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The New Coffee Room

  1. TNCR
  2. General Discussion
  3. Inflation?

Inflation?

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  • KlausK Offline
    KlausK Offline
    Klaus
    wrote on last edited by Klaus
    #1

    Every year for the last two decades some economists have warned about inflation, but so far it hasn't happened. Their warnings have been wrong so many times that nobody listens to the warnings anymore.

    I have a vague gut feeling that "inflation" might be the big buzzword of 2021.

    What do you think?

    If it does come, the consequences will be devastating. The central banks have basically lost the instruments to do anything about it.

    Aqua LetiferA 1 Reply Last reply
    • L Offline
      L Offline
      Loki
      wrote on last edited by
      #2

      If you could accurately predict inflation you would have unlimited wealth.

      1 Reply Last reply
      • KlausK Offline
        KlausK Offline
        Klaus
        wrote on last edited by
        #3

        Of course, that's why I said "gut feeling".

        1 Reply Last reply
        • X Offline
          X Offline
          xenon
          wrote on last edited by
          #4

          https://www.marketwatch.com/story/fed-unanimously-adopts-new-strategy-widely-seen-as-leading-to-easier-policy-2020-08-27?mod=the-fed

          1 Reply Last reply
          • L Offline
            L Offline
            Loki
            wrote on last edited by
            #5

            There is a ton of money on the sidelines. What does that do for inflation?

            HoraceH 1 Reply Last reply
            • taiwan_girlT Offline
              taiwan_girlT Offline
              taiwan_girl
              wrote on last edited by
              #6

              Maybe someone smart in economics can give me an history lesson.

              My understanding is that for hundreds of years and up until maybe 1850 or even after, inflation did not really exist.

              Why would we want to have inflation? I would think that in the US and also more developed countries, the population is aging. With the aging population, many of these people maybe have an income not link to inflation. For them, inflation is bad. And this percentage of people will only increase.

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              • L Loki

                There is a ton of money on the sidelines. What does that do for inflation?

                HoraceH Offline
                HoraceH Offline
                Horace
                wrote on last edited by
                #7

                @Loki said in Inflation?:

                There is a ton of money on the sidelines. What does that do for inflation?

                What does inflation do to it would be the important consideration for those who own that money.

                Education is extremely important.

                1 Reply Last reply
                • KlausK Klaus

                  Every year for the last two decades some economists have warned about inflation, but so far it hasn't happened. Their warnings have been wrong so many times that nobody listens to the warnings anymore.

                  I have a vague gut feeling that "inflation" might be the big buzzword of 2021.

                  What do you think?

                  If it does come, the consequences will be devastating. The central banks have basically lost the instruments to do anything about it.

                  Aqua LetiferA Offline
                  Aqua LetiferA Offline
                  Aqua Letifer
                  wrote on last edited by
                  #8

                  @Klaus said in Inflation?:

                  What do you think?

                  I think I'm on my fourth cup of green tea and so therefore I'm feeling groovy.

                  Please love yourself.

                  1 Reply Last reply
                  • JollyJ Offline
                    JollyJ Offline
                    Jolly
                    wrote on last edited by
                    #9

                    When you're on a fixed income, you notice price creep.

                    With the exception of gas, most everything has been going up for a couple of years.

                    “Cry havoc and let slip the DOGE of war!”

                    Those who cheered as J-6 American prisoners were locked in solitary for 18 months without trial, now suddenly fight tooth and nail for foreign terrorists’ "due process". — Buck Sexton

                    1 Reply Last reply
                    • jon-nycJ Offline
                      jon-nycJ Offline
                      jon-nyc
                      wrote on last edited by
                      #10

                      My bigger concern is not traditional inflation slowly eroding the value of the dollar but a sudden loss of confidence that sinks the dollar overnight. I think by the time it started happening it would be too late to hedge it.

                      The risk may not be large, but the outcome would be catastrophic enough that it’s worth being a bit concerned about.

                      All of my treasurys are inflation linked. I do have a lot of NY munis but I’m shrinking it over time.

                      Only non-witches get due process.

                      • Cotton Mather, Salem Massachusetts, 1692
                      AxtremusA 1 Reply Last reply
                      • jon-nycJ jon-nyc

                        My bigger concern is not traditional inflation slowly eroding the value of the dollar but a sudden loss of confidence that sinks the dollar overnight. I think by the time it started happening it would be too late to hedge it.

