The consumer price increased by more than 5 percent in the last 12 months. Several economists forecast similar level of inflation until the end of 2022. I guess you can buy bunch of music recordings now and tell your family members that you are saving money. ;D
The entire price increase in the two years, including the next year, would be around 10% (1.05 x 1.05=1.1). This means that our real income decrease by 10% in the two years. Do you have any plan or strategy to tackle this inflation/decline in real income?
https://www.bloomberg.com/news/articles/2021-11-12/economists-boost-u-s-inflation-forecasts-through-end-of-2022
Talking yesterday to a family member working for a shop selling outdoor equipment, she said that when they had to pay 2,000 Euros for a container unit transport from overseas a couple of years ago, the price had now gone up to ... more than 14,000 Euros.
Hard to see such developments not affecting prices, at least for a while, as regards a lot of imported goods ...
Quote from: MusicTurner on November 29, 2021, 12:11:18 PM
Talking yesterday to a family member working for a shop selling outdoor equipment, she said that when they had to pay 2,000 Euros for a container unit transport from overseas a couple of years ago, the price had now gone up to ... more than 14,000 Euros.
Hard to see such developments not affecting prices, at least for a while, as regards a lot of imported goods ...
Sorry to hear of your family member's problems; it must be rough.
It's amazing to hear of all of the problems regarding container ships: prices for them have shot sky-high, problems getting ahold of them, containers in ports but problems with not enough staff (I believe) to unload them, not enough truckers to transport them to where they are needed, etc. :(
PD
People are spending their higher incomes into a supply shortage. US income shot up in 2020 instead of falling because the government acted more vigorously than it usually does. But as in the past inflation jumps when supply constraints are severe. The last time supply was severely restricted was in the '70s and before that the late '40s when gigantic domestic savings clashed with an economy that couldn't yet produce consumer goods like it could bombers, tanks and other paraphernalia to fight a world war. It won't be nearly that bad this time.
Oh, and inflation often fails to meet "expectations". The most dire predictions tend to come just before inflation subsides, as I expect it will in a few months. So, enjoy it while it lasts, because if the inflationistas get their way you can expect the economy to slow and you'll have fewer of those lovely big dollars to play with. Larry Summers has risen from the grave.
Here's a lovely inflation fact. The increase in wages is a component in the headline figure. Wages are increasing. People don't complain about having more dollars to buy more costly goods. They complain about the nominal cost, but don't bother to calculate the real cost against income.
Bloomberg columnist Barry Ritholtz explains the wage inflation thing.
Thing (https://ritholtz.com/2021/12/minimum-wage-reset/)
Grocery prices increased 13.1% in July- highest increase since 1979.
I guess the prices at restaurants will follow. I personally suspect that the labor shortage today is one of causal factors.
I have heard that Wednesday is the best day for buying grocery at a supermarket- cheaper and good quality- but I am not sure.
https://finance.yahoo.com/news/inflation-grocery-prices-increased-in-july-despite-cool-down-143205313.html
Inflation subsides. One might wish it subsides faster, or not. A few months ago I mentioned it would subside in a few months. It's easy to be right, so I don't deserve any special credit.
Sometimes the Fed will act to recess the economy to inflict double pain on innocent consumers. They will take away your job to cure you of the nasty habit of buying stuff that is short supply. If they don't do that they will be "behind the curve", a bad no good thing.
It's not clear to me that job loss is better than high prices, or the double pain method is better than letting inflation subside on its own.
The title of an opinion article on Washington Post today- Jerome Powell (Fed Chair) to the Rest of the World: Drop Dead. ;D
The author says that an increase in interest rate will not lower price, which is pushed by the insufficient supply rather than increased demand.
https://www.washingtonpost.com/business/jerome-powell-to-the-rest-of-the-world-drop-dead/2022/09/15/70e7b764-34b3-11ed-a0d6-415299bfebd5_story.html
Quote from: Dry Brett Kavanaugh on September 16, 2022, 01:35:55 PM
The title of an opinion article on Washington Post today- Jerome Powell (Fed Chair) to the Rest of the World: Drop Dead. ;D
The author says that an increase in interest rate will not lower price, which is pushed by the insufficient supply rather than increased demand.
https://www.washingtonpost.com/business/jerome-powell-to-the-rest-of-the-world-drop-dead/2022/09/15/70e7b764-34b3-11ed-a0d6-415299bfebd5_story.html
Powell should push for larger rate increases and more aggressive quantitative tightening, though more caution is needed there to ensure smooth Treasury market operations. The Fed's mandates apply only to the US. (Really, price stability should be its only mandate, but that's a separate political and legal issue.) It would be nice if Powell really could use the now famous phrase from the Ford era.
