patrick.net

Gold/silver ratio is hovering around 85 these days. Somethings gotta give...

I am aware of the concept of stealth inflation.

The large container of liquid detergent that cost $6.49 last year is unchanged. But the fine print on the label says it's now 144.5 ounces instead of the 150 ounces it's been for years.

And that sales tax rate (San Jose, CA, - Silicon Valley for you Hipsters) on that item has gone up from 9.125% to 9.375%

Patrick says

Why didn't people just immediately buy gold or silver when they got money? At least it would hold value more or less.

Who would sell it? Why would I sell you a gold mark for 100 paper marks today, when I know my gold mark will be worth 1,000 paper marks next week? I would only by hard objects like a car or stockpiles of food with my gold.

Patrick says

During the inflation the wage rates changed every day, and then, at the height of the inflation, twice a day

And it was the same when you ordered a meal out. You paid for the meal up front because the price would have gone up by the time you finished it.

They seem to have gotten it under control by1927, but I'm sure the trauma was still felt. This is a documentary by a famous German film maker Walter Ruttmann of one day in Berlin in 1927 Weimar Germany. It opens with the train as it approaches the city early in the morning. People straggle out into the street and off to work. At noon people seem to be enjoying themselves, eating and dancing at outdoor cafes. The women are dressed in the latest flapper styles which look for all the world like what they looked like here. After work, the night life begins with revelry in nigh spots where jazz is being played. It's hard to imagine what the lives of these same people are going to be like ten or 15 years later, especially as Berlin faced destruction.

https://www.youtube.com/watch?v=TVqPoV9q4ck

https://www.zerohedge.com/markets/yellen-throws-biden-under-bus-runaway-inflation-she-wanted-19-trillion-stimulus-cut-third

Yellen Throws Biden Under The Bus On Runaway Inflation: She "Wanted" $1.9 Trillion Stimulus Cut By A Third

Perhaps the most idiotic thing to ever come out of the Biden administration - and there has been plenty to choose from - was the repeated lie that (trillions in) stimulus does not cause runaway inflation, but rather lowers it. ...

Only instead of taking one for the team of senile, clueless economists and Putin puppets (because if there is any admin that has done the Kremlin's bidding by sending oil prices to near record highs, it is Biden's) especially after the so-called "president" made it clear he will blame Powell and the Fed ahead of the midterms for his admin's catastrophic MMT policies which have assured an avalanche this November that will hand control of Congress to republicans on a silver platter...

... Yellen has decided to strike back, and as Bloomberg reports citing an advance copy of the Treasury secretary's biography- due out on Sept. 27, just weeks before the midterms - the treasury secretary initially urged Biden administration officials to scale back the $1.9 trillion American Rescue Plan by a third "worried by the specter of inflation"... the same stimulus plan that she herself said last March would not lead to an inflation problem. But, in retrospect, she appears to have changed her mind. ...

Of course, it's too little too late now, and with even the liberal media turning on Biden, Yellen's last-ditch attempt to preserve some of her reputation in the twilight of her career, and life, will be a miserable failure just like Biden's entire administration...

Patrick says

assured an avalanche this November that will hand control of Congress to republicans

You are assuming a fair vote count. Mail-in voting will allow a repeat of massive after hours vote dumps in strategic places.

Patrick says

Why didn't people just immediately buy gold or silver when they got money? At least it would hold value more or less.

During a crisis, it's impossible to buy gold or silver.

Try to buy some now. Tell us how much do you have to pay over "spot" price?

Buy silver chains and cheap rings. Preferably at the Flea Market from a long time vendor there.

You don't want to be flashing gold coins and expensive bling at the Black Market when TEOTWAKI. The security guards will call their gang pals (probably the same group hired to be guards) and follow you home, and they will have more weapons and be more of them.

Say "Oh, this is my last thing, my grandma gave me this for my Communion, but my kids really need to eat."

AmericanKulak says

TEOTWAKI.

The
End
Of
The
World

but I don't get AKI.

richwicks says

TEOTWAKI

should be AWKI.. as we know it

FortwayeAsFuckJoeBiden says

richwicks says

TEOTWAKI

should be AWKI.. as we know it

The End Of The World As We Know It.

Now I have it.

I read Saudi's and OPEC agreed to increase production by 50%. And the rig count as well as other data at Dallas Fed's energy site seem to show that supply will continue to increase. That is why I think oil prices will go down within the next couple of months.

AmericanKulak says

Buy silver chains and cheap rings. Preferably at the Flea Market from a long time vendor there.

You don't want to be flashing gold coins and expensive bling at the Black Market when TEOTWAKI. The security guards will call their gang pals (probably the same group hired to be guards) and follow you home, and they will have more weapons and be more of them.

Say "Oh, this is my last thing, my grandma gave me this for my Communion, but my kids really need to eat."

As far as The End of the World As We Know It, I think what will matter most are potable water, non perishable food and bullets. Those homesteaders in Alaska will fare a lot better than the survivors in the lower 48. If you live near salt water, learn how to make a solar still to make fresh water.

richwicks says

AmericanKulak says

TEOTWAKI.

The
End
Of
The
World

but I don't get AKI.

As We Know It. TEOTWAWKI.

Inflation isn’t the end of the world. It’s just the end of dollar stores, dollar menus at McDonalds, and cheap gas.

For home debtors, it’s a gift.
We will see at least 50% inflation from 2020-2026.
That means your million dollar shack will be worth $1.5 million, but your $800,000 debt will be “worth” $600,000 in inflation adjusted value.
Creditors are going to get shafted hard. Couldn’t happen to a nicer bunch of ASSHOLES!

Shaman says

We will see at least 50% inflation from 2020-2026

If my arithmetic using the exponential is right, 50% price rise in 6 years is 6.7% annualized. Yikes.

