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

Sri Lanka hikes rates in face of record inflation, despite economic contraction
Bloomberg - Are you a robot?
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SRI LANKA (Ceylon) reached a 51.4% Inflation Rate. Food Inflation hit 57.4%.

Then, un-explicably, this happened:



It's Bastille Day over in Sri Lanka (Ceylon). The President fled the country before the palace was stormed, so no guillotine. Ha! This is great--The commoners are having a pool party at the palace. :beertoast:
1097155843_134:0:959:464_1920x0_80_0_0_fa561c0e67c611ab2edeb21618ae0eb9.jpg

aeebff5d3cc00f5c3dde2f2683dc4b8c.jpg
 
Calling the great nations of the World! Is there, out there somewhere, a kind, selfless, and benevolent nation, who would altruistically bail Sri Lanka out--no strings attached...


b8e3ff7c-5ba9-11ea-b438-8452af50d521_image_hires_210415.jpg
 
images

So Vlad, then I called a default on their loan, took over their port, and sent their country even further into an economic tailspin. Don't worry, Russian Navy ships will be allowed to dock in our upcoming Chinese Naval Port in Ceylon.
 
Of course, it wasn't just China taking over their port.

A while back, in an example of sheer "green" policy madness, Sri Lanka started requiring all foods grown in Sri Lanka to be "organic"--meaning no man-made/man-synthesized fertilizers. Predictably, crop yields plummeted--down through the floor to the basement, and food inflation skyrocketed.

That, plus corruption that would make a Louisiana politician blush, and other misc. mismanagement.

Fertiliser ban decimates Sri Lankan crops as government popularity ebbs

‘It will be hard to find a farmer left’: Sri Lanka reels from rash fertiliser ban
 
rtr_al_gore_jc_150813_16x9_1600.jpg


A far-sighted, sensible policy. If we don't follow Sri Lanka's lead and ban fertilizers, this planet will have less than 3 years left...*


*(not an actual Al Gore quote, but c'mon--you know he's thinking it...)
 
I will keep beating the drum. History informs that the Fed rate must be at the inflation rate in order to reduce inflation. We are no where near that today.

Even better, end the Fed altogether and let the rates float according to market signals.
 
Monahorns said:
I will keep beating the drum. History informs that the Fed rate must be at the inflation rate in order to reduce inflation. We are no where near that today.

Even better, end the Fed altogether and let the rates float according to market signals.
Click to expand...
I think the Fed will keep raising the rate, ultimately to around what inflation is running at. They'll keep doing it incrementally to prevent a "shock." Others might say a one-time shock might be a good thing.
 
The rate has to go up.

Inflation must get under control.

We cannot end up like Sri Lanka.

We have (historically) very low unemployment now, therefore, the usual overriding concern of preventing unemployment is a much smaller factor than usual when considering whether to raise the interest rate more. Raise it.
 
Crude oil futures declined over 8% today—a huge move. So, relief may be on the way (or not).
 
Chop said:
I think the Fed will keep raising the rate, ultimately to around what inflation is running at. They'll keep doing it incrementally to prevent a "shock." Others might say a one-time shock might be a good thing.
Click to expand...

I think that will be an interesting experiment. Will there be a different effect from a slow rise vs an abrupt one? Maybe. The key will be to keep the rates high enough long term to prevent another bubble.
 
Chop said:
We have (historically) very low unemployment now, therefore, the usual overriding concern of preventing unemployment is a much smaller factor than usual when considering whether to raise the interest rate more. Raise it.
Click to expand...

Stagflation falsified the Philips Curve anyway.
 
Wholesale inflation just hit 11.3%
.................................:eek::eek::eek:

https://www.usnews.com/news/economy/articles/2022-07-14/wholesale-inflation-accelerated-in-june-to-11-3-on-energy-cost-spike#:~:text=July 14, 2022, at 9:25 a.m.&text=Wholesale inflation rose 11.3% annually,Labor Statistics reported on Thursday.&text=The monthly increase of 1.1,a 0.4% increase for April.

"The monthly increase of 1.1% follows a 0.9% increase in May and a 0.4% increase for April. June’s rise was above expectations of a 0.8% increase."
 
Shock inflation data may push Fed towards historic rate increase: Strategist

Another 40-year high in inflation has may leave no choice for the Federal Reserve but to hike interest rates by a 100 basis points at its July 27 policy meeting, pros are beginning to say.

"I think they'll definitely go big [on a rate hike]. The key question is how big do they go?" James McCann, Abrdn senior global economist, said on Yahoo Finance Live. "They have signaled 50 to 75 basis points, maybe even now 100 basis points. Historically [100 basis points] is really big. I think it's on the table. I don't think I would have it as my base case yet."

