Latest Inflation Numbers and Discussion

[Northforker]

Looks like we have definitely passed the peak:

I definitely wouldn't say definitely.

 

[Montecfo]

All inflation bets are off if we have a significant gulf hurricane - what a pleasant thought! We're very vulnerable right now on many fronts. Not much slack in the supply chain and folks are champing at the bit for wage increases. Could be the perfect storm. YMMV

Good point. But unfortunately government policy has placed us on a path of energy shortage. And we spent our emergency reserves for politics. So we are very vulnerable.

Good news is this can be fixed but not quickly. First step when digging a hole is to stop digging.

 

[Koolau]

^^^^^^^^^

We have passed "A" peak according to the graph. Let us hope it is THE peak. But as mentioned, we're one rail strike, one hurricane, one terrorist attack, etc., away from another peak. YMMV

 

[CarbonaNotGlue]

I've been following the linked site for decent inflation analysis and their inflation prediction graph has usually been pretty solid. Check it out here - https://inflationdata.com/articles/2022/09/14/august-2022-is-actually-disinflationary/

To see how well this inflation predictor has done historically, go here -

https://fintrend.com/charts/moore-inflation-predictor-mip/

 

[Montecfo]

^^^^^^^^^



We have passed "A" peak according to the graph. Let us hope it is THE peak. But as mentioned, we're one rail strike, one hurricane, one terrorist attack, etc., away from another peak. YMMV

Yes. This will take time. Folks should buckle in and get comfortable.

 

[jldavid47]

Some how the idea that the CPI will still be increasing at close to a 6% annual rate next July if the Fed tightens quickly is not a comforting thought.

I've been following the linked site for decent inflation analysis and their inflation prediction graph has usually been pretty solid. Check it out here - https://inflationdata.com/articles/2022/09/14/august-2022-is-actually-disinflationary/

To see how well this inflation predictor has done historically, go here -

https://fintrend.com/charts/moore-inflation-predictor-mip/

 

[mikes425]

It is easy to see. CPI flat in July, up .1 percent in August. It is a huge improvement from prior months.

Agreed. So much of this hype - and blatant market over-reaction is totally unwarranted and manipulative.

 

[CarbonaNotGlue]

Some how the idea that the CPI will still be increasing at close to a 6% annual rate next July if the Fed tightens quickly is not a comforting thought.

They’re predicting around 4.5% in a year. From the link - “ Based on current projections, annual inflation could fall to 3% by next June. But that is unlikely, most likely, it will be around 4.5%, which (although still high) is considerably better than over 8%”

https://fintrend.com/charts/moore-inflation-predictor-mip/

Here is the new model run yesterday -

Let’s hope they get it right. Even though 4.5% is elevated above the 2% target, it won’t be nearly as bad as 8%.

 

[Tekward]

I have seen several people mention that gasoline prices have plunged, but that is likely temporary due to record setting oil releases from the oil reserves. It is currently scheduled to stop in November and has led to the lowest strategic reserves in 40 years.

 

[Koolau]

I have seen several people mention that gasoline prices have plunged, but that is likely temporary due to record setting oil releases from the oil reserves. It is currently scheduled to stop in November and has led to the lowest strategic reserves in 40 years.

Kinda nice to have lower prices, but I'd rather have strategic reserves in case the actual oil supply of the USA were threatened by, say, war, storm, earth quake, other natural or man-made disasters. YMMV

 

[Tekward]

Kinda nice to have lower prices, but I'd rather have strategic reserves in case the actual oil supply of the USA were threatened by, say, war, storm, earth quake, other natural or man-made disasters. YMMV

Or say, a national railroad strike, since RRs transport almost all ethanol fuel from the Midwest.

 

[Koolau]

Or say, a national railroad strike, since RRs transport almost all ethanol fuel from the Midwest.

Heh, heh, maybe those of us stuck in the midwest can find something better to do with all that ethanol - rather than just burning it up in our cars.

 

[Montecfo]

Heh, heh, maybe those of us stuck in the midwest can find something better to do with all that ethanol - rather than just burning it up in our cars.[emoji23]

You mean like using the corn for food or something??

That's crazy talk!

 

[ExFlyBoy5]

Well, I think we can breathe a sigh of relief as it appears that the possible RR strike has been averted. I can only imagine what a mess that would have been created with a prolonged rail stoppage.

 

[jim584672]

Why has gold and silver done basically nothing with all this inflation? It gives me hope it is transitory.

 

[CarbonaNotGlue]

Why has gold and silver done basically nothing with all this inflation? It gives me hope it is transitory.

Contrary to popular belief, precious metals have a less than 50% chance of performing well in an inflationary cycle. Energy, consumer staples, and Healthcare all do better on average. Gold and silver's lackluster performance is not a sign of transitory inflation, just consistent with their prior performance in such cycles.

Read more here -

https://www.hartfordfunds.com/dam/en/docs/pub/whitepapers/WP597.pdf

 

[mpeirce]

I have seen several people mention that gasoline prices have plunged, but that is likely temporary due to record setting oil releases from the oil reserves. It is currently scheduled to stop in November

What happens in November?


Oh...

 

[jim584672]

Contrary to popular belief, precious metals have a less than 50% chance of performing well in an inflationary cycle. Energy, consumer staples, and Healthcare all do better on average. Gold and silver's lackluster performance is not a sign of transitory inflation, just consistent with their prior performance in such cycles.

Read more here -

https://www.hartfordfunds.com/dam/en/docs/pub/whitepapers/WP597.pdf

I remember the 1970s, gold and silver went crazy. Logically they are tangibles and rare so they should be moving, but they are sideways to down. Puzzling.

 

[MichaelB]

<mod note> Let’s please leave politics out of this discussion, which seem to continue despite previous mod requests.

 

[jldavid47]

I remember the 1970s, gold and silver went crazy. Logically they are tangibles and rare so they should be moving, but they are sideways to down. Puzzling.

In the 1970s gold prices were normalizing after being artificially held lower by artificial price fixing for 40 years. [Note to mods: Not trying to be political, just stating what happened.] "Gold is a hedge for inflation" is a narrative and not necessarily a fact under all circumstances. "Logic" doesn't move markets. Belief and emotion does.

 

[JoeWras]

Gold and silver are also a factor in supply and demand. A lot of far off corners of the world are mining gold these days.

 

[mikes425]

What happens in November?


Oh...

Zero real correlation.

 

[aja8888]

What happens in November?


Oh...

Thanksgiving turkey!

And the stores start the Xmas sales.....oh wait, Costco already has with an artificial Xmas tree for $1,400.00.

 

[Winemaker]

I mentioned I was renovating an apartment unit on another thread. I am replacing 3 6" chrome nipples for under sink and commode, unit built in 1978. I don't want any phone calls for leaks and pipe/valve failures. Valves were $9 each and the the pipe nipples were $17 each. Ouch! Didn't see that coming.

 

[Graybeard]

Why has gold and silver done basically nothing with all this inflation? It gives me hope it is transitory.

The dollar is very strong and treasury yields are quite a bit higher.