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Old 05-06-2021, 10:27 AM   #21
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Luckily I bought my saltwater access home last year, I don’t think I could have afford it now. Thankfully Florida has a homestead exemption that limits how much my taxes can go up a year.
This is one of my bigger concerns...property taxes. Yes, some places have decent restrictions in place to limit rapid increases, but not all.
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Old 05-06-2021, 12:01 PM   #22
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We are thankful that we have the resources to withstand unwanted inflation.

The flip side is that we have been retired for nine plus years. During that time we have experienced a winning combination of low inflation and high investment returns.

My thoughts go to those on a small, fixed income with little no adjustments for COL. The COL increases for people in that position is always higher than the published COL increase.
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Old 05-06-2021, 12:08 PM   #23
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It's here now but nothing like what's coming over the next few years.... Worried? I worry less about that sort of thing every year now.
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Old 05-06-2021, 12:48 PM   #24
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There will be some pensioners that won't be happy.
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Old 05-06-2021, 12:51 PM   #25
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If inflation or whatever other possible calamity is so widely expected that there's nowhere to run and nowhere to hide, then what's the point of worrying about it? Just pessimism for the sake of it?
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Old 05-06-2021, 12:53 PM   #26
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“Yes, there will be a lot” is not a meaningful answer. People expressing concern about future very high inflation should also share how high and over what period of time.

I think there’s a fair chance CPI may peak at 3% or a bit higher this year, while average CPI will be below that, and next year average inflation will be below the average for 2021.

US capacity utilization is at 73%, which is low. Europe has a similar level, except Germany, which is higher. China has a level in the same range as US. This means business around the world can increase production without having to add new capacity, which points toward a steady price level.
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Old 05-06-2021, 01:22 PM   #27
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“Yes, there will be a lot” is not a meaningful answer. People expressing concern about future very high inflation should also share how high and over what period of time. ...
Really? To be permitted to be concerned, the person must give you a specific scenario? IOW they must predict the future? They must be able to time the inflation market? That's a pretty high bar.

I would not use the phrase "will be" but I would certainly say there "might be." I don't have a clue how much, when, or have a probability number. Pressed, I might offer something like "at least triple the Fed's targets and for a couple of years" as an example of something to be worried about. Or I might set the threshold at 10% plus. But that is not predicting; it is simply identifying possibilities.

I was in Zimbabwe a few years ago and talking to a woman who had lived through their 2007-2009 hyperinflation. She was working in a store at the time and they were repricing three times a day, never really knowing what the right prices were. Some might worry about scenarios like that in the US. I still have a packet of fresh new Zim genuine currency, a billion or two Zim dollars, that I bought for one USD.
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Old 05-06-2021, 01:29 PM   #28
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Really? To be permitted to be concerned, the person must give you a specific scenario? IOW they must predict the future? They must be able to time the inflation market? That's a pretty high bar.
+1


Similar to your Zimbabwe example, back in the day when I was working, I recall the salaries of some of our employees "doubling" one or two years in a row due to run away inflation in their country. (in South America) I remember talking to some of them about how it was affecting so many of their friends and particularly hard on retirees living on fixed incomes in their country... Fortunately for them, the mega corp they were working for kept them near even.


Could it happen here in the US? Absolutely...
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Old 05-06-2021, 01:31 PM   #29
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Really? To be permitted to be concerned, the person must give you a specific scenario? IOW they must predict the future? They must be able to time the inflation market? That's a pretty high bar.
You’re just looking for an argument. The intent of my post was clear. “A lot” is far too vague for a discussion that would include measurable or actionable conclusions.

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I was in Zimbabwe a few years ago and talking to a woman who had lived through their 2007-2009 hyperinflation. She was working in a store at the time and they were repricing three times a day, never really knowing what the right prices were. Some might worry about scenarios like that in the US. I still have a packet of fresh new Zim genuine currency, a billion or two Zim dollars, that I bought for one USD.
Zimbabwe is often mentioned when the topic is inflation. It has no relevance to the US or any modern industrialized economy.
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Old 05-06-2021, 01:34 PM   #30
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Not worried about something I cannot change. Not concerned, not bothered, not staying up at night.

