INFLATION--FED announces 0.50% interest rate cut

Mona,

When Carter was president, I created my own inflation index since the "consumer price index" was obviously rigged to suit those inside the Beltway believing the public would never know the truth.

My index remains the same and includes:

Cost of housing
Cost of autos
Cost of groceries
Cost of utilities
Cost of gasoline

These things touch the lives of every American every day. Under Jimmy Carter it was 38% in Houston.

Of course, that was also the time that the idiots in Washington passed the competitive banking act that resulted in the S&L crisis, which (editorial comment) should and could have produced a profit for the American taxpayers if handled properly by anyone other than the federal government.
 
Monahorns said:
That is the flip side of inflation. When currency is devalued prices don't always go up or as much as the currency was devalued. What happens is that quality goes down or package quantity goes down. It is a trickier way to go.
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Yep, and they think we won’t notice. Next up, slightly thinner chips, cookies, everything. More and deeper dimples on your plastic coke bottles too.
 
My index is comic books. I own almost 4,000. The newer they are, they have smaller pages, fewer pages, fewer words per page, and less detailed art. All the while the price goes up, up, up. In 1982 they cost about $0.50-$65. By the late 80s they cost $0.75-$1. In the 90s that were $2. In the early 2000s $3. By 2015 they were $4. Similar now. Some are $5. All the while with less content.
 
As for beef and packing plants. Consider that nitrogen fertilizer and nitrogen feed used in feed lots, is short. Trucking from Canada a major nitrogen supplier, is almost gone now. So expect feed lots to close down later this year and 2023. The fertilizer shortage will hit farmers and slow down production of high demand produce. I have a big garden. Trying to grow our own food. Shopping for land to do that and hunt, fish on it. We’ll see how long this lasts. Hoping the transportation issues get cleared! No sign of that happening yet.
 
Yep. Note, there are many sources of nitrogen including man-made/chemical-plant derived, and even potash (Canada and New Mexico have a lot of that). Phosphate is a different story. Farms need it, and there is a limited supply. Morocco is the great phosphate country—the Saudi Arabia + of phosphate mining. If fertilizer prices spike, Morocco will be in high cotton. Could affect their currency, but I’m definitely not playing that one.
 
I like beef and other meats. In fact, 96 out of 100 MDs would probably say I eat too much of it. That being said, one safety valve we have to avoid an extreme starvation-level food shortage is shifting to a whole lot less meat. Most corn and soybeans and even wheat go to feeding livestock. If we hit severe shortages, the price of meat will skyrocket and most will be eating a near-vegetarian diet—but not starving. Meat would become a luxury.
 
TIME projects 7.3% inflation Jan to Jan. I don’t believe the official numbers are out yet. It doesn’t appear to be going down…
 
Chop, meat has already become a luxury for many of us. At least the higher cuts have. Finally bought some steaks the other day but only cheaper cuts. Been over 2 months since I finally said I didn’t want to put off any longer.
 


Remember there is CPI Inflation then there is Real Inflation. In Texas, I would say 14% to 15% and we're lucky!
 
I raised some eyebrows a few months ago when I predicted double digit inflation in 2022. I think we may get there before Summer. Hoping it flattens out, then goes back down to 1-2% (and stays there)...
 
Chop said:
I raised some eyebrows a few months ago when I predicted double digit inflation in 2022. I think we may get there before Summer. Hoping it flattens out, then goes back down to 1-2% (and stays there)...
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Real Inflation IS double digit. 14% in the Houston area. May be higher in Austin, 15%.

This tweet was sarcasm:

Clearly annual inflation is 7%. If homes go up 25%, rent goes up 30%, new car prices are up 15%, used cars are up 30%, grocery bills are up 30%, gas is up 40%, prime goes up 17%, netflix up 20%, well, that means inflation's 7%.

So if you get a 10% return on investment your Real return is -4% (inflation adjusted).
 
Don't go by CPI. It is very misleading, that was my point. It ignores living expenses, and it has a ratio back to 1982-1984 inflation.
 
AC said:
Real Inflation IS double digit. 14% in the Houston area. May be higher in Austin, 15%.

This tweet was sarcasm:

Clearly annual inflation is 7%. If homes go up 25%, rent goes up 30%, new car prices are up 15%, used cars are up 30%, grocery bills are up 30%, gas is up 40%, prime goes up 17%, netflix up 20%, well, that means inflation's 7%.

So if you get a 10% return on investment your Real return is -4% (inflation adjusted).
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Air is still free.
 
Inflation is a thing that can topple a government. If it continues as it is today, people will get restless very quickly. If people think the COVID truck convoy is serious wait until everyone is protesting at their local capital.
 
This isn’t a straight up inflation issue—but the Pillsbury (and similar brands) section of refrigerated cylinders of biscuits, cinnamon rolls, bake-it-in-the-oven goods, etc., of the grocery stores has been looking like a market from the Soviet Union lately. Empty shelves all over town.
 
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