Inflation Rate (CPI) at 4.2%

[karasan]

I know dude but the problem is everyone is way too early on that call.

We are still not ‘there’ yet.

We were tapping 15%s like pros in the 70s and we didn’t collapse. We were tapping 8s in the 80s and we still soldiered on.

We hit 4% for 3 months for the first time in 30yrs and people are going apeshit like it’s the end of the world lol.

Fuel is still cheap. Food is still cheap. Energy. Internet. All cheap.

Americans took to the streets for BLM. When you see 10x the number of protestors every single day protesting about lack of jobs, poor wages, food shortages, THEN you know we are ‘there’.

Maybe by 2025 we will be feeling a bit of pain and perhaps nearing 2028 we will be in the shit. Weimar took a decade to play out and it only hyperinflated in the final year.

What about accumulated debt? Credit dependent growth, near zero interest rates for so long, much more competitive international trade?
You can't bath in the same river twice.

[GigantorX]

I'd they are admitting 6.2% you can safely assume it's 10-15%.

Problem is you cant "fix" this with interest rates from the Fed Reserve. It's disconnected from that now....or close to it.

Also, even a .25 point hike would tank the markets.

[loco]

"The conventional wisdom among bestselling financial writers of the seventies and eighties was that unemployment and recession would get so bad that the fiscal and monetary floodgates would be thrown open to avert depression, bringing on inflation.

To fight it, the Fed would slam on the brakes and throw the country into an even greater slump requiring even more stimulus, causing even worse inflation, requiring even tougher brake slamming...and around and around it would go, inflation, recession, inflation, recession, getting ever worse.

The "malarial economy," Howard Ruff and others dubbed it, alternating chills and fever and, eventually, collapse.  Ruff wrote How to Prosper During the Coming Bad Years and (when they didn't come) Survive and Win in the Inflationary Eighties (which proved to be highly desinflamatory).

Douglas Casey cashed in with Crisis Investing.  Ravi Batra hit #1 in 1987 with The Great Depression of 1990 (unemployment was 5.6% in 1990), the same year James Dale Davison and William Rees-Mogg weighed in with The Great Reckoning: Protecting Yourself in the Coming Depression followed by Blood in the Streets: Investment Profits in a World Gone Mad."

- Andrew Tobias, The Only Investment Guide You'll Ever Need

[residue]

No one demanded that she take that job.

So how can she demand that the government set the salary requirements for something that you just admitted is her hobby and not her life’s work?

There are tens of thousands of liberal arts graduates working....for Uber.

You're right no one demanded she took the job, which is what folks aren't doing now and employers are crying about it

[OneMoreRep]

You can't bathe with same water twice.

One of my favorite Heraclitus' quotes! Fantastic use of it sir.

"1"

[Walter Sobchak]

You're right no one demanded she took the job, which is what folks aren't doing now and employers are crying about it

So the people who AREN’T taking jobs are demanding a living wage.

Probably makes sense to a brain dead liberal.

[Walter Sobchak]

I'd they are admitting 6.2% you can safely assume it's 10-15%.

Problem is you cant "fix" this with interest rates from the Fed Reserve. It's disconnected from that now....or close to it.

Also, even a .25 point hike would tank the markets.

Don’t put it past the RAPIST BIDEN ADMINISTRATION to try to slow down inflation and prop up the economy by starting an armed conflict.

[karasan]

One of my favorite Heraclitus' quotes! Fantastic use of it sir.

"1"

They say history repeats itself, and it sure does, but in longer stretches of time.

[Mayday]

What about accumulated debt? Credit dependent growth, near zero interest rates for so long, much more competitive international trade?
You can't bath in the same river twice.

Using only debt approx 3.8yrs to most likely max out debt/gdp but when you combine printing you can extend that out further.

It’ll be death by a thousand paper cuts and then BAM insolvency overnight and your head is chopped off. Bond rates won’t show it but the credit markets will as costs to insure debt will skyrocket.

You can break that down like this:

28T debt paying 1.5% interest on a 30Y bond is 420B (0.42T).

The US economy is 22T for arguments sake so the interest component would be 1.9% of GDP with total debt being 130% of GDP.

US tax revenues are around 3.7T making interest repayments 11% of govt revenues. That’s really the key part in answering your question as this is how they service debt from revenue. In other words today it’s a non-issue for servicing debt.

