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US annual inflation declines to 7.7% in October vs. 7.9% expected

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Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#501

Post by fullstop »

fleddr wrote: post #499
fullstop wrote: post #436

Earlier quoted context omitted.

Absolutely. I don't live where negative interest is a thing, but it seems like that would encourage people to keep money outside of banks.

How does that stop the money from being less valuable?

I'm not discussing inflation here, just the concept of negative interest on bank accounts.

If you had a pile of cash, it would remain a pile of cash. If you had 100,000 euro in the bank that might be 99,000 euro after some time because the bank essentially charges you a storage fee as interest rates are negative. Conversely, the bank would essentially be paying you to take out a loan.

Maybe I'm misunderstanding how it works since it's never happened in the USA, but I think that I have it right. See https://www.investopedia.com/articles/investing/070915/how-n...

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#502

Post by thunky »

JumpCrisscross wrote: post #219
throw0101a wrote: post #118

Earlier quoted context omitted.

> If milk is $4/gallon today and still $4/gallon 12 mos. from now, that's 0% YoY inflation. Conversely, if there was a one-time jump in a particular item, it will take a year before it gets 'removed' from the inflation numbers. Extremely contrived example: if gas/petrol was $1/L in December 2021 (and generally in all of 2021), but $1.20/L in January 2022, then there will be a 20% YoY jump in inflation for the January…

Which is partly what we’re seeing. CPI rose 0.4% MoM in October, or 4.8% seasonally adjusted. That’s above target, but better than YoY.

Also note the four most recent (seasonally adjusted) monthly CPI numbers:

  Jul 2022: 0.0%
  Aug 2022: 0.1%
  Sep 2022: 0.4%
  Oct 2022: 0.4%

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#503

Post by danielmarkbruce »

mlyle wrote: post #485
danielmarkbruce wrote: post #438

Earlier quoted context omitted.

And it's not even a theoretical issue. Look at the energy component of CPI. And then consider how that flows through to food and transportation. It is very possible that the vast majority of what we are seeing is the result of a big jump in energy prices over a few months, 8-10 months ago.

> Look at the energy component of CPI. And then consider how that flows through to food and transportation. It is very possible that the vast majority of what we are seeing is the result of a big jump in energy prices over a few months, 8-10 months ago. Well, that makes it even worse, the "flow through" you're describing from prices increasing because an input price increased. That spreads the initial shock over a lo…

yup, you are right.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#504

Post by dlp211 »

concordDance wrote: post #347
dlp211 wrote: post #249

Earlier quoted context omitted.

This is not how the national debt works.

You thinking inflated away or a default? Because those who have bought treasury bills are expecting that money in a few years.

THere is nothing that says that we ever have to pay off the debt. Debt can, and has continued to accrue to this nation since its founding. It is middle school thinking that debt incurred today must be "paid by our children". It's just not at all how the national debt works...like at all.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#505

Post by nemo44x »

Der_Einzige wrote: post #252
nemo44x wrote: post #114

Earlier quoted context omitted.

Hopefully that helps with new car pricing. Dealers are still selling well above MSRP.

Car lots need to be knocked down a peg or ten. Car sales folks are the scummiest folks on earth and they have been empowered by this disaster of a market for too long. The overwhelming majority of car sales people know almost nothing about cars. That's already how you know that their industry is basically useless. It's also extremely predatory. Anyone trying to pay a 30K mark up on a rav4 prime is being swindled (eve…

I don't buy cars often but it seems like the last decade or so, the major dealers anyways, don't play a lot of games like they used to. They put a decently fair price out there and can maybe knock a bit off but with some much information about cars today (CarFAX, BlueBook, searching online) it's really difficult to swindle people. So they just list a fair price and go from there.

They make a lot of their money today selling warranties, service packages, and financing.

I was looking a few weeks ago and the sales associate mentioned that it's starting to come down but they've just struggled so much at getting enough inventory that people were willing to bid up from MSRP. He advised me it's still a bad time to buy a car and that next year will probably be better.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#506

Post by nemo44x »

staringback wrote: post #182
nemo44x wrote: post #114

Earlier quoted context omitted.

Hopefully that helps with new car pricing. Dealers are still selling well above MSRP.

They are only selling well above MSRP because people are willing to buy well above MSRP

Well, yeah. There was an imbalance in the market between the supply of cars and the demand from consumers for cars. People were willing to spend more than ever, especially with super low interest rates making it nearly free to borrow money.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#507

Post by bryanlarsen »

hotdogrelish wrote: post #477
bryanlarsen wrote: post #418

Earlier quoted context omitted.

My reasons: in 10 years time most local gas stations will be closed, 95% of the demand for used cars will be for electrics and 97% of the supply will be gasoline so the car will only have its scrap metal value. But most people aren't thinking that far ahead. They just know I can recharge my car for $10 but it costs them $100 to refill theirs. They know that electricity prices are a lot more stable than gas prices.

I agree with your general sentiment, but I think this timeline doesn't necessarily extrapolate well for the United States. The average age of a vehicle on the road in the US is about 12 years - aftermarket suppliers as well as oil/gas companies have a very strong incentive to plan that far ahead in order to keep up with the demand. Especially given that the quantity of gas vehicles on the road will be, as you say, su…

Miles/year of old cars is a lot less than new cars. So demand for gas in 10 years might be about half of what it is now. Some stations will still do well, but a lot of marginal stations will disappear.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#508

Post by fleddr »

fullstop wrote: post #501
fleddr wrote: post #499

Earlier quoted context omitted.

How does that stop the money from being less valuable?

I'm not discussing inflation here, just the concept of negative interest on bank accounts. If you had a pile of cash, it would remain a pile of cash. If you had 100,000 euro in the bank that might be 99,000 euro after some time because the bank essentially charges you a storage fee as interest rates are negative. Conversely, the bank would essentially be paying you to take out a loan. Maybe I'm misunderstanding how i…

Got it. I was confused because the parent to your post suggested people are cool with storing money on the bank with 10% inflation. That makes no sense to me because when you convert it to cash, the inflation still applies.

As for negative interest rates, here in the Netherlands banks didn't dare to go negative, even if conditions would warrant it. Perhaps because it might trigger a bank run.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#509

Post by FollowingTheDao »

datalopers wrote: post #328
FollowingTheDao wrote: post #324

Earlier quoted context omitted.

It is funny to me that this does not make sense to you. Do you think I should have bought it when the price peaked? What I am saying is that the "market", which is now controlled by AI reading newsprint, is wrong and that 10 Year Bonds will increases again.

I don’t think you understand how bonds work. However I do agree that yields will increase and this is temporary.

?

You don't think I know how bonds work? Yet you agree with me?

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#510

Post by dntrkv »

fleddr wrote: post #490
dntrkv wrote: post #405

Earlier quoted context omitted.

As the other poster pointed out, that's primarily due to the energy costs and those will most likely come down. For a more accurate look at inflation, you should look at core CPI which excludes energy and food which can be volatile. This number is closer to around 5% in most of Europe.

Ah yes, inflation is just fine if you exclude housing, energy and food, the 3 things sustaining everybody's life.

Shelter is included in core inflation.

Where in my post does it say that inflation is just fine? The point is that the crazy 15% numbers we are seeing are mostly due to energy prices, which are extremely volatile.

We should strive to get an accurate picture of the current state of affairs, not be overly optimistic or pessimistic.

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