Economy GOP back to Inflation worries. "Hyperinflation" (Update: 2022 Inflation Highest in 40 Years)

[Jack V Savage]

I think the uptick in stocks had more to do with market stability post trumps trade war with china.

I don't believe we're going to see any noticeable inflation for 2 or 3 years. So in that aspect, i agree with you.

Talking about the uptick after last March.

It's not really me doing my own analysis and projecting low to normal inflation for the foreseeable future. I'm just saying that inflation expectations implied by markets are a much better guess than the wild claims of anonymous buffoons in the WR.

 

[SakurabasEar]

Talking about the uptick after last March.

It's not really me doing my own analysis and projecting low to normal inflation for the foreseeable future. I'm just saying that inflation expectations implied by markets are a much better guess than the wild claims of anonymous buffoons in the WR.

I'm certainly no economist, but i do consider myself conservative so i don't typically like wild spending. In this case though, alot of the economists I've read don't seem to be as worried as i would expect after the latest stimulus.

So in that case yeah I'm not trying to freak out about this like some sources on my side tend to be doing. We are achieving market stability early on, which is good. But there still seems to be speculation on both sides (who are knowledgeable) that 2-3 years from now may be a different story.

 

[Jack V Savage]

I'm certainly no economist, but i do consider myself conservative so i don't typically like wild spending. In this case though, alot of the economists I've read don't seem to be as worried as i would expect after the latest stimulus.

So in that case yeah I'm not trying to freak out about this like some sources on my side tend to be doing. We are achieving market stability early on, which is good. But there still seems to be speculation on both sides (who are knowledgeable) that 2-3 years from now may be a different story.

Expectations implied by markets show low inflation over the next 10 years and more. But within that period, there will be some variation. I think we're set up for a very fast recovery, and as the economy booms, there will probably be a period of above-average inflation (basically compensating for a long period of below-average inflation, though). But hyperinflation is, IMO, a crazy prediction, and even, say, 5%-plus for a short period seems highly unlikely.

On the other hand, the developed world was way excessively worried about inflation after the GFC, which led to an unnecessarily prolonged recovery (we did better than almost anyone in America, but the GOP still blocked stimulus after the first round). Policymakers learned their lesson (for now), and we've had a much stronger response this time, and I again think that we won't see any real negative impact. Could be that that leads opinions to sway the other way so that policymakers are excessively willing to risk inflation. If the boom that follows the relief and (hopefully) infrastructure packages causes Democrats to buck trends and hold a governing majority after 2022, they could become much bolder. But that's separate from anything that's happening now.

 

[Denter]

Stocks (rationally) soared when it was clear that we'd have a strong fiscal response to the downturn. We're set for a big boom now. See above. If there were any reasonable expectation of hyperinflation, you'd see it reflected in debt markets. But you don't. Since I know you won't put your actual money where your mouth is, why don't we make a sig bet? What do you expect inflation to be over the next 12 months (or whatever time frame it is that you're saying markets are getting it wrong about)?

This is what I was getting at. If new debt, secured or not, doesn't factor in inflation, than the debtor is basically getting free money if inflation goes up significantly, or at least a very reduced interest rate. If new debt interest rates aren't going up its hard to see how anyone (much smarter people than me) expects inflation to rise.

 

[PEB]

David Parkman is an economists graduated from college with a degree an has a pretty good look at spending vs inflation. He is discussing with Kevin who leans more right in spending an inflation position. By most accounts he seems to agree with David's opinion on inflation spending. It's worth a look if interested.

 

[thehighking]

How would one profit off it?

Put all your money into property, gold and crypto.

 

[Jack V Savage]

The federal reserve lent out like $2 trillion dollars to businesses last year...

Um, OK.

 

[cottagecheesefan]

 

[Prefect]

Stocks (rationally) soared when it was clear that we'd have a strong fiscal response to the downturn. We're set for a big boom now. See above. If there were any reasonable expectation of hyperinflation, you'd see it reflected in debt markets. But you don't. Since I know you won't put your actual money where your mouth is, why don't we make a sig bet? What do you expect inflation to be over the next 12 months (or whatever time frame it is that you're saying markets are getting it wrong about)?

Big boom? On a fundamental level, you have no concept of how bad business is right now.

 

[Jack V Savage]

Big boom? On a fundamental level, you have no concept of how bad business is right now.

Do you want to make a prediction and bet? Surely if you're right, it will show at some point in the future?

 

[Prefect]

Do you want to make a prediction and bet? Surely if you're right, it will show at some point in the future?

Betting with you would be pointless because you are still arguing that inflation is only around 1% and the CPI, which is a benchmark for employers COLA raises, is outpacing inflation and people's standards of living are rising. You are dishonest or just disconnected from the world. My brother's sister in-law works at a bank and they are lining up all the foreclosure documentation pre-emptively for when the housing bubble pops. Banks don't do that in a good economy. You can say all you want how good the economy is if but it doesn't make it reality.

 

[Jack V Savage]

Betting with you would be pointless because you are still arguing that inflation is only around 1% and the CPI, which is a benchmark for employers COLA raises, is outpacing inflation and people's standards of living are rising. You are dishonest or just disconnected from the world. My brother's sister in-law works at a bank and they are lining up all the foreclosure documentation pre-emptively for when the housing bubble pops. Banks don't do that in a good economy.

