Inflation

Discussion in 'Markets & Economies' started by mmm....shiney!, Jan 16, 2021.

  1. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Yep, up down, up down, up down.......

    US official inflation rate:

    Screen Shot 2022-06-21 at 10.41.35 am.png
     
  2. Davros10

    Davros10 Well-Known Member Silver Stacker

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    Which will be more transitory- Brandon or inflation?

    BTW, Germany's inflation figure came in yesterday at 33%. How long is a nations memory?
     
  3. Michael Kay

    Michael Kay Member

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    Inflation is a funny thing, and the central banks lose more credibility by the day. Take a look at the two biggest purchases that people make: houses and cars.

    Since the early 1990s, car prices did not increase much but have increased considerably in the last 2 years. Still, prices have not doubled.
    Regarding the housing market in that time, prices have increased 6x, or from 3x annual income to 9x. It is nuts that it is not included in official inflation stats, as it is the highest fixed expense (mortgages or rents) that the low to middle class have.
     
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  4. ParanoidAndroid

    ParanoidAndroid Well-Known Member

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    Where did you get that figure from?
     
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  5. Lovey80

    Lovey80 Well-Known Member

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    Bottom line is. Without central bank monetary policy allowing the commercial banks to print like crazy. Add to that governments ( backed by central bank printing) spending huge deficits (often at the same time). Inflation can’t get away like this. If here was only 3% more money in the system as there was in 2019. House prices, stock prices, car, caravan and boat prices along with everyday consumer goods couldn’t start jumping like they have.

    sure they could short term but few could buy them. Then it truely would be transitionary. An ebb and flow according to productivity and innovation.
     
  6. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    It saves rhe government lots of money by not using the real inflation number.
    Every year they give a raise to social security, welfare, military and everything else.
    A smaller CPI probably saves them tons.
     
  7. markcoinoz

    markcoinoz Active Member Silver Stacker

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    Hope this link will work.

    https://www.lynalden.com/june-2022-newsletter/

    In the newsletter, two of her charts points to a very similar time in history that we could be facing now.

    [​IMG]
    Worth subscribing to her Newsletter if you are into her work.
     
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  8. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    She's always worthwhile reading.

    The "government printing money = inflation" thesis is an oversimplification (I argue fallacious) of the cause of price inflation. Rather the inflation we're experiencing is a result of the near complete breakdown of our complex market environment.

    One of Alden's earlier newsletters included data back to the 1940s showing that government spending/bank lending, commodity prices and inflation are not 100% correlated but when the government spending/bank lending meets failing supply chains and a collapse in productive activity, then shit starts to get more expensive.

    https://www.lynalden.com/price-signals/

    Influenza is reeking supply chain havoc throughout Qld. Companies are facing significant delays to the supply of goods and services. It's just one assault after another on the functionality of the market.
     
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  9. markcoinoz

    markcoinoz Active Member Silver Stacker

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    I don't think she disagrees with what your saying.
    However, I see the main problem as being cause and affect.
    When the Fed plays the expansionary card, the biggest problem
    that I see, is malinvestment. In my opinion, that is the cause.
    The flow of funds is not distributed in proportion to where they are most needed within the economy.
    That comes down to the Policy Makers - Regulators and Key stakeholders.
    We can see it unravelling Globally.
    The affect will be bottlenecks tying up supply.
    Tariffs, Embargos, Trade Agreements locking out certain countries and lack of trust between Nations which impose restraints is a recipe for disaster.

    We have spineless leaders that will follow the mantra that they are given, or face destruction.
    I have no doubt that we are heading to War.
     
  10. Davros10

    Davros10 Well-Known Member Silver Stacker

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  11. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    markcoinoz and Real $ like this.
  12. jultorsk

    jultorsk Well-Known Member Silver Stacker

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  13. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Banks offering 3.5% for 24 months fixed term deposits. That's higher than fixed rate mortgages.
     
  14. STKR

    STKR Well-Known Member Silver Stacker

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    That's also a lot lower than the current rate of inflation, and a lot of risk to have your capital held up for 24 months in this environment.
     
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  15. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    There's little to no risk in being in cash, everything is lower than the current rate of inflation, but I take your point about the 24 months. Just on that it lacks appeal.
     
    Last edited: Jun 26, 2022 at 11:08 AM
  16. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    The banks must have a view that the interest rates are going higher (within 6-12 months) and trying to lock in some "Cheap" short to medium term funding now to use to fund their lending book in 6-12 months time....just getting ahead of the curve and hoping the average mug punter will lock in for that rate / term accordingly.
     
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  17. hardyakkagold

    hardyakkagold Well-Known Member Silver Stacker

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    I have been offered a 1.3% per annum loan up to $50k from one of the banks that I am with.
    It is unsecured and no questions asked about what the money is for, with a cheque sent in the mail within a few days.

    Maybe I should reinvest the money in a term deposit and make some profit from the bankster bastards.

    On second thoughts that sound too boring, I think I will use the funds to buy some more shiny yellow metal relics for the stack instead.
     
  18. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Inflation will come down when EU implements Gas rationing in Autumn
     
  19. lucky luke

    lucky luke Well-Known Member Silver Stacker

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    LOL do you want to bet your stack on that? :)
     
  20. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Is that an offer to apply or an approval?
     

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