Quote from: Todd on September 16, 2022, 01:54:48 PM
Powell should push for larger rate increases and more aggressive quantitative tightening, though more caution is needed there to ensure smooth Treasury market operations. The Fed's mandates apply only to the US. (Really, price stability should be its only mandate, but that's a separate political and legal issue.) It would be nice if Powell really could use the now famous phrase from the Ford era.
That begs the question if a tighter monetary policy will lower the prices or not. If effective, it would be a good policy for consumers, especially those of lower-class people, and it would be adversarial to business owners and industries.
Quote from: Dry Brett Kavanaugh on August 11, 2022, 01:29:27 PM
Grocery prices increased 13.1% in July- highest increase since 1979.
I guess the prices at restaurants will follow. I personally suspect that the labor shortage today is one of causal factors.
I have heard that Wednesday is the best day for buying grocery at a supermarket- cheaper and good quality- but I am not sure.
https://finance.yahoo.com/news/inflation-grocery-prices-increased-in-july-despite-cool-down-143205313.html
One trick: Check the fliers/circulars for specials and then get to the store the day that the new specials come out as they often sell out quickly. Oftentimes you can pick up or view (online? not certain) the next week's circular at the supermarket ahead of time and it helps for planning purposes. Note: in these days and times, sometimes the stores don't get in their specials or don't get them in right away. Also, some stores give out "rain checks" if they are sold out of something. You can get them at the customer service desk to use at a later date (ask how long they are good for).
Some other tricks: buy things like meat in larger (family size) packages and break them up into smaller amounts, wrap well, and freeze. Or you could work together with a friend and split a package. Also take a looksie through meat/fish, etc. and produce sections for "manager's specials" which are often items whose sell buy date is very soon (think tomorrow), but the food is still good. If you can't use it or all of it right away, freeze it.
Just some ideas....
PD
Quote from: Dry Brett Kavanaugh on September 16, 2022, 08:38:32 PMThat begs the question if a tighter monetary policy will lower the prices or not.
It's not a question at all. Contractionary monetary policy reduces demand, which lowers prices, though not uniformly. It's tried and true policy. The only question is how bad the accompanying recession will be.
Quote from: Pohjolas Daughter on September 17, 2022, 04:25:48 AM
One trick: Check the fliers/circulars for specials and then get to the store the day that the new specials come out as they often sell out quickly. Oftentimes you can pick up or view (online? not certain) the next week's circular at the supermarket ahead of time and it helps for planning purposes. Note: in these days and times, sometimes the stores don't get in their specials or don't get them in right away. Also, some stores give out "rain checks" if they are sold out of something. You can get them at the customer service desk to use at a later date (ask how long they are good for).
Some other tricks: buy things like meat in larger (family size) packages and break them up into smaller amounts, wrap well, and freeze. Or you could work together with a friend and split a package. Also take a looksie through meat/fish, etc. and produce sections for "manager's specials" which are often items whose sell buy date is very soon (think tomorrow), but the food is still good. If you can't use it or all of it right away, freeze it.
Just some ideas....
PD
Nice suggestions! I will implement these soon!
Quote from: Dry Brett Kavanaugh on September 16, 2022, 01:35:55 PM
The title of an opinion article on Washington Post today- Jerome Powell (Fed Chair) to the Rest of the World: Drop Dead. ;D
The author says that an increase in interest rate will not lower price, which is pushed by the insufficient supply rather than increased demand.
https://www.washingtonpost.com/business/jerome-powell-to-the-rest-of-the-world-drop-dead/2022/09/15/70e7b764-34b3-11ed-a0d6-415299bfebd5_story.html
Strange article, maybe to be expected with WaPo.
This in particular was bizarre.
Quote
US investors will continue to have no incentive to stray from American assets — and this will starve the rest of the world of capital. The latest Bank of America worldwide survey of fund managers survey, released on Tuesday, shows the largest underweight of global equities in its history. If you're a professional investment strategist, you're not going to be fired if you stick to dollar assets, or just dollar cash. It's hard to see what will change this mindset.
Why should it be on us (retail, fund managers) to invest in foreign markets that have historically underperformed the US? In March I looked up how much I would have lost if I used the ultra conservative three fund vs going nearly all in on US total stock market and it was an incredibly depressing amount. Investors will always need some incentive to invest in something, we are not charities.
