Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-16-2022, 02:48 PM   #861
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 34,755
It's scary on the other side of the pond. The Brits are back to the early 1980s. Which country is next?

From CNBC:

Quote:
London - Nov. 16, 2022 - U.K. inflation jumped to a 41-year high of 11.1% in October, exceeding expectations as food, transport and energy prices continued to squeeze households and businesses.

Economists polled by Reuters had projected an annual increase in the consumer price index of 10.7%, and October’s print marks an increase from the 40-year high of 10.1% seen in September.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-16-2022, 03:13 PM   #862
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 12,303
Quote:
Originally Posted by NW-Bound View Post
It's scary on the other side of the pond. The Brits are back to the early 1980s. Which country is next?

From CNBC:
Is their higher inflation based on their need (as an island nation) to import more goods than other European nations? We see that here in the Islands. Anything imported is vulnerable to the ravages of energy costs as it's mostly brought in on container ships (think massive diesel/electric engines going through megatons of diesel to get here from a minimum of 2400 miles away.)

We in the Islands have tried for years to grow food, but it's actually more expensive than importation because of land and labor costs. Also, "food crops" such as corn and wheat aren't suited for growing here for the most part.

Sometimes, we go to farmers markets where small time growers bring their produce. It costs about the same as the food chain stores but more than Costco/Sams. The difference is that it's fresher and we get to know the sellers.

An interesting fact that many do not know is that the Island of Lana'i (now, 98% owned by Larry Ellison) used to be planted in (wait for it) pineapple. That's all gone now. Even much of the central part of Oahu was planted in pineapple at one time. Now, only "tourist" pineapples are grown on Oahu and farmers are struggling to make ends meet by trying coffee, macadamia, and cacao (heh, heh, and pakalolo now and then.) The point being, that pineapple was once a main crop in the Islands and now it's too expensive to grow and export. Only the tourists pay enough locally to make it worth the effort.

Returning you now...
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Old 11-16-2022, 03:28 PM   #863
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 3,913
Quote:
Originally Posted by Koolau View Post
Regarding credit card usage: I've seen several news articles suggesting folks are using CCs because they can't make ends meet without them due to inflation. That will feed upon itself. Once addicted to credit, it's difficult to ever get out of it. Just ask my BFF who even did the "credit write-down" thing with his CCs and is now back to maxed out CCs MORE than he was before the write-down. It's a vicious circle that is easy to get into and almost impossible to get out of. YMMV
That favored long term wealth building strategy, compounding, works both ways. Increasing savings or debt, depending on which side you are on.
__________________
I used to have a handle on life, but it broke.
You can't spend yourself to prosperity.

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Old 11-16-2022, 03:29 PM   #864
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,991
Quote:
Originally Posted by NW-Bound View Post
It's scary on the other side of the pond. The Brits are back to the early 1980s. Which country is next?

From CNBC:
Id like to hear Alans point of view. He recently mentioned that the UK had ruined their own economy. I have no idea what the supply situation is, but things like their energy prices definitely seem out of whack.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-16-2022, 08:55 PM   #865
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 6,768
Brexit reduced trade with Europe.

Slowed or stopped flow of certain goods.

That probably didn’t help.
explanade is offline   Reply With Quote
Old 11-16-2022, 09:28 PM   #866
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 46,621
Quote:
Originally Posted by Koolau View Post
The point being, that pineapple was once a main crop in the Islands and now it's too expensive to grow and export.
+1

When I was a kid, in the late 1950's to early 1960's, you could get all the delicious, sweet, fresh pineapples you wanted at roadside stands on Oahu (by the pineapple fields) for (get this!) 2 cents apiece. My mother used to put pineapple in EVERYTHING she cooked because it was so cheap. I ate so much that to this day, I cannot stand fresh pineapple.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
W2R is online now   Reply With Quote
Old 11-18-2022, 08:12 PM   #867
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 12,303
Quote:
Originally Posted by W2R View Post
+1