So what level would it really hurt at? Well Greece is proper fucked and they are at 180% meanwhile Japan has been at stagflation for decades sitting at 230%. I’d say let’s assume 230% debt to GDP as a ceiling.

M2 is 20T and we are adding 4T a year but it costs more than that so let’s say 6T per year to keep the GDP fixed at 22T. Debt maxed at 230% = 51T-28T/6=3.8yrs using only bonds to raise enough debt to keep afloat.



Hence why I say people get all these collapse calls wrong all the time.  If I stand outside and say it’ll rain I’ll eventually be correct but that doesn’t mean I have any understanding or knowledge about the weather system. I just kept guessing.

[karasan]

Using only debt approx 3.8yrs to most likely max out debt/gdp but when you combine printing you can extend that out further.

It’ll be death by a thousand paper cuts and then BAM insolvency overnight and your head is chopped off. Bond rates won’t show it but the credit markets will as costs to insure debt will skyrocket.

You can break that down like this:

28T debt paying 1.5% interest on a 30Y bond is 420B (0.42T).

The US economy is 22T for arguments sake so the interest component would be 1.9% of GDP with total debt being 130% of GDP.

US tax revenues are around 3.7T making interest repayments 11% of govt revenues. That’s really the key part in answering your question as this is how they service debt from revenue. In other words today it’s a non-issue for servicing debt.

So what level would it really hurt at? Well Greece is proper fucked and they are at 180% meanwhile Japan has been at stagflation for decades sitting at 230%. I’d say let’s assume 230% debt to GDP as a ceiling.

M2 is 20T and we are adding 4T a year but it costs more than that so let’s say 6T per year to keep the GDP fixed at 22T. Debt maxed at 230% = 51T-28T/6=3.8yrs using only bonds to raise enough debt to keep afloat.



Hence why I say people get all these collapse calls wrong all the time.  If I stand outside and say it’ll rain I’ll eventually be correct but that doesn’t mean I have any understanding or knowledge about the weather system. I just kept guessing.

I am out of my depth to follow your calculation but thanks anyway.
You are so right about doom and gloom economists, if you listen them you are out of any opportunity to invest and get your share from cycles.
Take Peter Schiff, he is preaching about dollar collapse for over a decade.
Even if this eventually happens, you don't gain much with such outlook.

[Primemuscle]

According to Zillow the value of my house increased by nearly $50,000. in the last 30 days or 7.1%. That's just crazy! Homes around here are selling over asking price with bidding wars as soon as they hit the market. A for sale sign goes up and a couple of days later there's a pending sticker on it. If this isn't inflation, I don't know what is.

Of course there's no point in selling unless I planned to move somewhere where I can get more house for the money or if I wanted to downsize and invest the proceeds elsewhere.

The two bags of groceries I bought the other day came to $72. and I didn't buy any meat because I did that already at Costco where I spent $150 for meats and cheeses plus some pesto and a jar of bruschetta topping. Heck, it costs me around $100 a month to feed my Rat Terrier, but she's a picky eater and gets Sojos high end freeze dried dog food, which runs just over $80. for a 7 lb. bag.

[Hypertrophy]

According to Zillow the value of my house increased by nearly $50,000. in the last 30 days or 7.1%. That's just crazy! Homes around here are selling over asking price with bidding wars as soon as they hit the market. A for sale sign goes up and a couple of days later there's a pending sticker on it. If this isn't inflation, I don't know what is.

Of course there's no point in selling unless I planned to move somewhere where I can get more house for the money or if I wanted to downsize and invest the proceeds elsewhere.

The two bags of groceries I bought the other day came to $72. and I didn't buy any meat because I did that already at Costco where I spent $150 for meats and cheeses plus some pesto and a jar of bruschetta topping. Heck, it costs me around $100 a month to feed my Rat Terrier, but she's a picky eater and gets Sojos high end freeze dried dog food, which runs just over $80. for a 7 lb. bag.

It's a bubble, not inflation.


https://wolfstreet.com/2021/04/27/the-most-splendid-housing-bubbles-in-america-house-price-inflation-ignored-by-cpi-april-update/

[Mayday]

It’s inflation of financial assets as a result of QE, low rates and loosening of debt.

The rich love it because they get rich.

The poor love it because they get a lot more money than they used to.

The middle class get swelling debt, no pay rise and an increased risk of being made redundant.


Middle class gunna get nuked!