The United Nations dared to disagree with Todd. WSJ: U.N. Calls On Fed, Other Central Banks to Halt Interest-Rate Increases.
https://www.wsj.com/articles/u-n-calls-on-fed-other-central-banks-to-halt-interest-rate-increases-11664809202
Quote from: Dry Brett Kavanaugh on October 03, 2022, 05:52:51 PM
The United Nations dared to disagree with Todd. WSJ: U.N. Calls On Fed, Other Central Banks to Halt Interest-Rate Increases.
https://www.wsj.com/articles/u-n-calls-on-fed-other-central-banks-to-halt-interest-rate-increases-11664809202
What did the UN disagree with? The UN concern is recession. I explicitly stated that contractionary monetary policy will cause recession, and it is a matter of how bad it will be, not whether it will occur. When the Fed raises rates, it in effect exports US inflation to the rest of the world and it always ends up causing financial distress in developing countries. The Fed legal mandates apply to the US only, not the rest of the world. It is not the responsibility of the Fed to pursue policies that manage inflation or employment in other economies. In fact, such policies may violate US law. Since the Fed cannot address tax policy or fiscal policy, it can only use the tools at its disposal. At least it's not jacking up reserve requirements.
We now shop at Lidl rather than at Waitrose! It is much cheaper. We have turned off the heating completely (according to an article in the Times today this is quite good for you). We just heat up the hot water for an hour in the morning. We have an open fire which we haven't yet used this Autumn.
Quote from: vandermolen on October 04, 2022, 05:29:45 AM
We now shop at Lidl rather than at Waitrose! It is much cheaper. We have turned off the heating completely (according to an article in the Times today this is quite good for you). We just heat up the hot water for an hour in the morning. We have an open fire which we haven't yet used this Autumn.
All the measures sound rather fun, Jeffrey! I have minimized eating out, and I found that I prefer my cooking to those at restaurants. Also I stopped buying clothes. Always I liked discount stores, and I continue to use them, ie Dollar General in the U.S.A.. I prefer seafood and fruits to meat/chicken, which are less costly. However, I have no plan to change this.
Quote from: Todd on October 04, 2022, 04:41:46 AM
What did the UN disagree with? The UN concern is recession. I explicitly stated that contractionary monetary policy will cause recession, and it is a matter of how bad it will be, not whether it will occur. When the Fed raises rates, it in effect exports US inflation to the rest of the world and it always ends up causing financial distress in developing countries. The Fed legal mandates apply to the US only, not the rest of the world. It is not the responsibility of the Fed to pursue policies that manage inflation or employment in other economies. In fact, such policies may violate US law. Since the Fed cannot address tax policy or fiscal policy, it can only use the tools at its disposal. At least it's not jacking up reserve requirements.
Fed is responsible for a prevention of inflation, as well as stable economic growth. Anti-inflationary measure should be formulated in the framework of 'overall' cost-benefit analysis, rather than the inflation Kamikaze- policy for deflation at any price.
Quote from: vandermolen on October 04, 2022, 05:29:45 AM
We now shop at Lidl rather than at Waitrose! It is much cheaper. We have turned off the heating completely (according to an article in the Times today this is quite good for you). We just heat up the hot water for an hour in the morning. We have an open fire which we haven't yet used this Autumn.
Any chance of burst pipes come winter?
And what is an open fire?
And, yes, I've been trying to be more economical re food too; you're not alone there.
Quote from: Dry Brett Kavanaugh on October 04, 2022, 07:43:53 AM
All the measures sound rather fun, Jeffrey! I have minimized eating out, and I found that I prefer my cooking to those at restaurants. Also I stopped buying clothes. Always I liked discount stores, and I continue to use them, ie Dollar General in the U.S.A.. I prefer seafood and fruits to meat/chicken, which are less costly. However, I have no plan to change this.
Do you have access to locally caught seafood DB? That would be sweet!
PD
Quote from: Dry Brett Kavanaugh on October 04, 2022, 07:48:00 AMAnti-inflationary measure should be formulated in the framework of 'overall' cost-benefit analysis, rather than the inflation Kamikaze- policy for deflation at any price.
The Fed is mandated by law to pursue policies that maximize US employment and promote US price stability. If it does not do so, then it must answer to Congress. (It should anyway.) If by inclusion of the word "overall", you mean the economic well-being of other countries should be considered to be either on par with US economic interests, or taken as material considerations that may require otherwise violating the law, then that is not the intent of the law. Congress would need to pass new legislation. It should pass new legislation since the immediate post-war law on the books basically leads to policy schizophrenia.
If by "Kamikaze" policy you mean the Fed's recent rate raises, then you grossly mischaracterize the too slow incremental rate increases. Inflation became a serious, measurable issue no later than mid-2021, with inflation well above the Fed's long-term target of 2%. It should have started raising rates last year. Instead, it clung the then fashionable and blatantly wrong notion that inflation was "transitory", something pointed out by academic economists, business economists, and Fed economists at the time. The Fed is still acting too slowly. It should have gone for one or two full point increases in its last two FOMC meetings precisely to emphasize the primary objective of lowering inflation while U3 remains (misleadingly) low.
