Is inflation looming?

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10-27-2021, 12:07 PM

#61

fcoolaiddrinker

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Quote:

Originally Posted by Excargodog

My point is that a 16.63% mortgage rate DOES NOT reward taking on debt, regardless of the valuation. It rewards paying cash, or living very frugally, but it sure doesn’t reward debt.

sounds like you need to go back and actually read what I wrote. It was preferenced by super low interest rewards debt. I don’t believe we see any double digit CPI inflation for any length of time (more than a qtr or 2 based on the wacky 2020 numbers) You might based on all the articles you dug up so maybe we just disagree. No problem.

10-27-2021, 12:24 PM

#62

SonicFlyer

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Quote:

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.

1- interest rates don't punish savers, inflation does.

2- inflation is caused by the printing of money

3- inflation is a hell of a lot more than "5%" .... if the government is willing to admit that amount, then it is probably double or maybe even triple that. The real question is whether or not it will turn into hyperinflation.

10-27-2021, 12:49 PM

#63

fcoolaiddrinker

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Quote:

Originally Posted by SonicFlyer

1. In theory however a world of zero % interest and zero % inflation has never happened. Interest rates have been historically low for a while and savers are getting crushed by the near zero interest rate with 2-3% inflation. It started to improve right before this mess but unfortunately the fed had to go near zero to keep money flowing.

2. true that’s why the fed needs to raise interest to take some printed money out of the market.

3. agreed and again the fed needs to think about a 1/4 raise near term imo. It seems that a half a point for 2022 is priced into equities so I’m sure to not rattle markets that’s what’s going to happen.

10-27-2021, 03:10 PM

#64

fcoolaiddrinker

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Let’s not forget the fed asked Congress to print money and use it to keep unemployment down as well as provide liquidity in the markets. They did that knowing full well that inflation could become a problem. Last time 1 plus trillion=Almost no inflation giving them confidence it could be managed by raising interest rates on the backside. It seems the time is approaching for them to start doing that. I’ll wait for them to stop asset purchases, raise rates a bit, and supply chain issues to resolve before I start getting worried about hyperinflation.The fed has done a pretty good job to this point all things considered.

10-27-2021, 04:38 PM

#65

SonicFlyer

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Quote:

Originally Posted by fcoolaiddrinker

The fed has done a pretty good job to this point all things considered.

Are you kidding? The dollar has lost 99% of its value since the Fed was created.

10-27-2021, 04:40 PM

#66

SonicFlyer

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Quote:

Originally Posted by fcoolaiddrinker

Again, it is inflation that is hurting people, not low interest rates. Although the government should be out of the economics business all together and we should have a free market of interest. The government has zero legitimate business dictating the money supply or the cost of money.

Quote:

Originally Posted by fcoolaiddrinker

2. true that’s why the fed needs to raise interest to take some printed money out of the market.

They need to quit printing money.

10-27-2021, 07:54 PM

#67

Excargodog

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I’m not an expert in economics but I was trained in logistics. The just-in-time ordering that was a mainstay of the whole globalization concept has created an historically unique logistics situation where any node that fails now ripples far beyond where it once did with past less vulnerable parts and inventory systems.

https://sloanreview.mit.edu/article/...supply-chains/

https://www.abc.net.au/news/2020-08-...think/12529506

https://www.italy24news.com/News/238627.html

as the SEC makes everyone say, ‘past performance is no guarantee of future earnings.’ It would probably be foolish to believe that we can recover from logistics disruptions nearly as easily as we once could.

10-28-2021, 05:34 AM

#68

rickair7777

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Quote:

Originally Posted by Excargodog

I think that's been recognized, which is why we're doing things like establishing domestic production of problematic microprocessors.

10-28-2021, 06:55 AM

#69

Excargodog

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Quote:

Originally Posted by rickair7777

I think that's been recognized, which is why we're doing things like establishing domestic production of problematic microprocessors.

Which will, if successful, correct a single failed node in a long series. I say ‘if successful” because at one time Intel committed to establishment of a microprocessor plant near Olympia Washington.

https://www.seattletimes.com/busines...ys-mayor-says/
https://www.oregonlive.com/silicon-f...near_olym.html

Despite subsidies from the state, they closed it down before it had barely gotten started, driven in large part by the OSHA and EPA requirements. Chip manufacture uses a lot of really nasty industrial reagents - tank loads of Hydrofluoric acid among many others. But still, assuming they successfully navigate those shoals, that’s one node among many.