collapse

* Recent Posts

22-23 W-L Predictions by tower912
[Today at 01:36:20 PM]


More conference realignment talk by WhiteTrash
[Today at 01:31:25 PM]


Our coach isn't "top tier," but he ain't half bad by WhiteTrash
[Today at 01:27:53 PM]


2022 Team Outlook by The Lens
[Today at 12:43:09 PM]


NM by warriorchick
[Today at 12:42:02 PM]


EGB's by Dr. Blackheart
[Today at 06:54:42 AM]

Please Register - It's FREE!

The absolute only thing required for this FREE registration is a valid e-mail address.  We keep all your information confidential and will NEVER give or sell it to anyone else.
Login to get rid of this box (and ads) , or register NOW!


Author Topic: So much for inflation being "transitory"  (Read 3777 times)

MuggsyB

  • All American
  • *****
  • Posts: 5192
So much for inflation being "transitory"
« on: September 13, 2022, 10:09:15 AM »
We have problems. I don't see much evidence this is going to stabilize any time soon.  Unless I'm missing something?  Would you put some coin in t-bonds for a few years? 

TAMU, the Wizard of MU Basketball

  • All American
  • *****
  • Posts: 20125
  • SPELLS! MAGIC!
Re: So much for inflation being "transitory"
« Reply #1 on: September 13, 2022, 10:34:59 AM »
It is transitory but yes it will be rough for a while. Economy fades and economy surges, just like it always has.
God, grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And the wisdom to know the difference.

~Prayer of the Scooper

tower912

  • Registered User
  • All American
  • *****
  • Posts: 18834
Re: So much for inflation being "transitory"
« Reply #2 on: September 13, 2022, 10:46:33 AM »
Full employment pushing up wages.   

Continued supply chain issues in China as well as a record breaking heat wave.

Corporate profits way up.

Chip shortage. 

Grocery prices up

Fuel prices down.

If the railroads strike, expect a huge spike.

Luke 6:45   ...A good man produces goodness from the good in his heart; an evil man produces evil out of his store of evil.   Each man speaks from his heart's abundance...

It is better to be fearless and cheerful than cheerless and fearful.

MU82

  • All American
  • *****
  • Posts: 19104
Re: So much for inflation being "transitory"
« Reply #3 on: September 13, 2022, 10:54:40 AM »
We have problems. I don't see much evidence this is going to stabilize any time soon.  Unless I'm missing something?  Would you put some coin in t-bonds for a few years?

Inflation always takes awhile to be brought to heel. Before this becomes a political discussion, I'll offer this ...

Maybe the best investment out there is the Series I Savings Bond. "I Bonds" are indexed to inflation, and right now their annual rate is 9.62%. It's incredible to get almost 10% interest on anything, let alone something that is 100% safe.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

Fine print:

++ Each individual can only buy $10K worth per year. A couple can buy $20K. They also can buy $10K worth for each kid, although the money technically would belong to the kid.

++ Each I Bond must be held for at least a year. If cashed in after 1 year but before 5 years, the penalty is the last 3 months' interest -- but even cashed in after a year it currently would produce an effective rate of 7%+. From 5 years on, there is no penalty.

++ Rates can and usually do change every 6 months, in May and November. We don't know what the next rate will be yet ... but if it's lower it won't be by much.

So it's not a place where one can park hundreds of thousands of dollars, but anybody with $10K ($20K for couples) sitting around in checking accounts and who doesn't need the $$$ for at least a year ... it's a complete no-brainer to max out the annual I Bond account.
There were 681 attempts to ban or restrict access to a record 1,651 different books in schools through August of this year. What books? Mainly those written by or about people of color or that deal with LGBTQ issues.

BAN ASSAULT RIFLES, NOT BOOKS!

JWags85

  • All American
  • *****
  • Posts: 2618
Re: So much for inflation being "transitory"
« Reply #4 on: September 13, 2022, 10:55:40 AM »
It is transitory but yes it will be rough for a while. Economy fades and economy surges, just like it always has.

