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US inflation jumps to 31-year high amid global supply chain crisis

theguardian.com

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Re: US inflation jumps to 31-year high amid global supply chain crisis

#281

Post by MeinBlutIstBlau »

m0llusk wrote: post #274
podgaj wrote: post #164

Earlier quoted context omitted.

Poor people, which is a large majority of the United States, can only afford processed food. You neoliberals in your whole foods crap make me nauseous.

As a housecleaner I live in the SF Bay Area on between $15-20k/year. The cost of my dietary staples which are primarily vegetables, leafy greens, dairy products, and eggs has hardly budged. Anyone who has access to a kitchen can with practice use minimal time and effort produce meals that are competitive with processed options from frozen foods, grocery store chickens, and of course fast food joints. Though cuts of m…

I agree with this as well even as a Midwesterner. People balked at me when I told them I have gone by paying only $100/mo in food before(everything including out to eat). People don't realize that you can live without red meat. And chicken is a cheaper, healthier alternative.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#282

Post by ignasheahy »

littlestymaar wrote: post #271
ignasheahy wrote: post #195

Earlier quoted context omitted.

>Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. That usually happens in the beginning stages of high inflation scenario. Also government debt is not the same as household debt, however it still matters especially at these high levels. There is a breaking point just no one knows where it is. 300% gdp? 500%? 700%. At some point it will break down.

What would break mean? The US debt, like all debt, is somebody else's asset. This “somebody” has zero interest in collapsing the system. The only two things that can actually make the system collapse in the next 30 years are: - a communist revolution in the US (this is not happening anytime soon, do not worry). - zealots with a debt fixation, who would rather collapse the entire economy because they think debt is imm…

What I mean by "break" is runaway inflation or hyperinflation. That doesn't mean the whole system collapses. The rising debt or money supply is not a problem - the problem is its second derivative - how fast rising increases and how connected it is with underlying economy. And this points to a kinda dire future at the moment.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#283

Post by JCharante »

bell-cot wrote: post #212
coding123 wrote: post #107

Earlier quoted context omitted.

Not a single item I buy in the grocery store right now is less than 50% more expensive than it was 6 months ago.

Here (Michigan, US) there is not a single grocery item I buy that has gone up even 35%. Most items have not gone up at all. Might you tell us your approximate location?

In Massachusetts I haven't noticed any prices going up, everything is the same as 3 years ago.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#284

Post by anm89 »

littlestymaar wrote: post #270
anm89 wrote: post #108

Earlier quoted context omitted.

> They will raise it as soon as inflation goes up Yoy 6% for october. Inflation is already up. What are they waiting for? 10%? 15%? Also Powell isn't Volker by a long shot. I don't recall the Volker pivot because a few traders weren't having a good day.

> Yoy 6% for october. Inflation is already up. What are they waiting for? 10%? 15%? You realize that this figure was only calculated a few days ago, right? What reaction time do you expect?

So then you want to go on the record and say you think they will raise rates at the next on FOMC meeting?

Re: US inflation jumps to 31-year high amid global supply chain crisis

#285

Post by ashtonkem »

wbsss4412 wrote: post #147
starkd wrote: post #123

Earlier quoted context omitted.

It doesn't have to reach hyperinflation to have a seriously disabling influence. People look ahead for potential impediments to being able to get the goods they need. Hopefully, it won't amount to inflation, but historically, hyperinflation always tends to come out of nowhere. It's very hard to control once it gets going.

Hyperinflation just shouldn’t be entering into this discussion. It’s not happening, it’s not close to happening. Now, im not trying to downplay the fact that elevated inflation can cause issues, but it so so challenging to keep that nuance when every discussion devolves into “we are on the precipice of +1,000% inflation” when the inflation rate went from 1 to 6.

As I keep saying, threats of hyper inflation are fundamentally a political argument, and not a terribly convincing one at that. Hyperinflation can and does happen, but the doomsayers of such things are well into "boy who cries wolf territory" and can be ignored.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#286

Post by ac29 »

nostrademons wrote: post #181
zzleeper wrote: post #130

Earlier quoted context omitted.

What happened in 2019?

Corporate debt. Fed raised rates and then when it came time to roll over their debt, a lot of major corporations said "Uh, if interest rates keep going up, we are going to go bankrupt because of the higher costs of debt service." The markets had a taper tantrum (the S&P 500 dropped by about 18% in the second half of 2018), and then the Fed reconsidered and started dropping rates again. Situation is worse now, because…

> Situation is worse now, because it's highly likely that the U.S. Government would go bankrupt if they had to roll over their debt at higher rates

Is it even possible for a sovereign nation to go bankrupt in its own fiat currency?

Re: US inflation jumps to 31-year high amid global supply chain crisis

#287

Post by seanmcdirmid »

HappyTypist wrote: post #185
r00fus wrote: post #140

Earlier quoted context omitted.

Politics. Rates had to go down for the re-election effort.

Rates went down because the underlying economy was seeing slowing growth; particularly due to impacts of the trade war.

Trump on the one side of his mouth was trumping up "record economic growth!" but on the other side of his mouth was complaining "the economy will crash if they raise rates!"

It is crazy that the Democrats are the fiscal conservatives these days while the Republicans are much more irresponsible (though Obama and Biden are definitely nowhere near Clinton in terms of responsibility, they are way more responsible than Bush/Trump).

Re: US inflation jumps to 31-year high amid global supply chain crisis

#288

Post by RickJWagner »

Who would have guessed that months of government cash handouts, restricted energy providers, and massive spending programs would lead to this?

Pretty much everyone, of course.

Sorry for poor people and those on fixed incomes. If you can't afford a tank of gas for $30 you surely can't afford one for $60.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#289

Post by kyleee »

r00fus wrote: post #240
kyleee wrote: post #149

Earlier quoted context omitted.

I think that is probably naive, they can't raise rates for many reasons including the fact that it would basically immediately blow up significant parts of the economy that are only enabled/possible due to rock bottom rates

"immediately blow up" - if such fragility exists, is it a good thing? I mean, even raising rates a few basis points causes such collapse...

No I think it's an awful situation, but lawmakers and governments have made the bed for us by stepping in over and over to rescue and backstop failing entities and sectors time and time again which has allowed what would otherwise be insolvent and long ago bankrupted entities and business models to flourish

Re: US inflation jumps to 31-year high amid global supply chain crisis

#290

Post by landemva »

ItsMonkk wrote: post #193
tbabb wrote: post #136

Earlier quoted context omitted.

Maybe a stupid question, but if the velocity goes up, couldn't/wouldn't the Fed contract the supply? It seems like having large supply is desirable/correct when velocity is low.

No. We live in a fiat currency world where every dollar is allowed to leverage 10x. This means that every dollar defaulted on results in the destruction of 10 dollars. Even during the housing crash of 2008, the money supply didn't contract because the government was forced to keep the money supply constant, and if they did not it would lead to cascading failures that would destroy the currency entirely. Allowing the…

I am waiting with my popcorn ready for the exciting show to unfold when the Fed seriously raises rates. Those in Western Europe (low or negative bank account rates) will park funds in US banks. This will increase demand for dollars and put the final nail in the euro. This will be exciting to watch.
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