Inflation.......... ?

[davethedog]

It's more than just that, it is that people then have to use the money for consumption rather than to build back personal balance sheets, etc. But you are right, and you hit at the crux of the issue. Fiscal policy only works if people are unaware it is happening, because as a surprise, it doesn't create perverse incentives. If people know what is happening, they react based on their future assumptions given the change in policy. To wit, they might tighten their belt and save because they fear that stimulus will be followed by tax increases. Banks are not immune to this, especially after having just fucked up royally, and in the 2009 case, being told that they were going to be evaluated for solvency every so often by the government's own black box metrics. So yes, you are correct. Arguably, there is a function that will describe the increase in information speed and how it has a negative effect on purposeful government actions as opposed to when only some people could read, and they had to read a newspaper.

I should have said “banks have to lend money to people that are going to spend it for there to be inflation.” We saw a relatively large increase in durable goods purchases and general consumer spending right after both direct stimulus checks yet bank reserves backed by tax payers are at historic levels and more of less have been since QE1 in 09.

GDP = M * V. There’s a whole lot of M and not a whole lot of V. GDP also equals C + I G + NX. Not a lot of C happening when income inequality keeps growing.

I think we have to worry more about becoming a second world country with no industry and a looming lost decade like Japan than we do about massive inflation.

 

[Choid]

I should have said “banks have to lend money to people that are going to spend it for there to be inflation.” We saw a relatively large increase in durable goods purchases and general consumer spending right after both direct stimulus checks yet bank reserves backed by tax payers are at historic levels and more of less have been since QE1 in 09.

GDP = M * V. There’s a whole lot of M and not a whole lot of V. GDP also equals C + I G + NX. Not a lot of C happening when income inequality keeps growing.

I think we have to worry more about becoming a second world country with no industry and a looming lost decade like Japan than we do about massive inflation.

Agree completely, other than that I think V is a fictional notation. But otherwise a thousand times yes.

 

[davethedog]

Agree completely, other than that I think V is a fictional notation

Don’t tell my macro 101 kids that.

 

[Choid]

Don’t tell my macro 101 kids that.

Maybe one of them will be the first to observe V in real life! It isn't a useless concept, just one that has to be solved for, rather than input.

 

[DarnYankeeUSMC]

Roubini: The Fed is 'cornered'; will either lose control of inflation or crash markets

www.kitco.com

A quick read of the situation

 

[Hobo Hilton]

Roubini: The Fed is 'cornered'; will either lose control of inflation or crash markets

www.kitco.com

A quick read of the situation

Appears that Yellen is more in tune to inflation than Jerome Powell..... The Fed's have painted themselves into a corner with the Helicopter Money..... Those billionaires have hedged / insured their businesses and fortunes. Doing this is is out of reach for the average American.

 

[Hobo Hilton]

Now Bank of America is sounding the alarm​

After bottoming out around $460 last year, US benchmark hot-rolled coil steel prices are now sitting at around $1,500 a ton, a record high that is nearly triple the 20-year average.

Steel prices have tripled. Now Bank of America is sounding the alarm | CNN Business

A bubble could be brewing in steel stocks.

www.cnn.com

 

[Choid]

Now Bank of America is sounding the alarm​

After bottoming out around $460 last year, US benchmark hot-rolled coil steel prices are now sitting at around $1,500 a ton, a record high that is nearly triple the 20-year average.

Steel prices have tripled. Now Bank of America is sounding the alarm | CNN Business

A bubble could be brewing in steel stocks.

www.cnn.com

Did you even read the article. They are sounding the alarm by saying that fundamentals don't support current steel prices. It's the opposite of what you are implying. Just like when you were convinced that markdowns at the supermarket were indicative of inflation.

 

[Mr.BR]

 

[DarnYankeeUSMC]

It does not matter why.

Did you even read the article. They are sounding the alarm by saying that fundamentals don't support current steel prices. It's the opposite of what you are implying. Just like when you were convinced that markdowns at the supermarket were indicative of inflation.

Egg heads fumbling around with a Rubik's cube to give you a reason. Maybe they should be sent a magic 8 ball.
Does it matter why the tornado formed? Or the destruction it causes?

