The Death of Inflation

[biglentil]

[jazz]

Surprise slump in U.S. manufacturing released today..

Buying bonds and putting stimulus cheques into peoples accounts wont be enough to float this boat. They need individuals to take on the next debt bomb because govts and the fed are at the end of their rope here.

They will have to go negative across the board on rates, which will tank bond yeilds as well and put pensions an fixed income investors in jeopardy. Pension funds hold as much as 30-50% in govt issued debt. Govt debt is dead money. So I imagine more funds switching to hard assets aka farmland and the like.

[errolanderson]

Buying bonds and putting stimulus cheques into peoples accounts wont be enough to float this boat. They need individuals to take on the next debt bomb because govts and the fed are at the end of their rope here.

They will have to go negative across the board on rates, which will tank bond yeilds as well and put pensions an fixed income investors in jeopardy. Pension funds hold as much as 30-50% in govt issued debt. Govt debt is dead money. So I imagine more funds switching to hard assets aka farmland and the like.

Commodity price crunch is now upon us . . . stock wash straight ahead (IMO) . . . .

[jensend]

Haven't we already had inflation in stocks, housing, land..............?

[biglentil]

Haven't we already had inflation in stocks, housing, land..............?

Bingo! Inflation is the expansion of money supply which has grown by 40% in the last year. Supply is shrinking but somehow the inflated money supply is going to purchase more goods and services (price deflation)? Does that make sense to anyone?

[sumdumguy]

Nothing makes sense, that’s the problem. All I know is that data is concocted, statistics are cooked, real values are erased, news is censored, looney tunes on social media can print whatever they want, whenever they want, press is bought off and politicians and philanthropists pull the strings . Carbon, one of the most important staffs of life is now our most deplorable villain. ( Oh and they figured out a way to lock us up, we’re only allowed to line up for their medicine.) Now you tell me, how can I with Econ degree in hand say all available information points to inflation or deflation? Garbage In - Garbage Out.

How did that happen, I liked myself?🥴

[jazz]

Bingo! Inflation is the expansion of money supply which has grown by 40% in the last year. Supply is shrinking but somehow the inflated money supply is going to purchase more goods and services (price deflation)? Does that make sense to anyone?

The expansion of the money supply only causes inflation if the velocity of that supply is increased as well, which means consumers get it and it gets spent multiple times across the economy. If that doesnt happen, then its devaluing that money supply. Usually banks get it and lend it out, but what bank is going to lend to someone who hasnt worked or paid rent in a year.

I dont think that kind of inflation is happening. First just a fraction of stimulus ever gets to the common man. And in these days what is he or she going to buy with $1900? More likely to pay rent or debt and the reddit crowd to stick it in Gamestop. Maybe groceries.

Durable goods orders just decreased. That would be the most likely place for someone to spend $1900, on a fridge that might last a decade.

Supply might not be shrinking at all, it might just be a covid related trade logjam. Thats why I am worried about grains as well.

https://www.cnbc.com/2021/03/26/personal-income-february-2021.html

[biglentil]

MMT is a pipe dream, there is no such thing as a free lunch the Piper always gets paid. Expand the money supply 40% sooner or later the dollars will purchase approximately 40% less.

[sawfly1]

I have been wrong more than right
Buying land etc. But in spite of my ineptitude I have tons of cash and no debt. After 1/2 my life on the minus side if the ledger.even with a divorce.
I just have to wonder how these big outfits go broke. We have had a good run. How can they screw that up. It is not the 1980s.
Now we have the maddness of
Covid programs , get 60,000 pay back 40 , some folks have 3 corporations, triple up. You have to take it , at least that makes me feel less guilty.
Because we all will have pay for it even if you did not take it.
If that is not inflationary, what the hell is?
How can it not be?
I read with great interest , trying to figure out what to do now.
All I know is if the banker tells you something, do the opposite.

[errolanderson]

This is where I’m going to steer all over the road and possibly hit-the-ditch, which some will enjoy.

Asset bubbles are not the result of true inflation (IMO) rather greed. Oh, oh, I’m feeling some skid . . . .

Are today’s market values truly inflationary? Proof-in-the-pudding is; can prices hold up if the stock market doesn’t? If asset prices drop at the first hint of financial market distress. . . . are prices really inflationary or simply manipulated creating mass greed inflating prices. To me, there is a difference, this is not inflation. Oh, oh, think I’m headed for the ditch for sure.

Let’s say economic reality strikes right out-of-the-blue . . . heaven-for-bide. Wall Street bonuses suddenly dry up. Keysian economic theory of forced money printing (to continually save-the-day) no longer has much appeal or impact on markets . . . say it can’t be true! All asset prices suddenly drop.

Is this true inflation? Gold certainly doesn’t think so.
OK, I hit-the-ditch . . . .

[farming101]

Could someone please pinpoint a time in history when an economy was working perfectly?

[jazz]

Could someone please pinpoint a time in history when an economy was working perfectly?

50s and 60s. Mid 90s?

https://wolfstreet.com/2021/03/19/i-truly-believe-that-we-the-rich-will-emerge-from-this-crisis-stronger-and-better-as-we-the-rich-have-done-so-often-before-jerome-powell-in-wsj-op-ed/

Very illustrative in that article the massive wealth gap that has been created by money printing.


-

[burnt]

Could someone please pinpoint a time in history when an economy was working perfectly?

Wouldn't that require a definition of "working perfectly"?

And take into consideration regionality?

In my humble view, I would offer that the best overall time that any nation at any time has ever known was within our lifetime.

Has there been - ever - another society in the history of this earth that has had more conveniences, more improvement over the preceding generation, more luxury, better food and better opportunity than what our generation grew up with?

Not stating a fact here, just asking. For myself. :-)

What are the parameters of measurement?

Edit: I would add that the less government interferes with an economy, the better things run.

What do we see today, in that regard?

[biglentil]

Errol since inflation died when will Lumber come back to earth?
Would love the deflationary boogeyman to show up so I can afford to do a project with my funny money.

[jazz]

Errol, I think its time to revisit this. The last few months have told the story of whats coming.

Trillions printed up and more to come under Biden. More money has been printed up in the last yr than in all the yrs prior combined. Fed reserve has stopped reporting M2 because its so massive and growing exponentially every day.

And this time, unlike the 70s, the money has a 3 fold effect. First trying to engineer a great reset for the climate hoax, secondly people getting direct payments and buying scarce goods and services that havent rebounded from covid or even buying stocks and lastly with fiat money crashing in value, there is an entire group of retail and institutional speculators trying to park it in real assets to preserve wealth. Homes, cars, equipment, collectables, commodities, value stocks.

And at the same time the fed has to hold the 10yr at low levels so they are buying bonds and MBS on the other end.

This has to be the most risky and dangerous economic experiment since Weimar.