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Post by Sara on Nov 13, 2021 13:00:26 GMT -5
From YBB weekly posting Pg 9, UP & DOWN WALL STREET....The monetary and fiscal stimulus are also creating inflationary pressures....In fiscal stimulus, $1.85 trillion SOFT-INFRASTRUCTURE stimulus will soon follow the $1.2 trillion INFRASTRUCTURE-CAPEX stimulus already passed.As I said already, Gov actions matter, nobody could predict it. We have known about the stimulus and bond buying programs for some time and this has been the key reason for estimates of inflation based on the growth of money supply. Infrastructure spending hasn't begun. |
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Post by Sara on Nov 13, 2021 13:06:10 GMT -5
I have no idea what the Fed is going to do when. It is data dependent. I do know there is a lot of conjecture of a .25 raise in June or July - I assume you aren't doing independent analysis so are adopting these views. Means nothing to me at this point. I hope they are more concerned about other things than the market, such as the price of food and shelter for most Americans. The last time inflation reached 6% was 1990. Next highest rate in last 31 years was 4% in 2007. There have only been 6 years since 1990 when inflation reached 3%. Last year inflation reach 3% was 2011. And high inflation doesn’t persist. In 1991 inflation declined by 50% to 3%. 6% inflation in 2021 for the first time in 31 years is a blip on the inflation chart. So what is your point? That the past determines the future? Again - huge increase in money supply worldwide, huge pent up demand worldwide, increasing inflation expectations worldwide. What I see debatable at this point is labor costs and sustained growth. Was all of this going on in 1990, 1991 or 2011? If not, how it is relevant to the macro situation today? Pretty sure the growth in the money supply is historic. |
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Post by intruder1 on Nov 13, 2021 13:59:43 GMT -5
The last time inflation reached 6% was 1990. Next highest rate in last 31 years was 4% in 2007. There have only been 6 years since 1990 when inflation reached 3%. Last year inflation reach 3% was 2011. And high inflation doesn’t persist. In 1991 inflation declined by 50% to 3%. 6% inflation in 2021 for the first time in 31 years is a blip on the inflation chart. So what is your point? That the past determines the future? Again - huge increase in money supply worldwide, huge pent up demand worldwide, increasing inflation expectations worldwide. What I see debatable at this point is labor costs and sustained growth. Was all of this going on in 1990, 1991 or 2011? If not, how it is relevant to the macro situation today? Pretty sure the growth in the money supply is historic. My point is that over the long run 6% inflation every 31 years is not going to have any long term effect on the US economy or the stock market. Labor costs will be controlled by increased use of IT and automation. Companies that rely on increasing use of Tech or that are tech based companies will continue to grow earnings.If you want to worry about increasing money supply and increasing worldwide inflation expectations caused by pent up demand feel free to do so. I will focus on the companies that will continue to grow from increasing use of tech or supply tech services to grow the global economic system. |
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Post by Sara on Nov 13, 2021 14:22:51 GMT -5
So what is your point? That the past determines the future? Again - huge increase in money supply worldwide, huge pent up demand worldwide, increasing inflation expectations worldwide. What I see debatable at this point is labor costs and sustained growth. Was all of this going on in 1990, 1991 or 2011? If not, how it is relevant to the macro situation today? Pretty sure the growth in the money supply is historic. My point is that over the long run 6% inflation every 31 years is not going to have any long term effect on the US economy or the stock market. Labor costs will be controlled by increased use of IT and automation. Companies that rely on increasing use of Tech or that are tech based companies will continue to grow earnings.If you want to worry about increasing money supply and increasing worldwide inflation expectations caused by pent up demand feel free to do so. I will focus on the companies that will continue to grow from increasing use of tech or supply tech