Future of Economy and Inflation

[GTFan]

I agree to some extent, but what are the alternatives to the USD? China? The Euro?

None of these are accepted as widely nor is there any real push that I've seen to move off the dollar. The more interesting question is what happens to energy, especially in Europe.

 

[Chuckanut]

Good points.

There is no real candidate to dethrone the USD as reserve currency but there could be at some point.

I have to agree. I doubt if China would not seize foreign funds if it found itself in the same place as the US does with the Ukraine invasion. China has pretty much shown that their game plan is China First (to borrow a term from a USA politician).

Europe is too disorganized to make the Euro a reserve currency. I am amazed that they agree as often as they do.

What the USA provides is flexibility and a reasonable level (so far) of laws that protect one's property. Granted that could change. I am always amazed at how many people are willing to sell their USA birth-right (The Bill of Rights for example) for a bowl of pottage in order to obtain some short-term political advantage. Tides go in and out. Winds change direction.

 

[Car-Guy]

^^^^^
A very wise man once told me, (about 20 years ago) that every empire rises and then falls... Only it seems to be happening faster as time goes by.

 

[Starsky]

I think protracted stagflation is inevitable. We have had no inflation for so long thanks to cheap imports from China. That's done for now, and we're going to be paying it back over the next decade as markets and prices reach a new global equilibrium. We will lose the efficiency of cheap Chinese labor and will be replacing it with higher-cost labor and unsubsidized transportation costs. It is hard to see where the growth will come from to stimulate global GDP as it has in the recent past. American billionaires can only buy so much...

Population in many countries is peaking. China's population has been predicted to drop to below 1 billion people within this century. We were operating at such a high level of economic activity and global integration, but now the party is over. It will be a long time before we see anything like the 'roaring 10's' again. These economic changes will almost certainly be accompanied by extreme socio/political changes. I predict the current global order will be almost unrecognizable on the back side of this new economy.

 

[youbet]

I think protracted stagflation is inevitable.

"Stagflation" might be too optimistic. Why do you think it won't be "crashflation?"

 

[Car-Guy]

Maybe he's on to something....


Elon Musk says Americans 'are trying to avoid going to work at all,' unlike Chinese workers who 'will be burning the 3am oil'


https://news.yahoo.com/elon-musk-says-americans-trying-152047925.html

 

[Freedom56]

Maybe he's on to something....


Elon Musk says Americans 'are trying to avoid going to work at all,' unlike Chinese workers who 'will be burning the 3am oil'


https://news.yahoo.com/elon-musk-says-americans-trying-152047925.html

Isn't that the point of this forum?

 

[Chuckanut]

Maybe he's on to something....


Elon Musk says Americans 'are trying to avoid going to work at all,' unlike Chinese workers who 'will be burning the 3am oil'


https://news.yahoo.com/elon-musk-says-americans-trying-152047925.html

I have a lot of respect for Mr. Musk and what he has accomplished. Thanks to him the USA has the ability to put its astronauts into LEO again. And, he is wiping the floor with the other rocket makers thanks to his recoverable boosters. (Three boosters have now been reused 12x each!) Europeans still look at Tesla and the Teslaverse as the EV system that sets the standard.

But, he still puts his pants on one leg at a time. I bet that overworked Chinese worker is not as productive and creative as he could be.

 

[aja8888]

I have a lot of respect for Mr. Musk and what he has accomplished. Thanks to him the USA has the ability to put its astronauts into LEO again. And, he is wiping the floor with the other rocket makers thanks to his recoverable boosters. (Three boosters have now been reused 12x each!) Europeans still look at Tesla and the Teslaverse as the EV system that sets the standard.

But, he still puts his pants on one leg at a time. I bet that overworked Chinese worker is not as productive and creative as he could be.

Chinese workers are glad to have a job. I doubt their welfare and freebie systems are not up to par with the U.S.

 

[NW-Bound]

Hungry and skinny people are always more motivated than fat people with a full belly.

 

[Car-Guy]

I have a lot of respect for Mr. Musk and what he has accomplished.

Me too! Sure puts his money where his mouth is...

 

[almost there]

Getting back to the orig. topic. What do folks think is going to happen. With an inflation rate of 8% and a current fed rate of .75%?

 

[daylatedollarshort]

Getting back to the orig. topic. What do folks think is going to happen. With an inflation rate of 8% and a current fed rate of .75%?

