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Inflation

It’s over.
Avocados were $1.28 at WalMart a few days ago. Today I bought a couple for $.88 each. Can’t wait to resume with the avocado toast. 🤗
 
Meanwhile, in the circus, we call the general public. IT'S BIDENS FAULT! In reality, the farmer's costs increase as their losses increase more than their profits and the stores that end up with that Avacado put whatever price tag they want on it. The public blames the government while food industry CEOs walk unscathed to the bank.
 
The Producer Price Index is up 23.5%, year over year.

The Producer Price Index is up 23.5%, year over year! Many market seers, as well as SocSec. FRB etc. focus on the CPI — the prices Consumer pay (it's up 9%) — but the PPI — the prices Producers pay — gives a better look at corporate profit potential and consequent business sentiment.

I thought there was a single aggregate PPI. but I can't find it. The PPI shown in the graph is for "All Commodities." PPI for "Total Manufacturing Industries" tracks the one I show, more or less. PPI for "Final Demand: Finished Goods Less Foods and Energy" tracks CPI, more or less. I hope I haven't made mistakes.

A graph is pictured below. Red and green lines show inflation rate, CPI and PPI respectively. The blueish lines are interest rates. Use this URL if you want to manipulate the graph.

Note that interest rates are "always" higher than the inflation rate, and remain high until financial opinion is that inflation has been tamed. Until recently. Now you see inflation rates much higher than interest rates. In other words, "real" interest rates are now negative. Very negative if inflation continues.

I don't get TV. Is Producer Price Inflation a big story?

Bonds are still selling at a high price and, despite recent correction, stocks are still overpriced (according to pessimists). Should we expect more inflation? Recession? Both?

fredgraph.png
 
bilby said:
I know. It’s a fucking pittance. Minimum wage in Australia is $21.38 from July 1 this year; And very few Australians work for so little.
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You still don't understand that the $600/week was in addition to regular unemployment and that it was paid to people to not work. They were not even required to look for work.
 
Derec said:
bilby said:
I know. It’s a fucking pittance. Minimum wage in Australia is $21.38 from July 1 this year; And very few Australians work for so little.
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You still don't understand that the $600/week was in addition to regular unemployment and that it was paid to people to not work. They were not even required to look for work.
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I understand it; I just don't share your emotional response to it.
 
bilby said:
I understand it; I just don't share your emotional response to it.
Click to expand...
It's not an emotional response. It was a bad policy, and worst of all, it was continued for much longer than even a good expanded unemployment scheme due to the pandemic should have continued for.
It, and other pandemic policies that had long overstayed their welcomes, caused a great deal of the inflationary pressure we have been seeing.
 
Derec said:
bilby said:
I understand it; I just don't share your emotional response to it.
Click to expand...
It's not an emotional response. It was a bad policy, and worst of all, it was continued for much longer than even a good expanded unemployment scheme due to the pandemic should have continued for.
It, and other pandemic policies that had long overstayed their welcomes, caused a great deal of the inflationary pressure we have been seeing.
Click to expand...
You are so horrified by the idea of anyone getting something for nothing, that you cannot truly grasp the possibility that a reasonable and sensible person might think there's nothing wrong with it.

But really, there's nothing wrong with it.

Particularly not during an emergency situation. But even in normal times, freeloaders are not only acceptable, but unavoidable. And in our post full employment world, with its vast surpluses of pretty much everything, they're positively desirable.

We can't employ everybody. We can, and should, provide a high standard of living to everybody.

This is anathema to The American Way, rooted as it is in post-medieval Christianity, which holds that hard work and suffering are both desirable and virtuous. They are neither.
 
Reading a nice little story of how the US is getting more LNG to Europe than expected.

The United States is on track to blow past Biden’s March commitment of an additional 15 billion cubic meters of LNG for Europe this year

but then…

Benchmark gas prices in Europe have averaged $34.06 per million British thermal units (mmBtu) so far in 2022 compared with $29.99 in Asia and $6.12 in the United States .

That compares with average 2021 prices of $16.04 in Europe, $18.00 in Asia and $3.73 in the United States, data showed.

“The cargoes are going to go where the market demands it will go,” said Ed Hirs, an energy economist at the University of Houston.
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I wonder how their profit margin is doing these days?
 
