patrick.net

I was reading Wolf Street's blog post today about Fed Chair Jerome Powell stating core inflation has at best slowly decreased as is not where the Fed wants it to be.

That's a lot because there are not enough qualified worker and capacity to meet the demand. Maybe there are too stupid and lazy people starting out in workforce.

Its a 3rd world economic environment, where the services and goods that you took for granted in the past are more expensive and less available today.

As a country we got to put less emphasis on woke and social justice and more on innovation and productivity gains.

We have to learn how to be more self-sufficient at the family and individual unit level from fixing things at home instead of throwing them out, and growing our own food. This is somewhat of a homesteading mindset.

Also bring back more manufacturing capabilities.

Patrick says

True Patrick, as it is relative to last 12 months ago.

Awaiting if 12-month or annual Consumer Price Index and Personal Consumption Expenditure will be below 3% next year and remains below 3% for a couple of years.

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https://www.dailymail.co.uk/news/article-12246775/Biden-regulations-cost-American-households-10K-spike-60K-reelected-2024.html

Biden's regulations have cost Americans almost $10,000 per household - and could spike to $60,000 if he is elected in 2024
Analysis found Biden regulations cost Americans $10,000 per household since 2021 – with one-third of the cost coming from new fuel and emission standards
Total per household could equal $60,000 by 2028 if Biden wins a second term

Nothing that a few more million illegals can't cure.

https://www.msn.com/en-us/money/realestate/people-are-hot-bedding-or-sharing-a-bed-with-a-stranger-and-sleeping-in-shifts-to-save-money-on-rent/ar-AA1dnE84?ocid=msedgdhp&pc=U531&cvid=da276fa935224204922cd7059dcfff26&ei=17

So, gas prices can only go to $9.99 a gallon because the pumps only have 3 digits, right?

Misc says

So, gas prices can only go to $9.99 a gallon because the pumps only have 3 digits, right?

That is when it will be priced per liter. $4.50 per liter will fit just fine.

Inflation continues to trend downward. I suspect it will settle between 2.5% and 3.5% in 12 months.

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ad says

Inflation continues to trend downward. I suspect it will settle between 2.5% and 3.5% in 12 months.

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Damage is already done. What is the overall inflation since Biden got in.

RC2006 says

Damage is already done. What is the overall inflation since Biden got in.

Birdbrain Biden continued to spend money when a lot of money was given out the last year of Trump.

Biden had to pay back the left wing and Green Party voters, especially those who canvased mail-in ballots for the 2020 election in key areas like Atlanta and Phoenix suburbs.

Biden's oil/gas policies do not help, and also low supply of housing starts do not help, combined with a lot of housing getting converted to vacation rentals and second homes.

Need to see at least see energy and housing prices to drop relative to wages and income. Need more supply with energy and housing.

Cheap bread 2 yrs ago: 88c/loaf
Now: 2.19

And inflation is 8 pct

At least we use the US dollar.

In Egypt (the largest importer of wheat in the world), the inflation rate is 38%. A new record high. There may be a bit of social friction in that nation coming up.

MUMBAI, Aug 8 (Reuters) - Indian wheat prices surged to a six-month high on Tuesday due to limited supplies and robust demand ahead of the festival season, dealers said.

The increasing prices may prompt New Delhi to eliminate import duties on the cereal to bolster supplies and control prices ahead of key state polls and next year's general election.

Rising wheat prices could contribute to food inflation and potentially complicate the efforts of both the government and the central bank to contain inflation.
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Bd6r says

"Cheap bread 2 yrs ago: 88c/loaf
Now: 2.19"

This says that the inflation on bread alone is 249%. The claim that we have 8% inflation is bunk.

I calculate that as about 58% inflation per year for two years, because:

219 / 88 = 2.48

So the bread costs 2.48x more that it did 2 years ago.

1.58 ^ 2 = 2.5

It takes 58% inflation over two years to make something cost about 2.5 times what it did.

The_Deplorable says

Bd6r says

"Cheap bread 2 yrs ago: 88c/loaf
Now: 2.19"

This says that the inflation on bread alone is 249%. The claim that we have 8% inflation is bunk.

That was the point
Inflation in groceries is probably 50 pct over last 2 years if everything is taken into account
Medical insurance for students is twice more expensive compared to 2020
And they lie about 8 pct inflation

At 8% inflation, it would take 9 years for prices to double (the old "rule of 72"). When Biden took office, store brand bread at Walmart was 60 cents, and so was a gallon of store brand spring water. After one year of Biden being in office, those prices doubled.

Patrick, I would change that meme to say currency instead of money. The debt notes that we trade out of our pockets and accounts are not money at all; they ceased being such when the gold window was shut. They are just currency as the value can be manipulated at whim of the creator with no store of Value at all.

Need more supply side economics emphasis on housing and energy to lower prices.

By the way, I read an article there is a glut of truckers now as the trucking industry is in a major recession as less goods are being bought as compared to 2020 to 2022. This was no surprise since retail sales were going to destined to drop significantly from 2020 - 2022 levels.
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The cost of everything depends on the cost of energy.

