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Old 02-23-2021, 11:07 AM   #41
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Originally Posted by 24601NoMore View Post
Gas here, start of year: ~$2/gal.

Gas yesterday when filling up wife's car..$2.57/gal.

$2.57 / $2 = 28.5% increase since start of year.
2.652 today
2.470 1 year ago
7.4% increase
Avg US prices per gallon.
Sourced from:
New Jersey Gas Prices - Find Cheap Gas Prices in New Jersey
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Old 02-23-2021, 11:13 AM   #42
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Originally Posted by sergio View Post
I've seen lots of arguments that most of the inflation we've experiences has been absorbed by real estate, equities, bitcoin, gold,
Yeah, none of which are reflected in CPI, GDP, or interest rates (well real estate is indirectly in CPI via rent).

Investment is the reason for this monetary policy, so I guess it's working, but this is not very productive investment.
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Old 02-23-2021, 11:45 AM   #43
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2.652 today
2.470 1 year ago
7.4% increase
Avg US prices per gallon.
Sourced from:
New Jersey Gas Prices - Find Cheap Gas Prices in New Jersey
I wouldn't look to "Gas Buddy" as a definitive source, as that's retail vs wholesale - and as we all know, retail is going to vary wildly due to big differences in state & local taxes and other reasons. Let's try actual market commodity prices for wholesale gasoline, nationally that clearly show a >31% YTD increase..see:
https://tradingeconomics.com/commodity/gasoline





I really see no point in going back and forth further on this and candidly can't fathom what point you're trying to make, as it's not supported by publicly available data. I've posted about my own experience from the upper Midwest, and retail gas is up more than 28% YTD here.

Similar data was posted up-thread by Running_Man..I assume his post was from a couple days ago, which would explain the ~2.5% delta from the numbers I posted above.

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Originally Posted by Running_Man View Post
Here are the current YTD price increases in some commodities:
Crude Oil USD/Bbl 25.99%

Natural gas USD/MMBtu 14.34%
Gasoline 28.84%
Propane USD/Gal 41.86%
...
US Houses Year over Year 10.97
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Old 02-23-2021, 02:11 PM   #44
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ERD 50 says I should post this as a warning in believing anything I would post. I allocated one percent of my portfolio to calls for 2020 and then sold all my stocks on March 5, 2020. Returned back in on June 3, 2020.

https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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Old 02-23-2021, 02:27 PM   #45
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I see cycles in that chart. And a current price that's in the range of the last 20 years. What do you see? Inflation over the last 20 years has been kind of boring, no?
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Old 02-23-2021, 02:34 PM   #46
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This is funny
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https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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Old 02-23-2021, 02:54 PM   #47
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I see cycles in that chart. And a current price that's in the range of the last 20 years. What do you see? Inflation over the last 20 years has been kind of boring, no?
The last 3 months have the fastest rising prices for Raw Materials in 20 years up 12 percent in 9 months, nearly equal to the drop in 2008 as the economy was dropping. That resulted in the FED creating QE to halt that problem (see video above), what equivalent do you think the FED will do in response to this, with 2 trillion of unfunded government spending about to hit the US economy?

In 2008, the last time raw material prices were rising this fast the 10 year treasury was trading at 4.2%, the 2010 surge which was at 1/4 the speed of this one saw 10 year treasuries increase to 3.86%.
In 2017 the 10 year went from 1.5 to 3.1 before the FED abondoned ending QE and getting to where we are today.

I will agree something is happening Mr Jones
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https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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Old 02-23-2021, 03:00 PM   #48
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Inflation typically refers to CPI over sustained periods of time, not snapshot views of specific commodity prices. So, for those who feel the rate of inflation is going to increase or already increasing:

What rate do you project for inflation and when does it reach that level?

Edit to add - the most recent BLS showed 0.3% in January and 1.4% for the previous 12 months. https://www.bls.gov/news.release/pdf/cpi.pdf
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Old 02-23-2021, 03:22 PM   #49
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Inflation typically refers to CPI over sustained periods of time, not snapshot views of specific commodity prices. So, for those who feel the rate of inflation is going to increase:

What rate do you project for inflation and when does it reach that level?
At least 3% (conservatively - possibly as much as 3.5% or higher) by end of 2021. Certain segments of the economy - housing, energy, etc - much higher, as we're already seeing.

By the end of the current administration's term (12/2024): 5 - 8% core.