I'm still arguing that inflation is what the numbers show it. How dishonest and disconnected from the world of me. The honest, connected thing to do apparently would be to just make up numbers if the real numbers aren't what I want them to be. And refusing to provide any way to check one's claims is also apparently honest and connected.

BTW, if inflation spikes, that's good for people who have debt, so your reasoning is exactly backwards.

 

[Prefect]

I'm still arguing that inflation is what the numbers show it. How dishonest and disconnected from the world of me. The honest, connected thing to do apparently would be to just make up numbers if the real numbers aren't what I want them to be.

BTW, if inflation spikes, that's good for people who have debt, so your reasoning is exactly backwards.

IInflationary spikes don't help when they are offset by real income not keeping up with inflation.

 

[Jack V Savage]

IInflationary spikes don't help when they are offset by real income not keeping up with inflation.

Huh?

Also, what would cause inflation to rise would be the economic booming. Your whole model is nonsense (though not as bad as your model of honesty, where you think that lying is honest if the truth is unfavorable to your position).

 

[Prefect]

Huh?

Also, what would cause inflation to rise would be the economic booming. Your whole model is nonsense (though not as bad as your model of honesty, where you think that lying is honest if the truth is unfavorable to your position).

The idea that inflation can be good and a means of relieving the burden of debt is almost the textbook reason given as to why a country destroyed its currency. Name me a country that used inflation to relieve the burden of debt and it didn't also correspond to a decline in effective wages.

 

[Jack V Savage]

The idea that inflation can be good and a means of relieving the burden of debt is almost the textbook reason given as to why a country destroyed its currency. Name me a country that used inflation to relieve the burden of debt and it didn't also correspond to a decline in effective wages.

That's not what I said. Your argument was that some guy you know is preparing for defaults so the evidence on inflation should be ignored, and it should be expected to be high. I'm saying that if it turns out that inflation rises more than markets expect them to, that will lead to lower mortgage defaults.

I also asked you to make some kind of prediction so we can test your theory, but you refused, which suggests to me that you know on some level that you're bullshitting. And you accused me of dishonesty because I prefer to look at the numbers rather than just make stuff up. It seems to me, again, that you're not really interested in understanding anything or trying to believe and say things that are true. You're just trying to kind of signal a general unhappiness with the world.

 

[Prefect]

That's not what I said. Your argument was that some guy you know is preparing for defaults so the evidence on inflation should be ignored, and it should be expected to be high. I'm saying that if it turns out that inflation rises more than markets expect them to, that will lead to lower mortgage defaults.

I also asked you to make some kind of prediction so we can test your theory, but you refused, which suggests to me that you know on some level that you're bullshitting. And you accused me of dishonesty because I prefer to look at the numbers rather than just make stuff up. It seems to me, again, that you're not really interested in understanding anything or trying to believe and say things that are true. You're just trying to kind of signal a general unhappiness with the world.

Oh, tell us how a rapid 40% increase in the money supply won't have any ramifications.

 

[Jack V Savage]

Oh, tell us how a rapid 40% increase in the money supply won't have any ramifications.

Are you actually interested in figuring out why the bump in M1 will not lead to high inflation or are you just throwing out more bullshit hoping something will stick? You might want to memorize this identity: the money supply times the rate of spending will equal prices times output (nominal GDP). So the money supply rising could lead to higher prices, but there are other ways for it to resolve. That's just logic (and definitions). If you want to know what's going to happen, you'll have to wait (though given your blind assertion that the numbers can't be trusted, you'll never admit it), but consistently my point has been that markets are the best guide to what to expect.

 

[Scheme]

Are you actually interested in figuring out why the bump in M1 will not lead to high inflation or are you just throwing out more bullshit hoping something will stick? You might want to memorize this identity: the money supply times the rate of spending will equal prices times output (nominal GDP). So the money supply rising could lead to higher prices, but there are other ways for it to resolve. That's just logic (and definitions). If you want to know what's going to happen, you'll have to wait (though given your blind assertion that the numbers can't be trusted, you'll never admit it), but consistently my point has been that markets are the best guide to what to expect.

The rate of spending is strongly linked to money supply. Why would we print money if no one was going to use it?

As I broke down earlier, the major costs of all Americans have gone up way past inflation. Housing, medical care and education are the major debts that Americans have and they have all outgrown inflation by at least 7% YOY. This has real consequences, like people becoming bankrupt from medical expenses, huge amount of student loan debt and millennials struggling to afford housing. These are problems that are at an all time high and you don't think they are strongly linked to inflation?

We've also gotten away with feeling some of the effects of inflation because of two main reasons: technology and cheap products from China. But technology is slowing down and the China sinkhole can only make things so cheap for so long (they are also adversarial in nature so depending on them in the long run is not a good idea).

 

[Pride23]

BTW, if inflation spikes, that's good for people who have debt, so your reasoning is exactly backwards.

Just browsing through and this caught my eye. That seems debatable no?

Wouldn't it depend on the debt and the situation. How would the cost of commonly consumed items going up help people whom already have racked up debt and are living beyond their means, can't even afford living pay check to pay check as it is. They will just go further into debt right?.