Latest Inflation Numbers and Discussion

[jldavid47]

Hopefully, forum members who have enjoyed strong portfolio returns over the past decade have saved some of that excess return.

From what I read on these forums, not bloody likely. The "The stock market only goes up" narrative never dies as if there is no risk in staying heavily in equities as one ages. This couples with a greed state that makes people who have earned excess returns to continue seeking excess returns even if they have enough money to last them two lifetimes. If the sh*t really hits the fan (think Japan since 1989 or worse) these people won't know what hit them until it's too late. People ignore the history of markets until it's too late. History doesn't necessarily repeat itself, but it rhymes.

 

[Timeisprecious]

I'm OK as long as I stay off the "Blow that Dough" thread.

+1

 

[W2R]

Hopefully, forum members who have enjoyed strong portfolio returns over the past decade have saved some of that excess return.

From what I read on these forums, not bloody likely. The "The stock market only goes up" narrative never dies as if there is no risk in staying heavily in equities as one ages. This couples with a greed state that makes people who have earned excess returns to continue seeking excess returns even if they have enough money to last them two lifetimes. If the sh*t really hits the fan (think Japan since 1989 or worse) these people won't know what hit them until it's too late. People ignore the history of markets until it's too late. History doesn't necessarily repeat itself, but it rhymes.

Ummm.... there are quite a few forum members who have been saving money throughout the past decade. I should only speak for myself.... I am invested conservatively, and haven't withdrawn spending money from my portfolio for 4-5 years by now (since SS kicked in). Instead I just save as cash or re-invest. And that may not be unusual. Still others may be continuing to withdraw, but may have reduced their spending as well and squirrel away the excess.

People here used to encourage me to spend more, but I'm happy with the lifestyle that I am accustomed to; I'd rather be very cautious to make sure I can continue to lead that lifestyle.

I know it seems like everyone here is in "Blow That Dough" mode, but I suspect that some of our forum members are quite well to do and are barely scratching the surface of what they *could* be spending. Doesn't mean that people can't show off a little on the rare occasion when they buy something.

 

[NW-Bound]

... I know it seems like everyone here is in "Blow That Dough" mode, but I suspect that some of our forum members are quite well to do and are barely scratching the surface of what they *could* be spending. Doesn't mean that people can't show off a little on the rare occasion when they buy something.

One can blow any dough he wants, as long as he stays below the 4% SWR, correct?

Or is it 3% now?

 

[MichaelB]

From what I read on these forums, not bloody likely. The "The stock market only goes up" narrative never dies as if there is no risk in staying heavily in equities as one ages.

My sense is just the opposite, and the post by W2R reflects the mainstream wisdoms of ER forum members. Members who were withdrawing 4% a decade ago continued to do so as portfolio returns increased but their spending didn’t increase, some surplus was generated.

Ummm.... there are quite a few forum members who have been saving money throughout the past decade. I should only speak for myself.... I am invested conservatively, and haven't withdrawn spending money from my portfolio for 4-5 years by now (since SS kicked in). Instead I just save as cash or re-invest. And that may not be unusual. Still others may be continuing to withdraw, but may have reduced their spending as well and squirrel away the excess.

 

[foxfirev5]

Boat winterization and storage +20% this year. It only makes me appreciate my dentist increasing rates by a mere 15%. And I have faith he actually knows what he's doing.

 

[Chuckanut]

Just to keep things in perspective…..

At a 7.7% rate of inflation your dollars lose half their value in a little over nine years.

 

[Brat]

I am a fan of Peter Zeihan who is predicting the break of supply chains worldwide and that the US will be bringing manufacturing presently outsourced back to the North American continent. He said this process will be inflationary for the next 2-3 years. He said that current US inflation is not primarily consumer demand-driven.

With respect to oil, he says that clean alternatives are not sufficient to power the global energy demand.

For the above reasons, I have been buying oil, TIPS, and IBonds with and salting it with BHP and soon RIO.

 

[NW-Bound]

Just to keep things in perspective…..

At a 7.7% rate of inflation your dollars lose half their value in a little over nine years.

Hurrah, the glass is still half-full after 9 years of high inflation.

 

[Popeye]

I am a fan of Peter Zeihan who is predicting the break of supply chains worldwide and that the US will be bringing manufacturing presently outsourced back to the North American continent. He said this process will be inflationary for the next 2-3 years. He said that current US inflation is not primarily consumer demand-driven.

With respect to oil, he says that clean alternatives are not sufficient to power the global energy demand.

For the above reasons, I have been buying oil, TIPS, and IBonds with and salting it with BHP and soon RIO.