The only way to end current inflation is with a recession. The idea of a "soft-landing" is false. Current inflation is the direct result of fourteen years of lax monetary policy and two years and roughly $5 trillion of fiscal stimulus - just in the US. Estimates of global fiscal stimulus since the beginning of 2020 put the total at about $25 trillion. Sustained, inflated aggregate demand leads directly to inflation.
I learned recently on a visit to the Haydnhaus Museum in Vienna that, when Haydn's estate was wound up in 1809, his pet parrot sold for more (in purely monetary terms) than he had paid for the whole house 16 years earlier, thanks to the inflation caused by the Napoleonic wars. War seems to equate to inflation, now or then.
Quote from: Todd on October 04, 2022, 08:24:12 AM
The Fed is mandated by law to pursue policies that maximize US employment and promote US price stability. If it does not do so, then it must answer to Congress. (It should anyway.) If by inclusion of the word "overall", you mean the economic well-being of other countries should be considered to be either on par with US economic interests, or taken as material considerations that may require otherwise violating the law, then that is not the intent of the law. Congress would need to pass new legislation. It should pass new legislation since the immediate post-war law on the books basically leads to policy schizophrenia.
If by "Kamikaze" policy you mean the Fed's recent rate raises, then you grossly mischaracterize the too slow incremental rate increases. Inflation became a serious, measurable issue no later than mid-2021, with inflation well above the Fed's long-term target of 2%. It should have started raising rates last year. Instead, it clung the then fashionable and blatantly wrong notion that inflation was "transitory", something pointed out by academic economists, business economists, and Fed economists at the time. The Fed is still acting too slowly. It should have gone for one or two full point increases in its last two FOMC meetings precisely to emphasize the primary objective of lowering inflation while U3 remains (misleadingly) low.
The only way to end current inflation is with a recession. The idea of a "soft-landing" is false. Current inflation is the direct result of fourteen years of lax monetary policy and two years and roughly $5 trillion of fiscal stimulus - just in the US. Estimates of global fiscal stimulus since the beginning of 2020 put the total at about $25 trillion. Sustained, inflated aggregate demand leads directly to inflation.
I partly agree with you and partly disagree with you. I'm divided myself as I don't know about the future. As you say, the soft-landing maybe a myth. However, there is a danger that a recession may not lower the price much, or at all. Ie, is an 8 percent unemployment in the USA worth for reducing inflation rate by 2 percent? It is an ideological question rather than scientific or sociological question. The bottom line is that it's difficult getting out of recession a lot more than getting out of inflation.
Quote from: ultralinear on October 04, 2022, 01:12:49 PM
We're big fans of Lidl, particularly the German and Polish produce e.g. meats and cheeses. Also their mini-Stollen, which around this time of year we consume by the bucketload. ;D They used to do tubs of a delicious potato salad which was identical to the one that Figlmüllers in Vienna serve with their Schnitzels, but lack of demand meant they stopped stocking it. :(
The only issue we've encountered is that their fresh fruit and veg often seems to have a very short shelf life - absolutely fine if you're going to use it today or tomorrow, but things like melons seem to go off a lot faster than those from elsewhere. :-\
Have you tried wrapping fruits/veggies with paper towel and keep them in plastic/vacuum bags?
Quote from: Pohjolas Daughter on October 04, 2022, 07:58:52 AM
Any chance of burst pipes come winter?
And what is an open fire?
And, yes, I've been trying to be more economical re food too; you're not alone there.Do you have access to locally caught seafood DB? That would be sweet!
PD
Open fire:
(//)
Quote from: ultralinear on October 04, 2022, 01:12:49 PM
We're big fans of Lidl, particularly the German and Polish produce e.g. meats and cheeses. Also their mini-Stollen, which around this time of year we consume by the bucketload. ;D They used to do tubs of a delicious potato salad which was identical to the one that Figlmüllers in Vienna serve with their Schnitzels, but lack of demand meant they stopped stocking it. :(
The only issue we've encountered is that their fresh fruit and veg often seems to have a very short shelf life - absolutely fine if you're going to use it today or tomorrow, but things like melons seem to go off a lot faster than those from elsewhere. :-\
I notice that shopping there is much cheaper than expected. I met the Headmistress of the school where I teach there recently (in the wine section) which convinced me that it was socially acceptable to shop there. 8)
Quote from: ultralinear on October 04, 2022, 01:12:49 PM
We're big fans of Lidl, particularly the German and Polish produce e.g. meats and cheeses. Also their mini-Stollen, which around this time of year we consume by the bucketload. ;D They used to do tubs of a delicious potato salad which was identical to the one that Figlmüllers in Vienna serve with their Schnitzels, but lack of demand meant they stopped stocking it. :(
The only issue we've encountered is that their fresh fruit and veg often seems to have a very short shelf life - absolutely fine if you're going to use it today or tomorrow, but things like melons seem to go off a lot faster than those from elsewhere. :-\
Good to know! Thanks :)
Quote from: Dry Brett Kavanaugh on October 04, 2022, 01:50:04 PMThe bottom line is that it's difficult getting out of recession a lot more than getting out of inflation.