I think the issue is the way "transitory" was positioned or used.  Some, not all, tried to brush aside inflationary concerns as something that would pass in weeks or a few months.  Whether it was for political reasons, to bide time to find a solution, or just cause the full extent wasn't known, that doesn't really matter.  I don't think its the end of the world, and agree that economies, even the strongest economies, ebb and flow, but honesty and living in reality is important.

Inflation or economic stumbles can never be placed at the foot of one party or politician or policy.  But in this partisan era, there seems to be a need to immediately blame or scapegoat something, thus this discussion.  That being said, there are a disturbing number of people lacking even the most remedial economic education that don't seem to understand what causes inflation, what can make it worse, and what can be done to solve it, and that is obnoxious.

IBTL

TAMU, the Wizard of MU Basketball

  • All American
  • *****
  • Posts: 20125
  • SPELLS! MAGIC!
Re: So much for inflation being "transitory"
« Reply #5 on: September 13, 2022, 10:59:28 AM »
I think the issue is the way "transitory" was positioned or used.  Some, not all, tried to brush aside inflationary concerns as something that would pass in weeks or a few months.  Whether it was for political reasons, to bide time to find a solution, or just cause the full extent wasn't known, that doesn't really matter.  I don't think its the end of the world, and agree that economies, even the strongest economies, ebb and flow, but honesty and living in reality is important.

Inflation or economic stumbles can never be placed at the foot of one party or politician or policy.  But in this partisan era, there seems to be a need to immediately blame or scapegoat something, thus this discussion.  That being said, there are a disturbing number of people lacking even the most remedial economic education that don't seem to understand what causes inflation, what can make it worse, and what can be done to solve it, and that is obnoxious.

IBTL

100% agreed
God, grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And the wisdom to know the difference.

~Prayer of the Scooper

WhiteTrash

  • All American
  • *****
  • Posts: 1731
Re: So much for inflation being "transitory"
« Reply #6 on: September 13, 2022, 11:42:03 AM »

Inflation or economic stumbles can never be placed at the foot of one party or politician or policy.  But in this partisan era, there seems to be a need to immediately blame or scapegoat something, thus this discussion.  That being said, there are a disturbing number of people lacking even the most remedial economic education that don't seem to understand what causes inflation, what can make it worse, and what can be done to solve it, and that is obnoxious.

IBTL
Agreed. Same can be said for economic booms. Policies can be a factor in the direction of the economy, but one of 100's of factors.

MU Fan in Connecticut

  • Registered User
  • All American
  • *****
  • Posts: 3034
Re: So much for inflation being "transitory"
« Reply #7 on: September 13, 2022, 12:47:15 PM »
My 2 cents.  Inflation is decreasing and a declining inflation percentage would be a lagging indicator of reality and here's why. 

(My company is near the start of the supply chain as we purchase metals direct from raw material mills.)  Metals have significantly decreased (30-45%) per kilogram in price for six months and actually leveled off in August.  Gas has dropped the last 2 months and is still falling.

The percentage won't drop right away because all the lead times became dragged out for an incredible number of perfect storm reasons each of which would be a big disruption.  I posted these back in early June and here's the repeat.  (I added number 6 that just began September 1 and will cause some effects until resolved.)
***  Supply chain perfect storm series of events from February 2020 to June 2022.

1.       COVID.  Remote work.  Global Cyber attack.

2.       Truck Transport USA shortage.  Lumber shortage.  Labor.

3.       Gulf Freeze Shut-downs. Steel shortage.  Labor

4.       Omicron COVID surge. COVID Relief Bill injection. West Coast Port Congestion.

5.       Russia invasion of Ukraine.  China “0” COVID policy.  Potential WC Port strike.  Labor.

6.       Copper Mill strike in Canada (largest copper mill in North America)


Companies purchased significantly larger quantities than usual and at a higher price than usual to compensate for lead times that went from 2-3 months to 6-8 months.  This inventory is still sitting in company inventories.  Companies need to continue charging the higher price until they expire the older inventory.  New purchases for metal right now are significant lower than 6-12 months ago and lead times are more like 3-4 months.  In addition many companies average the metal price that is charged higher up the food chain at a 3 month or 6 month metal price average and higher up customers are just starting to see the lower price this month after the highest prices were averaged out.

