INFLATION--FED's cutting rates again...

[Monahorns]

drastic reduction of GDP

Yes. But GDP is a bit of a smokescreen anyway. It doesn't really represent economic health. But correct. In a bust it goes way down and the economy does slow down while it readjusts to reality.

s without energy and food. So you have a green agenda combined with food shortages and a drain on capital. The resetting at at a “more real level” is likely to be so low that we see massive chaos and upheaval. Or it seems like a strong possibility.

Prices go down which means food and energy are more affordable. Demand goes up and profit goes up at some point. The resetting is going to be low but it has to happen if the economy is ever going to grow again. No one knows where that level is either until the economy finds it. It depends on how much capital was being consumed or maintained during the malinvestment.

 

[mchammer]

 

[Chop]

Unemployment is down now to a very low 3.6%—just a tad above the extra low pre-pandemic level. Wages have risen significantly, and the pace of wage growth is now flattening out. Also the labor shortage is easing as many new people have entered and re-entered the workforce.

So, for now, it doesn’t look like stagflation, but more like just plain old inflation. This gives the Fed more latitude in further (and possibly more substantial) increases in the interest rate.

 

[mchammer]

The average merit increase at my company effective April 1 for “meeting expectations” was a paltry 2.6%. It was 2.2% last year and 0% before that (Covid).

 

[mb227]

Unemployment is down now to a very low 3.6%—just a tad above the extra low pre-pandemic level. Wages have risen significantly, and the pace of wage growth is now flattening out. Also the labor shortage is easing as many new people have entered and re-entered the workforce.

So, for now, it doesn’t look like stagflation, but more like just plain old inflation. This gives the Fed more latitude in further (and possibly more substantial) increases in the interest rate.

I wouldn't say wages rose 'significantly.' Chart I saw the other day showed about 5%, but that is offset by inflation which was pushing 8% in the same chart.

In other words, some people ARE getting more money than a year ago, but that dollar still doesn't help get them what that same dollar would have done last year.

The cynic in me also believes that those wage increases were at the lower levels of entry-level minimum wage which ALSO saw hours being cut so that other benefits could be avoided.

 

[mb227]

The average merit increase at my company effective April 1 for “meeting expectations” was a paltry 2.6%. It was 2.2% last year and 0% before that (Covid).

Brings back memories of my early years with the State...I think it was FY89 where we saw a pay increase 'approved' but made contingent upon the Comptroller certifying the funds as available.

The increase came through but, coincidentally, insurance and taxes rose, meaning most actually saw a pay CUT.

 

[Monahorns]

At the same time AISD and RRISD voted themselves hefty salary increases. Must be nice to simply take more from others. Taxation is theft.

 

[Vol Horn 4 Life]

At the same time AISD and RRISD voted themselves hefty salary increases. Must be nice to simply take more from others. Taxation is theft.

Its been a few years since I did the research but its pathetic how much of ISD money goes to "administration". Back then over 50% went to administration while less than 50% went to schools and teachers. All they do is create more work for themselves and red tape for the teachers. I suggest 10-15% go to admin and 85+% go to schools and teachers. RRISD is one of the worst at that. Used to be one of the best districts in the state but now I wouldn't step foot into one of those schools much less send my kid there.

 

[guy4321]

Went to my neighbor's daughter's middle school play last fall. Cost for a family of four was $0. Went to her play last week. Cost for a family of four was $40. My shocked face made the mom collecting cash say, "It's due to inflation."

 

[Mr. Deez]

Went to my neighbor's daughter's middle school play last fall. Cost for a family of four was $0. Went to her play last week. Cost for a family of four was $40. My shocked faced made the mom collecting cash say, "It's due to inflation."

Lol. Inflation is bad, but it's not that bad.

 

[guy4321]

Lol. Inflation is bad, but it's not that bad.

What do you mean inflation hasn't gone up an undefinable percent?

 

[nashhorn]

Wow Gus, I complained when I went to see my granddaughter cheer for the basketball team and the price went up to $10 for the championship playoffs. Tried to say I was a student but couldn’t pass. I cannot imagine not getting a discount got the kids.

 

[Horn6721]

Vol
I also looked into how money was spent in school districts. This was at the beginning of the Robin Hood theft.
IIRC almost every district receiving funds had the huge disproportionate spending on administrative you mentioned
The poorer the district the higher % admin costs and less %spent on actual teaching

 

[Chop]

Per UBS -- (official March #s aren't out yet), but UBS says Inflation will hit 8.5% in March. (once the numbers are in).

Bloomberg - Are you a robot?

Goldman makes negative projections for equities:

Goldman Sachs’s grim message for investors: Your portfolio will flatline this year—and that’s if you’re lucky

 

[Chop]

Businesses brace for high inflation to stick around over next two years: BoC survey

Bank of Canada projects high inflation over next 2 years.

 

[Chop]

Turkish inflation to top 60% in March, stay lofty all year
Turkey's inflation jumps to 20-year high as energy prices surge

Hyper-Inflation in Turkey. 60% +

Historically, that usually means they're through. Through as a government or regime--there will still be a Turkey and Turkish people and stuff, of course...

Turkey is also running short on wheat/grains/foodstuffs (a big precursor to revolution...)

 

[Chop]

Turkish inflation to top 60% in March, stay lofty all year
Turkey's inflation jumps to 20-year high as energy prices surge

Hyper-Inflation in Turkey. 60% +

Historically, that usually means they're through. Through as a government or regime--there will still be a Turkey and Turkish people and stuff, of course...