Shaman says

Creditors are going to get shafted hard. Couldn’t happen to a nicer bunch of ASSHOLES!

Yes and no.
Massive capital destruction for pension funds and insurance companies. Yes their managers are probably a bunch of assholes, but that won't stop wee little folk like we little folk from getting hurt.

Shaman says

That means your million dollar shack will be worth $1.5 million, but your $800,000 debt will be “worth” $600,000 in inflation adjusted value.

If your pay or income keeps up with the ability to service the shrunken debt. Like, no disruption in employment, no haircut in retirement income, no tax increases.

Can you say, "Stagflation?".

B.A.C.A.H. says

Shaman says

We will see at least 50% inflation from 2020-2026

If my arithmetic using the exponential is right, 50% price rise in 6 years is 6.7% annualized. Yikes.

We are in for massive inflation.

I need to post the national debt priced in commodities over the last 100 years or so. The pattern is clear. $100 will buy you a cup of coffee in 2030.

People who are unaware of Hayek or Mises have no idea what is coming. Austrian economics is NOT a system, it's a science, the science of what happens in any market. Communist, free market, fascist, kleptocracy, anything. Economics is the study of how people interact in groups, it's almost psychology. Keynesianism is a system, a failed one. It was designed to fail. Given power to a centralized authority always results in a calamity because power always corrupts.

DooDahMan says

Inflation will be higher for longer — and you’re not going to like what comes next

Prices for oil, natural gas, food and other goods will stay elevated while economic growth slides, bringing stagflation. Let’s review six factors now shaking the U.S. and global economies that set the stage for stagflation:

1. Oil

2. Natural gas

3. Food

4. Interest rates

5. Supply-chain problems

6. Deglobalization

https://www.marketwatch.com/story/6-reasons-inflation-will-stick-around-longer-and-youre-not-going-to-like-what-comes-after-11653415808?mod=home-page

Two economic indicators do not play well in regard of my knowledge of economy.
This is:
1. Price of Gold. Investor usually run up gold prices to avoid inflation burn. Not this time.
2. Price of 10y. Treasury Bonds. This is typical money parking for big investors. They went up but well below when they should be. Usually, they exceed inflation by about 1.3%
Is then inflation seen as a very short event?

https://finance.yahoo.com/news/may-inflation-data-june-10-2022-212834308.html

Inflation hits 40-year high as CPI rises 8.6% in May

So wall street takes a dump because they think that the federal reserve is maybe possibly going to do the right thing and jack up interest rates more than .5% next week?

I think I've read more than half of the US dollars are outside of the US.

But I think maybe they're referring to physical paper bills, like 100's or whatever. Maybe if we include all the credit and whatnot it's a lot more than half.

So now that we've been asleep at the wheel, distracted by COVID and Gun Nuts and The Kardashians and Same Sex Marriage and Trannies and Abortion RIghts, we allowed the fate of our currency to get outside of our control. It's our own fault. The federal reserve board can peg its overnight loan rate and tweak its Balance Sheet, but most of the dollars are outside its control. I suppose it's like steering a motorboat in front of a 100 meter tall rouge wave. (Or maybe in our case, a McMansion cruise liner packed with obese leisure travelers).

Obligatory:

Gimme stimmy!

https://nypost.com/2022/06/10/inflation-costing-americans-an-extra-460-per-month-analysis/

Inflation costing Americans an extra $460 per month, analysis says

https://boriquagato.substack.com/p/the-real-economy

https://www.dailywire.com/news/shrinkflation-cereal-brand-cuts-amount-per-box-by-17-toilet-paper-brand-slashes-roll-size-24

Shrinkflation: Cereal Brand Cuts Amount Per Box By 17%; Toilet Paper Brand Slashes Roll Size 24%

These numbers look low to me:

Patrick says

https://nypost.com/2022/06/10/inflation-costing-americans-an-extra-460-per-month-analysis/

Inflation costing Americans an extra $460 per month, analysis says

I'm thinking that it is more than that. Maybe for just food or gas alone?

I also think inflation is clearly far higher than the supposed 8.5%.

.
CPI (government reported inflation) was about 2.3% a year since the mid 1990s to 2021 :-/

;


,

https://thegoodcitizen.substack.com/p/i-am-uncle-sams-inflation

https://notthebee.com/article/come-read-this-thread-on-why-inflation-is-way-worse-than-theyre-telling-you

https://notthebee.com/article/the-university-of-michigans-legendary-consumer-sentiment-index-is-at-its-lowest-level-in-40-years-of-surveys

Patrick says

notthebee.com/article/come-read-this-thread-on-why-inflation-is-way-worse-than-theyre-telling-you

Where did all the money go ?

If all the new money pumped up housing that means housing prices need to return to early 2020 price levels ?

So the S&P 500 (around 4000 points) needs to return to the February 2020 level (around 3300 points) ?

.

Patrick says

I also think inflation is clearly far higher than the supposed 8.5%.

No doubt about it. Closer to 15-20%.

Don't forget Shrinkflation and Hedonics.

Patrick says

https://thegoodcitizen.substack.com/p/i-am-uncle-sams-inflation

.

Where did all the money go ?

If all the new money pumped up housing that means housing prices need to return to early 2020 price levels ?

So the S&P 500 (around 4000 points) needs to return to the February 2020 level (around 3300 points) ?

.

https://adventuresincapitalism.com/2022/06/13/volcker-and-inflation/

Here’s my alternative view; what if monetary actions mostly serve to impact the price of risk assets, while fiscal mostly impacts the economy’s growth rate, and government policy mostly controls for inflation? As I’ve experienced the interplay of these three factors over more than two decades as an investor, I increasingly think that this is the case.