tower912

  • Registered User
  • All American
  • *****
  • Posts: 18834
Re: So much for inflation being "transitory"
« Reply #8 on: September 13, 2022, 01:18:31 PM »
So, COVID is bad for inflation.
War is bad for inflation.
Supply chain issues are bad for inflation.
Full employment causes upward pressures on wages, which leads to .....

Well, you know.     Irksome.
Luke 6:45   ...A good man produces goodness from the good in his heart; an evil man produces evil out of his store of evil.   Each man speaks from his heart's abundance...

It is better to be fearless and cheerful than cheerless and fearful.

Goose

  • All American
  • *****
  • Posts: 8004
Re: So much for inflation being "transitory"
« Reply #9 on: September 13, 2022, 02:03:11 PM »
MU Fan

All of that is great info and thanks for sharing. That being said, I believe we have lived in a fantasy world for a minimum of 21 years, and could argue 5-7 more years, and traditional wisdom (like you shared) has less meaning today, IMO. Unfortunately, I think it is going to take a serious, serious downside move in the stock market and housing market to bring inflation. Too many people had access to cheap money, or easy money, it removed common sense to the consumer.

I was just talking with a good friend of mine (real estate person) and I said that any real estate agent in greater MKE that is selling houses to someone at bloated prices today they are guilty of malpractice. I watch local real estate pricing closely and think all common sense has been robbed of those looking to purchase a home. I laugh when they talk about how a couple points in mortgage rate is a game changer, how about paying $700k for house that was $400k 3-4 years ago.

I wish raw material costs, shipping costs and bloated inventories was the only problems we have in our economy. Good news, as bad as I think our economy is going to get, I am very happy that I do not live in China or Europe because I think their challenges are going to be immense.

Lennys Tap

  • All American
  • *****
  • Posts: 11411
Re: So much for inflation being "transitory"
« Reply #10 on: September 13, 2022, 02:27:41 PM »
Full employment pushing up wages.   

Continued supply chain issues in China as well as a record breaking heat wave.

Corporate profits way up.

Chip shortage. 

Grocery prices up

Fuel prices down.

If the railroads strike, expect a huge spike.

We’ve had “full employment” for quite some time. More deceiving now than ever because a record number have left the work force.

The stock market is down this year and struggling. That tells me that profits will be turning down big time due to government policies that are forcing fed policy.

Lennys Tap

  • All American
  • *****
  • Posts: 11411
Re: So much for inflation being "transitory"
« Reply #11 on: September 13, 2022, 02:30:50 PM »
It is transitory but yes it will be rough for a while. Economy fades and economy surges, just like it always has.

Transitory as in only death is permanent. By that measure every recession or depression is transitory. That’s not what Biden meant by transitory, though, and I think you know that. Several economists who worked for Obama certainly did.

Uncle Rico

  • All American
  • *****
  • Posts: 4651
Re: So much for inflation being "transitory"
« Reply #12 on: September 13, 2022, 02:42:16 PM »
I’m pulling for an economic downturn to stick it to the libs
Tis a shame, 'tis a rotton shame, for if ye can enjoy the walkin’ ye can probably enjoy the other times in yer life when ve're in between. And that's most o' the time; wouldn't ye say?

