The Death of Inflation

[AlbertaFarmer5]

Was watching Bloomberg this morning,,, seems everyone forecasting full global economic recovery from covid plus biden spending equals = higher equities and lower commodities. Not just recovery,,, but sooner than expected recovery!

Money exiting commodities, moving to equities.

Makes for a good headline.

What kind of recovery doesn't require raw materials?

Are equities so far detached from the real world that they can (continue) to rise unabated without affecting demand for any of the tangible assets used to create things?

Sounds like the service oriented economy has been a roaring success. Primary production is no longer relevant to growth. Amazing.

[beaverdam]

Makes for a good headline.

What kind of recovery doesn't require raw materials?

Are equities so far detached from the real world that they can (continue) to rise unabated without affecting demand for any of the tangible assets used to create things?

Sounds like the service oriented economy has been a roaring success. Primary production is no longer relevant to growth. Amazing.

Isn't proof of what you're questioning, in the fact that the value/cost of the raw commodity in proportion of the retail product, seems to get smaller in every passing year.

[Rareearth]

For those that are concerned with the velocity of money, then inflation is stimulus to increase the velocities.

[biglentil]

Peter Schiff article "There is a big difference between earning money and just receiving money that’s been printed. When you have a job you earn money because you have contributed some value to society. You have helped produce a product or provide a service. As compensation, you earn some money that you can use to buy some of the goods and services in the economy that you helped create.

But if you don’t create anything, if you don’t have a job and the government just prints money and gives it to you, now you go out to spend it — you contributed nothing. Yet, you’re drawing from the supply of goods and services that you didn’t help to expand. So, it’s pure inflation. Prices just go up. That’s the only thing that can happen.”

But a lot of people have bought into the myth that you can consume without producing.

The recent spike we have seen in price inflation is just the beginning.

[farming101]

It would depend how much money for nothing people are given. If it is just enough to keep them alive and provide the basics it is not inflationary.
It also depends whether or not the availability of goods and services remains abundant. If a portion of the workforce is productive enough to supply everything the whole population requires inflation should not be a big deal.
Government policy is to regulate inflation, not get rid of it

[sumdumguy]

So, if the Canadian Economy needs to “grow” and interest rates are going to stay down because of that fact, then why would Trudeau keep raising Carbon taxes and defeat that rationale. Instead he should be reducing consumption taxes to grow the economy. Low interest rates do nothing but create housing bubbles - dangerous policy to go unchecked as seen in 2008 US. Too low-too long.

[sumdumguy]

Container yard east of Regina is packed to the nines with full containers sitting. What’s going on? Don’t see any trains being filled, none on the tracks either. Maybe those of you moving around see some rail movement. Are railcars moving down those tracks. Something seems off.

[burnt]

The processor who takes our IP soys is having one heck of a time getting empty cans for shipping them overseas. Consistently dealing with getting a very small percentage cans ordered and promised.

Asia is paying shipping companies to return them empty for a faster turn-around.

[helmsdale]

Used 8'x 40' can was $5500 last month.

$7500 a couple days ago... if you can find one.

Another one today... not necessarily apple's to apple's, but going rate on a 30ish hp Kohler auger motor was ~$3000 around christmas time. First place phoned yesterday said they've gone up alot, and new price is $4200.

Neighbor said a bundle of posts was ~$650 last year. $950 the other day.

[furrowtickler]

This has the double wham effect.
Money for nothing reduces productivity, we’re seeing it already with the shortages of product thus creating inflation.
Now the people have a more difficult time making ends meet, government answers with more handouts perpetuating the problem.

This has been tried in Canada for decades ... and has done exactly as you pointed out .

[errolanderson]

Every American can sit on-the-couch this weekend and have their bank balance jacked-up automatically.

Is this inflation risk?. . . lack of productivity risk? . . . or both? . . . or is this crash risk?

[biglentil]

Every American can sit on-the-couch this weekend and have their bank balance jacked-up automatically.

Is this inflation risk?. . . lack of productivity risk? . . . or both? . . . or is this crash risk?

1 and 2 yes but crash risk unlikely, not until they cut off the free money to the addicts. Plenty of it will find its way into Robinhood and crypto exchanges. Used cars under $3000 might get hard to find along with Xbox's. Saving in dollars is a sucker bet only for those willing to watch the purchasing power of their hard earned money get eroded by inflation. The ones that get money for nothin know better.