When I was a kid, in the late 1950's to early 1960's, you could get all the delicious, sweet, fresh pineapples you wanted at roadside stands on Oahu (by the pineapple fields) for (get this!) 2 cents apiece. My mother used to put pineapple in EVERYTHING she cooked because it was so cheap. I ate so much that to this day, I cannot stand fresh pineapple.
I know what you mean. I OD'd on pineapple when we moved to the Islands. Now, I'll eat it 2 or 3 times/year.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Old 11-19-2022, 02:49 PM   #868
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 46,621
Quote:
Originally Posted by Koolau View Post
I know what you mean. I OD'd on pineapple when we moved to the Islands. Now, I'll eat it 2 or 3 times/year.
And here I thought I was the only one!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
W2R is online now   Reply With Quote
Old 11-19-2022, 03:15 PM   #869
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 12,303
Quote:
Originally Posted by W2R View Post
And here I thought I was the only one!
Heh, heh, as toursits, we toured the Dole cannery (now, long gone) and they took fresh pineapple off the line for the huddled masses. That satisfied me for the whole trip - and we even let our "room" pineapple go bad. I guess I like pineapple like I like turkey. 2 or 3 times a year is great - beyond that is too much.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Old 11-20-2022, 10:57 PM   #870
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,991
The next Fed meeting is Dec 13-14.

This dovetails with the November CPI report which is released early Dec 13.

Ron Insana (former CNBC anchor) had an interesting opinion piece where he complains about the Fed members talking about 7%. https://www.cnbc.com/2022/11/18/insa...l-reserve.html
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-20-2022, 11:39 PM   #871
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 9,237
Quote:
Originally Posted by audreyh1 View Post
The next Fed meeting is Dec 13-14.

This dovetails with the November CPI report which is released early Dec 13.

Ron Insana (former CNBC anchor) had an interesting opinion piece where he complains about the Fed members talking about 7%. https://www.cnbc.com/2022/11/18/insa...l-reserve.html

The only action that has worked to tame persistently high inflation in the past has been raising interest rates higher than the federal funds rate. Unless someone comes up with a brilliant alternative solution that all living and dead economists throughout history have never thought of before, The Fed is going to keep raising interest rates until inflation starts coming down at least closer to their 2% goal. This was pretty obvious from the beginning of the year, whether or not The Fed members wanted to publicly admit it or not until now.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 11-21-2022, 02:29 PM   #872
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 5,318
Quote:
Originally Posted by daylatedollarshort View Post
The only action that has worked to tame persistently high inflation in the past has been raising interest rates higher than the federal funds rate. Unless someone comes up with a brilliant alternative solution that all living and dead economists throughout history have never thought of before, The Fed is going to keep raising interest rates until inflation starts coming down at least closer to their 2% goal. This was pretty obvious from the beginning of the year, whether or not The Fed members wanted to publicly admit it or not until now.
Of course, interest rates can exceed inflation if inflation gradually falls lower than the level of interest rates.

This is the Fed's strategy.
Montecfo is offline   Reply With Quote
Old 11-21-2022, 03:31 PM   #873
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 34,755
Quote:
Originally Posted by Montecfo View Post
Of course, interest rates can exceed inflation if inflation gradually falls lower than the level of interest rates.

This is the Fed's strategy.
Is it not natural that the interest rate should be higher than inflation?

When you don't spend your money but save it and lend it to someone, you should be entitled to some small remuneration, and the only way you actually get some is if you are paid an interest above inflation.

When you are penalized for saving and lending money, something is awfully wrong. I am not an economist to know all the ramifications, but that would not be natural.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 11-21-2022, 08:50 PM   #874
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 16,654
Quote:
Originally Posted by NW-Bound View Post
Is it not natural that the interest rate should be higher than inflation?

When you don't spend your money but save it and lend it to someone, you should be entitled to some small remuneration, and the only way you actually get some is if you are paid an interest above inflation.

