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U.S. inflation reached a new four-decade high of 8.6% in May

wsj.com

81–90 of 99 posts

Re: U.S. inflation reached a new four-decade high of 8.6% in May

#81
post #3

Anyone have opinions on how long this inflation spike will last, or what the peak will be? I seriously thought we had maybe peaked earlier this year, and it looks like the peak so far was in March for core inflation excluding food and energy. However, maybe high energy prices will feed back into other consumer prices eventually, triggering more inflation. The producer price index (PPI) is still really wild, so maybe…

Global shipping has improved recently (from $10300 in September 2021 to $7600 in May 2022) and demand has cooled to the extent stores are starting to run clearance sales because of excess inventory. Gasoline prices will drop as suppliers ramp production to capture the revenue opportunities. Supply chain snarls will resolve with time. All of this will be deflationary.

We are recovering from a global natural disaster and things are still broken. I think it’s very difficult to apply steady state reasoning in these sorts of situations. But I don’t see any structural reason things won’t return to more or less 2019 status quo.

Concerns about inflation and deflation IMO are most important if they’re a structural feature. Periods of inflation and deflation as the system corrects itself are transitory and while impactful on our day to day lives don’t necessarily portend long term economic crisis.

Re: U.S. inflation reached a new four-decade high of 8.6% in May

#83
post #26
post #22

Earlier quoted context omitted.

Everyone likes to blame the Russia-Ukraine conflict but inflation was spiking prior to supply issues. That war is a convenient scapegoat for politicians and bureaucrats who don’t want to take credit for profligate spending and loose policy for decades.

Russia is a convenient excuse. It's not the reason. They cancel the XL and other pipelines but pressure KSA to produce more. The whitehouse has even admitted they are using this situation to push their stated agenda of transitioning to more renewables (noble, but not consequence free). They want to eat their cake and have it too. Reality does not work that way.

Blaming the xl pipeline cancelation is silly.

Re: U.S. inflation reached a new four-decade high of 8.6% in May

#84
post #43

Earlier quoted context omitted.

Why? If Republicans control congress what will be different? Is the US going to be the only country in the world to get inflation under control? Is the GOP that good? What are their solutions (serious question)? Because all I here is "CRT bad" and "don't say gay". I never hear anything proposed to solve any of this.

Guessing you get all your GOP news from democrat news sources. Listen to Ben Shapiro or other view points for awhile to a better perspective. He has been screaming about inflation for awhile now. Really go out on on a limb and read up on Thomas Sowell.

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Re: U.S. inflation reached a new four-decade high of 8.6% in May

#85
post #43

Earlier quoted context omitted.

Why? If Republicans control congress what will be different? Is the US going to be the only country in the world to get inflation under control? Is the GOP that good? What are their solutions (serious question)? Because all I here is "CRT bad" and "don't say gay". I never hear anything proposed to solve any of this.

Well, if a single additional R senator had won in 2020, the ARP wouldn't have passed and inflation at these levels largely wouldn't have occurred to begin with. Gridlock is the best thing we can get right now. They are still pitching BBB among all of this, which is frankly amazing. Despite inflation being a horrible political anchor for the Democrats, they have yet to pitch any economically sound policy to combat it.…

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Re: U.S. inflation reached a new four-decade high of 8.6% in May

#86

Earlier quoted context omitted.

> If Republicans control congress what will be different? Um, well, a lot will be different, but nothing with regards to gas prices or inflation. And this is coming from somebody with a passionate bordering on maniacal hate for democrats.

High gas prices is a "GOAL" of Democrats. They see it as a way to get US off fossil fuel.

1. Could have solve energy 50 years ago. Thanks Greenpeace

2. Let's all buy a $70,000 electric car. The insurance rate alone would negate any gas savings across a 40 year time frame for most people

Re: U.S. inflation reached a new four-decade high of 8.6% in May

#87
What an incredible lesson for us. At least, for me.

First, I was cocky about assets in securities and crypto. I kept a lot of cash, at the time it was 1/3, and the advice was, "What are you doing, cash is trash, man." Let's just say that now that cash ratio is more like 1/2 and increasing, while the cash hasn't increased. Brutal stock market beating and it's continuing to bleed.