 

[BuildingConceptsllc]

50k worth of lumber won't even do 1- 3000 sq.ft slab house now. Absolutely nuts. There's games being played in that though, it's not all inflation, but inflation certainly has a big effect, as does - us lumber mills being sold to Canadian companies who are sticking it to us.- supply and demand effect- fuel cost and expected fuel cost further increases.

 

[Mr.BR]

Did you even read the article. They are sounding the alarm by saying that fundamentals don't support current steel prices. It's the opposite of what you are implying. Just like when you were convinced that markdowns at the supermarket were indicative of inflation.

Do fundamentals support anything in the crazy money print economy?

 

[Choid]

Do fundamentals support anything in the crazy money print economy?

There is correspondence for sure. But the reasoning is kind of circular. Are rolled steel prices up because of a demand for rolled steel created by money printing, or are rolled steel prices up because the excess funds are finding themselves into the commodity markets. If A, then there is a fundamental issue, and that is inflation, if B, there is an investment bubble, not material inflation.

 

[Alpine 338]

Do you think they will honor this price? Cleaning out some files, and found this from 2004.

 

[BuildingConceptsllc]

Do you think they will honor this price? Cleaning out some files, and found this from 2004.

View attachment 7621988

You can lock on lumber for 2 weeks now (used to be 30 days) but only if you are a solid customer. Folks that buy from different places all the time and stuff are out of luck and cant lock anything. In 20 years I've never seen anything close to this, and I've been through many crazy times including. 08-09 and many lumber jumps in between. I just hope it goes back down soon to some degree. We have a great set up we could do well with, but we are about to price ourselves into a stopage. It's slowing a lot already due to price alone.

 

[Hobo Hilton]

You can lock on lumber for 2 weeks now (used to be 30 days) but only if you are a solid customer. Folks that buy from different places all the time and stuff are out of luck and cant lock anything. In 20 years I've never seen anything close to this, and I've been through many crazy times including. 08-09 and many lumber jumps in between. I just hope it goes back down soon to some degree. We have a great set up we could do well with, but we are about to price ourselves into a stopage. It's slowing a lot already due to price alone.

Time for the Helicopter Money to stop and interest rates rise.... Latest numbers say 30% of American households are being funded by the US Government.

 

[DarnYankeeUSMC]

Time for the Helicopter Money to stop and interest rates rise.... Latest numbers say 30% of American households are being funded by the US Government.

I would wager that number is probably low. I'd like to know what the true number of partial supplement homes there are currently. How many illegals that we fund in one way or another.

 

[BuildingConceptsllc]

Time for the Helicopter Money to stop and interest rates rise.... Latest numbers say 30% of American households are being funded by the US Government.

Yes, it is but interest rates dont need to go up a ton, just a slow increase and stop paying people to sit on their ass at home, and stop printing money.

 

[BuildingConceptsllc]

I would wager that number is probably low. I'd like to know what the true number of partial supplement homes there are currently. How many illegals that we fund in one way or another.

The illegal funding is absolutely obscene! I know all about it another underworld of it too. I don't even want to get into that actually.

 

[DarnYankeeUSMC]

Shake that 8 ball and see if it makes a damn bit of difference in the price. Go ahead I dare you.

There is correspondence for sure. But the reasoning is kind of circular. Are rolled steel prices up because of a demand for rolled steel created by money printing, or are rolled steel prices up because the excess funds are finding themselves into the commodity markets. If A, then there is a fundamental issue, and that is inflation, if B, there is an investment bubble, not material inflation.

Magic 8 ball says.......
You are like a fucking lawyer. Quibble about the definition?

 

[NoDopes]

Time for the Helicopter Money to stop and interest rates rise.... Latest numbers say 30% of American households are being funded by the US Government.

64% of "non-native born" "people" in the US are on some sort of welfare. I suspect "people" means illegal alien more than not.

The real question... where to I put my cash and retirement investments so they don't get destroyed over the next year or two.

 

[BuildingConceptsllc]

64% of "non-native born" "people" in the US are on some sort of welfare. I suspect "people" means illegal alien more than not.

The real question... where to I put my cash and retirement investments so they don't get destroyed over the next year or two.

Imo- in gold and silver that you hold in your hands, not paper.

It's tax free, and as long as you buy under 10k at a time, there's no reporting at all.... It will at minimum ride with inflation, if not appreciate quite a bit.

 

[Hobo Hilton]

64% of "non-native born" "people" in the US are on some sort of welfare. I suspect "people" means illegal alien more than not.

