Inflation

Garpal Gumnut said:

I don't believe there is much difference between the 70's and today.

We spent our money on vinyl music, alcohol, cannabis, expensive clothes and sports goods produced by our highly paid Australian workers. We had a Sandman and beaches alright, but airfares and travel were horrifically expensive. The food was crap but not cheap and the financial sector was highly regulated and it cost an arm and a leg for brokerage. We were also paying for a war not of our making. Houses were cheap and unions were plenty and corrupt for all the good they did.

Today clothes are cheap, as is alcohol. I have no idea what cannabis costs but it can be grown now quite easily, cars are better and safer, airfares are cheap (maybe not in to the future ) , music is cheap or free and sports goods are inexpensive. Food is tasty and nutritious and cheap on world terms. And we were recently and will be in wars not of our own making. The only thing really different is the price of housing and the lack of unions who could make a difference if they tried for workers nowadays.

gg

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70's oil shock was caused by a cutoff of supply, so too has this one been (will be).

Peter schiff absolutely on the money. Watch until the end.

Stocks plummeting but oil is UP you say? HMMMMMMMMM.



Grabbed some more at 550 right where that volume spike is. Another excellent night.

over9k said:

Peter schiff absolutely on the money. Watch until the end.

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I lol everytime someone rolls out Peter Schiff. To me, he is the OG Gold Bug as my formative years were during the GFC when I distinctly remember him and Dr. Marc Faber preaching economic armaggeddon. Both should have been right, but they ended up being totally wrong because they couldn't foresee (in fact no one could) how far government would go to stop the entire global economy from collapsing.

Which brings me to this video. Inflation is running hot. It's not as the Fed or Yellen have predicted (the latter has admitted). And the agreed upon remedy is jacking up interest rates faster than what has been done in the past 20 years.
How then, can we not be entering a recession?



We have retail sales slowing in Europe and the retailers in the US unable to clear inventory, now looking at marking down products. US home sales have slowed and prices are expected to fall. Real wages are falling. NASDAQ is now down 31% from all time highs! 10-year bonds are now 3.3% (last time they were this high was in 2011).

Worse still, regulated financial institutions are tied into the crypto market. It seems they've been chasing greedy crypto gains in an unregulated jungle market that has lost $2T to date, and if the NASDAQ is any indicator for what to expect for post-COVID tech risk, will likely continue to fall by an additional $500-800 billion.
This is another thread in itself but it absolutely stinks of contagion and is a mirror copy of the private CDO/CDS markets that herladed the GFC. Big financial institutions making private bets in an unregulated market, booking massive losses only for the public to bail them out again.

These are huge shifts that are occurring. Therefore the Fed response, if they truly wish to reign this in, will have to also be huge.
The ECB lifting rates and (forecasting their rate hike plan) has received a lot of criticism as it eliminates the 'shock and awe' aspect of a rate hike cycle. There may be some truth to that as central bankers are notorious for calming/jawboning the public when they've had to - after all the entire system is built on perception, smoke and mirrors.
Which begs the question. Has the Fed's publicly-stated committment to 0.5% rate hikes over the past few months been a bit of a white lie? IMO, it sounds like it has. Why? Well the Fed released its own internal study showing that a run-off of their balance sheet alone amounts to the equivalent of a 0.5% rate hike! What the absolute f***
This means they still only have one tool - interest rates. And as several commentators have already stated, a federal funds rate of 2.x% is not going to make an impact when CPI is 8.x%.

I am increasingly of the opinion that they're going to slam this down by starting with a surprise 0.75%-1% hike this Wednesday, or via additional surprise inter-meeting rate hikes (as they've done multiple times in past economic emergencies).

Combined with the data, and the position that the Fed is in, how can we not be expecting a recession?

I'm not saying I disagree with you bottle, but the problem is that a 1% or whatever hike is a tacit admission that they've dropped the ball, which would only bring their credibility into question, which would only tumble markets further.

This might (probably does) make them very hesitant to do so. Pure gut instinct on this but I reckon we'll see "more" 50 point hikes forecast (so they can be priced in) rather than a couple of 100's now.

Forward guidance can (CAN) be enough.

over9k said:

which would only bring their credibility into question,

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Their credibility was high with which financial analyst??

3 hound said:

Their credibility was high with which financial analyst??

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Ok, MORE into question then.

Point is, any blow to fed credibility = increase in uncertainty = sh!tshow.

Yellen has already admitted defeat. And Powell is backpedalling. I think most analysts now understand that Fed got it wrong.
The only party they need to save face with are the Public. Fortunately, Biden is there to take the blame.

Only question from here is seasonality. We usually see a rollover about now but I've read/heard a lot of talk from a lot of very smart people of russia's oil just going byebye once it's wrecked by the cold this year.

Either way, my current strategy is to deploy 20% of remaining cash at every big dip from now until I, well, run out. Either we see it scream once russian oil's toast or I buy up cheap in the winter lull before it takes off again with the thaw next year. Still kicking myself that I didn't put more on the line doing precisely this the past couple of years, but tech ran hard until the start of this year so I didn't exactly lose everything. Now that's off the menu.

My two biggest positions are still FNGD and NRGU.

waterbottle said:

Biden is there to take the blame.

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Biden can not take accountability for anything, everything wrong is because Trump, Putin, climate change, white nationalists, conservative SCOTUS...UFO's

In order for biden to be responsible for the biden administration he would have to first be in charge of the biden administration

over9k said:

In order for biden to be responsible for the biden administration he would have to first be in charge of the biden administration

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who is biden?

againsthegrain said:

who is biden?

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3 hound said:

Biden can not take accountability for anything, everything wrong is because Trump, Putin, climate change, white nationalists, conservative SCOTUS...UFO's

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over9k said:

In order for biden to be responsible for the biden administration he would have to first be in charge of the biden administration

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againsthegrain said:

who is biden?

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LMAO

USmidbterms are being held in Nov 22. The Biden administration will have to face the public, regardless of what your politics are.

Buy the dips boys

over9k said:

Peter schiff absolutely on the money. Watch until the end.

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Hes been waiting for a long time for someone to say that. The guy must be messing his pants that he might finally be right.

3 hound said:

I don't follow this so could be wrong, doesn't every wage job have an award that dictates your pay, what award has ever been revised down because of inflation???

Examples plz.

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i don't know about currently but some ( Mega corp ) companies have interesting ways to circumvent awards and enterprise agreements , in some cases it is the discrete erosion of entitlements ( in one job i had in the '70s it was how sick-pay was defined , in others it has been the definition of 'holidays ' or overtime entitlements ,)

now i stress this has been prominent in MEGA- corps , the smaller employer simply bites the bullet ( regulators and fines and stuff seems to make any attempt distracting and unprofitable )

i remember working at one job that had 'an enterprise agreement ' that nobody could find a copy of , not management , the pay-master , the union , the state government department in charge of that sphere ( labour-relations and wages ) and CERTAINLY NOT the employees that had worked there for more than 10 years ( who one might have thought would have been part of the 'agreement negotiations ')

now in SOME companies there have been in times of stress salary cuts for management

againsthegrain said:

who is biden?

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isn't he Jill's wife or is that the current vice president , maybe if someone asks him today they will get an answer ( someone will understand )

divs4ever said:

isn't he Jill's wife or is that the current vice president , maybe if someone asks him today they will get an answer ( someone will understand )

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I thought that was a comedy show I was watching

more like an insult to one's intelligence , and not just the US leadership either , there are several supporting characters around the globe

i hope the parents of the world realize nearly all these clowns are university educated ( if we send those broke , the deranged Communists might starve )