The multiple, multi-trillion dollar spending bills either already passed (since 3/2020) or being talked about and likely to be passed are gonna flood the economy with newly printed $$s. That's going to hit existing savings hard (by devaluing the $$ retirees have saved) - just look at the DXY since Oct of last year, or better, Jan 2020 - DXY is down roughly 10% since then. It's also going to hit stocks as the "risk premium" gets thrown out of kilter. We're already seeing that in a big way this week with the NAS getting hit hard. Assuming inflation does rise to 3+% this year, markets are likely to get hit across the board. I know there are a lot of experts predicting 4,200 or higher on the S&P by EOY..but I just don't see it, and for that reason am investing in Value and Emerging Markets (eg: Asia, particularly China) because my faith in US equity returns (especially Growth) this year is not high..in fact, I think inflation is going to be the pin that pops the balloon and 2021 is likely to be painful in terms of US markets - JMHO and guess we'll see.

And it's not just one commodity like gas..we're seeing housing prices up +10% YTY and many other indications of significant inflation already happening since 1/1/21. Look at pretty much any commodity..lumber is crazy (thank God I didn't buy that retirement property we were going to build a new house on!). Ditto copper. Etc. Those of course hit new construction housing but food commodity and other prices are up significantly so far in 2021, and likely to go much higher with all the new spending.
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Old 02-23-2021, 03:48 PM   #50
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I prefer the personal inflation rate to any trailing selective CPI number for actual inflation. Personally I'm looking at future purchases which we'll need to make. HVAC this year, car next year, etc. These will have a significant impact was well as the taxes and various insurance policies which may be the 800# gorilla.
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Old 02-23-2021, 04:37 PM   #51
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I hope the stimulus causes some inflation. Interest rates for fixed interest investments are way too low imo.
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Old 02-23-2021, 04:54 PM   #52
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The US is dead broke. Yet, today's politicians on both sides seem to think we can just keep issuing these multi-trillion dollar (largely boondoggle) "stimulus" bills that add HUGELY to our already unsustainable debt burden.

Multi-trillion dollar lump spending (over and over again) simply can't last.

Inflation? Heck, yeah. Perhaps runaway inflation.

And even then, there won't be enough $$ to pay for everything including the interest on all that new national debt.

Eventually, the whole thing has to go belly up. We simply can't keep spending at the levels that we are spending at and expect our financial system to survive long (or even near) term.
My entire life I've heard this and believed it. After the previous Covid spending bill I realized we've had deficit spending for all the years I've been alive except for five years. The national debt rolls onward and upward. And yet...no real elevated inflation rates outside of the mid 70's and early 1980's, almost all of it related to oil prices shooting upwards.

So there is the world we live in and the world that we are told we live in. Pick.
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Old 02-23-2021, 05:18 PM   #53
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My entire life I've heard this and believed it. After the previous Covid spending bill I realized we've had deficit spending for all the years I've been alive except for five years. The national debt rolls onward and upward. And yet...no real elevated inflation rates outside of the mid 70's and early 1980's, almost all of it related to oil prices shooting upwards.

So there is the world we live in and the world that we are told we live in. Pick.
Far as I know, we've NEVER had the level of repeated, "special" multi-trillion dollar package spending we've had since early last year.

I heard that last year's COVID spending was > $4T. Now add $1.9T. That's almost $6 TRILLION "one-off" spending in addition to the normal deficit spending we usually have.

Now, add the $2-3T "Infrastructure" bill that's being discussed and which could easily happen. That'd take us to $8-9 TRILLION above and beyond "normal" deficit spending since last March, which already has the country $28T in debt.

Then, I read today that some Harvard "experts" are calling for (get this) TWELVE TRILLION in "reparations" spending. (Will that happen? God, I sure hope not - I'd like the money I spent 40 years saving to be worth something more than extra wallpaper covering).

That's $20 - $21 Trillion dollars in "one off" spending - in addition to the deficit spending we already have normally. $20 - 21T is almost as much debt as we accumulated over our entire 240+ year history as of the end of last year (less roughly $7 - 8T).

Like I said above - our existing Debt-to-GDP level was already higher than Greece's right before Greece totally collapsed. There's a point that printing money by the wheelbarrow full destroys the value of all existing dollars - and if we keep going like this, we're gonna hit that point quite rapidly, IMHO.

I've never been one (to this point) to own inflation hedges. Stupid me, I know. But I just bought PIRMX today and have been tracking IAU and GLD looking for a good entry point. TIPS don't appear to be a good play at the moment with negative yields - but one of the things I like about PIRMX is that the PIMCO guys can buy TIPS, foreign currencies, gold, real estate or commodities in the mix they deem prudent, all to respond to inflationary pressures. And I'm sure they know boatloads more than I pretend to on what mix is best to achieve that goal..
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Old 02-23-2021, 05:24 PM   #54
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I heard that last year's COVID spending was > $4T. Now add $1.9T. That's almost $6 TRILLION "one-off" spending in addition to the normal deficit spending we usually have.
Yep.