Two cars that are only 2 yrs old with less than 8k miles, paid for house, Medicare and Tricare, a comfortable nest egg - If inflation hurts us then more than 75% of the people in the country will already have one foot in the toilet. Isn't that how we were supposed to plan for retirement?



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Old 05-06-2021, 01:34 PM   #31
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“Yes, there will be a lot” is not a meaningful answer. People expressing concern about future very high inflation should also share how high and over what period of time.
While I agree that "Yes, there will be a lot" is not meaningful, you might be asking for a level of specificity that would be difficult to express without using broad ranges. For example, I'd say that an average level of 5% CPI increase over 5 years would very negatively impact the youbet household budget, at least on the spending side. But so would 4% over 6 years and 6% over 4 years. Etc.
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I think there’s a fair chance CPI may peak at 3% or a bit higher this year, while average CPI will be below that, and next year average inflation will be below the average for 2021.
Well, that seems like a good guess Michael. Our rolling 12 month increase (through March) is 2.6%. March alone was 0.6%.
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US capacity utilization is at 73%, which is low. Europe has a similar level, except Germany, which is higher. China has a level in the same range as US. This means business around the world can increase production without having to add new capacity, which points toward a steady price level.
That would only be true if the low capacity utilization is caused by lack of demand, which is not completely true. Much of the capacity utilization issues we have today are being caused by lack of labor and lack of key materials.

I'm not looking for so-called "hyper-inflation." But I do think we're going to have some low-mid single digit levels of inflation for a few years that won't be as transient as Chairman Powell is projecting.

It'll be fun to watch!
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Old 05-06-2021, 02:01 PM   #32
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While I agree that "Yes, there will be a lot" is not meaningful, you might be asking for a level of specificity that would be difficult to express without using broad ranges. For example, I'd say that an average level of 5% CPI increase over 5 years would very negatively impact the youbet household budget, at least on the spending side. But so would 4% over 6 years and 6% over 4 years. Etc. Well, that seems like a good guess Michael. Our rolling 12 month increase (through March) is 2.6%. March alone was 0.6%.
There was no expectation of a prediction, just an effort to put some substance to the conversation. Your examples are quite good
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That would only be true if the low capacity utilization is caused by lack of demand, which is not completely true. Much of the capacity utilization issues we have today are being caused by lack of labor and lack of key materials.
I agree that right now there are shortages, and if they were to persist, inflation would probably push up higher and stay there longer - to the levels of your earlier example. Our difference is I think that’s not going to happen.

Quote:
I'm not looking for so-called "hyper-inflation." But I do think we're going to have some low-mid single digit levels of inflation for a few years that won't be as transient as Chairman Powell is projecting.

It'll be fun to watch!
I agree there’s a chance this scenario happens. Just how much fun depends on how portfolios react.
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Old 05-06-2021, 02:02 PM   #33
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“Yes, there will be a lot” is not a meaningful answer. People expressing concern about future very high inflation should also share how high and over what period of time.
Really? I didn't know that we had to come up with concrete numbers to express concern. If the experts can't come up with a number, why should a forum member have to?

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You’re just looking for an argument. The intent of my post was clear. “A lot” is far too vague for a discussion that would include measurable or actionable conclusions.
Too vague, eh? How can someone come up with a single concrete number when it involves MANY factors (food, textiles, cars, housing, and how many hundreds more?)...I wouldn't even know where to start.

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Really? To be permitted to be concerned, the person must give you a specific scenario? IOW they must predict the future? They must be able to time the inflation market? That's a pretty high bar.
I guess we are now required to use a crystal ball when contributing.
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Old 05-06-2021, 02:04 PM   #34
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Snark and sarcasm does not lead to a thoughtful exchange.
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Old 05-06-2021, 02:07 PM   #35
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Snark and sarcasm does not lead to a thoughtful exchange.
OK. Translation lost in the internet, I suppose. I was asking honest questions.