The real question... where to I put my cash and retirement investments so they don't get destroyed over the next year or two.

where to I put my cash and retirement investments so they don't get destroyed over the next year or two.

You have some research to do. There is no straight answer. Look at the industries or businesses that are hedged against a catastrophic disaster / loss. The largest publically owned insurance companies have done well. With the uncertain future, many businesses are insuring themselves against certain risk.

Another hedge is this:

The term 'force majeure' has been defined in Black's Law Dictionary, as 'an event or effect that can be neither anticipated nor controlled. ... Some contracts also contain a provision that if such force majeure event continues for a prolonged time period, the parties may be permitted to terminate the contract.

You have asked a very timely question.

 

[E. Bryant]

There is correspondence for sure. But the reasoning is kind of circular. Are rolled steel prices up because of a demand for rolled steel created by money printing, or are rolled steel prices up because the excess funds are finding themselves into the commodity markets. If A, then there is a fundamental issue, and that is inflation, if B, there is an investment bubble, not material inflation.

There's a third option - are steel prices up because friction of various types (freight costs, worker unavailability, tariffs, etc.) have been introduced into what was previously a smoothly-operating supply chain? Or maybe there is also a fourth option, which prices are up due to an increase in demand caused by what I'll coarsely call "hoarding"; i.e. the concern that I might not be able to get it when I need it later, so I'll place a bigger order now.

Of course, none of those four options are mutually exclusive, and in all likelihood, all four are contributing to various degrees.

 

[Choid]

There's a third option - are steel prices up because friction of various types (freight costs, worker unavailability, tariffs, etc.) have been introduced into what was previously a smoothly-operating supply chain? Or maybe there is also a fourth option, which prices are up due to an increase in demand caused by what I'll coarsely call "hoarding"; i.e. the concern that I might not be able to get it when I need it later, so I'll place a bigger order now.

Of course, none of those four options are mutually exclusive, and in all likelihood, all four are contributing to various degrees.

I have serious doubts that hoarding would have much effect on a market as large as steel. And what you are talking about, unless it is at a true end user level, which is unlikely, is actual demand. Businesses work on the future assumptions they have, especially on goods like this. Tariffs are certainly an issue, but the speculative price on steel should be going down on the assumption that the asinine tariffs will be lifted soon. The other frictions you mention could have a marginal effect, but not account for a great percentage of a 200% gain. So I am sticking with real demand, or a frothy market, but as you said, some of these other factors could have an impact.

 

[Alpine 338]

Supply Chain disruption, and demand for Product.

 

[Maxwell]

How many remember this?

 

[Hobo Hilton]

How many remember this?

The campaign was later described as "one of the biggest government public relations blunders ever".

 

[Hobo Hilton]

U.S. inflation climbs in April to the highest level in 13 years .​

 

[NoDopes]

U.S. inflation climbs in April to the highest level in 13 years .​

yeah, and at the same time....

U.S. job openings soar to record 8.1 million, but businesses can't find enough workers

Businesses have a record 8.1 million jobs to fill. The problem, they say, is getting enough people to fill them.

www.marketwatch.com

Too much money given to people not to work. Nike may be a good play before the next earnings announcement... even considering their wokeness.

 

[Hobo Hilton]

yeah, and at the same time....

U.S. job openings soar to record 8.1 million, but businesses can't find enough workers

Businesses have a record 8.1 million jobs to fill. The problem, they say, is getting enough people to fill them.

www.marketwatch.com

Too much money given to people not to work. Nike may be a good play before the next earnings announcement... even considering their wokeness.

I lived and worked around Beaverton, Oregon.... Got the Nike experiences while there.....
So, remind me again... What does Nike really produce, other than "Marketing".... ?
Inflation will move NKE's stock down to the $45 level...

 

[Choid]

I lived and worked around Beaverton, Oregon.... Got the Nike experiences while there.....
So, remind me again... What does Nike really produce, other than "Marketing".... ?
Inflation will move NKE's stock down to the $45 level...

Please explain how one of the companies with the most pricing power on earth, and no exposure to onshore labor markets, is a loser in a more inflationary environment. Look at which names have historically done well during inflation (using your assumptions.). They are all ones with greater pricing power than their employees have.

I mean, are all your posts a joke? They just defy logic completely.