I think the Fed is going to do at least the 6 rate increases they talked about in March and probably even more. They dug themselves in quite a hole now and we're likely going to have either a recession, high inflation or both for some time into the future. I just don't see how the numbers predict anything else.

 

[38Chevy454]

I think the Fed is going to do at least the 6 rate increases they talked about in March and probably even more. They dug themselves in quite a hole now and we're likely going to have either a recession, high inflation or both for some time into the future. I just don't see how the numbers predict anything else.

I agree, with the latest inflation number still running at 8.3%, that is quite a difference from 0.75%. Govt does not have a tax income problem, it has a spending problem that created this mess.

 

[Tetto]

The vast majority of the population are total disasters at managing their personal finances. Almost two thirds are living paycheck to paycheck irrespective of their income level. At some point individuals and governments hit a debt wall.

That’s very depressing….

 

[youbet]

I bet that overworked Chinese worker is not as productive and creative as he could be.

But even at 50% efficiency, that Chinese worker might produce more than an American worker sitting at home playing golf on his computer and collecting benefits. Or maybe not..... I dunno...... Never got to do that.

 

[pb4uski]

.... The fed at .75 as we speak. ...

Looks like you screwed up on that one. They increased it form 50bps to 100bps.

.75 was never in the mix.

 

[almost there]

Yea, some consider 0-.25% Effectively zero. But I see what you are saying. Read a few days ago actual is .83% or something. With a range of .75 to 1%. These rates are still a joke. 2021 was the year to begin correcting it.
GDP increased by 6.9% in 2021, the largest one-year jump since 1984;
on the other hand, inflation also increased by 7%, the largest increase since 1982.
With Fed fund rate of .25% / Effectively zero. All year...
But that ship has sailed. And here we are.

https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135

 

[HarryHawk]

The vast majority of the population are total disasters at managing their personal finances. Almost two thirds are living paycheck to paycheck irrespective of their income level. At some point individuals and governments hit a debt wall.

That’s very depressing….

What is most depressing is the notion that it is not their problem to fix, but yours.

 

[Markola]

Govt does not have a tax income problem, it has a spending problem that created this mess.

I always find that to be an unexamined cliche that rarely comes with, …and I’d cut (insert _____ program/s that would make any noticeable difference)….”

 

[copyright1997reloaded]

Getting back to the orig. topic. What do folks think is going to happen. With an inflation rate of 8% and a current fed rate of .75%?

They will reverse course sooner rather than later. Just look at where we are with a puny .75% increase. Stock market is getting pounded, companies are starting to show bad earnings/earnings growth. Employment is a trailing indicator, it will show stress soon enough. Similar for housing.

So let's envision a little better inflation reports (which are likely just because the year over year will start to drop off big up months). Then, inflation "moderates" to 5% or so (just pulling this $ out of my ....) and with an economy faltering the pressure will be on to reverse course.

I'm talking my book here: Long PM's, Long TIPS, not selling all my stocks that I think can do decently in an inflationary environment.

 

[almost there]

Not sure I would call it pounded, just yet.
But who knows....

 

[Popeye]

I always find that to be an unexamined cliche that rarely comes with, …and I’d cut (insert _____ program/s that would make any noticeable difference)….”

Don’t we elect congress and a president to figure that out?

 

[Sunset]

They will reverse course sooner rather than later. Just look at where we are with a puny .75% increase. Stock market is getting pounded, companies are starting to show bad earnings/earnings growth. Employment is a trailing indicator, it will show stress soon enough. Similar for housing.

So let's envision a little better inflation reports (which are likely just because the year over year will start to drop off big up months). Then, inflation "moderates" to 5% or so (just pulling this $ out of my ....) and with an economy faltering the pressure will be on to reverse course.

I'm talking my book here: Long PM's, Long TIPS, not selling all my stocks that I think can do decently in an inflationary environment.

I think the Fed will increase rates to 3% maybe 3.5% and keep it there until inflation is beaten down.
I think Congress doesn't mind, as they all know the plan and probably have liquidated most/all stock holdings, so if the market falls 50% it won't hurt. Then they can buy back just before the Fed stops increasing the rate.

 

[Dash man]

I agree, with the latest inflation number still running at 8.3%, that is quite a difference from 0.75%. Govt does not have a tax income problem, it has a spending problem that created this mess.

There might be a tax income problem if we go into recession. Additionally, tax brackets are increased each year by inflation, so individuals will be paying a bit less of their income in tax.