Anyway, so you are adamant that a conversation is useless unless we cite numbers then I "see" inflation of about 5-7% over the next 18 months.
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Old 05-06-2021, 02:08 PM   #36
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That would only be true if the low capacity utilization is caused by lack of demand, which is not completely true. Much of the capacity utilization issues we have today are being caused by lack of labor and lack of key materials.

I'm not looking for so-called "hyper-inflation." But I do think we're going to have some low-mid single digit levels of inflation for a few years that won't be as transient as Chairman Powell is projecting.

It'll be fun to watch!
Speaking of materials, copper price is now $4.5/lb (was 1/2 that last year), and expected to go to almost $6/lb in a few months. And we all know about the higher cost of lumber.

Speaking of labor, there's a headline on the Web about a trucking company offering pay of $14,000/week for truck drivers. Repeat, that's $14K/week, not per month. Crazy!
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Old 05-06-2021, 02:15 PM   #37
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Here are some sobering YTD inflation stats..

Beef: + 12.40%
Poultry: +18.80%
Lean Hogs: +58.52%
Canola: +59.35%
Wheat: +19.48%
Coffee: +16.57%
Sugar: +13.49%
Corn: +57.02%
Wool: +12.64%
Lumber: +90.47% (!!) after a crazy 2020 on top of that..roughly triple 2 years ago
Milk: +21.20%
Gas: +50.03%
Heating Oil: +34.35%

...etc. More at https://tradingeconomics.com/commodity/gasoline

Pretty much, no matter WHAT any of us do with our portfolios or investing strategy, we're all pretty much in a heap of trouble with numbers like that.

And with that many moving pieces and parts, predicting an "average" future rate - or even a range - becomes darn near impossible, IMHO.

In terms of actionable to-dos..I recently bought PIMCO's Inflation Protection (Instl) fund and some IAU (Gold-backed ETF), but wish I bought more of both as they've both increased in price quite a bit since I bought and I'm now wishing I had more than I do of both. I also have little faith in US growth going forward and am pretty convinced we're going to be looking at the mother of all market meltdowns in 2021 or 2022..so am investing in International Value, US Value, China, Utilities and other areas to diversify away from US large-cap growth.

I heard a good analyst say the other day that his strategy (and one he advocates for clients) is to shift from capital growth to capital preservation given what he anticipates coming (also huge market melt-down in the near term). I personally think there's a lot to be said for that and plan to shift my own assets largely this way..
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Old 05-06-2021, 02:18 PM   #38
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Really? I didn't know that we had to come up with concrete numbers to express concern. If the experts can't come up with a number, why should a forum member have to?
I think it's widely known that most economists lurk on this forum to harvest information they later present as their own. If forum members don't "come up with a number," then economists won't have anything to say. Come on ExFlyBoy5, get with the program and contribute!
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Old 05-06-2021, 02:20 PM   #39
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Try buying plywood or a new car right now if you enjoy sticker shock...
Was going to do some building additions at the Farm plus plus DW is thinking we have 150k miles on our 'city car'. Talking but not actively shopping yet!

Heh heh heh - Back in workerbee days I remember the 70's inflation. I toyed with the Harry Browne portfolio back then with higher doses of gold/pm, RE, and commodities. But toward the end leaned 60/40 with rental RE and coins on the side. Today ?? Expect inflation but a number??
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Old 05-06-2021, 02:21 PM   #40
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Originally Posted by 24601NoMore View Post
Here are some sobering YTD inflation stats..

Beef: + 12.40%
Poultry: +18.80%
Lean Hogs: +58.52%
Canola: +59.35%
Wheat: +19.48%
Coffee: +16.57%
Sugar: +13.49%
Corn: +57.02%
Wool: +12.64%
Lumber: +90.47% (!!) after a crazy 2020 on top of that..roughly triple 2 years ago
Milk: +21.20%
Gas: +50.03%
Heating Oil: +34.35%

...etc. More at https://tradingeconomics.com/commodity/gasoline
...
The above numbers are bad, but I am going to check them against their pre-Covid values.

Many commodities went down because of lack of demand, and their recovery may make the price increase looks bad.
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