Derec said:
bilby said:
I understand it; I just don't share your emotional response to it.
Click to expand...
It's not an emotional response. It was a bad policy, and worst of all, it was continued for much longer than even a good expanded unemployment scheme due to the pandemic should have continued for.
It, and other pandemic policies that had long overstayed their welcomes, caused a great deal of the inflationary pressure we have been seeing.
Click to expand...
This is the pandemic economics version of adults blaming their parents. Inflation has been caused by a tremendous amount of things and it keeps shifting. The one thing not contributing to inflation today... stimulus support 18 months ago.
 
bilby said:
This is anathema to The American Way, rooted as it is in post-medieval Christianity, which holds that hard work and suffering are both desirable and virtuous. They are neither.
Click to expand...

I mean, some people pay a lot of money to have people make them suffer and it's all deliciously "unchristian".
 
Jarhyn said:
bilby said:
This is anathema to The American Way, rooted as it is in post-medieval Christianity, which holds that hard work and suffering are both desirable and virtuous. They are neither.
Click to expand...

I mean, some people pay a lot of money to have people make them suffer and it's all deliciously "unchristian".
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I have no personal experience, but I think voluptuous blond sadists were available in San Francisco 1990 for $100/hour. What's the rate now? (Has the rate been rising recently? — this IS the inflation thread.) How does demand for such services vary among countries?

As a percentage of entertainers which countries have the highest portion of professional sadists? Is it, once again, some of the Anglophone countries?

There is some controversy about the alleged "pee-pee tapes." Why do they give Putin a strong hold on his asset? Is it because Mr. Trump, after all, really prefers sadists? (See how Melania slaps him; Stormy reportedly hit him with a magazine.) He fears that some supporters would see his preferred sex play as unmanly.
 
Swammerdami said:
Jarhyn said:
bilby said:
This is anathema to The American Way, rooted as it is in post-medieval Christianity, which holds that hard work and suffering are both desirable and virtuous. They are neither.
Click to expand...

I mean, some people pay a lot of money to have people make them suffer and it's all deliciously "unchristian".
Click to expand...

I have no personal experience, but I think voluptuous blond sadists were available in San Francisco 1990 for $100/hour. What's the rate now? (Has the rate been rising recently? — this IS the inflation thread.) How does demand for such services vary among countries?

As a percentage of entertainers which countries have the highest portion of professional sadists? Is it, once again, some of the Anglophone countries?

There is some controversy about the alleged "pee-pee tapes." Why do they give Putin a strong hold on his asset? Is it because Mr. Trump, after all, really prefers sadists? (See how Melania slaps him; Stormy reportedly hit him with a magazine.) He fears that some supporters would see his preferred sex play as unmanly.
Click to expand...
Inflation on how the overinflated inflated his underwhelmingly inflatable inflatable.
 
slate.com

Republicans Are Outraged at Joe Biden for Accurately Describing the Economy

There have now been two consecutive news cycles of negative tweets.
slate.com slate.com
Along with critical race theory, “wokeness,” the deep state, and other recent conservative obsessions, it appears we can now add the basic language of economics to the list of things Republicans have decided to go to war on.

Take the latest round of inflation statistics. On Wednesday morning, the U.S. got its first bit of truly good news about the rising cost of living this year. The Consumer Price Index, which has been surging in recent months, remained essentially flat in July. That was largely thanks to tumbling gas prices, which canceled out rising costs elsewhere. (Technically, the index actually declined a tiny amount, but the change rounded to zero.)
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Boy oh boy. If republicans ain’t got inflation to beat Joe up about come November, what do they got?
Could be just gas prices doing what they would do: “The best cure for high gas prices is high gas prices”.

I’m hoping the administration starts announcing big infrastructure projects in advantageous locations starting next month. Let the people know who their daddy is.
We could use a new CLE.
 
US Corporate Profits Soar With Margins at Widest Since 1950

A measure of US profit margins has reached its widest since 1950, suggesting that the prices charged by businesses are outpacing their increased costs for production and labor.

After-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, improved in the second quarter to 15.5% -- the most since 1950 -- from 14% in the first quarter, according to Commerce Department figures published Thursday.

Profit margins rise to most since 1950



The data show that companies overall have comfortably been able to pass on their rising cost of materials and labor to consumers. With household budgets squeezed by the rising cost of living, some firms have been able to offset any slip in demand by charging more to the customers they’ve retained -- though others like Target Corp. saw their inventories swell and were forced to discount prices in order to clear them.

The surge in profits during the pandemic era has fueled a debate about whether price-gouging companies carry a share of the blame for high inflation -- an argument pushed by President Joe Biden’s Democrats. Most economists have been skeptical about the idea.
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I know this is an old thread but I think it applies here in addition to the covid thread.

 
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