Turkey is also running short on wheat/grains/foodstuffs (a big precursor to revolution...)

The worst outcome - the Turkish regime is overturned and a new regime take power that:

(1) Aligns with Putin

and/or

(2) is radical fundamentalist Muslim

 

[Mr. Deez]

The worst outcome - the Turkish regime is overturned and a new regime take power that:

(1) Aligns with Putin

and/or

(2) is radical fundamentalist Muslim

Honestly, I have a hard time seeing any outcome other than one of these. Pick your poison.

 

[Chop]

Honestly, I have a hard time seeing any outcome other than one of these. Pick your poison.

If Turkey goes enemy on us, that would close off the Black Sea.

It looks like Sunni Muslims are over 80% of Turkish people. Iran is wed to Russia. It may be hard for Iran to join up with a radical Sunni Muslim Turkey, who knows...? My understanding is they hate the other kind of Muslim even more than they hate Christians or Jews. Maybe the Turks would be another Saudi Arabia without so much oil?

 

[Mr. Deez]

If Turkey goes enemy on us, that would close off the Black Sea.

It looks like Sunni Muslims are over 80% of Turkish people. Iran is wed to Russia. It may be hard for Iran to join up with a radical Sunni Muslim Turkey, who knows...? My understanding is they hate the other kind of Muslim even more than they hate Christians or Jews. Maybe the Turks would be another Saudi Arabia without so much oil?

Losing Turkey would be a disaster. It would close the Black Sea, and we'd lose some of the most important overseas US military installations.

 

[Chop]

Losing Turkey would be a disaster. It would close the Black Sea, and we'd lose some of the most important overseas US military installations.

If only Turkey would have adopted a responsible and pro-active federal reserve board--like ours...

 

[Chop]

https://www.kiplinger.com/economic-forecasts/inflation

Kiplingers lets loose with some projections:

"The surge in gasoline prices this month will boost March inflation to near 10% when the figures are released next month. The inflation rate will likely remain high for the rest of the year, ending at 6.5% or so in December. Russia’s war in Ukraine will keep gasoline prices elevated for much of the year. Even if the war ends, a Western embargo on Russian energy will likely continue for quite a while. Food prices are also likely to see a jump in next month’s report, as wheat prices have surged 35%, given that Ukraine is a major producer. Plus, there are expectations of continued upward price pressures on rent, housing costs, and prices of many services, as the pandemic eases and demand rebounds."

 

[Chop]

The new favored place to store your wealth:

 

[mb227]

The new favored place to store your wealth:

That is all fine and dandy until...

 

[Chop]

That is all fine and dandy until...

Is that what they call a "Commodities Market Crash"?

 

[mb227]

Is that what they call a "Commodities Market Crash"?

Market forces exploded...

 

[Chop]

Minutes of Fed's March meeting seen detailing a speedy balance sheet rundown

So is the opposite of quantitative easing called "quantitative tightening"...? Whatever the cool kids call it these days, it's underway.

WASHINGTON, April 6 (Reuters) - U.S. Federal Reserve officials on Wednesday will release more details on what's evolving as a three-year plan to trim several trillion dollars from the stash of assets purchased to stabilize financial markets through the coronavirus pandemic, its next step in the move to tighten credit and lower inflation.
...
Powell laid out the broad contours of the plan when he told Congress last month the Fed would "in the range of three years" return its asset holdings to "a size relative to our economy that it was before" the pandemic.

In response to the 2007-2009 financial crisis, the Fed through several rounds of "quantitative easing" accumulated around $4.2 trillion of assets, the equivalent of around 24% of U.S. gross domestic product. From 2017 to 2019 it reduced those holdings to less than $3.6 trillion, or about 16.5% of GDP.

 

[Chop]

https://www.cnbc.com/2022/04/05/how...ceries-are-due-to-inflation-item-by-item.html

Say, here's some practical news for the grocery consumer:

From the chart in the article, and elsewhere in the article (% change from Feb. 2021 to Feb. 2022 for a market basket of grocery items):
(additional details on the items selected are found in the article)

Some Higher inflation items:

Bacon................17.0%
Oranges............14.3%
Ground beef......13.6%
Margarine..........11.4%
Eggs..................11.4%
Milk...................11.2%
Donuts...............11.2%
Fried chicken......11.1%
Ground coffee.....10.5%
Canned soup.......10.0%



Some Lower inflation items:

Potatoes.............3.0%
Ice Cream..........3.3%
Soda..................5.4%

Overall, grocery prices were 7.9% higher year-over-year as of February 2022, according to the Consumer Price Index’s most recent data.

 

[Chop]

Egypt caps bread prices as shockwaves of Ukraine war hit Middle East - CNN

Egypt has employed a classic old GOP approach to tackle their rapidly rising food prices: PRICE CONTROLS

In the three weeks since Russia's invasion of Ukraine, the price of unsubsidized bread in Egypt jumped by as much as 25% in some bakeries. Cairo on Monday fixed the price of unsubsidized bread to limit the inflationary impact.

 

[Monahorns]

Some Higher inflation items:

Bacon................17.0%
Oranges............14.3%
Ground beef......13.6%
Margarine..........11.4%
Eggs..................11.4%
Milk...................11.2%
Donuts...............11.2%
Fried chicken......11.1%
Ground coffee.....10.5%
Canned soup.......10.0%



Some Lower inflation items:

Potatoes.............3.0%
Ice Cream..........3.3%
Soda..................5.4%

For whatever reason meat prices always rise more than grains and processed foods. Fun fact: the diet pyramid was partially created to motivate people to eat more grains and processed foods.