Inflation’s Collapse

[errolanderson]

Fed pausing rates today may be a clear signal rate hikes are over, despite Powell’s tough talk of raising rates further. Inflation is now the least of the Fed’s concern.

There is a full-on commercial real estate crisis.in-progress. Home owners having difficulty refinancing failing bank stress tests. Banking industry fallout (fuelled by rate hikes) has been conveniently, but temporarily, swept-under-the-rug. Unemployment is now rising as corporate layoffs and bankruptcies accelerate.

Truck freight volumes have dropped substantially, a key economic indicator. Commodities globally are in now on a bear market. from oil, copper, steel lumber to grains. China has just cut rates in an effort to stimulate their economy.

And the Bank of Canada, going it alone on rate hikes.

[errolanderson]

Watch out commodities . . . China's inflation rate has now been reported @ zero (0) . . . yes, 0%.

China is now in a massive deflationary struggle. And they purchase more than 1/2 of all global commodities.
Massive China real estate crash in-progress . . . .

[AlbertaFarmer5]

Errol Anderson
@ProMarketWire
·
1h
What’s happening to the U.S. dollar? The USD collapse appears more than just a slight miss in the PPI reading. Crude oil, commodities in-general may continue breaking higher, including loonie


I just saw this on twitter. I assume someone has hacked into Errol's account and posted something bullish. Thought I should let him know.

[biglentil]

When Errol gets very bearish commodities like clockwork they breakout to the upside. This run to the upside for commodities is going to be a doozy imo.

[AlbertaFarmer5]

Commodities globally are in now on a bear market. from oil, copper, steel lumber to grains. China has just cut rates in an effort to stimulate their economy.

Are you sure about that? Lumber is supposed to be a leading indicator. Up nearly 50% in 6 months.

[errolanderson]

FED RATE HIKE DAY: Likely 1/4% hike to 5.25 to 5.50%. A mis-judgement by central bankers talking-up dying inflation while pouring gasoline on the much bigger problem . . . the debt crisis and fire.

[jazz]

erroll, between the food stamp payout, EV subsidies, the dental benefit, the enhanced CCB, and now CWB package and this little doozy below that wasnt widely reported ($23B for 300,000 people), I estimate the govt spent almost $100B this past month alone on these extras.

Inflation cannot be halted until govt spending is.

I firmly believe capital gains is the next hammer to fall in this country. Capital gains will be used as reparations and to pay back our insane debt.

[errolanderson]

Good point Jazz . . .

My view, inflation is already dead in-its-tracks. Producer Price Index (PPI) stateside is now turning negative. Fed raising rates further just gives deflation more fuel. Debt crisis fueled further. And stock market melt-up right now could turn into a crash similar to 1987. It could hit hard and very, very fast.

Government spending has been entirely abused. Fix-all forever? Not a chance . . . .

[jazz]

Many reasons why I am bullish oil and commodities, this being one of them recently.

US cant take on Russia or China directly, so they move to break one of the middle allies between these two.

Eyes open people, be prepared.

[furrowtickler]

Fertilizer prices jumping again , other inputs will follow back up .
10 - 20% of the crop in western Canada is in good to very good shape , and crop prices are good so they are going to inflate all inputs up again
The rest of the 80% are going to get skinned , then get pounded with higher crop insurance premiums yet again next year with lower coverage. Ohh and then the 80% will get blamed for higher government deficits and higher food prices next year 🙄.
Ahhh farming so easy .

[AlbertaFarmer5]

If we are headed for systemic long-term deflation, can anyone explain to me how it plays out.

Every level of government in virtually every country is holding unsustainable levels of debt. Along with most consumers in most countries, and with businesses of all types massively in debt.
If the natural deflationary economic forces are permitted to play out as they should, the only possible outcome I can see is complete economic collapse. Apocalyptic crash and burn. Which won't be good for the careers of politicians and bankers, probably won't even be good for their survival.

The only way they know of to avoid that outcome is more of the same policies that got us here in the first place, massive money printing, easy credit, artificially low interest rates, deficit spending, more consumer debt, more public and private debt. All of which are inflationary.
Personally, I would bet on politicians and Central bankers pushing the easy button every time. They'll talk the talk, but when push comes to shove they cannot possibly afford to walk the walk.
With the entire world in the same boat, it is mutually assured destruction if one of the big Domino's falls. Under that scenario, it seems we can't allow one country to either fail, or do the right thing and get off the inflationary treadmill.
And add to that wars and geopolitics and energy shortages and labor shortages and demographics, and chronic malinvestment in all the wrong sectors and industries, and it looks like inflation is here to stay for a long time to come.
Or can anyone come up with a deflationary scenario that isn't apocalyptic?

[biglentil]

The ponzi of a debt based monetary system in which dollars only come into existence as debt must continue to grow exponentially. However, exponential growth on a finite earth is unsustainable.