Inflation Duration

Concrete Helmet

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Lets hear your thoughts and facts regarding the current state of inflation. Is it monetary, supply chain, labor shortage or any combination of the 3? What's the cure and how long till we return to say 3% or under?

New economic data yesterday shows another increase in wholesale pricing and we've already seen the massive 7.5% mark from a week or so ago. How long does it go on? When does it peak/ When do we see the Fed Put?

I'm laughing at the MSM throwing smoke about oil prices and the shiny object of Russia. While I agree there is an effect there the bigger underlying problem is lack of not only inventory but lack of development and new production. I see this continuing longer than just a few more weeks or months. Like anything else I don't see a straight line up but a series of chopping sideways and higher.

Saw another interesting fact in commodities that show either 18 or 19 basic materials are in a state of backwardation which is the first time since 1997 that we have had so many in that state. Obviously higher prices now are a fact but what if there is a continued physical shortage? If the materials are in fact not short how long before the supply chain/labor issue is resolved returning them to a flatter price?
 

BMF

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I think it's all 3, plus a few other factors. The issue w/ supply chain could have easily been resolved by now, and should have never happened. When that eases, I think we see a mild drop. The cost of fuel/energy is another self-inflicted democrat wound - but are they willing to resolve? I doubt it, because 'climate change' is their religion. Eliminating the gas tax is a bandaid. The monetary issue is going to be the biggest problem - you can't take back the $6 trillion we've given away. We need people to get the f*ck back to work, asap! I think by year's end it will still be well over 5% (by "their" numbers - reality is it'll be closer to 10%, or more).
 

Loogis

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The issue w/ supply chain could have easily been resolved by now, and should have never happened.
I think it was vastly overplayed as well.

I’ve read the administration will slowly raise taxes to try to stymie inflation. It’s apparently a way to try to slow it down at least.
 

BMF

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I think it was vastly overplayed as well.

I’ve read the administration will slowly raise taxes to try to stymie inflation. It’s apparently a way to try to slow it down at least.

What's crazy is the Biden admin hasn't implemented "their" tax plan. This is due to the current sh*tshow we're living through, they're avoiding throwing more gasoline on a huge fire. But when does that happen? And if/when they lose congress in November, it'll just be a rollback to the pre-Trump era tax plan.
 

Concrete Helmet

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Ok here's some other factors that could come into play in the near future.
Over the last year the rise in the 30 year mortgage rates on a 300K-400K house is costing 20% more. I'd say 300-400k is a pretty average mortgage these days day so these buyers who paid an extra 20% in the price of that house will also have 20% less the amount in disposable income.

Now factor in most of thoses are working(commuting, lunch, cloths) and probably have kids so they will bear the 15-20% real inflation along with that....What effect does that have on durable goods purchases and such? Since the stock market will likely suffer earnings loss that will increase lay offs/job losses.

Likely the market drops 25-35% so there goes some of their total worth? Anyone see where this is going. BTW locally here house prices dropped last month meaning less equity for homeowners who may need emergency funds from that source....
 
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URGatorBait

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BTW locally here house prices dropped last month
excelente-burns.gif
 

78

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Whenever you’re talking about price changes, you have to look at the x/y axis. In this instance it begins and ends with the pandemic.

Supply. Few RE sellers, and for obvious reasons. Buyers? Not many initially. That changed with the vaccine rollout, adoption of permanent work-from-home privileges and rising disenchantment with government overreach in states where strict Covid management has been the rule. States like New York, California, New Jersey, Connecticut.

That brings us to demand. Beginning a year ago, that dearth of supply was met by a surge in demand from deep-pocketed, out-of-state cash buyers from the strictly governed Covid areas. That led to the runup in prices that continues today. Crete says home prices are sharply down in Orlando. Maybe they are. That’s not the case here in Pinellas County, not yet anyway. The x/y still favors a runup.

Stocks. A heavy rotation into disruptive stay-at-home stocks followed by an equally large rotation out of them and into reopening stocks in energy, financials, materials and consumer staples. Again, an x/y axis driven by swings in the pandemic.

Supply chains. Again, a function, or dysfunction, of the pandemic. Limited and oftentimes unexpected shrinking supply met by steadily surging demand. That lends itself to only one outcome. Surging prices.

Joe Biden ran as a moderate. He’s governed as Bernie Sanders’ right hand man. Yes, the Democrats’ spending bills are contributing to inflation, but not nearly as much as the aforementioned or the Fed’s quantitative easing that, maddeningly, continues on today, albeit winding down.