 

[NoDopes]

Or will every gang-banger that got stim money buying new Nikes and the market irrationalness of higher gross sales drive the price up?

 

[Choid]

Or will every gang-banger that got stim money buying new Nikes and the market irrationalness of higher gross sales drive the price up?

What is "the market irrationalness of higher gross sales?"

 

[Hobo Hilton]

Or will every gang-banger that got stim money buying new Nikes and the market irrationalness of higher gross sales drive the price up?

They got to go steal a "Saturday Night Special" and some ammo before they go steal those Nikes from a kid in the suburbs.

 

[Alpine 338]

Median Home price for Single Family Homes in Colorado is now $500K.

 

[kortik]

Well, some inflation related numbers do not look good, according to the U.S. gov. reporting.
What I fear and suspect is that the real situation is a lot worse than it is being reported.

 

[lariat]

yeah, and at the same time....

U.S. job openings soar to record 8.1 million, but businesses can't find enough workers

Businesses have a record 8.1 million jobs to fill. The problem, they say, is getting enough people to fill them.

www.marketwatch.com

Too much money given to people not to work. Nike may be a good play before the next earnings announcement... even considering their wokeness.

This article is the biggest “no shit Sherlock” anyone could have come up with.

 

[lariat]

Yes, it is but interest rates dont need to go up a ton, just a slow increase and stop paying people to sit on their ass at home, and stop printing money.

This is a two edged sword. I don’t think I’m against either at this point: get people off of their asses and stop new home building/falsely high prices in home purchases. This whole thing feels very pre-2008.

 

[DarnYankeeUSMC]

There were a few articles here and there about inflation and a few were flipping a coin on whether it is just temporary thing a false pricing rise that will correct itself after the plandemic. After the revelation of last months 4.2% increase it looks like a bunch of people are worried that it's the real deal. Almost every major news outlet is carrying a story on it.
The printing of monopoly money, buying your own debt, mandatory doubling of minimum wage, regulations back in full swing and a few other economic impacts can't lead to anything else.
The Fed recently said that it can't foresee raising the interest rate for the next couple of years. Somehow I don't believe that. It's the only tool they have to stop the skid. Is it time to turn your cash into hard assets?

 

[SilentStalkr]

Well, some inflation related numbers do not look good, according to the U.S. gov. reporting.
What I fear and suspect is that the real situation is a lot worse than it is being reported.

You think?

 

[lariat]

There were a few articles here and there about inflation and a few were flipping a coin on whether it is just temporary thing a false pricing rise that will correct itself after the plandemic. After the revelation of last months 4.2% increase it looks like a bunch of people are worried that it's the real deal. Almost every major news outlet is carrying a story on it.
The printing of monopoly money, buying your own debt, mandatory doubling of minimum wage, regulations back in full swing and a few other economic impacts can't lead to anything else.
The Fed recently said that it can't foresee raising the interest rate for the next couple of years. Somehow I don't believe that. It's the only tool they have to stop the skid. Is it time to turn your cash into hard assets?

It’s going to be harder to raise interest rates than it appears. You have inflation rearing it’s head on hard assets, which are usually financed. If you want to really fuck up an economy and cause defaults with deflation then raise rates on these loans. What disposable income that is left in the economy will then be sucked up with the higher rates or be removed in the form of cash savings (sidelined money). Deflation is the monster they are trying to avoid. But by inducing monetary inflation it’s only being made into a larger problem. Deflation will fuck up the whole system, since assets will have a market value less than the note that is on them, causing a chain of events, etc. what they are trying to avoid is real, but I think it is inevitable unless they find a way to pull some digital currency reset.

 

[Choid]

It’s going to be harder to raise interest rates than it appears. You have inflation rearing it’s head on hard assets, which are usually financed. If you want to really fuck up an economy and cause defaults with deflation then raise rates on these loans. What disposable income that is left in the economy will then be sucked up with the higher rates or be removed in the form of cash savings (sidelined money). Deflation is the monster they are trying to avoid. But by inducing monetary inflation it’s only being made into a larger problem. Deflation will fuck up the whole system, since assets will have a market value less than the note that is on them, causing a chain of events, etc. what they are trying to avoid is real, but I think it is inevitable unless they find a way to pull some digital currency reset.