services to grow the global economic system. Since I've been on board with the projection of an economic boom for the last year and a half, I'm not worrying. You have been predicting no more than 2.5% inflation for the last year and a half based on the Fed's past record which is flawed reasoning. Second, your point itself is flawed. If we have 6% inflation for the next 10 years, it would be a problem if production doesn't keep up. Huge problem. Are you instead saying this is it? Back to the fed target now? In what year are labor costs going to be controlled by IT and automation - next year, 2050? Anyways, with all due respect, I think you should be more precise in your statements so it's clear what you are saying. |
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Post by brocksamson on Nov 13, 2021 14:26:09 GMT -5
The last time inflation reached 6% was 1990. Next highest rate in last 31 years was 4% in 2007. There have only been 6 years since 1990 when inflation reached 3%. Last year inflation reach 3% was 2011. And high inflation doesn’t persist. In 1991 inflation declined by 50% to 3%. 6% inflation in 2021 for the first time in 31 years is a blip on the inflation chart. So what is your point? That the past determines the future? Again - huge increase in money supply worldwide, huge pent up demand worldwide, increasing inflation expectations worldwide. What I see debatable at this point is labor costs and sustained growth. Was all of this going on in 1990, 1991 or 2011? If not, how it is relevant to the macro situation today? Pretty sure the growth in the money supply is historic. Yes, the growth in money supply, sustained growth and the extended low rates and current labor shortages are mostly unique to this point in time. No total equivalency to the past. Like you, I believe that we are in the process of making/writing economic history, not that everything is already known. Even as just an academic or entertainment exercise, this is a conversation worth having. Will it all "average out" over the next 30 years? Of course. Heck it won't even be a blip if averaged out over the next 200 years. In 500 years people will think our economic system was quaint. It seems like some folks are saying "don't worry", without even asking if anyone is actually worried. I am not. Doubt that you are. It is also interesting to note that the folks who believe that others are "worrying", appear to be the ones with very large allocations to either stocks or bonds. Mayhaps a bit of self-comforting projection? It is important to point out here that economics is a subset of psychology: Economics (/ɛkəˈnɒmɪks, iːkə-/) is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work... It is not simply some mathematical construct, where you plug in the numbers and out comes the same result every time. |
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Post by brocksamson on Nov 13, 2021 14:28:41 GMT -5
My point is that over the long run 6% inflation every 31 years is not going to have any long term effect on the US economy or the stock market. Labor costs will be controlled by increased use of IT and automation. Companies that rely on increasing use of Tech or that are tech based companies will continue to grow earnings.If you want to worry about increasing money supply and increasing worldwide inflation expectations caused by pent up demand feel free to do so. I will focus on the companies that will continue to grow from increasing use of tech or supply tech services to grow the global economic system. Since I've been on board with the projection of an economic boom for the last year and a half, I'm not worrying. You have been predicting no more than 2.5% inflation for the last year and a half based on the Fed's past record which is flawed reasoning. Second, your point itself is flawed. If we have 6% inflation for the next 10 year, it would be a problem if production doesn't keep up. Huge problem. Are you instead saying this it? Back to the fed target now? In what year are labor costs going to be controlled by IT and automation - next year, 2050? Anyways, with all due respect, I think you should be more precise in your statements so it's clear what you are saying. if production didn't keep up. LOL - I was typing my above post as you were posting this. |
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Post by Sara on Nov 13, 2021 14:32:01 GMT -5
I know! Glad you are back by the way. Yes, I do think economic history is being written.
