Bank is warning of a growing split in Australia between renters and everyone else.
The bank’s latest household spending report shows Australians without a home ownership stake are pulling back on outlays, while mortgage holders or outright owners are increasing their spend.

Spending by renters is down 0.9 per cent in the year to June, the report states, while spending for mortgage holders is up 1.5 per cent over the same period.

Australians who own their homes outright lifted their spend by 2.1 per cent across the year.

While renters are pulling back, the bank’s overall Household Spending Insights index lifted 0.6 per cent in June to 150.5 points, following a 0.7 per cent rise in May for a yearly 3.9 per cent increase.

The data is drawn from de-identified payments from the bank’s seven-million customer base, accounting for about 30 per cent of Australian consumer transactions.

Eight of 12 spending categories lifted last month, led by recreation and hospitality, which recorded a 3.2 per cent rise.

Online bookings from Australians looking to take holidays helped push the rise, Mr Halmarick said.

“The increase (in June) was pretty narrowly based. Really, it was recreation, hospitality, food and beverages that provided most of the increase,” he said.

“But year-to-June spending is stronger in essential services, where prices are rising.

“Insurance, health, education and utilities, that’s where the biggest increase is.”
Year-to-June spending on insurance is up 8.8 per cent and up 5.9 per cent for health. Spending on utilities increased 6.8 per cent.

Recreation, by contrast, recorded a 0.2 per cent lift across the year.

Consumer spending makes up about 50 per cent of the economy and CBA’s index is a closely watched economic indicator.

 

[over9k]

In real terms or nominal?

In nominal terms I agree it's highly unlikely.

In real terms if we don't get inflation down, right down, then it's already happening. Inflation of hard assets and consumer prices has run well ahead of bond yields in recent times.

We've had negative rates since 2009 and constant debt increase since too.

They're going to inflate their way out of the debt I guarantee it.

 

[over9k]

Meanwhile:

 

[divs4ever]

while mortgage holders or outright owners are increasing their spend.

???

i am not aiming to shoot the messenger certain costs i wouldn't classify as 'spending ( insurance , power , local charges ) have risen noticeably ,inferior quality parts in home maintenance ( and not because the cheapest choice was selected

maybe there is a definition mis-match here , surely a rising number of home-owners( and mortgagees ) aren't tapping the 'home equity for discretionary spending