Biden shut down Keystone XL on the first day of his illegitimate regime after the mass election fraud of 2020.

https://www.advisorperspectives.com/dshort/updates/2023/08/11/middle-class-hourly-wages-as-of-july-2023

Patrick says

The cost of everything depends on the cost of energy.

Biden shut down Keystone XL on the first day of his illegitimate regime after the mass election fraud of 2020.

look at oil rig count on Y charts... its all by design seeing gas prices increase now ...

I wonder we will see if rig count peak again in November 2024 like we did in November 2022 ...

this time Birdbrain Biden can't tap the strategic reserves since he depleted them leading up to the November 2022 midterm election
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Goods consumption is at or below the trend line. I think we may have a recession by end of this year if they force another COVID lockdown.

If yes, then its all rigged or staged to get the economy to crash by end of year, and then Birdbrain Biden proclaims the economy is recovering by August 2024.

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Consumers buying less laptop computers and appliances, and buying more airline tickets, hotel stays, and music concert tickets.

That's why there is a trucking recession right now. Retail has dropped off. Best Buy stock is down about 45%.

https://www.cnn.com/2023/08/23/business/nightcap-consumer-spending-us-econ/index.html

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Ye[, purchasing PMI just came out today. It was barely positive coming in at 51.

Misc says

Ye[, purchasing PMI just came out today. It was barely positive coming in at 51.

Looks like heading into another recession :-/

When does a recession start ? around 45 ?
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As of 8/23/23, it is no longer forecasted to be "Inflation beyond the Stars". The yield on the 10 year bond is 4.21% and inflation over the next 10 years according to the bond gurus is gonna be 2.37%. Over the last few years, not only was inflation gonna be super low, but government bond holders were willing to accept a negative real rate of return on their treasury holdings. Now they want a real rate of return of 1.84% annually over those ten years.

Mortgage rates are about 7.5% for 30 year conforming loans. We could have these "HIGH" rates for decades.

This means a permanent decrease in living standards for younger Americans. House prices do not have to fall because interest rates go up. Neither do higher education costs. Recent college grads could have a $100k education loan at 2% now that exact same program is at 5.5%. The yearly interest differential is easy to figure out. Loans for new vehicles (only the highest paid segment of society can afford the payments and maintain the other niceties of living in a 1st world country).

Disillusionment is already rampant among the young. Looks like they will be stamped as being 2nd rate citizens through no fault of their own.

Misc says

This means a permanent decrease in living standards for younger Americans.

Can still build affordable housing such as 1200 square foot townhomes or rowhouses with 3 bedroom and 2 bath. Just need the local governments to approve and the developers to build. Housing is the biggest factor right now as far as standard of living, followed by health care insurance and access.

Mortgage rates are driven largely by inflation. So if inflation goes down then won't mortgage rates eventually catch up with inflation (which means following CPI and PCE).

I understand the 30 year mortgage rate also tracks the 10 year Treasury: https://www.mortgagenewsdaily.com/mortgage-rates/30yr-treasuries

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Inflation is forecast to be about 3/8 of a percent above the 2% target the Fed has set. So pretty close to what the Fed wants. Sure if the Fed drops inflation by that much then mortgage rates should decline that much...all else being equal. That still leaves about a 7% mortgage rate and who knows bond holders may want more than the 1.84% real rate of return on their investment. We just came out of a really weird time where Central banks forced bond holders to accept negative rates of return (after inflation for the US), but even a nominal loss for the Eurozone & Japan bonds. Mortgage rates track inflation, but the real rate of return the bondholders want on the 10 year has gone from about negative 2 percent to about a positive 2 percent, and given the low rates the Central Banks crammed down, the current mortgages just seem high.

In the US we have 30 year fixed rate mortgages because our forefathers didn't trust bankers. Here in the US as the rates rise there is generally less debt issued as it becomes more expensive. In the Eurozone with their variable rate mortgages, rate increases immediately suck cashflow from the family budget (with a certain lag).

Misc says

Inflation is forecast to be about 3/8 of a percent above the 2% target the Fed has set. So pretty close to what the Fed wants.

Why do you believe anything they say at this point? They've been lying about inflation for 20 years. They lie about literally everything. You must be aware of this.

They lowball a number, it's bullshit, they backwards revise it at the ministry of truth.

Start saving their predictions, literally, and the date, and then a few years later, see how far they were actually off by looking of the number being reported by Google or them or whatever, later.

Until just recently inflation had been below the Fed's target rate since the Great Recession. They were struggling to get inflation up. The problem was they were concentrating on the CPI and ignoring the rampant inflation in real estate and stocks.

Who coulda known that giving away free trillions of dollars could cause the CPI to go nuts??

Misc says

Who coulda known that giving away free trillions of dollars could cause the CPI to go nuts??

Yeah, Wolfman at Wolf Street website was warning about asset inflation and how that would lead to inflation as people feel more rich with their inflated stock gains, and willing to spend more on the latest AirBnB vacation rental, Mac Book, etc.

But everything has to eventually to settle and return to the mean. Historical rules and metrics ultimately are what significantly matter.

Housing has gone up 4% a year since the late 1940's according to Robert Shiller.

The stock market in general goes up about 5% to 7% above inflation each year over the long run.

Housing costs should not be more than 37% of household income.

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