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Post by intruder1 on Nov 13, 2021 16:46:58 GMT -5
My point is that over the long run 6% inflation every 31 years is not going to have any long term effect on the US economy or the stock market. Labor costs will be controlled by increased use of IT and automation. Companies that rely on increasing use of Tech or that are tech based companies will continue to grow earnings.If you want to worry about increasing money supply and increasing worldwide inflation expectations caused by pent up demand feel free to do so. I will focus on the companies that will continue to grow from increasing use of tech or supply tech services to grow the global economic system. Since I've been on board with the projection of an economic boom for the last year and a half, I'm not worrying. You have been predicting no more than 2.5% inflation for the last year and a half based on the Fed's past record which is flawed reasoning. Second, your point itself is flawed. If we have 6% inflation for the next 10 years, it would be a problem if production doesn't keep up. Huge problem. Are you instead saying this is it? Back to the fed target now? In what year are labor costs going to be controlled by IT and automation - next year, 2050? Anyways, with all due respect, I think you should be more precise in your statements so it's clear what you are saying. I have not predicted 2.5% inflation. What I said was that the fed predictions were for 2.5% + which could become higher because of transitory factors. Your allusion to the possibility of 6% inflation for 10 years is pure fantasy. High inflation only occurs when there are large scale wars such as WWII/Korea when inflation was 6% or more for 6 of the 11 years from 1941-51 and again during and after the Vietnam war, 9 of the 13 years from 1969-81. This is why inflation above 3% is a rarity in peacetime with only 4% inflation in 2007, 6% in 1990 and this year as the only 3 years in the last 32 years in which inflation exceeded 3%. |
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Post by Sara on Nov 13, 2021 17:20:13 GMT -5
Since I've been on board with the projection of an economic boom for the last year and a half, I'm not worrying. You have been predicting no more than 2.5% inflation for the last year and a half based on the Fed's past record which is flawed reasoning. Second, your point itself is flawed. If we have 6% inflation for the next 10 years, it would be a problem if production doesn't keep up. Huge problem. Are you instead saying this is it? Back to the fed target now? In what year are labor costs going to be controlled by IT and automation - next year, 2050? Anyways, with all due respect, I think you should be more precise in your statements so it's clear what you are saying. I have not predicted 2.5% inflation. What I said was that the fed predictions were for 2.5% + which could become higher because of transitory factors. Your allusion to the possibility of 6% inflation for 10 years is pure fantasy. High inflation only occurs when there are large scale wars such as WWII/Korea when inflation was 6% or more for 6 of the 11 years from 1941-51 and again during and after the Vietnam war, 9 of the 13 years from 1969-81. This is why inflation above 3% is a rarity in peacetime with only 4% inflation in 2007, 6% in 1990 and this year as the only 3 years in the last 32 years in which inflation exceeded 3%. Intruder - this is just one of your posts from May - You've been endorsing the Fed's view quite a bit based on the warped past 10 years - "In the past wasnt raising interest to statropheric levels to prevent higher inflation the way the fed caused the economy to collapse because of the higher rates. New fed policy is to allow inflation to grow in excess of 2.0% benchmark and take a wait and see attitude to see how far inflation will increase above 2.5%. Since inflation has only attained 3% or more in 6 of the last 30 years (including 2011), only 2 of which were consecutive, it appears likely that inflation will remain at or below 3% for most of the foreseeable future." As far as 6% and 10 years, that's my attempt to clarify what YOU are saying - what does this post of yours mean and when is automation taking over so that labor costs will be controlled? Are you saying there will be 6% for 1 year or what? 2 years, 10 years? What amount of time doesn't matter? "My point is that over the long run 6% inflation every 31 years is not going to have any long term effect on the US economy or the stock market. Labor costs will be controlled by increased use of IT and automation. Companies that rely on increasing use of Tech or that are tech based companies will continue to grow earnings.If you want to worry about increasing money supply and increasing worldwide inflation expectations caused by pent up demand feel free to do so. I will focus on the companies that will continue to grow from increasing use of tech or supply tech services to grow the global economic system." |
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Post by Sara on Nov 13, 2021 17:26:22 GMT -5
From the link that Sara provided - "As the massive increase in the M2 measure of the money supply continues to gain traction, we think the ranks of those claiming the recent burst in inflation is transitory will dwindle. The Federal Reserve and many others assume inflation will be close to 2.0% next year. They are in for a rude awakening." I couldn't agree more and have posted about the unprecedented amount of NEW money that's floating around. I also agree with others about the "stripping out" of food and energy of the "Consumer" Price Index. If you're going to call it that but remove the 2 things that "consumers" buy every day then maybe change the name to something else. It just seems to be a way to keep the inflation numbers where they (Fed) want them. Most of the M2 new money is being put into investments, savings and paying down debt such as home mortgages and student loans. Fed excludes energy and food costs from inflation because they are more volatile and difficult to predict. I haven’t see dramatic increases in food prices and increases in prices are due to droughts and other disasters. There are many posters who obsess on transitory increases in prices in some sectors that will decline in 2022 when economy returns to full production. And over the last 10 years there has only been 1 year when inflation reached 3%. So what’s the big deal if inflation reaches 3% again in the 11th year. Low fed rates and low wage increases = low inflation. Sounds to me like an endorsement of the Fed and no inflation. Might reach 3%. |