That's debatable. The US has generally favored comparatively low inflation and has experienced more damaging bouts of true deflation than inflation. That's why the Volcker Fed and the JPow Fed caused and cause so much discomfort when taking necessary steps. (Greenspan did as well in the early 90s when he jacked up rates, but he had a different and friendlier fiscal and geopolitical environment to work in, and so he avoided recession then, gained a reputation as some type of superguru, and then pursued more questionable policies later.) The means for countering recession are very well known - increase demand through some combination of tax cuts, government expenditure, and/or expansionary monetary policy. Ideology typically drives policy preference. The US is somewhat constrained on the fiscal side, of course, since it now has $31 trillion in national debt and a weighted average duration for Treasuries of about five years, meaning debt service outlays will start to increase sooner than hoped. And the Fed, by acting slowly in raising rates and unwinding QE, has fewer tools at its disposal than it could to act as expansionary tools. Based on data and analyses I have seen (all in publicly available sources), the current economic situation indicates that the coming recession will be more like 90/91 or 2001 than the great recession, sticking with the most recent examples. Unfortunately, that means recovery will take a long time, but that is the secular trend anyway.
Inflation must be reduced more than two points. Inflation is currently ~8%, though forecast to be lower, while wage growth is around ~4%. That is a recipe for stagnation for the general population, further accelerated income and wealth inequality, and ultimately political instability. Inflation must be brought down even at the expense of recession.
Of course, there are a couple wildcards in this, namely the Russo-Ukrainian War, and the latest, rather familiar announcement by OPEC+ that it will cut oil production. Short of full-scale war mobilization in the US, which seems unlikely to say the least, the policy choices will end up changing in magnitude rather than type. Europe, Japan, and much of the developing world will be hit harder than the US. How China and India respond to recession will also help set their growth trajectories and therefore geopolitical ambitions into the next decade.
Quote from: vandermolen on October 04, 2022, 02:27:19 PM
Open fire:
(//)
So, when you are saying an "open fire" do you just mean having a fireplace in your home? Or is this an outdoors fire place?
If you're referring to it being inside a home, here in the States, we just refer it to as being/having a fireplace (with chimney of course).
PD
An amusing anecdote: The local, low brow Winco I shop at for groceries, where the parking lot has historically been filled with older cars and newer cars topping out at around the $40K range, has recently become frequented by higher income sorts. The proportion of fancier cars in the lot has increased, with multiple European makes popping up. At the same time, the fancy New Seasons store at the other end of the mall now has a markedly less full parking lot. (New Seasons is a formerly local, and now South Korean owned competitor to Whole Paycheck Foods.) It seems organic chow can't overpower inflation.
Quote from: Todd on October 07, 2022, 07:50:53 AM
An amusing anecdote: The local, low brow Winco I shop at for groceries, where the parking lot has historically been filled with older cars and newer cars topping out at around the $40K range, has recently become frequented by higher income sorts. The proportion of fancier cars in the lot has increased, with multiple European makes popping up. At the same time, the fancy New Seasons store at the other end of the mall now has a markedly less full parking lot. (New Seasons is a formerly local, and now South Korean owned competitor to Whole Paycheck Foods.) It seems organic chow can't overpower inflation.
I checked Dollar Tree and Family Dollar last month. I still prefer Dollar General. Have a great weekend, Todd.
My sense is that prices here haven't spiked particularly.
Quote from: k a rl h e nn i ng on October 07, 2022, 02:34:34 PM
My sense is that prices here haven't spiked particularly.
It is much worse in Europe. A lot of people have barely survived before this so prices going up just a little bit is already bad. If Your income has been 2000 euros and all of it has gone, 10 % increase in the cost means you need to cut spending 200 euros, but what if you can't because all of it is necessary (food, rent, electricity etc.?) Next winter will be horrible in Europe. People will get violent, because they are literally fighting to survive. Crime will spike. People have no choice but to rob to have food. I am fine for now, because I have savings, but I will lose those savings so that in the future I will be broke. It is horrible! Next spring will get right-wing goverment (FUCKING ASSHOLE FINNS voting for ASSHOLE RIGHT_WINGERS) and they will cut social security so my benefits will go down. I am screwed. THIS SUCKS SO MUCH!!! All this crap after the crappy covid years! Unbelievable!
