Thread: Inflation

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  1. #1
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    Inflation

    Barrons had quite a few articles on inflation this week. In many of them, there seems to be a consensus that the fed may move its inflation target from 2 percent up to 3 or 4 percent since many do not believe they have the will to raise rates too much higher and because the government likely wants to inflate away much of the debt. If they move it to 4 percent then that is really going to be an interesting variable to look at in a retirement calculator. I think most of the calculators assume 2-3%. I think I would prefer a recession and the taming of inflation versus moving the inflation rate higher to keep the economy afloat. Of course we could always get the worst of both worlds, stagflation.

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    I think we're screwed ... raising rates will slow the upper crust, but not the inflation on consumer goods.
    Sure, we can control borrowing (housing) with increases. But what about milk, bread, rice and wheat?
    We're double checking our ability to cope with higher crime. At this point, it's a much greater concern.

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    #3
    Quote Originally Posted by TampaJim View Post
    I think we're screwed ... raising rates will slow the upper crust, but not the inflation on consumer goods.
    Sure, we can control borrowing (housing) with increases. But what about milk, bread, rice and wheat?
    We're double checking our ability to cope with higher crime. At this point, it's a much greater concern.
    The inflation in food and gas is really what is going to hurt the most for people in the middle class. I don't think that gets resolved until Ukraine gets resolved and I have no idea how that will turn out. They are saying there is going to be famine in many emerging markets as Ukraine supplied a ton of wheat to those countries.

  4. Member Painter1's Avatar
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    #4
    We lived through this in the 70’s and until the Fed got serious about running rates into double digits did inflation ease

  5. idbefishing
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    Quote Originally Posted by Painter1 View Post
    We lived through this in the 70’s and until the Fed got serious about running rates into double digits did inflation ease
    The market will crash if they do that this time

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    #6
    Quote Originally Posted by idbefishing View Post
    The market will crash if they do that this time
    I'm not sure the government can afford to make the interest payments on the debt if we go double digits this time.

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    #7
    The 10 year just broke over 3.2%. It moved up pretty sharply the last few days. Mortgage rate are going to be in the 6% range soon.

  8. Stocks/Investments Moderator boneil's Avatar
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    #8
    Quote Originally Posted by NitroZ7 View Post
    I'm not sure the government can afford to make the interest payments on the debt if we go double digits this time.

    I have been reading that tax receipts are at all time highs and that our deficit will be a trillion less this year. Like you said, we are inflating our way out of debt. Maybe we can let the economy run hot for a year or two. Maybe high gas prices and high food prices will put a cap in the 7 or 8% inflation. Maybe we can sustain 3 or 4% inflation. I know alot of maybes. But would it be that bad to run 3-4% inflation for a couple years?
    Thanos was the hero

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    #9
    This is starting to look like 2008, but for a different reason. When does that buying opportunity start?

  10. Stocks/Investments Moderator boneil's Avatar
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    #10
    Quote Originally Posted by Bassin08 View Post
    This is starting to look like 2008, but for a different reason. When does that buying opportunity start?

    Today.

    Not saying today is the bottom, although It feels like it to me for a short term bottom. I think the real bottom happens with with peak QT in the fall. I think there's a good chance the rate of inflation peaked with last weeks data.
    Thanos was the hero

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    #11
    Quote Originally Posted by Bassin08 View Post
    This is starting to look like 2008, but for a different reason. When does that buying opportunity start?
    Hopefully June 16.

  12. idbefishing
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    Quote Originally Posted by boneil View Post
    Today.

    Not saying today is the bottom, although It feels like it to me for a short term bottom. I think the real bottom happens with with peak QT in the fall. I think there's a good chance the rate of inflation peaked with last weeks data.
    I'm with ya, probably won't be til after labor day

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    #13
    Quote Originally Posted by boneil View Post
    Today.

    Not saying today is the bottom, although It feels like it to me for a short term bottom. I think the real bottom happens with with peak QT in the fall. I think there's a good chance the rate of inflation peaked with last weeks data.
    Sounds valid. Do you think it will improve much though assuming this is the bottom until then? I figure if this is basically the bottom for a while it will just go sideways until then

  14. Stocks/Investments Moderator boneil's Avatar
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    #14
    9.1

    Gonna need 100 pt rise in rates. Might even get an emergency mtg.
    Thanos was the hero

  15. idbefishing
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    Ho lee sheet............biggest 10 minutes kill candle I've ever seen. SPX dropped 90 pts soon as that CPI # released

  16. Expert at Retired RangrSkipr's Avatar
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    #16
    Quote Originally Posted by TampaJim View Post
    I think we're screwed ... raising rates will slow the upper crust, but not the inflation on consumer goods.
    Sure, we can control borrowing (housing) with increases. But what about milk, bread, rice and wheat?
    We're double checking our ability to cope with higher crime. At this point, it's a much greater concern.
    This ^^^ I've heard the feds are looking to raise the annual inflation rates way above the average of 2-3% to as much 6-8% for the next two to three years. As you stated, cost of consumer goods will continue to rise to the point that we will just stop spending because our dollar is worthless. They're way behind the curve this time and are going to have to crash the dollar and the market to bring it back to a point for which it can recover.

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    #17
    The only "bright side" of the equation ... very lost point in the lounge, it's worse elsewhere.
    We have a strong economy, others aren't as blessed with our diversity and overall strength.

    Panama just instituted austerity measures. 10% pay cut to government employees & more.
    The EUR is on parity with the USD and will likely drop at least another 5-10% very quickly.

    It's going to be bad here, but due to crime. Brother can you spare a dime was in good times.
    Instead of folks buckling down and working thru things to achieve recovery, wide destruction.