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Inflation

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I'm not an economist and don't know much about what kneebone affects what thigh bone when people talk about inflation but I do know a few things. I'm just talking about the effect of tariffs on the USA brought about by Trump tariffs.

  • Price rises are different from inflation.
  • Not every tariff is going to lead to a price rise.
  • Price rises do not necessarily lead to inflation.
  • If a tariff is applied it varies whether the cost is borne by the importer or the exporter.
  • If it is the latter it is not a problem for the USA.
  • It also varies whether the importer decides to just apply the tariff cost to that which is imported or spread it over all in that class of imports, even those to which no tariff applies.
  • Price rises may lead to increased wages and less profit on imported goods or it may not. It depends.
  • Inflation does not occur immediately after tariffs are applied and later on as price rises.
  • Team Trump is now talking about applying tariff increases gradually.
  • The USA is a closed economy. Most of its activity is USA generated. The guy who makes an EV car, sells it to a dealer who sells it to someone else who works for a mob making EV engines which are bought by the guy who makes cars, same with bananas or buildings.
  • Less than 20% of economic activity is with other countries, lower than every other country in the world, so after tariffs start it is not going to affect 80% of the economy.
  • I could go on but the NYSE opens in 2 hours and I have some charts to look at.
  • Finally I don't believe tariffs will hurt the US consumer nor cause US inflation but it may affect other countries, probably will.

gg
 
Macquack said:
I am wondering what a "huge portfolio" is these days.
Click to expand...
I broke it down backwards as such,

Folio is like a folder ok,
If the folder is port it's on the left side, right?
Huge must mean it's a A3 sized folder... unless it's A2 or could it be so huge it's A1?
Not sure I've ever seen a folder for those sizes.
 
The California fires will probably do more to boost US inflation than the tariffs will, at least initially.
A lot of if demands in building materials cars, tv, sofa, etc plus trades.close the borders and the builders will get very busy.
Inflation in the US is good, reduce the real debt and avoid default
so Trump will be a winner on that one.not that it will be acknowledged as such, just that the economic alternatives are worse
 
From the above:
Now what will inflation be here?
More cheap China products for us, less mineral export,AUD falling and oil more expensive?
A recession in Australia?
Honestly not sure
 
Yank CPI comes in on estimates, markets happy but quite some way to go to erase their drop over the last couple of months.
 
MOST of my big winners are from luck AND taking passing opportunities taken , rather than planning to do certain trades at planned times

i NORMALLY avoid big bet ( but not always ) i am happy with small bets ( sometimes on the same stock in the same day/week )

my secret sauce is , looking at a lucky result and thinking maybe i should take some cash off the table ( letting the profits run )
 
Most of my big winners have been from stocks I have held for a long time and most of my worst losses have been from stocks I have held for too long.
 
Talking heads now predicting a 200 basis point difference between american & european interest rates.

I've been waxing lyrical about the EU vs NA divergence for quite some time and we're now starting to see it in central bank policies as well.
 
over9k said:
AUD dropped below 61 U.S a few hours ago. Recovered since but I reckon we've got maybe a month before we crack the 59's.
Click to expand...
Glad I asked you.
Admittedly, I'm pretty lazy that the option of not doing anything was already high.
 
over9k said:
AUD dropped below 61 U.S a few hours ago. Recovered since but I reckon we've got maybe a month before we crack the 59's.
Click to expand...
It is difficult to make any decisions with the Trump rapid action coursing through all fundamentals. One of his aims was to have a strong $USD which seems difficult to imagine given his other decisions.

gg
 
Garpal Gumnut said:
It is difficult to make any decisions with the Trump rapid action coursing through all fundamentals. One of his aims was to have a strong $USD which seems difficult to imagine given his other decisions.

gg
Click to expand...
I doubt he wants a strong U.S dollar because it would negate the tariffs, if the value of the imported product drops with the drop in the value of their currency, the effect of the tariff will be reduced.

Well that's with my basic maths.
You put a 50% tariff on a product that comes in at a cost of $100US.
It costs the consumer $150US.

If the currency of the imported product drops, so does the cost.

If the imported product drops to $80US, add the 50% tariff, it still drops the price to $120US.

So having a strong $US doesn't really make sense.

Add to that the fact he wants to relocate manufacturing back to the U.S, making it even more expensive actually doesn't make sense.

Are you sure you aren't reading the tabloids Bas reads?
Or else I'm misreading the logics completely. Lol
 
Last edited:
Garpal Gumnut said:
It is difficult to make any decisions with the Trump rapid action coursing through all fundamentals. One of his aims was to have a strong $USD which seems difficult to imagine given his other decisions.

gg
Click to expand...
depends on how much Government waste' get's cut out of 'foreign assistance '

there could be as many as 20 nations that cannot stand on their own without US cash injections , if they all become obvious basket-cases the USD will look fairly solid in comparison ( but just send me gold bullion .. or even silver bullion instead )
 
No mate. I don't read the tabloids that Bas reads.

Just the Financial Times for the pictures. lol

gg
 
Well there is also the EU nations that have been relying on US aid, not in direct monetary terms, but in the fact they have spent nothing on defence for years.

Trump highlighted it the first time he was in office and now the EU is in a position of being exposed to the Russia/Ukraine issue and having limited resources to deal with it.
As is being shown with the optical cable cuts and the lack of fire power.

What would happen, if China and North Korea went all in with Russia, to take on Europe? Does the EU have any way of countering it?

Interesting times.
 
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