Quote from: k a rl h e nn i ng on October 07, 2022, 02:34:34 PM
My sense is that prices here haven't spiked particularly.
Some states. And also it did for low-income people.
https://www.jec.senate.gov/public/index.cfm/republicans/2022/8/state-inflation-tracker-july-2022
Quote from: Dry Brett Kavanaugh on October 08, 2022, 06:31:27 AMSome states. And also it did for low-income people.
One must factor in gas and food price increases as well. Western states have seen a rapid increase in gas prices recently due to refinery capacity issues. Oregon, specifically, has the fastest rising gas prices in the US. Prices are pushing $6/gallon in the suburbs of the Portland metro area and are higher in some other areas. Technically, rapid price increases are not classified as inflation, particularly as it pertains to food and fuel. Rapid price changes do change consumer behavior, though.
Handy gas price link: https://gasprices.aaa.com/state-gas-price-averages/
US producer price inflation eases to still-high 8.5% (https://apnews.com/article/biden-inflation-business-prices-producer-480e451e18a9b9d12bb5e6cfe911ae85)
Quote from: vandermolen on October 04, 2022, 02:27:19 PM
Open fire:
(//)
As in you have a fireplace in your home? I have some here, but never use them. A relative has a fire pit on their deck (It's made of metal and is raised off of the ground with appropriate fireproof materials under it. Some friends have a propane-burning stove in their house for extra heat plus they have a beautiful old (and huge) wood-burning stove in their kitchen (a nice big Victorian one). They sometimes use it for baking though the results are a bit uneven. Another friend only uses his wood stove (not a cooking one) during the wintertime as he has electric heat and it's too expensive to use it.
PD
Quote from: Dry Brett Kavanaugh on October 08, 2022, 06:31:27 AM
Some states. And also it did for low-income people.
https://www.jec.senate.gov/public/index.cfm/republicans/2022/8/state-inflation-tracker-july-2022
Thanks! The pizzeria across Main Street has inched up their prices, perhaps, but that's not a situation which creates any squeeze for me, and they're neighbors, so we're in it together.
It appears that unexpectedly many small businesses were born and expanded during the pandemic years.
https://www.bbc.com/news/business-62894499
Consumer inflation rose 8.2% over the past 12 months, keeping pressure on households (https://www.latimes.com/business/story/2022-10-13/us-inflation-price-increases-in-september)
Some bipartisan economists criticize the Fed policy:
http://gregmankiw.blogspot.com/2022/10/paul-krugman-may-be-right.html
Plus, Supply-side view:
https://www.japantimes.co.jp/opinion/2022/07/06/commentary/world-commentary/supply-side-inflation-fix/
Quote from: Dry Brett Kavanaugh on October 13, 2022, 07:58:53 PM
Some bipartisan economists criticize the Fed policy:
http://gregmankiw.blogspot.com/2022/10/paul-krugman-may-be-right.html
Plus, Supply-side view:
https://www.japantimes.co.jp/opinion/2022/07/06/commentary/world-commentary/supply-side-inflation-fix/
Speaking of supply-side issues, I heard this morning (thanks to CNN) that drought conditions have been so bad (in many areas of the US not to mention in many areas around the world) that the Mississippi River's water levels have sunk so low that barges are running aground and that there is now a long cue. According to an article that I just found, the Army Corps of Engineers have been busy dredging the river and were hoping to get things moving again by today. Does anyone know whether or not they have been able to do so? I'm guessing not or not yet, since I just heard the story today on their t.v. channel though the article online is older.
In any event, when they do get things moving again, the barges will also have to proceed with a lighter load.
https://edition.cnn.com/2022/10/07/business/mississippi-river-closures-grounded-barges-drought-climate/index.html
PD
Quote from: Dry Brett Kavanaugh on October 13, 2022, 07:58:53 PM
Some bipartisan economists criticize the Fed policy:
http://gregmankiw.blogspot.com/2022/10/paul-krugman-may-be-right.html
Both are Keynesian ("New" or not). That one was a Republican and one is a Democrat doesn't mean anything. There are also Keynesians who want to see more tightening. There are also non-Americans who want to pursue contractionary monetary policy to eliminate inflation.
Quote from: Dry Brett Kavanaugh on October 13, 2022, 07:58:53 PMPlus, Supply-side view:
https://www.japantimes.co.jp/opinion/2022/07/06/commentary/world-commentary/supply-side-inflation-fix/
Spence's article does not explain how so-called supply side policies would reduce inflation. Reducing tariffs would reduce the price only of taxed imports. By definition, that would not reduce inflation. Even in the midst of neomercantalist policies emerging around the globe, tariffs are not imposed on a broad enough array of products to materially impact core inflation. I'm all for reducing all tariffs to zero. That won't solve the problem.