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Post by Sara on Nov 13, 2021 17:27:47 GMT -5
The fed forecast was wrong short term. They are looking at PCE. I think is will get to 2.5-3% in 2022. Siegel is wayyyyyyy off. PCE core inflation increased .3% in august, same as increase in July, lower than 0.5% increase predicted by economists. Don’t know where all the inflation is going to come from. So what if PCE inflation reaches 3% in 2021 for the first time in 10 years. No inflation. Might get to 3%. |
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Post by Sara on Nov 13, 2021 17:31:11 GMT -5
Yahoo Finance Morning Brief withh Myles Udland and Sam Ro Wednesday, Sep 15 'The most inflationary' 50 years ever shows no signs of slowing First, the good news: August’s price pressures as measured by the consumer price index (CPI) were mostly in-line with market expectations. Formerly stratospheric pricing associated with categories like used cars (-1.5%) and air travel (-9.1%) came back to earth, which helped to tame inflation. Now the bad news: It’s becoming increasingly apparent that those “transitory” costs won't be enough to normalize prices to pre-pandemic levels, and will likely continue what one economist recently called a half-century trend of soaring prices. There are at least a few reasons behind this, but two in particular stick out: Businesses and service providers have grown more comfortable charging customers (a function of still elevated demand), and housing prices are still climbing in the face of COVID-era challenges. Just how much inflation are you expecting this year? Last time inflation reached 3% was 2011. Fed has had difficulty getting inflation to 2% since it set 2% as the target in 2012. If 3% inflation in 2021 is transitory as fed expects, inflation could be close to 0 in 2022 if prices don’t don’t increase. As for half century of soaring prices, last time inflation reached 6% was 1990. Next highest rate was 4% in 2007. In last 30 years inflation reached 3% only 7 times. Inflation could be 0 in 2022 here. Okay? Excuse me if I thought you were endorsing the Fed's very erroneous view. I thought that's what this post was doing too. armchairinvesting.freeforums.net/post/20141. And this one - armchairinvesting.freeforums.net/post/13560 |
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Post by intruder1 on Nov 13, 2021 18:23:01 GMT -5
Just how much inflation are you expecting this year? Last time inflation reached 3% was 2011. Fed has had difficulty getting inflation to 2% since it set 2% as the target in 2012. If 3% inflation in 2021 is transitory as fed expects, inflation could be close to 0 in 2022 if prices don’t don’t increase. As for half century of soaring prices, last time inflation reached 6% was 1990. Next highest rate was 4% in 2007. In last 30 years inflation reached 3% only 7 times. Inflation could be 0 in 2022 here. Okay? Excuse me if I thought you were endorsing the Fed's very erroneous view. I thought that's what this post was doing too. armchairinvesting.freeforums.net/post/20141My observation at that time was based on the fed expectation that prices would not increase in 2022 because inflation would be a transitory event in 2021 and there would be no increase in inflation in 2022. Now that it is clear that inflation will continue at 6%+ into 2022 the forecast changes. As Keynes reminds us when the facts change my opinion changes. According to the Economics Group of Wells Fargo this rapid increase in inflation to 6% means that the fed will raise fed funds rate by 0.25% in 3rd quarter of 2022 instead of 2023 with a second 0.25% increase in 4th quarter 2022. |
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Post by ECEProf on Nov 13, 2021 19:04:43 GMT -5
If you want to keep up with inflation, the usual rule to invest in equities (stocks) and not bonds (even in I-bonds) makes sense. Here is the opinion column from Mark Hulbert.
- The investment implication: If inflation proves to be more than transitory and the stock market declines significantly, you might want to treat the selloff as a buying opportunity.
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Post by intruder1 on Nov 13, 2021 19:33:50 GMT -5
If you want to keep up with inflation, the usual rule to invest in equities (stocks) and not bonds (even in I-bonds) makes sense. Here is the opinion column from Mark Hulbert.
- The investment implication: If inflation proves to be more than transitory and the stock market declines significantly, you might want to treat the selloff as a buying opportunity.
My bet is that the equities I own will continue to out perform other assets and there will be no long term inflationary impact that will reduce their value because they are the bedrock companies that will propel the economy as the physical world adapts to the tech world. Best stocks to buy when inflation increases are those with pricing power. |
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Post by ECEProf on Nov 13, 2021 21:19:39 GMT -5
Intruder
For the first time in my life, I bought an individual stock (6 shares of Apple) at the beginning of this month using some of my retirement income. Never before, I bought an individual stock.