I observed a major difference in opinion, in the last two years, between private economists / market researchers, and academic economists. I trusted the academic economists, who told us that inflation was transitory, so on and so forth, "blah blah blah velocity of money is what matters, blah blah blah, you should ignore those who say that we're printing too much, blah blah blah a broken clock always strikes twice." The market people were right: the housing forecasters, the real estate people and the wealth advisors who manage money and put out research reports -- they were all correct. The academic economists mostly seemed to side with the Fed and were Incorrect. "But Russia.." no, this started before Russia.

It's obvious to me today that an economy is comprised of goods and services; when we locked down the economy in the U.S., well de-facto, we locked out businesses, we handed out checks and we did stimulus package after stimulus package (Trump and then Biden, you can't partisan this), that we were giving money out while the goods and services produced were decreasing. Thus the ratio of money (which we printed) to goods and services is out of wack, hence, inflation.

I've been pushed to the fiscal conservative end of things, at least a bit more. A Democrat my whole life, it's clear the Keynesian vision is nutty as is the conversation around "corporate greed." I saw in slow motion how the Covid lockdowns enriched the likes of Amazon, and how low interest rates enriched the rich, how it's contributed to a nation of renters (corporate real estate investors used this money to buy out huge swathes of Atlanta, Phoenix and so forth to rent out homes to people who were trying to buy them).

Perhaps the Austrian School folks have a point about macro interference in the economy.

It's clear I was greedy. I thought about, but did not, sell high-flying stock gains (400% in some cases on non-meme, and 50+% on crypo), because "time in the market is better than timing the market" and I wanted to wait at least a year at a minimum. God how wrong that is. In retrospect I should have captured the gains better, instead of watching it drop at the end of last year and waiting for it to inevitably come back up.

It's clear that I'm not as comfortable financially as I thought. Living (like many of you) in a very HCOL area, since my assets were going through the roof I spent and didn't save. Now, I can't even save; I have plenty of savings, since I'm old, so I'm not paycheck-to-mouth, but I'm essentially working all day long and shoveling money into the pockets of my landlord and a lot of other nonsense.

It's clear I should have bought a property, any property, and I almost did, when the interest rates were at 2.5%.

Summary for me personally, very subjectively: seize the moment, don't overthink, don't dilly dally, while Fate passes you by.

Re: U.S. inflation reached a new four-decade high of 8.6% in May

#88
post #43

Earlier quoted context omitted.

Why? If Republicans control congress what will be different? Is the US going to be the only country in the world to get inflation under control? Is the GOP that good? What are their solutions (serious question)? Because all I here is "CRT bad" and "don't say gay". I never hear anything proposed to solve any of this.

Well, if a single additional R senator had won in 2020, the ARP wouldn't have passed and inflation at these levels largely wouldn't have occurred to begin with. Gridlock is the best thing we can get right now. They are still pitching BBB among all of this, which is frankly amazing. Despite inflation being a horrible political anchor for the Democrats, they have yet to pitch any economically sound policy to combat it.…

we knew this was coming well before the 2020 election, look at google trends for ‘money printer go brrr’

Re: U.S. inflation reached a new four-decade high of 8.6% in May

#89
post #27

Earlier quoted context omitted.

Thanks for clearly ignoring 90% of my comment. By “predicting this in 2008” they predicted a long period of low inflation before it started to accelerate quickly. I’d say that’s pretty damn accurate.

Please show a quote where he predicts a "long period of low inflation". The transcript feature on that site states "Why are interest rates currently so low? Shouldn't they be higher, reflecting expected inflation? Because people all over the world are fearful. But they've moved up quite a bit in the last month" So he's saying inflation hadn't hit yet in 2009 but when the fear goes away they would. He's also implying…

Thanks for your critique without actually listening to the podcast.

Re: U.S. inflation reached a new four-decade high of 8.6% in May

#90
post #43

Earlier quoted context omitted.

Why? If Republicans control congress what will be different? Is the US going to be the only country in the world to get inflation under control? Is the GOP that good? What are their solutions (serious question)? Because all I here is "CRT bad" and "don't say gay". I never hear anything proposed to solve any of this.

Well, if a single additional R senator had won in 2020, the ARP wouldn't have passed and inflation at these levels largely wouldn't have occurred to begin with. Gridlock is the best thing we can get right now. They are still pitching BBB among all of this, which is frankly amazing. Despite inflation being a horrible political anchor for the Democrats, they have yet to pitch any economically sound policy to combat it.…

This really feels like you are ignoring the larger context here. The issues didn't start with the ARP...far from it. The pandemic and Republicans are equally to blame here. Saying that none of this would've happened without the passing of the ARP is very simplistic and probably wrong.
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