The bit about technology solutions is even weaker:
Quote from: Michael SpenceAt the same time, efforts must be made to improve productivity. Digital technologies will be crucial here. While the pandemic helped to accelerate the digital transformation, many sectors — including the public sector — are lagging and concerns about the effects of automation on employment persist.
But in a supply-constrained world characterized by persistent labor shortages, productivity-boosting digital technologies, together with higher wages for workers, would go a long way toward improving the balance between supply and demand. For example, artificial-intelligence-based tools can perform a wide range of functions, from screening luggage more efficiently at airports to analyzing medical imaging to detect cancers. Beyond digital technologies, regulatory regimes can be streamlined and improved, in order to reduce supply-side bottlenecks.
"Digital technologies will be crucial here" doesn't really mean anything - it's amorphous to the point of practical uselessness - and Spence does not explain how "digital transformation" will reduce inflation. Converting old federal systems built on 70s and 80s era technologies (eg, the IRS, the Fed) to new technologies is underway now and will take years. The same applies to many state governments and even local governments. Pinning monetary policy hopes on "artificial-intelligence-based tools" is as fashionable as it is irrelevant. Spence should keep it more direct: the government should pursue tax policies that increase private sector investment and should modernize government processes, allowing for a head count reduction.
It should be noted that the last bout of high inflation in the US also resulted in a preference for supply side policies, though inflation was eliminated by punishingly high interest rates and the most severe recession of the post-war era.
^ The Harvard guy is not a Keynesian. Yes, I found the article by the Nobel laureate rather superficial. I was thinking about perhaps corporate/producer (henceforth business) tax cut, loans/grants/subsidiaries to business, subsidiary for hiring, the same to solar and other energy sectors, reduction in tariffs and quotas, increase in free trade, etc.
Quote from: Dry Brett Kavanaugh on October 14, 2022, 07:28:34 AM^ The Harvard guy is not a Keynesian.
He's a proponent of New Keynesianism, hence my inclusion of "New". New Keynesianism attempts to merge Keynesian and Neoclassical approaches.
Quote from: Dry Brett Kavanaugh on October 14, 2022, 07:28:34 AMI was thinking about perhaps corporate/producer (henceforth business) tax cut, loans/grants/subsidiaries to business, subsidiary for hiring, the same to solar and other energy sectors, reduction in tariffs and quotas, increase in free trade, etc.
I guess you mean subsidy, not subsidiary. If so, you advocate a form of industrial policy (or neomercantalism) at the same time as an increase in free trade. These are contradictory policies. Subsidies are trade barriers. Neomercantilism is all the rage now. Some people will benefit, others will not. The general public may even benefit.
^ Yes, subsidies. I regret my error.
Quote from: Dry Brett Kavanaugh on October 15, 2022, 09:29:20 AM
^ Yes, subsidies. I regret my error.
But do you still advocate contradictory policies - that is, an increase in free trade while simultaneously relying on more trade barriers?
I'm not advocating anything. I make living by doing research on these things. As you already know, the subsidies I mentioned are not those given to USA exporters or domestic firms competing with foreign goods. They are subsidies/grants for hiring people and research/operations to cut production costs.
Quote from: Dry Brett Kavanaugh on October 15, 2022, 10:10:17 AMAs you already know, the subsidies I mentioned are not those given to USA exporters or domestic firms competing with foreign goods. They are subsidies/grants for hiring people and research/operations to cut production costs.
You are explicitly advocating several things, including subsidies. On the hiring side, do you advocate subsidies to encourage hiring only in lower skilled and lower wage service industries, which arguably do not require additional subsidization? Given current labor markets, who, precisely, would you target for hiring for any industry? Even in the slowing economy, U3 is at or near all-time lows. Is your objective to increase labor force participation? If so, what does your research show in terms of effectiveness of hiring subsidies as compared to continuing education and retraining programs targeting people not currently in the labor force?
On the so-called research/operations side, you previously mentioned "solar and other energy sectors". China is the largest manufacturer of solar panels. Subsidies for US solar panel manufacturers would directly aid US producers and would therefore directly compete with foreign goods in that case. "Other energy sectors" is amorphous, so which other sectors? Are you focused on renewables? If so, subsidies would have to be very carefully crafted so as to not compete with foreign manufacturers in certain sectors, such as wind turbines. Or do you mean that you would focus subsidies in even more specialized sectors such as, say, geothermal or tidal power, or that you would subsidize large scale energy storage by funneling funds to pumped storage hydro?
Without details as to what types of subsidies you advocate and/or have researched, claims that they would not compete with foreign goods are unsubstantiated.
