Inflation

[over9k]

jesus christ

 

[over9k]

"The fed cannot drill for oil or plant crops"

 

[over9k]

Because NOT "digital gold".

 

[over9k]

Didn't sell at 800 but did put a topup order in for 660 that filled while I was at the gym so I've had a VERY good night:



It'll be back up to 800 soon enough. Still kicking myself for not getting in earlier last year but oh well.

There might even be more dips to buy heading into winter (lots of speculation that the winter will crumble a lot of russian infrastructure which will send prices soaring before then but we shall see) before we see a seasonal rebound too.

Either way, still a total buy/hold IMO.

 

[3 hound]

Milton Friedman explains inflation;

 

[Macquack]

The only thing that does not go up with inflation is your own labour.

Retired people realise that very quickly.

 

[waterbottle]

Shanghai locks down for another round of mass COVID-19 testing

China's COVID-zero policy means tens of million of Shanghai residents will again be locked down to undergo mass testing over the weekend, just days after a gruelling, two-month lockdown was lifted.

www.abc.net.au

Meanwhile 8.6% CPI... Me thinks now that the Fed is not going to be sticking to their 0.5% schedule. There's a risk of a bigger than expected rate rise with oil at $120+. All of this translates to a real risk of recession.

I'm in cash folks

 

[Value Collector]

Shanghai locks down for another round of mass COVID-19 testing

China's COVID-zero policy means tens of million of Shanghai residents will again be locked down to undergo mass testing over the weekend, just days after a gruelling, two-month lockdown was lifted.

www.abc.net.au

Meanwhile 8.6% CPI... Me thinks now that the Fed is not going to be sticking to their 0.5% schedule. There's a risk of a bigger than expected rate rise with oil at $120+. All of this translates to a real risk of recession.

I'm in cash folks

Well a bunch of the inflation is caused by supply chain bottle necks due to covid lock downs, and sanctions due to war, so I am not sure that interest rates alone can fix it.

 

[over9k]

Shanghai locks down for another round of mass COVID-19 testing

China's COVID-zero policy means tens of million of Shanghai residents will again be locked down to undergo mass testing over the weekend, just days after a gruelling, two-month lockdown was lifted.

www.abc.net.au

Meanwhile 8.6% CPI... Me thinks now that the Fed is not going to be sticking to their 0.5% schedule. There's a risk of a bigger than expected rate rise with oil at $120+. All of this translates to a real risk of recession.

I'm in cash folks

0.75 would be admitting that they've dropped the ball though

 

[JohnDe]

Milton Friedman explains inflation;

When central banks raise interest rates, the impact is felt far and wide. Mortgages become more expensive, house prices might fall and unemployment can rise. So why do central banks do it? This film tells you why.​

​

00:00 - Why should you care about rising interest rates?​

00:45 - What are interest rates?​

01:36 - What do central banks do?​

02:14 - Why do central banks raise interest rates?​

03:12 - How do raised interest rates affect consumers?​

04:30 - How do raised interest rates affect businesses?​

05:20 - What are the risks of raising interest rates?​

06:05 - How do interest rates affect inflation?​

 

[3 hound]

I still don't understand how prices/inflation decreases.

Official inflation only refers to what two time periods exactly. As I understand inflation is calculated by the difference in prices at two time points. What are those time points because it can make a huge difference in the number.

Anyone feel free to comment.

 

[againsthegrain]

I still don't understand how prices/inflation decreases.

Official inflation only refers to what two time periods exactly. As I understand inflation is calculated by the difference in prices at two time points. What are those time points because it can make a huge difference in the number.

Anyone feel free to comment.

supply and demand is a simple one to start you off

e.g supply of money > demand

 

[3 hound]

supply and demand is a simple one to start you off

Ok price for a manufactured product is X, demand drops I have never heard of workers in the entire supply chain pay and condition going down (they might lose their job I guess but that stops products being made) in order to reduce manufacturing cost of product at price X so how does the price X drop?

 

[againsthegrain]

Ok price for a manufactured product is X, demand drops I have never heard of workers pay and condition going down in order to reduce manufacturing cost of X so how does the price of X drop,?

If you got 100 units of brand new product, but now only 50 people can afford it because;
- can borrow less
- have more expenditure on essentials

what do you do? throw 50 in the sea and write them off or find a lower price point where you can sell 75 at less profit.
Workers pay does go down, a position is made redundant and a cheaper "contractor" fills the gap, or the workload is spread across other workers so essential they are doing more work for same $

 

[3 hound]

If you got 100 units of brand new product, but now only 50 people can afford it because;
- can borrow less
- have more expenditure on essentials

what do you do? throw 50 in the sea and write them off or find a lower price point where you can sell 75 at less profit.
Workers pay does go down, a position is made redundant and a cheaper "contractor" fills the gap, or the workload is spread across other workers so essential they are doing more work for same $

I know a lot of workers that got laid off with huge redundancy packages never to work at the organisation again. They didn't even get back from their first luxury cruise and the organisation bribed them to come back as contractors and consultants at ridiculous pay increases and better conditions.

Pulling old people out of retirement to do their old job is becoming a trend. I know people that have been sacked and retired a dozen times being begged to return to their job from tradies, nurses, teachers software engineers, truckers the lot.

 

[againsthegrain]

I know a lot of workers that got laid off with huge redundancy packages never to work at the organisation again. They didn't even get back from their first luxury cruise and the organisation bribed them to come back as contractors and consultants at ridiculous pay increases and better conditions.

Pulling old people out of retirement to do their old job is becoming a trend. I know people that have been sacked and retired a dozen times being begged to return to their job from tradies, nurses, teachers software engineers, truckers the lot.

Contractors and consultants may get paid more at a certain point in time, but like you pointed out the full timers got huge payouts, paid holidays etc. Contractors/consultants will not, when they are not needed the contract is not renewed and its simple for the company to freeze that expense.
Also labour hire can be written off differently then full time workers with benefits, in the favour of the company of course.

 

[3 hound]

Migjt be technically true but the opposite is happening in reality.

Contractors and consultants may get paid more at a certain point in time, but like you pointed out the full timers got huge payouts, paid holidays etc. Contractors/consultants will not, when they are not needed the contract is not renewed and its simple for the company to freeze that expense.
Also labour hire can be written off differently then full time workers with benefits, in the favour of the company of course.

 

[againsthegrain]

Migjt be technically true but the opposite is happening in reality.

Yeah at the moment with shortages and all the sugar money still floating around. Im not going to pretend to know where we will be at the end of the year tho.

 

[divs4ever]

0.75 would be admitting that they've dropped the ball though

i took the rate hike during the month-long election campaign as that admission ( especially as there was no earth-shattering event in the month leading up to the rise )

and i would add they not only dropped but let it disappear from sight , rolling down the hill

let's say they jack rates to 3% by December but 'official inflation ' is running at more than 6% that ball is gathering real speed , it could bounce and shatter a glass ceiling or plunge over a cliff and the RBA will still be a spectator ( if they are lucky )

 

[divs4ever]

If you got 100 units of brand new product, but now only 50 people can afford it because;
- can borrow less
- have more expenditure on essentials

what do you do? throw 50 in the sea and write them off or find a lower price point where you can sell 75 at less profit.
Workers pay does go down, a position is made redundant and a cheaper "contractor" fills the gap, or the workload is spread across other workers so essential they are doing more work for same $

now from my observations in the '70s and '80s pays didn't go down ( in a meaningful way ) they just eroded 'entitlements ' , and there were noticeably less people getting a pay-packet