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Post by intruder1 on Nov 13, 2021 23:58:29 GMT -5
Intruder For the first time in my life, I bought an individual stock (6 shares of Apple) at the beginning of this month using some of my retirement income. Never before, I bought an individual stock. AAPl is a good stock to own because of its pricing power and the millions of customers who buy appl products and services. AAPL is is a stock you own, not a stock to trade. |
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mnfish
Junior Member
Posts: 64
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Post by mnfish on Nov 15, 2021 7:19:36 GMT -5
Interesting segment on 60 Minutes last night about the ports. Link if you want to watch. My take is that we are in the early innings of this mess and the inflation that is coming with it. Shipping containers are costing about 10 times more, per container, than last year. Maersk Integrated reported 2021 Q3 revenue that was 68% higher than last year. All the cargo on those loaded ships with thousands of containers that has not hit the store shelves yet, and will take months to do so, will have to be inflated to cover all the increased costs. It seems that as of now consumers have the extra money, thanks to Covid relief and rising wages, to shrug it off. When that ends is anyone's guess but you would think that eventually corporate earnings are going to suffer. Like AMZN? |
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Post by intruder1 on Nov 15, 2021 10:21:31 GMT -5
Interesting segment on 60 Minutes last night about the ports. Link if you want to watch. My take is that we are in the early innings of this mess and the inflation that is coming with it. Shipping containers are costing about 10 times more, per container, than last year. Maersk Integrated reported 2021 Q3 revenue that was 68% higher than last year. All the cargo on those loaded ships with thousands of containers that has not hit the store shelves yet, and will take months to do so, will have to be inflated to cover all the increased costs. It seems that as of now consumers have the extra money, thanks to Covid relief and rising wages, to shrug it off. When that ends is anyone's guess but you would think that eventually corporate earnings are going to suffer. Like AMZN? |
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Post by intruder1 on Nov 15, 2021 10:29:13 GMT -5
Why is this the early innings? 60 minutes focused on a segment of the economy which has problems while the larger US economy recovers from Covid. Eventually the backlog at the ports will be reduced. After the 6% inflation rate in 1990 inflation dropped to 3% in 1991.
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Post by archer on Nov 15, 2021 11:06:19 GMT -5
Interesting segment on 60 Minutes last night about the ports. Link if you want to watch. My take is that we are in the early innings of this mess and the inflation that is coming with it. Shipping containers are costing about 10 times more, per container, than last year. Maersk Integrated reported 2021 Q3 revenue that was 68% higher than last year. All the cargo on those loaded ships with thousands of containers that has not hit the store shelves yet, and will take months to do so, will have to be inflated to cover all the increased costs. It seems that as of now consumers have the extra money, thanks to Covid relief and rising wages, to shrug it off. When that ends is anyone's guess but you would think that eventually corporate earnings are going to suffer. Like AMZN? The 60 min reporting makes the ship-port-trucking-empty container situation more interdependent than it really is. The trucking component is presented as if there isn't a shortage of trucks since there are plenty of trucks with empty containers. So, how can they say there isn't a shortage of trucks? There IS a shortage of EMPTY trucks. More trucks would empty the ports, and the empty container yards, making room to empty the ships which could then take empty containers back to their source. More real estate could help also. Seems a higher % of the world's containers than usual have gathered in the US. |
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Post by intruder1 on Nov 15, 2021 11:49:48 GMT -5
Reason there are so many trucks with empty containers is that the shipping co. only want to transport trucks that are loaded for which they will be paid a transport fee. Who is going to transport all the empty containers to places were they can be filled?