Goose

  • All American
  • *****
  • Posts: 8004
Re: So much for inflation being "transitory"
« Reply #13 on: September 13, 2022, 02:42:37 PM »
Lenny,

There is full employment at the moment, but I believe there will be a nice number of smart people that will be looking for work in upcoming months. Employment numbers are great to watch, but I look watching how smart companies handle their workforce. In my book, the big tech guys and big finance guys are the ones to watch. Big tech is announcing job cuts, marketing cuts and other cost cutting measures and they know what they are doing. I think a year from now the employment situation is going to look a lot different than it does today. Tech and finance guys are proactive and when they make moves, I definitely take note of it.

muwarrior69

  • Registered User
  • All American
  • *****
  • Posts: 4164
Re: So much for inflation being "transitory"
« Reply #14 on: September 13, 2022, 03:19:35 PM »
Lenny,

There is full employment at the moment, but I believe there will be a nice number of smart people that will be looking for work in upcoming months. Employment numbers are great to watch, but I look watching how smart companies handle their workforce. In my book, the big tech guys and big finance guys are the ones to watch. Big tech is announcing job cuts, marketing cuts and other cost cutting measures and they know what they are doing. I think a year from now the employment situation is going to look a lot different than it does today. Tech and finance guys are proactive and when they make moves, I definitely take note of it.

Not just Big Tech.
https://www.bbc.com/news/business-62885047

tower912

  • Registered User
  • All American
  • *****
  • Posts: 18834
Re: So much for inflation being "transitory"
« Reply #15 on: September 13, 2022, 03:27:03 PM »
I assume there will be layoffs.   Who wants to pay all of those high salaries?   Along with the shakeout of working from home v. working from the office.
Luke 6:45   ...A good man produces goodness from the good in his heart; an evil man produces evil out of his store of evil.   Each man speaks from his heart's abundance...

It is better to be fearless and cheerful than cheerless and fearful.

MU Fan in Connecticut

  • Registered User
  • All American
  • *****
  • Posts: 3034
Re: So much for inflation being "transitory"
« Reply #16 on: September 13, 2022, 03:31:19 PM »
We’ve had “full employment” for quite some time. More deceiving now than ever because a record number have left the work force.

The stock market is down this year and struggling. That tells me that profits will be turning down big time due to government policies that are forcing fed policy.

I had a meeting with my Financial Adviser last week.
Ameriprise is still bullish on the stock market.  He said September is always the worst month every year for the stock market.  Based on stock market history and statistical performance 2022 year to date they expect a rebound in 4Q and all of 2023 as all those major disruptions get further in the rearview mirror.

I read something this week that the US housing market is short 2 million housing units.  One of the reasons home prices are not expected to drop much at all.

muwarrior69

  • Registered User
  • All American
  • *****
  • Posts: 4164
Re: So much for inflation being "transitory"
« Reply #17 on: September 13, 2022, 03:48:04 PM »
I assume there will be layoffs.   Who wants to pay all of those high salaries?   Along with the shakeout of working from home v. working from the office.

Who wants to work 95 hours a week? I guess you make big money while your young, retire at 40 and start living a life; but.

Uncle Rico

  • All American
  • *****
  • Posts: 4651
Re: So much for inflation being "transitory"
« Reply #18 on: September 13, 2022, 04:01:22 PM »
Who wants to work 95 hours a week? I guess you make big money while your young, retire at 40 and start living a life; but.

I’m a lobbyist.  Life is easy, ain’a
Tis a shame, 'tis a rotton shame, for if ye can enjoy the walkin’ ye can probably enjoy the other times in yer life when ve're in between. And that's most o' the time; wouldn't ye say?

TAMU, the Wizard of MU Basketball

  • All American
  • *****
  • Posts: 20125
  • SPELLS! MAGIC!
Re: So much for inflation being "transitory"
« Reply #19 on: September 13, 2022, 04:06:00 PM »
Transitory as in only death is permanent. By that measure every recession or depression is transitory. That’s not what Biden meant by transitory, though, and I think you know that. Several economists who worked for Obama certainly did.

I don't know that. I understood it as we are heading for a rough patch but it will end as all economic rough patches end. I don't think he or anyone else know for sure how long this will last.
God, grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And the wisdom to know the difference.

