Latest Inflation Numbers and Discussion

[ShokWaveRider]

Our grocery bill actually went down a little in September vs August.

 

[Turbo29]

Don't worry, it will be repeated here.

Regardless of whether it is a tax cut funded by additional debt, or spending programs that increase debt, or just plain "old" MMT the net result is the same. It is fiscal stimulus and increases debt.

All good, the Brits have just turned that money printer back on....as will we.

Reminds me of a cartoon I saw almost 50yr ago during our last big inflationary stage.

Crowd [in the streets rioting]: What are you going to do about high prices?
King [up in a window of his palace]: Give you all more money.
Advisor [taps King on shoulder]: But sire, we can't give them more money.
King: Why not?
Advisor: Because we are all out of gold.
King [with a big sigh of relief]: Oh, for a moment I was worried you were going to tell me we were all out of paper.

 

[Sunset]

Heck, I'm going to Canada next year and I'm wondering if my bills and coins for my 1992 trip will still work.

Same issue for me, with the British Pound, I went and got some years ago in Gibraltar so when we travelled to the UK, I'd have some to start.

Now.... I wonder if I'll be able to use it. Never mind the inflation has probably wiped 15% off it, and it would cost me another 15% less due to the strength of the greenback.

 

[braumeister]

Same issue for me, with the British Pound, I went and got some years ago in Gibraltar so when we travelled to the UK, I'd have some to start.

Now.... I wonder if I'll be able to use it. Never mind the inflation has probably wiped 15% off it, and it would cost me another 15% less due to the strength of the greenback.

Not a problem. Even if they change the currency, as most countries do from time to time, the Bank of England has an ironclad policy that their money will always be valid. All you have to do is go into any bank and exchange it for the new currency.

Some years ago just before a trip I found some really old pound notes. Looked it up and saw that they were still legal tender, so I took them to a bank. Funniest 20 minutes of the trip, as two young bank employees tried to figure out what to do with them. They had never seen pounds as anything but coins, so I first had to convince them the notes were real. They made at least three phone calls to superiors, but were still unsure. Finally, one of them just reached into his pocket and handed me the equivalent in pound coins.

 

[JoeWras]

Not a problem. Even if they change the currency, as most countries do from time to time, the Bank of England has an ironclad policy that their money will always be valid. All you have to do is go into any bank and exchange it for the new currency.

Some years ago just before a trip I found some really old pound notes. Looked it up and saw that they were still legal tender, so I took them to a bank. Funniest 20 minutes of the trip, as two young bank employees tried to figure out what to do with them. They had never seen pounds as anything but coins, so I first had to convince them the notes were real. They made at least three phone calls to superiors, but were still unsure. Finally, one of them just reached into his pocket and handed me the equivalent in pound coins.

I have a bunch of USA $2 bills I'm afraid to use because I think people would think it is funny money.

The USA's habits with currency and coinage are perplexing*. I guess the problem will self-heal as most transactions are going electronic anyway.

* - Not necessarily. I was reading up on the issue recently and apparently though the years when the mint made changes, people hoarded, and this changed behavior. $2 silver certificates were first to go away, so people hoarded the $2. Then when the quarter and half went to clad, people especially hoarded the extra heavy halfs. Then the mint came up with the gloriously huge Eisenhower $1, which was simply too heavy, even though it approximated a Morgan well. Problem was Morgans were from an age where $1 got you a lot, like a $20. So they were worth toting around. Eisenhowers? Not so much. Then of course, the Anthony that looked like quarter was next...

Anyway, sorry for the diversion. Back to your regularly scheduled inflation discussion.

 

[Koolau]

I have a bunch of USA $2 bills I'm afraid to use because I think people would think it is funny money.

The USA's habits with currency and coinage are perplexing*. I guess the problem will self-heal as most transactions are going electronic anyway.

* - Not necessarily. I was reading up on the issue recently and apparently though the years when the mint made changes, people hoarded, and this changed behavior. $2 silver certificates were first to go away, so people hoarded the $2. Then when the quarter and half went to clad, people especially hoarded the extra heavy halfs. Then the mint came up with the gloriously huge Eisenhower $1, which was simply too heavy, even though it approximated a Morgan well. Problem was Morgans were from an age where $1 got you a lot, like a $20. So they were worth toting around. Eisenhowers? Not so much. Then of course, the Anthony that looked like quarter was next...

Anyway, sorry for the diversion. Back to your regularly scheduled inflation discussion.

Here in the heartland, I'm seeing a lot of $2 bills. No problems with using them but YMMV.

 

[Chuckanut]

The Fed indicated yesterday that what it calls 'sticky' prices are still up there.

Accelerating core costs show that high inflation is spreading increasingly to the services side of the economy, where prices tend to be sticky—meaning that once they rise, they are usually slow to reverse

.