Of course, with the WTO now basically toothless, complaints from foreign competitors would be less significant than they were only a few years ago.
(https://media-exp1.licdn.com/dms/image/C4E22AQElZyXt0ONNCw/feedshare-shrink_800/0/1665856790620?e=1668643200&v=beta&t=t3g-Mn7k5TlMPr85YJ11tSCSNp6g1krtiMt9AtaRYsI)
Why the Fed must keep on its current path.
Saw a video clip on CNN's website over the weekend in which they compared the current prices of certain food items vs. their respective prices in 2021:
Milk: 17% higher
Flour: 23% "
Eggs: 40% "
Bread: 16% "
https://www.cnn.com/videos
PD
Quote from: Pohjolas Daughter on October 17, 2022, 01:41:37 AM
Saw a video clip on CNN's website over the weekend in which they compared the current prices of certain food items vs. their respective prices in 2021:
Milk: 17% higher
Flour: 23% "
Eggs: 40% "
Bread: 16% "
https://www.cnn.com/videos
PD
The figures are very high. Probably medical cost too. I guess some people in developed economies are moving to low-cost countries. I am thinking about it myself too. In the time of electronic books and mp3, it's easy to move. Only problem would be finding good audio set.
(https://media-exp1.licdn.com/dms/image/C4E22AQEhjTT4-EJ_iA/feedshare-shrink_800/0/1666034304633?e=1668643200&v=beta&t=jslF-CutWlGmKmLskhvMwh_cEswHiY-qoNnDPV0xehc)
Quote from: Dry Brett Kavanaugh on October 17, 2022, 09:43:19 AM
The figures are very high. Probably medical cost too. I guess some people in developed economies are moving to low-cost countries. I am thinking about it myself too. In the time of electronic books and mp3, it's easy to move. Only problem would be finding good audio set.
Well, I would weigh in a lot of factors (which you are probably already doing) before moving. Things like:
Political climate
Crime
Economy
Healthcare and insurance
Infrastructure
Language and Cultural Differences and how to make friends and fit in
I'm sure that there are some good articles and resources out there. Including how to/what to expect when applying for a working visa.
Good luck! :)
PD
'Bad situation': Soaring US dollar spreads pain worldwide (https://apnews.com/article/inflation-middle-east-africa-business-global-trade-bee68344b1812dd48ca9c0735395b868)
Bad: Germany dodges recession but inflation climbs to 11.6% (https://www.reuters.com/world/europe/german-economy-posts-unexpected-q3-growth-2022-10-28/)
Maybe worse: Eurozone inflation climbed to new record high of 10.7% in October (https://www.euronews.com/my-europe/2022/10/31/eurozone-inflation-climbed-to-new-record-high-of-107-in-october)
Supporting rationing over negotiation should be a red flag.
Quote from: absolutelybaching on October 31, 2022, 09:55:51 AMI'm not advocating particularly for one or the other. I literally said "I wonder if..." we'd ever see rationing again.
Oh.
(https://media-exp1.licdn.com/dms/image/C4E22AQHBmh6YPBfnew/feedshare-shrink_800/0/1667563716574?e=1670457600&v=beta&t=yqLT4mAo7sYLTpJSJLaf9p9dBRmaWWKTIkBVYiXsXCk)
Mounting global price pressures threaten to trigger more rate rises (https://www.ft.com/content/7354b85e-64b5-4cc5-bcf3-ee74fe6d4915)
January inflation hits 6.4%, missing analysts' expectations for a faster slowdown (http://january%20inflation%20hits%206.4%,%20missing%20analysts'%20expectations%20for%20a%20faster%20slowdown)
Contractionary monetary policy is working as intended, though more is required. Keep up the good work, JPow.
Staggering to see the increases over the past few months in terms of egg prices (due to Avian flu and other factors). :(
Anyone here thinking of raising there own chickens? Or are buying eggs off of friends?
PD
While prices on eggs are definitely high now, I just suck it up. At the end of the day paying $6 for a dozen eggs is not exactly on par with having steak or lobster with every meal. I just see it as a mild inconvenience.
Fed can't tame inflation without 'significantly' more hikes that will cause a recession, paper says (https://www.cnbc.com/2023/02/24/the-fed-cant-tame-inflation-without-more-hikes-paper-says.html)
JPow needs to channel his inner Volcker.
From the Financial Times: ECB must do more to tackle inflation 'monster', says Christine Lagarde (https://www.ft.com/content/83d44991-4988-4e4f-8143-81d34b2b4173)
Christy went from "Inflation is largely transitory" to "inflation is a monster that we need to knock on the head". How about that?
US inflation below 5% for first time in two years.
https://www.bbc.com/news/business-65547974