Is inflation looming?
10-26-2021, 02:33 PM
#51
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Former President Barack Obama’s chief of global development on Tuesday predicted inflation was here to stay, despite the Biden administration’s protestations to the contrary.
Prices “will go higher, and the Fed has misread the inflation dynamics in a big way,” former Global Development Council Chairman Mohamed El Erian said in an afternoon interview with Fox News’ Sandra Smith, adding that the Federal Reserve was “still hostage to this notion that it’s transitory.”
“The first thing it should do is stop injecting $120 billion every month,” he said, referencing the Fed’s monthly purchase of Treasury securities and mortgage-backed bonds aimed at encouraging heightened levels of consumer borrowing and spending. “It should stop that. Do we really need the Fed to buy $40 billion of mortgages and push house prices even higher? No!”
Biden administration officials have vacillated between denying inflation will persist into the future and offering other arguments in its defense, including one offered by former Obama economist Jason Furman, who stoked controversy this month when he commented on Twitter that inflation was a “high-class problem.” White House Chief of Staff Ron Klein retweeted the comment in a show of support, provoking further outrage among administration critics.
Prices “will go higher, and the Fed has misread the inflation dynamics in a big way,” former Global Development Council Chairman Mohamed El Erian said in an afternoon interview with Fox News’ Sandra Smith, adding that the Federal Reserve was “still hostage to this notion that it’s transitory.”
“The first thing it should do is stop injecting $120 billion every month,” he said, referencing the Fed’s monthly purchase of Treasury securities and mortgage-backed bonds aimed at encouraging heightened levels of consumer borrowing and spending. “It should stop that. Do we really need the Fed to buy $40 billion of mortgages and push house prices even higher? No!”
Biden administration officials have vacillated between denying inflation will persist into the future and offering other arguments in its defense, including one offered by former Obama economist Jason Furman, who stoked controversy this month when he commented on Twitter that inflation was a “high-class problem.” White House Chief of Staff Ron Klein retweeted the comment in a show of support, provoking further outrage among administration critics.
10-27-2021, 06:55 AM
#52
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We’re just going to have to see what happens. The fed has plenty of room to raise rates and needs to. Slowly so the market has time to adjust. Cheap money forever has several negatives as well. Last time (2008/09) 2 trillion in stimulus didn’t move the inflation needle much at all. This time it seems 5-6ish will. Right now the % increases are going to look large when compared to 2020 plus supply chain issues are nowhere close to being over. In the end if some items (other than essentials) become to expensive people will just not purchase those items (free market). 4/5% inflation is fine. Your contract (nk) has COL increases. More than likely it’s 2 or 3%. Several non aviation Unions are starting thier ask at 6% COL knowing it’s going to be above the last decade average around 2-3 but more than likely will settle below 6.
10-27-2021, 07:46 AM
#54
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Originally Posted by SonicFlyer
No it's not. All inflation is harmful.
Last edited by fcoolaiddrinker; 10-27-2021 at 08:07 AM.
10-27-2021, 10:09 AM
#56
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Originally Posted by SonicFlyer
Inflation steals wealth from people UNLESS they are investing (risking) their money. Inflation is a tax. And taxation is theft.
Last edited by fcoolaiddrinker; 10-27-2021 at 10:42 AM.
10-27-2021, 11:08 AM
#57
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Originally Posted by fcoolaiddrinker
hard to argue with that but from a big picture going from a decade of 2-3 to potentially 3-4 or even 5 shouldn’t be a major problem. Plan accordingly. Super low interest rates punish savers and rewards debt. It Also causes some inflation as it adds liquidity. Until the supply chain issues work themselves out and the fed starts to raise rates (both should bring down inflation) it’s pretty difficult to predict where exactly inflation ends up longer term.
And reward debt? SERIOUSLY? Mortgage rates averaged 16.63% in 1981. Good luck going in debt at that rate.
10-27-2021, 11:24 AM
#59
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Originally Posted by Excargodog
Ok, so we negotiate a new CBA with the prospect that there will be a 5% inflation rate. Inflation COMPOUNDS ANNUALLY, meaning at the end of year one we’ll need another 5%, then year two 105% of THAT 105%, then at year three, 105% of that (105%x105%) just to stay even. We need damn near 128% raise every five years (assuming we actually GET a new CBA every five years) and at that we are only running in place.
And reward debt? SERIOUSLY? Mortgage rates averaged 16.63% in 1981. Good luck going in debt at that rate.
And reward debt? SERIOUSLY? Mortgage rates averaged 16.63% in 1981. Good luck going in debt at that rate.
And there 3ish now with highly inflated prices. What’s your point? I had a 6% mortgage with a normal middle class house valuation. That’s what we’re trying to get back to.
10-27-2021, 12:00 PM
#60
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Originally Posted by fcoolaiddrinker
And there 3ish now with highly inflated prices. What’s your point? I had a 6% mortgage with a normal middle class house valuation. That’s what we’re trying to get back to.
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