Where Are The ET Inflation Bulls???
- Thread starter Landis82
- Start date
<i>"smilingsynic, your voice of objective reason is a nice change here on ET, at least in my ears!"</i>
agreed, and makloda's input is always well-thought out and respectful, too.
*
Regardless of why inflation is an issue right now, inflation is an issue. Doesn't matter what drove fuel, heating and food costs to the current levels they reside at on a consumer's level.
The fact remains that consumers will consume less because their finite budget will not allow more. Unlike the Fed, joe sixpack cannot print his own money supply... or at least remain out of federal prison while passing it off.
So joe & jane average will dine out less, drive less, remain closer to home for vacations, repair the old vehicle instead of replacing with new, run fans instead of air-conditioning in the house, shop wiser at the grocery store, curtail impulse purchases and most of all... cut back dramatically on Christmas shopping.
It's not like J&J Average want to make these cutbacks... they are forced to. A capped income and uncapped expense budget doesn't allow anything else. So... consumers pull in the horns and business cycle all thru the chain of supply feels the pinch.
What part about that natural process is not deflationary? Regardless of why inflation has arrived, here it is. A one-time welfare "stimulus" package check will only create a blip of spending ahead. Most of that public graft will trickle into already existing debt of some form or another.
Inflation leads to deflation. That's why the FOMC #1 priority is to fight inflation. Greenspan and Bernanke both failed miserably to do so. Therefore, here it is.
agreed, and makloda's input is always well-thought out and respectful, too.
*
Regardless of why inflation is an issue right now, inflation is an issue. Doesn't matter what drove fuel, heating and food costs to the current levels they reside at on a consumer's level.
The fact remains that consumers will consume less because their finite budget will not allow more. Unlike the Fed, joe sixpack cannot print his own money supply... or at least remain out of federal prison while passing it off.
So joe & jane average will dine out less, drive less, remain closer to home for vacations, repair the old vehicle instead of replacing with new, run fans instead of air-conditioning in the house, shop wiser at the grocery store, curtail impulse purchases and most of all... cut back dramatically on Christmas shopping.
It's not like J&J Average want to make these cutbacks... they are forced to. A capped income and uncapped expense budget doesn't allow anything else. So... consumers pull in the horns and business cycle all thru the chain of supply feels the pinch.
What part about that natural process is not deflationary? Regardless of why inflation has arrived, here it is. A one-time welfare "stimulus" package check will only create a blip of spending ahead. Most of that public graft will trickle into already existing debt of some form or another.
Inflation leads to deflation. That's why the FOMC #1 priority is to fight inflation. Greenspan and Bernanke both failed miserably to do so. Therefore, here it is.
<i>"Austin, you can list as much anecdotal evidence for 'rampant inflation due to massive liquidity pumping by the Fed' as you want, it doesn't make the case any more convincing."</i>
I said that the reason(s) for inflation arrival and entrenchment are irrelevant. It is here, it exists, it impacts the consumer at core levels. The CPI and PPI can be shoved up the fed's API until the sun never shines any more. Fact remains someone somewhere failed to contain inflation.
Semantics be damned, finger-pointing is moot. The fed did not successfully fight inflation and they are not effectively fighting it now. A brief blip in commodity price retraction due to one publicly failed bank behemoth (others probable to follow) will not give consumers permanent inflationary relief.
Basically, it's now beyond the fed's control. Our economy will deal with it. No sustained economy can remain dependent on consumer debit-spending anyway. Eventually the debt becomes due. That time has now arrived, so we'll all see what happens next.
I said that the reason(s) for inflation arrival and entrenchment are irrelevant. It is here, it exists, it impacts the consumer at core levels. The CPI and PPI can be shoved up the fed's API until the sun never shines any more. Fact remains someone somewhere failed to contain inflation.
Semantics be damned, finger-pointing is moot. The fed did not successfully fight inflation and they are not effectively fighting it now. A brief blip in commodity price retraction due to one publicly failed bank behemoth (others probable to follow) will not give consumers permanent inflationary relief.
Basically, it's now beyond the fed's control. Our economy will deal with it. No sustained economy can remain dependent on consumer debit-spending anyway. Eventually the debt becomes due. That time has now arrived, so we'll all see what happens next.
Inflation in terms of commodities prices is easily remedied: grow more supply to meet the demand. It is harder to do with crude, since we don't have enough here to meet our needs, but for most commodities, the cure for high prices is high prices.
If inflation is indeed a systemic problem, bring back Volcker (lol) and raise interest rates until the problem goes away.
Deflation is much harder to combat because it is based on confidence, one of the building blocks of investment.
Increased government spending SEEMED to have worked during the Great Depression, but increased government spending is itself inflationary.
I think the history of Japan's economy post-1991 shows just how hard it is to beat deflation. No wonder the Fed fears it more than it does inflation.
If inflation is indeed a systemic problem, bring back Volcker (lol) and raise interest rates until the problem goes away.
Deflation is much harder to combat because it is based on confidence, one of the building blocks of investment.
Increased government spending SEEMED to have worked during the Great Depression, but increased government spending is itself inflationary.
I think the history of Japan's economy post-1991 shows just how hard it is to beat deflation. No wonder the Fed fears it more than it does inflation.
and that will lead to inflation! possibly a blow up later on that will end up with a depression that was trying to be avoided in the first place.
what was in 2002 when he made his helicopter talk in regards to deflation? the US was exporting inflation to 3rd world countries, thats not something that can be sustained. eventually inflation will pop up and its starting to do so now.
Inflation bulls,
How can we have inflation when the housing market (housing, after all, is the biggest family expense and, most recently, the easiest source of extra liquidity in the form of home equity loans) sucks?
After all, isn't real estate and the land itself upon which it is established the biggest commodity of all?
How can we have inflation when the housing market (housing, after all, is the biggest family expense and, most recently, the easiest source of extra liquidity in the form of home equity loans) sucks?
After all, isn't real estate and the land itself upon which it is established the biggest commodity of all?
Quote from Landis82:
Where are the ET INFLATION BULLS TODAY???
Is "Helicopter Ben" no longer pumping?
BWWWWWWAAAAAAAA!!!
Again, stop trying to forecast the long term trends of a market(s) by what happens on any given day or week.
One thing you can always guarantee with commodities is that they have horrible and vicious sell-offs when trending higher (basically the opposite to bear market short covering rallies with stocks).
The bull market is still very much on, just a retracement that's all. And when prices go a lot higher from today then again expect plenty more of these hard and fast sell-offs.
Study your market history and then you'll understand everyone (well, not everyone, but most of you).....