~Prayer of the Scooper

dgies9156

  • All American
  • *****
  • Posts: 3558
Re: So much for inflation being "transitory"
« Reply #20 on: September 13, 2022, 04:08:00 PM »
As an old codger, I'm aware of the impact of the 1973 and 1979 oil shocks on the economy. While there were many reasons why inflation was out of control in the 1970s, the price of oil was a huge issue then and it is now.

We will not have inflation under control until we get control of energy prices. Petrochemicals, natural gas and carbon-based fuel underlies almost everything we do, from heating and cooling our homes to transportation to manufacturing to refining of raw materials to agriculture. In the past two years, we've seen a doubling in the cost of gasoline and a barrel of crude rise from $42 to almost $100 a barrel. Because this is sustained, we have inflation.

Energy prices drop and we get back to something close to normal.

Lennys Tap

  • All American
  • *****
  • Posts: 11411
Re: So much for inflation being "transitory"
« Reply #21 on: September 13, 2022, 04:08:09 PM »
I’m pulling for an economic downturn to stick it to the libs

Congrats, you already have your downturn (back to back quarters of negative growth). Unfortunately, the libs aren’t the only one getting stuck - by their fellow libs. Everyone is being stuck.

NCMUFan

  • Registered User
  • All American
  • *****
  • Posts: 2064
Re: So much for inflation being "transitory"
« Reply #22 on: September 13, 2022, 04:09:03 PM »
Inflation always takes awhile to be brought to heel. Before this becomes a political discussion, I'll offer this ...

Maybe the best investment out there is the Series I Savings Bond. "I Bonds" are indexed to inflation, and right now their annual rate is 9.62%. It's incredible to get almost 10% interest on anything, let alone something that is 100% safe.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

Fine print:

++ Each individual can only buy $10K worth per year. A couple can buy $20K. They also can buy $10K worth for each kid, although the money technically would belong to the kid.

++ Each I Bond must be held for at least a year. If cashed in after 1 year but before 5 years, the penalty is the last 3 months' interest -- but even cashed in after a year it currently would produce an effective rate of 7%+. From 5 years on, there is no penalty.

++ Rates can and usually do change every 6 months, in May and November. We don't know what the next rate will be yet ... but if it's lower it won't be by much.

So it's not a place where one can park hundreds of thousands of dollars, but anybody with $10K ($20K for couples) sitting around in checking accounts and who doesn't need the $$$ for at least a year ... it's a complete no-brainer to max out the annual I Bond account.
Thanks, well worth looking into.

Uncle Rico

  • All American
  • *****
  • Posts: 4651
Re: So much for inflation being "transitory"
« Reply #23 on: September 13, 2022, 04:19:11 PM »
Congrats, you already have your downturn (back to back quarters of negative growth). Unfortunately, the libs aren’t the only one getting stuck - by their fellow libs. Everyone is being stuck.

Not me.  I’m killing it and that’s all I care about.  Ruthless capitalists don’t have time for the little people
Tis a shame, 'tis a rotton shame, for if ye can enjoy the walkin’ ye can probably enjoy the other times in yer life when ve're in between. And that's most o' the time; wouldn't ye say?

Lennys Tap

  • All American
  • *****
  • Posts: 11411
Re: So much for inflation being "transitory"
« Reply #24 on: September 13, 2022, 04:28:56 PM »
I had a meeting with my Financial Adviser last week.
Ameriprise is still bullish on the stock market.  He said September is always the worst month every year for the stock market.  Based on stock market history and statistical performance 2022 year to date they expect a rebound in 4Q and all of 2023 as all those major disruptions get further in the rearview mirror.

I read something this week that the US housing market is short 2 million housing units.  One of the reasons home prices are not expected to drop much at all.

Glad he’s still bullish. At some point he’ll be right, I hope soon. But the S+P is down 18% in the last 8 months. The Nasdaq (where the real money has been made in the market) is down 28%. As corrections in this bull market are concerned, this one is deep and extended.

 

feedback