This is generally correct. The most worrying issue is that there is significant dislocation in the employment markets due to some really bad policies put in place over the last year, and it is almost impossible to raise rates in that situation without causing mass defaults. On the other hand, the fed has no room to do anything helpful. It remains to be seen how persistent this inflation is, but I think the fed is unlikely to start raising rates if it is at 3-5% annualized without any real improvement in employment.

 

[DarnYankeeUSMC]

3 to 5% is using the "New" calculator. Go back to 15 years ago and use that calculator and I bet we are around 10 to 12%.

It’s going to be harder to raise interest rates than it appears. You have inflation rearing it’s head on hard assets, which are usually financed. If you want to really fuck up an economy and cause defaults with deflation then raise rates on these loans. What disposable income that is left in the economy will then be sucked up with the higher rates or be removed in the form of cash savings (sidelined money). Deflation is the monster they are trying to avoid. But by inducing monetary inflation it’s only being made into a larger problem. Deflation will fuck up the whole system, since assets will have a market value less than the note that is on them, causing a chain of events, etc. what they are trying to avoid is real, but I think it is inevitable unless they find a way to pull some digital currency reset.

They tried raising the rates for the first year and a half of the Trump admin and realized how fucked we are. Trump was bitching about them screwing the economy so he would look bad. Which at the time it was okay to keep interest rates down. But after them printing $10 trillion in the last year. We are screwed. The 18% interest of the Carter years? Defaults worse than 08?
But I heard kanye has found a new fat ass bitch to replace one of those Kardashian hoes

 

[Hobo Hilton]

America will be forced to "Bite the Bullet" and allow interest rates to rise. The other option is to allow the monetary system to collapse.

 

[Choid]

America will be forced to "Bite the Bullet" and allow interest rates to rise. The other option is to allow the monetary system to collapse.

So manichean

 

[SilentStalkr]

America will be forced to "Bite the Bullet" and allow interest rates to rise. The other option is to allow the monetary system to collapse.

Some would argue that this is what they want...

 

[lariat]

America will be forced to "Bite the Bullet" and allow interest rates to rise. The other option is to allow the monetary system to collapse.

Raising interest rates will almost cause a collapse of its own at this point. This is why Keynesian economics doesn't work in the long term, its a fallacy that only holds true as long as you are the reserve currency of the world and nobody asked to be really paid back. Everyone in the world is in on the game, until they aren't. If I was an enemy of the US and I wasn't tied to the American economy for a significant portion of my GDP I would be laughing hard right now.

I remember an article (I believe it was from the Von Misses Institute), that quoted a prominent banker as saying that everyone knew the capital crunch of 2008 was coming but you had to play the game as long as the music was playing. Everyone really is in the same boat - you can withdraw from the world, but we all still have to eat and work to support our desire to eat. So here we are, together. Whatever the future holds we will all suffer the consequences; not too many people are going to be unscathed, and even they will look back on these last few decades as superlative with regard to the quality of life we enjoyed.

I really do recommend a deep study into the great depression and the social impacts it had, including (IMO) just how close we really came to a socialist state because of the hardships caused by deflationary forces and the desire by the people to fix it by any means necessary. I feel like chapter 2 is coming and the socialist state may not be escaped this time, if for no other reason than the intestinal fortitude of the populace.

 

[Choid]

Anything remotely along the lines of Keynesianism is a fallacy get my support

So, my personal hypothesis is that at one point, before information dissemination got so fast, there was some small utility in fiscal stimulus, but its utility relied on the ignorance of the populace as to what was happening. The second people have information, they plan based on new information, rather than just on seeing an extra few dollars here and there. They understand that free money today likely means higher rates or higher taxes tomorrow, so they save. Back in his day, it was much thinner and had a tiny positive effect, though nothing to the scale of his predictions.

 

[SilentStalkr]

So manichean

Not sure many will get this...

So, my personal hypothesis is that at one point, before information dissemination got so fast, there was some small utility in fiscal stimulus, but its utility relied on the ignorance of the populace as to what was happening. The second people have information, they plan based on new information, rather than just on seeing an extra few dollars here and there. They understand that free money today likely means higher rates or higher taxes tomorrow, so they save. Back in his day, it was much thinner and had a tiny positive effect, though nothing to the scale of his predictions.

Ive bolded what I find amusing. You are assuming most people in this country have a brain. Most don’t.