But higher prices for services, including rent, healthcare and utilities, can be harder to avoid. Services spending accounts for about two-thirds of household outlays.Services prices were up 0.6% in August from the prior month, and up 5% from a year earlier.

There are signs that some of these pressures may be subsiding. The producer-price index, which generally reflects supply conditions in the economy, rose 8.7% higher in August than a year earlier, down from annual increases of 9.8% in July and 11.2% in June. Other supply-chain measures show backlogs easing, inventories increasing and shipping costs declining.

 

[explanade]

My last fill up at the gas station was $4.85 a gallon.

The one previous to that was 5.99.

Now it's back up to 5.79.

Supposedly some refineries are offline for maintenance.

 

[Breedlove]

It’s all transitory . Don’t sweat the small stuff.

 

[nap470]

I have a bunch of USA $2 bills I'm afraid to use because I think people would think it is funny money.

I thought we were the only people on the planet with $2 bills. When we cleaned out my wife's parent's home after her mother's death (10 years ago), she had stacks of $2 bills in multiple places. At first, I thought it was monopoly money. I bet we have more than a hundred $2 bills in our basement. I had forgotten about them until your comment.

 

[W2R]

My last fill up at the gas station was $4.85 a gallon.

The one previous to that was 5.99.

Now it's back up to 5.79.

Supposedly some refineries are offline for maintenance.

Wow, that's high! Maybe it's due to location. The price of a gallon of gas here is:

$2.95 at the nearest Exxon,
$2.91 if I drive three blocks to another Exxon.
$2.85 if I drive a mile and a half to the cheapest Exxon.

Probably less if we got no-name gas at a convenience store.

 

[RobbieB]

Over 6 here. CA blues...

 

[W2R]

Over 6 here. CA blues...

Yes, must be location! Maybe California has a higher tax on gasoline, or something like that.

 

[Mr. Tightwad]

$ 5.25 a gallon near LA, for those who still drive gas cars.

 

[Turbo29]

Yes, must be location! Maybe California has a higher tax on gasoline, or something like that.

Here in Phoenix the price of gas today is $4.99/gal (with a few $5+). Over half of our gasoline comes via pipeline from California.

Allegedly, there are "refinery problems."

 

[Koolau]

Yes, must be location! Maybe California has a higher tax on gasoline, or something like that.

Can't forget that CA demands specific blends of fuel from refineries. It costs more to make fuels compatible with air pollution standards.

 

[W2R]

Can't forget that CA demands specific blends of fuel from refineries. It costs more to make fuels compatible with air pollution standards.

That's probably it! I didn't realize that CA requires special blends of fuel like that.

 

[aja8888]

That's probably it! I didn't realize that CA requires special blends of fuel like that.

Very high gasoline tax in Ca (state tax).

 

[Teacher Terry]

5.39 is the cheapest in Reno.

 

[unclemick]

Unfortunately, I am now hearing radio commercials for gold, jewelry, precious metals, and similar as a great way to protect one's money from inflation. I am reminded of a similar spike in such things in the 70's and early 80's when we had double digit inflation. This is very sad, IMHO. I suppose it's only time until I start hearing about investing in barrels of Scotch stored in Scotland (the longer you let it age the more valuable it becomes!!!), land on the edge of nowhere that will skyrocket when the new highway/airport/industrial-center, etc is built there, and even renting out RVs you don't want to own. This is all too familiar.

Plus Art, Guns(collectible) and real estate.

I started in 1966 and soldiered on in stock until 1982 when things picked up a tad. Do have the paperwork for a 10% Joint Venture in a Colorado Gold mine - still waiting .

Heh heh heh - 29 years ER and that old sled dog index via Target Retirement is still pulling the load.

 

[Lsbcal]

Over 6 here. CA blues...

This is apparently due to a refinary shutdown for maintenance:

https://www.northbaybusinessjournal.com/article/news/refinery-issues-cause-sudden-spike-in-california-gas-prices/

 

[jim584672]

We hit $2.99 and now around $3.15. NY suburb.

 

[Lsbcal]

Recently I read of 2 phenomena pushing on inflation:

1) Consumers were still flush and working down the excess savings from their withholding of spending + government help. Wells Fargo has a nice chart:

2) The Economist reported that the states had Fed government money stashed away of some 200 billion and have only spent 1/5 of it so far.

 

[Mark1]

Over 6 here. CA blues...

No worries, as this won't last. I'm sure they are very smart people right now figuring out how long this imbalance will last and whether there is money to be made bringing in out of state product.

 

[Turbo29]

No worries, as this won't last. I'm sure they are very smart people right now figuring out how long this imbalance will last and whether there is money to be made bringing in out of state product.

That might be difficult as California uses a special blend of gasoline for air quality reasons.