Idk, I get the feeling insourcing on a scale that equals the outsourcing of the past would take 2-3 decades rather than years. And where will we get the skilled workers required. Finding people who could work competently in a manufacturing shop was a problem in my Megacorp days for the last 15 years at least.

 

[NW-Bound]

Idk, I get the feeling insourcing on a scale that equals the outsourcing of the past would take 2-3 decades rather than years. And where will we get the skilled workers required. Finding people who could work competently in a manufacturing shop was a problem in my Megacorp days for the last 15 years at least.

Yes, it takes time to rebuild the manufacturing capacities that were moved overseas. A lot of supporting infrastructures will need to be re-established.

Perhaps the inflation can still get abated if people learn to do without, or cut back on consumption of imported goods.

 

[aja8888]

Yes, it takes time to rebuild the manufacturing capacities that were moved overseas. A lot of supporting infrastructures will need to be re-established.

Perhaps the inflation can still get abated if people learn to do without, or cut back on consumption of imported goods.

They could start rebuilding manufacturing in my home town in Connecticut where scores of manufacturing plants were shut down. This was the center in the U.S. for brass and copper manufacturing and all that's left are millions of square feet of empty plants. Some buildings are being knocked down for new malls to be built (LOL!).

I was a Plant Manager of a 1,500 employee plant that was in continuous operation for 100+ years. We made over 100 alloys of non-ferrous metals and turned that material into water tube, radiator fin stock, brass alloy rods and shapes for making fittings, rolled sheet, plate, strip, etc.

All gone now and those products are now made in Asia and China.

Good luck bringing that back here! That was 100+ years of development and heavy machinery which now has been scrapped. And the existing buildings are rotting into the ground.

 

[MichaelB]

<mod note> Multiple posts discussing covid origins and specific world leaders have been removed. Let’s please stick to to the thread topic.

 

[NW-Bound]

They could start rebuilding manufacturing in my home town in Connecticut where scores of manufacturing plants were shut down. This was the center in the U.S. for brass and copper manufacturing and all that's left are millions of square feet of empty plants. Some buildings are being knocked down for new malls to be built (LOL!).

I was a Plant Manager of a 1,500 employee plant that was in continuous operation for 100+ years. We made over 100 alloys of non-ferrous metals and turned that material into water tube, radiator fin stock, brass alloy rods and shapes for making fittings, rolled sheet, plate, strip, etc.

All gone now and those products are now made in Asia and China.

Good luck bringing that back here! That was 100+ years of development and heavy machinery which now has been scrapped. And the existing buildings are rotting into the ground.

Instead, huge amounts of money are made by moving merchandise instead of making them. Yes, I am looking at you, Amazon.

It's sad, but I don't blame Amazon. There has to be someone to move the goods from the makers to the consumers, and if it's not Amazon someone else will do it.

Ah, if the US needs to, we can build new plants and start over. It will take a lot longer than 2 or 3 years though.

 

[38Chevy454]

Ah, if the US needs to, we can build new plants and start over. It will take a lot longer than 2 or 3 years though.

It will also require a govt that doesn't put onerous regulations and bureaucracy such that a US company can't be competitive.

 

[aja8888]

Ah, if the US needs to, we can build new plants and start over. It will take a lot longer than 2 or 3 years though.

The heavy industry where I started is gone for good. To rebuild those plants which melt millions of pounds of metal and pour casting them work them using rolling mills, presses, etc, etc are pretty much unbuildable under current permitting rules. Getting permits to build emission heavy manufacturing that makes basic materials is difficult and takes years. That's precisely why a new large petroleum refinery won't be built in this country anymore.

Based on the above, industries like iron and steel, non ferrous metals, refining a petrochemical, etc (basic materials) will be gone from the U.S. forever as Asian and other countries that do not have rigorous environmental permitting rules as we do here. And I won't even mention new mining operations....

 

[youbet]

And I won't even mention new mining operations....

While it appears that most of the lithium we'll need going forward will be imported, we do have some deposits in Arkansas, California and a few other places. But the old lithium mining technology is horribly destructive. New start-ups are working to solve the environmental problems but I wonder if they'll be able to pass current standards and requirements in the near future.

I suspect lithium/lithium batteries will be an inflation driver as we move away from carbon-based energy.

 

[Beststash]

With respect to oil, he says that clean alternatives are not sufficient to power the global energy demand.

In the short term, I agree, but long term it can and is vital for the survival of humanity (IMO)

Idk, I get the feeling insourcing on a scale that equals the outsourcing of the past would take 2-3 decades rather than years. And where will we get the skilled workers required. Finding people who could work competently in a manufacturing shop was a problem in my Megacorp days for the last 15 years at least.