McCann's comments came just hours after the Bureau of Labor Statistics said Wednesday the June Consumer Price Index (CPI) surged 9.1% year over year, marking a 40-year high.
:eek::eek::eek:
 
I've been hearing (cnbc, which I watch 4 plus hrs a day anywhere between 6am to 5pm) for 2 months now that inflation will flatten soon. It made sense when the analysts/ guests made their opinions known. But damn, the hits keep coming. The data indicates it's not cooling

The past year has been a recession in its own right. In my adult life I can't recall prices of every day items going up this much. I was 25 /26yo in 1981 when inflation was supposedly higher than today. I was beginning a career, made a decent salary but inflation didn't affect me then like it's screwing families now.
 
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The truly appalling thing to me is how so few of the talking heads and self-proclaimed economic experts in the regime don't SEE just how the policy failures OF the regime are directly contributing to the problems.

You cannot helicopter funds and be surprised when inflation occurs

You cannot jack up wages to the untrained and then be surprised when wages elsewhere adjust upwards, which then impacts every facet of the production and supply processes

You cannot seek to kill domestic energy production and be surprised when the futures market acts accordingly

You cannot take steps which effectively kill off the mom and pop small business and be surprised that the resulting big-box monopoly results in price increases at the community level

You cannot take steps which harm the market and be condemning companies which many pensions are invested in, further harming those whose very pension/retirement is dependent upon those dividend-producing stocks.

It is abundantly clear that the current regime is filled with people that want the masses dependent solely upon the government. They don't want anyone except the ruling class to have any meaningful sources of income.
 
One recent fact the downplay inflation crowd has going for it is that oil futures have been going down very recently. Oil is a big driver of inflation.
 
Chop said:
One recent fact the downplay inflation crowd has going for it is that oil futures have been going down very recently. Oil is a big driver of inflation.
Click to expand...
Crude and commodity prices are going down. At my company, I don’t hear of price increases any more. What’s happening now is the last of the price increases exiting the pipe at the consumer level. It’s amazing that it takes 9-12 months for this to occur. Upstream, sometimes prices are reset every 5 days.
 
mb227 said:
It is abundantly clear that the current regime is filled with people that want the masses dependent solely upon the government.
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mb227, you are (unfortunately) correct. They are trying their very best to centralize power and control in their hands. Sure hope the voters realize this and get out and vote in November.
 
Chop said:
One recent fact the downplay inflation crowd has going for it is that oil futures have been going down very recently. Oil is a big driver of inflation.
Click to expand...

No! No! No! NOOO!

Inflation is a monetary policy of central banking. Period. Money supply growth was astronomical in 2020-2021. That is why there is astronomical price inflation today. The oil price was a mainly a function of the money inflation. Sure supply restrictions don't help, but we aren't producing much more now that 6 months ago. The issue is the $$$.

Until Americans realize this basic fact and demand our leaders take appropriate action, we will be doomed to price inflation like this. We will literally be doomed to having the government steal from us every minute of every day. It is a subtle form of theft. Let's hold our representatives accountable. No more money printing. No more QE. No more centrally planned interest rates. We are all being duped.
 
mb227 said:
The truly appalling thing to me is how so few of the talking heads and self-proclaimed economic experts in the regime don't SEE just how the policy failures OF the regime are directly contributing to the problems.

You cannot helicopter funds and be surprised when inflation occurs

You cannot jack up wages to the untrained and then be surprised when wages elsewhere adjust upwards, which then impacts every facet of the production and supply processes

You cannot seek to kill domestic energy production and be surprised when the futures market acts accordingly

You cannot take steps which effectively kill off the mom and pop small business and be surprised that the resulting big-box monopoly results in price increases at the community level

You cannot take steps which harm the market and be condemning companies which many pensions are invested in, further harming those whose very pension/retirement is dependent upon those dividend-producing stocks.

It is abundantly clear that the current regime is filled with people that want the masses dependent solely upon the government. They don't want anyone except the ruling class to have any meaningful sources of income.
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1. I think this administration carpet-bombed $$$$$$, rather than helicoptered $$$$$$.

2. Dividends are for old ladies. :beertoast: :thumbup:
(said by plenty of guys in expensive suits with slicked back hair)

shopping
 
Chop said:
1. I think this administration carpet-bombed $$$$$$, rather than helicoptered $$$$$$.

2. Dividends are for old ladies. :beertoast: :thumbup:
(said by plenty of guys in expensive suits with slicked back hair)

shopping
Click to expand...
Excuse me...I am far from old. I'm not even as aged as some of the Scotch or wines that I have had the privilege of consuming in my lifetime.

But those dividend producers add a nice chunk of change to the accounts each month and/or quarter (some of the REITs and oil/gas trusts pay out monthly),,,
 
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