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

[Chop]

(as well as engaging in the stupidity known as price caps).

Did somebody say "price caps"?

 

[Mr. Deez]

Sounds like Truss is removing fracking limits (as well as engaging in the stupidity known as price caps).

While we know caps will fail miserably, perhaps SlowJoe will pay attention on the fracking issue.

They're also going to spend £150B to subsidize people's electric bills. For perspective, they only spend about £175B on the NHS (by far the biggest expense for the UK government), so £150B is an assload of money for the UK.

 

[Monahorns]

They're also going to spend £150B to subsidize people's electric bills. For perspective, they only spend about £175B on the NHS (by far the biggest expense for the UK government), so £150B is an assload of money for the UK.

Well, that solution is fool proof. This won't cause any other problems.

 

[Chop]

NORTH SEA BRENT

 

[Mr. Deez]

Well, that solution is fool proof. This won't cause any other problems.

And they're pretty clear that they're going to borrow the money. I don't think their debt situation is quite as bad as ours is, but it's bad, especially after COVID. (Their inflation situation is worse - at least worse than we claim ours to be.)

 

[Chop]

And they're pretty clear that they're going to borrow the money. I don't think their debt situation is quite as bad as ours is, but it's bad, especially after COVID. (Their inflation situation is worse - at least worse than we claim ours to be.)

Something else to consider: is their inflation merely transitory?

 

[Mr. Deez]

Something else to consider: is their inflation merely transitory?

The £150B splurge isn't a good sign, but for them, inflation may actually end up being transitory. Brits are generally proud of the £ and how strong it is. They're not big fans of just printing money for shits and giggles like the Federal Reserve and the European Central Bank are.

 

[Chop]

When things get out of control in British Banking:

 

[mchammer]

When things get out of control in British Banking:

Where is Waldorf from the muppets?

 

[Facing Addiction]

 

[Monahorns]

We should refer to today as Conan's Fault.

 

[Chop]

Yes, the oil/energy markets are a major driver when it comes to inflation, probably second only to the supply of money.

https://www.cnbc.com/2022/09/12/fal...ion-is-slowing-new-york-fed-survey-shows.html

 

[Chop]

Yellen says inflation and higher gas prices remain a 'risk' - CNNPolitics

The Fed should pause interest rate rises as US inflation slows | Joseph Stiglitz and Dean Baker

 

[Chop]

Hey! There's a light at the end of the tunnel!

 

[Mr. Deez]

Yellen says inflation and higher gas prices remain a 'risk' - CNNPolitics

The Fed should pause interest rate rises as US inflation slows | Joseph Stiglitz and Dean Baker

Stiglitz wrote my college econ textbook. He's a Keynesian hack.

 

[Monahorns]

I was going to say something similar.

 

[Mr. Deez]

I was going to say something similar.

You can throw in dishonest, partisan tool as well if you want.

I got a feel for that when he discussed the 1980s deficits and blamed it all on tax cuts. He said nothing about revenue levels and nothing about how much money the government spent during that time (for obvious reasons - they blow his assertion). How can anyone do that and claim to be intellectually honest or anything other than a propagandizing hack?

 

[mchammer]

8.3% yoy in August. Higher than 95% of expectations

 

[HornHuskerDad]

And Joe still thinks it's "transitory." I suppose in his mind "transitory" can be very open-ended.

 

[Sangre Naranjada]

In Joe's mind, basic lucidity is transitory.

 

[HornHuskerDad]

In Joe's mind, basic lucidity is transitory.

Some would say that in joe's case, it has already transited out for good.

 

[mchammer]

Inflation: Grocery prices in August rose 13.5%, the highest increase since March 1979

 

[Monahorns]

These small bumps in interest rate aren't doing anything as many Austrian-school economists predicted. The interest rate must be equal to or above the inflation rate to make a difference. We need 10-15% now, like what Volker did. We have a clear historical solution but our leaders won't do it because that would end their whole monetary regime of patronage.

 

[mchammer]

These small bumps in interest rate aren't doing anything as many Austrian-school economists predicted. The interest rate must be equal to or above the inflation rate to make a difference. We need 10-15% now, like what Volker did. We have a clear historical solution but our leaders won't do it because that would end their whole monetary regime of patronage.

You are right and wrong at the same time. For one, the inflation comps (yoy) start to look better starting in November (when the high rates of inflation kicked in last year and continued into 2022). So, inflation rates drop to 5-6% by summer 2023 even if you did nothing from today. Second, watch inflation drop further with milder or zero economic growth in the next 2-3 quarters. This will drop inflation to 4-5%. By then, the Fed will have slowly increased rates to 5% (6% in worst case). At that point, rates will be higher than inflation. Fed is trying for a smooth landing and not cause a recession before Election Day.

 

[HornHuskerDad]

The stock market tanked today - over 1200 points on the Dow - in reaction to the bad news on inflation. So prices go up and purchasing power goes down - and those of us on a fixed income bear the brunt of that, as well as watching my hard-earned investment dollars evaporate.

 

[Monahorns]

You are right and wrong at the same time. For one, the inflation comps (yoy) start to look better starting in November (when the high rates of inflation kicked in last year and continued into 2022). So, inflation rates drop to 5-6% by summer 2023 even if you did nothing from today. Second, watch inflation drop further with milder or zero economic growth in the next 2-3 quarters. This will drop inflation to 4-5%. By then, the Fed will have slowly increased rates to 5% (6% in worst case). At that point, rates will be higher than inflation. Fed is trying for a smooth landing and not cause a recession before Election Day.

Do you have any historical examples? I do and mentioned it.

Plus yoy comparisons aren't the issue. The issue is vs 2019. 5% inflation compared to 2021 is still really bad. We need a stable currency not a slightly less devalued currency once you have already hurt peoples' savings. Working class people aren't getting wage increases to keep up.

 

[Monahorns]

Second, watch inflation drop further with milder or zero economic growth in the next 2-3 quarters. This will drop inflation to 4-5%.

We'll see. I am skeptical. Economic growth and price inflation have the same source, money supply growth. Price inflation isn't the result of economic growth or vice versa.

 

[Mr. Deez]

Inflation: Grocery prices in August rose 13.5%, the highest increase since March 1979

And I do wonder how they're calculating that figure. Are they weighing tofu, kale, and crap that normal people don't eat on the same level with beef, chicken, and fresh fruits and vegetables? I can't speak for US grocery stores, but there are many items I see at the Commissary on base (sells US items) that are more like 20 or 30 percent more expensive than they were a year or two ago.

 

[Horn2RunAgain]

The stock market tanked today - over 1200 points on the Dow - in reaction to the bad news on inflation. So prices go up and purchasing power goes down - and those of us on a fixed income bear the brunt of that, as well as watching my hard-earned investment dollars evaporate.

And yet Biden was celebrating our "strong economy " in the rose garden today. The cnbc folks were apoplectic over his comments

 

[Chop]

So what would a truly Draconian Fed rate raise look like?