The Fed is in a real bind. It’s been late to recognize the urgency of the matter and yet reluctant to commit beyond jawboning and suggesting a start to rate hikes in March. It’s ridiculous to attempt to project the amount of hikes coming. It needs to be, and will be, a matter of monitoring the data month to month. If the Fed does as Bullard suggests and front-end loads a 50 bps hike at the start, it may take a lot less time and consternation to arrive where it wants. The data of late has been back and forth. The odds of a 50 bps fell this week, sparking a short rally in stocks until the Russia-Ukraine conflict came back into focus.

The economy isn’t in as good shape as consumer spending may suggest. Manufacturing is down and banks are beginning to pile up delinquencies and foreclosures. Powell knows if he goes too far, he and his mates will tip the economy into recession. Hence the month to month balancing act.
 

Concrete Helmet

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Restart exploration and production of oil domestically and inflation will cure itself in a matter of weeks or months...since we know were not going to see that for 2.5 more years....well...anyway isn't it crazy how much the last Admin. poured into the money supply yet inflation was flat.....hmmmm...the root cause is right under our feet.
 

78

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Restart exploration and production of oil domestically and inflation will cure itself in a matter of weeks or months...since we know were not going to see that for 2.5 more years....well...anyway isn't it crazy how much the last Admin. poured into the money supply yet inflation was flat.....hmmmm...the root cause is right under our feet.

The Trump admin, had he been re-elected, would have seen a similar runup in inflation. It’s unavoidable given the unique circumstances from the pandemic. OPEC’s reluctance to ramp up production combined with the reopening has had the most deleterious impact on oil prices. Prices are up all over the globe, not just here.
 

Concrete Helmet

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The Trump admin, had he been re-elected, would have seen a similar runup in inflation. It’s unavoidable given the unique circumstances from the pandemic. OPEC’s reluctance to ramp up production combined with the reopening has had the most deleterious impact on oil prices. Prices are up all over the globe, not just here.
Exactly...the entire world is missing our production which is causing inflation....the Plandemic is the transitory part....food and energy are not. Every single thing(goods and products) are under the direct inflationary effects of oil...nothing is exempt, control the flow, control inflation.
 

78

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Exactly...the entire world is missing our production which is causing inflation....the Plandemic is the transitory part....food and energy are not. Every single thing(goods and products) are under the direct inflationary effects of oil...nothing is exempt, control the flow, control inflation.

63af0de4cf303cd1c79f5b1b336f57c2.jpg
 

Concrete Helmet

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What is your point?
Control....control the commodity(production) control the price and in this case we would control inflation.... Oil is going to be harder and harder to find, develop and produce from now until the end of time....we've given up our position of control(stupid)therefor we cannot truly control inflation in a monetary system that is based around a petrol dollar...Trump understood this concept and the economy reaped great rewards....now we have a dummy who doesn't have a clue.
 

78

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I won’t argue the economic benefit of controlling more of the world’s output of oil, but the link between oil and inflation has diminished over the past four decades as we morphed into a services economy.

The per barrel price of oil recorded a high of 147.00 in 2008.

Meanwhile, CPI-U.

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URGatorBait

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Crete says home prices are sharply down in Orlando
first of all, fuchs you for making me do this because I HATE backing crete :lol: but I don't think he said "sharply down" He simply said they were down last month in Orlando...no information whatsoever on how much.
I don't know what he's looking at, but from just my keeping an eye on houses for sale because I eventually want to buy, I'm not seeing anything that looks like anything is down at all, unless you want a dilapidated half burnt out pile of schit :lol:
 

Concrete Helmet

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first of all, fuchs you for making me do this because I HATE backing crete :lol: but I don't think he said "sharply down" He simply said they were down last month in Orlando
Small decrease but maybe worth noting...maybe not and just a seasonal glitch...

BTW I just happen to know of a nice little property in the Oviedo area, great schools, close to shopping and the 417/408....might be going on the market soon and it could have some attractive owner financing involved....if you're interested :lol:
 

URGatorBait

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Small decrease but maybe worth noting...maybe not and just a seasonal glitch...

BTW I just happen to know of a nice little property in the Oviedo area, great schools, close to shopping and the 417/408....might be going on the market soon and it could have some attractive owner financing involved....if you're interested :lol:
Negative.
 

Concrete Helmet

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Negative.
OK how about one in the Sandlake/McCoy area with sh!tty schools close to plenty of drug dealers and a small discount for the drive by bullet holes in the doors and windows....:dunno: Same great owner financing applies....
 
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