Quote:
There's a point that printing money by the wheelbarrow full destroys the value of all existing dollars - and if we keep going like this, we're gonna hit that point quite rapidly, IMHO.
That's been the mantra for 50 years, at least.

Reaganís tax cuts and deficit spending rebuilding the military and funding SDI was going to ruin the economy. Inflation would come roaring back. Then it was George W. Bushís tax cuts coupled with the spending on the Iraq War and the war on terror that caused the national debt to balloon, which would lead to inflation. Then Obamaís economic stimulus spending, $780+ billion, was going to cause inflation. Then Trumpís Covid relief package was going to cause it.

Funny thing though, inflation hasnít happened.

Now itís Bidenís spending plan thatís going to trigger inflation. And why should I believe it this time?
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Old 02-23-2021, 05:47 PM   #55
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Now itís Bidenís spending plan thatís going to trigger inflation. And why should I believe it this time?
Because, as I said above, we've never in our entire history as a country had spending to the LEVEL we're talking about.

It took us nearly 244 years to get to $28T. Now, we're talking about spending nearly three quarters of that (71%) in less than 2 years JUST on "one-off" spending: COVID "stimulus" (although much of it is reportedly not COVID related), Infrastructure and even potentially reparations..

That has never, ever, ever happened - and it's 100-1000X anything that Reagan, Obama, Trump or anyone else ever did or considered. And spending nearly 75% of our ENTIRE debt incurred over 244 years in the span of 24 months is a recipe for disaster, IMHO.

Any of us who have saved anything for retirement should be extremely concerned. The value of those savings is potentially going to be vaporized by spending at these levels.

FWIW, I'd love to be wrong in the end and have everything turn out just fine and ducky. But I don't suspect I will be.
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Old 02-23-2021, 05:51 PM   #56
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Originally Posted by MichaelB View Post
Inflation typically refers to CPI over sustained periods of time, not snapshot views of specific commodity prices. So, for those who feel the rate of inflation is going to increase or already increasing:

What rate do you project for inflation and when does it reach that level?

Edit to add - the most recent BLS showed 0.3% in January and 1.4% for the previous 12 months. https://www.bls.gov/news.release/pdf/cpi.pdf
I'm using 3.0% inflation average, and 1.0% stddev.
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Old 02-23-2021, 06:09 PM   #57
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There's probably 3 Trillion dollars in US denominated currency outside the US. We don't have much tourists right now to spend 'US dollars' in US tourism industries.

The stimulus won't cause inflation, because our economy contracted by nearly 1.9 Trillion dollars in 2020 - big drop in consumer spending. And there are millions of people unemployed - both officially reported and unofficially reported. To get back to growth, the stimulus is needed to pump prime the economy.

Can I still buy a $1.19 Cheeeseburger - Yes. Food and essentials -there's no inflation here. Housing prices are a bit higher, since there's a higher demand due to covid19 and there's less construction going on.
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Old 02-23-2021, 06:16 PM   #58
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We had a big deficit and incurred a huge debt in the Bush administration, as we bailed out banks in the trillions. so I don't agree with you here. The stimulus now is just the solution to the problem. Our economy contracted by 1.9 Trillion in 2020 so we need to spend that much to get back to growth.

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Because, as I said above, we've never in our entire history as a country had spending to the LEVEL we're talking about.

It took us nearly 244 years to get to $28T. Now, we're talking about spending nearly three quarters of that (71%) in less than 2 years JUST on "one-off" spending: COVID "stimulus" (although much of it is reportedly not COVID related), Infrastructure and even potentially reparations..

That has never, ever, ever happened - and it's 100-1000X anything that Reagan, Obama, Trump or anyone else ever did or considered. And spending nearly 75% of our ENTIRE debt incurred over 244 years in the span of 24 months is a recipe for disaster, IMHO.

Any of us who have saved anything for retirement should be extremely concerned. The value of those savings is potentially going to be vaporized by spending at these levels.

FWIW, I'd love to be wrong in the end and have everything turn out just fine and ducky. But I don't suspect I will be.
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Old 02-23-2021, 06:20 PM   #59
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Average real estate property tax increase in NJ was 1.0177% in 2020.
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Old 02-23-2021, 07:28 PM   #60
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On page 1 of this thread, you'll see a giant blip in the M1 chart (from Shiller's email).

I think we're about to see another giant blip, but of no consequence maybe.

From a Hussman tweet:
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