I seriously doubt that manufacturing jobs will ever return to the US in numbers that will create a rising middle class - there will always be cheaper labor somewhere and multinational companies favor cheap labor.

Instead we need to incentivize apprenticeship programs that focus on the "soft skills" - the need to report ready to work and on time every day. The training then progresses to simple job skills and ultimately the high-level skills that have good pay. It also helps create strong company loyalty.

Although I have been retired for almost 20 years now and not familiar with current workplace conditions, the issue of getting experience based skills is vital for success in a service or manufacturing business.

 

[Samsung4321]

Getting permits to build emission heavy manufacturing that makes basic materials is difficult and takes years. ...

Based on the above, industries like iron and steel, non ferrous metals, refining a petrochemical, etc (basic materials) will be gone from the U.S. forever as Asian and other countries that do not have rigorous environmental permitting rules as we do here. And I won't even mention new mining operations....

Hydrogen dreaming:

. https://fuelcellsworks.com/news/calix-plans-to-build-a-hydrogen-based-iron-plant-in-australia/

. https://www.abc.net.au/news/2022-11...r-wa-town-in-renewable-energy-trial/101648728

 

[aja8888]

Hydrogen dreaming:

. https://fuelcellsworks.com/news/calix-plans-to-build-a-hydrogen-based-iron-plant-in-australia/

. https://www.abc.net.au/news/2022-11...r-wa-town-in-renewable-energy-trial/101648728

Nice stuff!

 

[JoeWras]

I'm starting to think that the brand names on Amazon from these low cost manufacturers are made by a random name generator. Have you seen them?

I recently got a light fixture made by some company with a name like "Zxyphlgis" that is actually very cool looking. Also very affordable. BUT, it has no safety certifications. The instructions say to connect the wires with electrical tape!! Very sketchy.

My point is we are getting what we pay for. I'm not going to keep or install this fixture. Not worth it. I'll be paying more for a different fixture that I can trust. There is a bottom to going generic when fighting inflation. Some generics go too far in their corner cutting.

 

[NW-Bound]

I recently got a light fixture made by some company with a name like "Zxyphlgis" that is actually very cool looking. Also very affordable. BUT, it has no safety certifications. The instructions say to connect the wires with electrical tape!! Very sketchy.

My point is we are getting what we pay for. I'm not going to keep or install this fixture. Not worth it. I'll be paying more for a different fixture that I can trust...

Why? What can go wrong with the fixture? If it's LED, it's not going to get hot enough to burn down the house, right? And if it's mounted high up, if it has a current leakage it is not going to electrocute somebody.

 

[JoeWras]

Why? What can go wrong with the fixture? If it's LED, it's not going to get hot enough to burn down the house, right? And if it's mounted high up, if it has a current leakage it is not going to electrocute somebody.

I admit I'm a bit picky.

Let me turn that around regarding lack of certifications. Why? If the design is bullet proof, why shouldn't they apply for UL, ETL, CSA or CE mark, right?

The generic white box has "CE" on it, but there are no marks on the fixture. That's not good. The suggestion to use electrical tape is alarming and makes me think about what is inside. What kind of LED driver are they using? Etc.

This company clearly is taking a shortcut and shoving a fixture at us that is marketed for Asia or Europe without taking the extra steps to make it North American compliant. It has the standard brown-blue wiring that Europe uses for L(ive)/N(uetral). The gauge of the wire is pretty small since it is really marketed to the 240V standard. (Aside: amazing how modern electronics can handle input voltage ranges.)

Maybe my concern is more general. The instructions are useless and I worry about people not familiar with lighting could get themselves in trouble. I'm pretty sure that Europe now requires a mechanical connection on a fixture, something like a Wago.

TL/DR: less about getting shocked, more about lack of attention by the manufacturer and clearly taking shortcuts to push more product. What other shortcuts are lurking?

 

[NW-Bound]

Ah, I forgot about the LED driver, which has electronics. Shortcomings there are not as visible as mechanical or physical features.

 

[JoeWras]

Ah, I forgot about the LED driver, which has electronics. Shortcomings there are not as visible as mechanical or physical features.

I don't watch a lot of YouTube, but one guy I watch quite a bit is "bigclivedotcom". He obtains a lot of sketchy electronics from Ebay and Amazon and picks them apart. Some go into depth including reverse engineered schematics. He likes to expose some of the dangerous shortcuts taken in some electronics. It is slightly alarming in some of the things he finds.

But he does it all with humor. A current example: He's based in the UK, so he usually doesn't see the California cancer sticker we all know well. While recently buying some wire, a spool came with the sticker. So he made his own sticker as a response. Typical humor from him.