                        The risk may not be large, but the outcome would be catastrophic enough that it’s worth being a bit concerned about.

                        All of my treasurys are inflation linked. I do have a lot of NY munis but I’m shrinking it over time.

                        AxtremusA Away
                        AxtremusA Away
                        Axtremus
                        wrote on last edited by
                        #11

                        @jon-nyc said in Inflation?:

                        My bigger concern is not traditional inflation slowly eroding the value of the dollar but a sudden loss of confidence that sinks the dollar overnight. I think by the time it started happening it would be too late to hedge it.

                        +1. I have the same thought when I hear the news that the Federal Reserve signaled that they are willing to let inflation run higher than 2% per year to "make up" for the very low inflation rates in the last few years. Not that there is anything fundamentally wrong with that policy stance itself, but the market/people can overreact and the overreaction can spiral out of control.

                        1 Reply Last reply
                        • kluursK Online
                          kluursK Online
                          kluurs
                          wrote on last edited by
                          #12

                          I'm wondering a bit about the effect of the international market moving away from USD as the dominant reserve currency, a goal of Putin and others.

                          1 Reply Last reply
                          • LuFins DadL Offline
                            LuFins DadL Offline
                            LuFins Dad
                            wrote on last edited by
                            #13

                            My teenaged son is making $11.50 an hour working 30 hours a week at a Walmart. This is a job that a few short years ago started at $7.50 an hour. Their competitor, Target, just raised their starting pay to $15 per hour across the nation. How does this not lead to inflation?

                            Housing prices are rising everywhere - https://www.globalpropertyguide.com/North-America/United-States/Price-History. My house has increased 35% in 5 years. How does this not lead to inflation?

                            Groceries skyrocketed thanks to COVID, and now that the supply lines have stabilized, the prices haven’t dropped (at least not as much as they should have). How does this not result in inflation?

                            There are already new trade agreements in place designed to bring more manufacturing back to the US. I think you will see the same around the world. Many countries are going to want to be less reliant on China for their goods. How does this not result in inflation? Especially in the US where wages are skyrocketing, but quality of manufacturing is generally a little sub par meaning we will be paying more for goods that will ultimately cost more in maintenance and replenishment. How does this not result in inflation?

                            The only major things that have kept inflation relatively in check has been the price of oil, and the trend of technology to both improve AND get cheaper. I don’t think those two things alone can hold back the storm with what’s coming.

                            The Brad

                            1 Reply Last reply
                            • taiwan_girlT Offline
                              taiwan_girlT Offline
                              taiwan_girl
                              wrote on last edited by
                              #14

                              @jon-nyc Were you in Brasil during hyper inflation?

                              A friend was there at the Taiwan economic cooperation office, and told me stories where he could not pay anything with a credit card, because in the 30 days it would take to process the charges, the hotel or other vendors would get only approx half of the value of the goods and services!

                              The office had to have huge amounts of cash on hand to run the office!

                              1 Reply Last reply
                              • jon-nycJ Offline
                                jon-nycJ Offline
                                jon-nyc
                                wrote on last edited by
                                #15

                                I wasn’t there for the hyperinflation but there was a major devaluation in late 98 (the so-called Real crisis) which actually precipitated my departure. I was based in NY and billed in dollars. So overnight my billing rate almost doubled. I tried to double my productivity but wasn’t able to pull it off. lol

                                Only non-witches get due process.

                                • Cotton Mather, Salem Massachusetts, 1692
                                taiwan_girlT 1 Reply Last reply
                                • jon-nycJ jon-nyc

                                  I wasn’t there for the hyperinflation but there was a major devaluation in late 98 (the so-called Real crisis) which actually precipitated my departure. I was based in NY and billed in dollars. So overnight my billing rate almost doubled. I tried to double my productivity but wasn’t able to pull it off. lol

                                  taiwan_girlT Offline
                                  taiwan_girlT Offline
                                  taiwan_girl
                                  wrote on last edited by
                                  #16

                                  @jon-nyc said in Inflation?:

                                  I tried to double my productivity but wasn’t able to pull it off. lol

                                  5555 Only able to get to 198%!!!!

                                  1 Reply Last reply
                                  • MikM Offline
                                    MikM Offline
                                    Mik
                                    wrote on last edited by
                                    #17

                                    2 x 0 still = 0

                                    “I am fond of pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals.” ~Winston S. Churchill

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