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Post by archer on Nov 15, 2021 12:32:29 GMT -5
Reason there are so many trucks with empty containers is that the shipping co. only want to transport trucks that are loaded for which they will be paid a transport fee. Who is going to transport all the empty containers to places were they can be filled? Good point. If the bottle neck is due to no trucks to take empty containers that are already in the yard back to the ships, then you are correct, where is the money going to come from to employ an empty truck to take a container from the yard to the port? On the other hand, that part of the transporting has been the case all along. I guess current difference is that the shippers (the boats) don't feel a need to fund the shipping of empty containers (which they don't need) when they can instead charge for holding full ones. |
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Post by brocksamson on Nov 15, 2021 16:06:05 GMT -5
Intruder For the first time in my life, I bought an individual stock (6 shares of Apple) at the beginning of this month using some of my retirement income. Never before, I bought an individual stock. I am certain that you own mutuals funds (?), likely index funds and, more specifically, growth funds. I know that you own ETFs. Most people are owning stocks that they do not even realize they own. I keep a M* portfolio of my total holdings (401k, IRA, taxable, miscellaneous things like a Cash account Plan at work) that can be X-rayed. I like to look at total holdings holistically. That way I can augment my holdings or fill in the gaps. And get a full picture of allocations. Point being that you likely own quite a bit of Apple already. My own X-ray indicates that AAPL is my second largest holding, MSFT being the first and followed by AMZN, FB, GOOG, HD...only HD is a stock that I own on an individual basis. |
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fritzo489
Junior Member
Retired Plumb-Fit
Posts: 64
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Post by fritzo489 on Nov 15, 2021 16:29:46 GMT -5
Time to get terminology right. Empty containers are sitting on trailers. The trailers are pulled by a tractor.
Time to watch the link & thanks for it.
Enjoy your evening, fritzo489
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Post by brocksamson on Nov 15, 2021 19:19:01 GMT -5
So, based on that video, there is no shortage of product or tractors or trailers or containers or drivers or ships full of goods. Rather a flawed logistics system at the ports or entry. Which in my mind makes it another infrastructure problem. Prices going up due to storage fees, inflation driven by incompetence or antiquated systems.
According to that clip other countries have systems that are working much better, more efficiently, but here we are still believing in our exceptionalism, while making political hay over infrastructure spending, which is likely too little too late. Had we just invested in infrastructure over the past decades, wouldn't the jobs and stimulus have been there as a result. Thus driving GDP and increased revenues?
What is really interesting here is that after more than a decade of fiscal and monetary policy and stimulus that barely moved the needle, there are indications that the supply chain problems and inferior port operations are going to actually drive inflationary pressures. And likely already are. So, it may end up very difficult to determine what exactly is causing the majority of the inflation. The CEO of the toy company says he had to raise prices due to storage fees charged because of the bottlenecks.
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Post by youth1 on Nov 15, 2021 19:50:56 GMT -5
How to deal with inflation easily...invest in gold and spend frugally.
Gabe
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Post by archer on Nov 15, 2021 20:33:52 GMT -5
Are other country's port systems really able to cope with the same number of containers/time period we are?
OK, we are not really processing many now due to the back up, but, would other country's systems have been able to handle all the containers that headed our way in recent months?
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Post by brocksamson on Nov 16, 2021 0:28:24 GMT -5
Are other country's port systems really able to cope with the same number of containers/time period we are? OK, we are not really processing many now due to the back up, but, would other country's systems have been able to handle all the containers that headed our way in recent months? I don't know. Rotterdam is often pointed to as a model of efficiency. But, you raise a valid question. Are our problems unique, etc. And if the problem really is unique and specific to this timeframe, then the implication is that no one is to blame. Still, a failure to produce a viable solution is still a problem. Plus, this didn't happen over night. And if the problem is not unique, it would be hard to place blame on any one government or entity. While storms in Asia and even the blockage in the Suez were a contributory factor, U.S. woes are being pinned on infrastructure.
"U.S. ports have some of the highest congestion rates in the world, the data show.
The Port of Savannah, Georgia, on the East Coast had 25 waiting ships versus just six in port late Thursday, leading all major ports with an 81% congestion rate. On the West Coast, the adjacent ports of L.A. and Long Beach had a combined congestion rate of 56% Friday, as ships waiting outnumbered the ships in port.
In Europe, ports in Rotterdam and Antwerp had blockage rates about half that level."
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Post by intruder1 on Nov 16, 2021 1:23:32 GMT -5
How to deal with inflation easily...invest in gold and spend frugally. Gabe Not exactly. According to Monday’s WSJ it’s Better to invest in companies that have pricing power to raise the cost of their products and services to cover higher expenses and increase profits. |
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