When you are penalized for saving and lending money, something is awfully wrong. I am not an economist to know all the ramifications, but that would not be natural.
The FED is ignoring the Taylor Rule.

https://www.investopedia.com/terms/t...flation%20rate.
__________________
Now a widower and wondering what the rest of my life has in store for me?
aja8888 is offline   Reply With Quote
Old 11-21-2022, 08:58 PM   #875
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 20,123
Quote:
Originally Posted by aja8888 View Post
The FED is ignoring the Taylor Rule.

https://www.investopedia.com/terms/t...flation%20rate.
From your source:

Quote:
The Taylor Rule has tended to serve as a fairly accurate guide to monetary policy during relatively calm periods marked by steady growth and moderate inflation, but much less so during economic crises.
Arguably, we haven't been in a "relatively calm period" free of "economic crises" in almost three years.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 11-21-2022, 09:04 PM   #876
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 16,654
Quote:
Originally Posted by Gumby View Post
From your source:



Arguably, we haven't been in a "relatively calm period" free of "economic crises" in almost three years.
Yes, I said they were ignoring the rule.
__________________
Now a widower and wondering what the rest of my life has in store for me?
aja8888 is offline   Reply With Quote
Old 11-21-2022, 09:07 PM   #877
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 20,123
Quote:
Originally Posted by aja8888 View Post
Yes, I said they were ignoring the rule.
Perhaps I misunderstood your point.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 11-21-2022, 09:33 PM   #878
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 9,237
Quote:
Originally Posted by daylatedollarshort View Post
The only action that has worked to tame persistently high inflation in the past has been raising interest rates higher than the federal funds rate. Unless someone comes up with a brilliant alternative solution that all living and dead economists throughout history have never thought of before, The Fed is going to keep raising interest rates until inflation starts coming down at least closer to their 2% goal. This was pretty obvious from the beginning of the year, whether or not The Fed members wanted to publicly admit it or not until now.

Whoops, my bad...I meant to say raising interest rates higher than the inflation rate, not the federal funds rate.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 11-22-2022, 06:59 AM   #879
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 9,907
If you haven't seen the new WSJ article on the Fed rate tightening, it is really good and comprehensive with many charts and comparisons to other cycles the last 40 years.

What pops out to me is the fact that although the Fed is sloping up like never before, they are also doing this from zero, which they never had to do before (except 2016).

Link below. If I following instructions, this is the freely available link and should not be paywalled.

https://www.wsj.com/articles/feds-ag...hare_permalink
__________________
Retired Class of 2018


JoeWras is offline   Reply With Quote
Old 11-22-2022, 03:11 PM   #880
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 12,303
Quote:
Originally Posted by NW-Bound View Post
Is it not natural that the interest rate should be higher than inflation?

When you don't spend your money but save it and lend it to someone, you should be entitled to some small remuneration, and the only way you actually get some is if you are paid an interest above inflation.

When you are penalized for saving and lending money, something is awfully wrong. I am not an economist to know all the ramifications, but that would not be natural.
My understanding is that the FED's main mission is to "stabilize" the currency. In so doing, inflation will (truly) be transient. Fiat currencies are difficult to stabilize, so the FED uses more crude methods (funds rate increases) to damage the economy and destroy jobs which eventually (maybe) brings inflation down.

The classic example of a stable "currency" is gold (yeah, I know!) Though gold (in relation to fiat currencies) isn't stable in PRICE - it is (reasonably stable) in what it "buys." There's the old adage (still pretty much true) that a $20 gold piece (aka 1 oz fine Gold) will buy an excellent suit of men's clothes. With it's ups and downs, that's still pretty much true since the $US20 gold piece was first minted in 1850. Not a bad track record when you compare it to fiat currencies. I'm not suggesting a return to the gold standard, but the FED is at a distinct disadvantage when it comes to inflation control. It's not a science and barely an art. It's more like magic with a track record to imitate from the last time.

Since I've told you way more than I know about gold and the FED, YMMV.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Latest Inflation Data and report aja8888 FIRE and Money 240 02-21-2022 03:18 PM
Latest net worth numbers from Fed Fred123 FIRE and Money 8 09-06-2014 07:59 PM
My Inflation numbers - Hows Yours Cut-Throat FIRE and Money 37 06-14-2006 12:23 PM

» Quick Links

 
All times are GMT -6. The time now is 02:40 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2023, vBulletin Solutions, Inc.