Inflation is Coming

[poker]

To me at least, it is clear that inflation will be part of the Covid Economic recovery. I don't see any way around it. And I mean more than what's happening now....

What I don't know is, how will affect the markets.

Is it time to get out before the dip? Or am I over reacting?

Are their sectors that will be harder hit, and some that won't be affected?

Is my S&P500 fund going to take a dip? When should I expect it?

Will the Feds just airdrop pallets of money in Times Square and keep the markets propped up?

Should I buy Gold now?

Am I crying wolf?

 

[poker]

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[poker]

Seriously? Nobody on this board has a strategy for inflation. No hedging my bets advice?

 

[Valcazar]

The problem is, What do you mean by "inflation"?
What number do you think you're dealing with?

"Inflation" has been the scare tactic against most activity for the last 30-40 years, so lots of people hear "INFLATION IS COMING" and just tune it out because shouting it with no details about what kinds of numbers people actually mean is just noise.

 

[poker]

The problem is, What do you mean by "inflation"?
What number do you think you're dealing with?

"Inflation" has been the scare tactic against most activity for the last 30-40 years, so lots of people hear "INFLATION IS COMING" and just tune it out because shouting it with no details about what kinds of numbers people actually mean is just noise.

Fair. But this time we have a global pandemic where almost every nation turned on the printing press... when they are warning me about inflation, I am taking it serious this time.

I would not presume to have a crystal ball... just trying to see if someone smarter than me can offer some friendly advice.

 

[oil&gas]

The problem is, What do you mean by "inflation"?
What number do you think you're dealing with?

"Inflation" has been the scare tactic against most activity for the last 30-40 years, so lots of people hear "INFLATION IS COMING" and just tune it out because shouting it with no details about what kinds of numbers people actually mean is just noise.

I was living in various parts of North America and Asia as
a teen and young adult from the late 1970s through the early
1980s. Most people younger than 50 have little experience of
the impact of inflation on their livelihood. Even though I was
still financially supported by family and well fed during those
years I still have vivid memory of the hardship. Runaway inflation may
be a scare tactic at present. When it finally kicks in many people
will finally get a real taste of what inflation is like. I have a
hunch that things are going to be worse than in 1980s.

 

[fall]

To me at least, it is clear that inflation will be part of the Covid Economic recovery. I don't see any way around it. And I mean more than what's happening now....

What I don't know is, how will affect the markets.

Is it time to get out before the dip? Or am I over reacting?

Are their sectors that will be harder hit, and some that won't be affected?

Is my S&P500 fund going to take a dip? When should I expect it?

Will the Feds just airdrop pallets of money in Times Square and keep the markets propped up?

Should I buy Gold now?

Am I crying wolf?

Get out of stocks and go where? Stocks are backed up by real assets and/or future expected cash flow. Inflation increases the nominal value of both. Investing in stocks is, actually, a way to hedge inflation, so, if anything, inflation will lead to further increase in S&P500.

 

[fall]

I was living in various parts of North America and Asia as
a teen and young adult from the late 1970s through the early
1980s. Most people younger than 50 have little experience of
the impact of inflation on their livelihood. Even though I was
still financially supported by family and well fed during those
years I still have vivid memory of the hardship. Runaway inflation may
be a scare tactic at present. When it finally kicks in many people
will finally get a real taste of what inflation is like. I have a
hunch that things are going to be worse than in 1980s.

When Canadian think of "high inflation", they think of 7-10% per year. Not 100% - 1000% as many of us have experienced at different parts of the world. And 10% inflation will not harm the economy.

 

[sprite09]

and many people don't know there's a diff between cost push inflation and demand pull.

rn it's mainly cost push inflation ("acts of God") due to covid19 (eg labour shortages) and bad weather (eg which is affecting price of commodities such as edible oil , coffee , etc) which is why the bank of Canada sees the relatively high inflation to be transient. additionally, the bank of Canada's preferred measured of inflation (CPI common) is around 1.7 percent (below their target of 2, which is what they want) but OFC the media just reports the general number (3.7) in its headlines. so, that's why they're not too concerned at the moment. yes , gasoline and food are up, but central banks in general strip these items out to arrive at at their core measure(s) because, as I mentioned, they're prone to supply chain disruptions (acts of god --weather , war, covid19, etc) and thus they are volatile .

Canada’s inflation rate jumps to 3.7 per cent in July, political opponents point finger at Trudeau

Prices were up in six of the eight product categories tracked by Statistics Canada, with an increase in the cost of shelter contributing the most to the overall rise in CPI

www.theglobeandmail.com

demand pull is the dangerous one where prices rise because the economy is running at full capacity , but clearly that's not the case right now (high unemployment rate, economy isn't fully open, etc) and some people blame the Canada Recovery Benefit for driving up prices ...hmm ya ...like $1000 a month (used to be 2k but even then not a lot of money unless you're a young adult living at home without any bills) is enabling unemployed people to buy cars, furniture , etc left and right and driving up prices....

speaking of furniture, that was driven not really by demand but govt tariffs ..fed govt imposed tariffs of about 300 percent on furniture from Vietnam and china ....so a recliner that used to cost $600 is now around $2600, according to one retailer

https://www.google.com/amp/s/www.cbc.ca/amp/1.6043863

housing...well ..that's been going up for a while in general and the reasons are multifaceted but put succinctly, due to low interest rates (in general low rates = higher asset prices ...look at the stock market as well...ATHs[all time highs])

 

[Carvher]

Inflation is here now. I don't think it will be transitory like can and us governments are saying. I think it will stay above their targets and they will be raising interest rates. Inflation on its own is not bad for markets nor is it bad for earnings as earnings should keep pace with inflation. All hard assets should inflate but that could include stocks as in if you own x amount of bce stock, that is a hard asset in the sense that bce or another Company is tangible. It really comes down to earnings. A correction will occur when the earnings start sucking or they are anticipated to.

 

[The Fox]

I’m a business owner and all my raw materials have doubled (lots of silicone) and logistics and distribution has doubled (plus arrival times massively delayed). I’m a small business and I’ll be losing money at my current list price. Businesses will need to pass the cost to their customers. They have no choice.

 

[fall]

and many people don't know there's a diff between cost push inflation and demand pull.

rn it's mainly cost push inflation ("acts of God") due to covid19 (eg labour shortages) and bad weather (eg which is affecting price of commodities such as edible oil , coffee , etc) which is why the bank of Canada sees the relatively high inflation to be transient. additionally, the bank of Canada's preferred measured of inflation (CPI common) is around 1.7 percent (below their target of 2, which is what they want) but OFC the media just reports the general number (3.7) in its headlines. so, that's why they're not too concerned at the moment. yes , gasoline and food are up, but central banks in general strip these items out to arrive at at their core measure(s) because, as I mentioned, they're prone to supply chain disruptions (acts of god --weather , war, covid19, etc) and thus they are volatile .

Canada’s inflation rate jumps to 3.7 per cent in July, political opponents point finger at Trudeau

Prices were up in six of the eight product categories tracked by Statistics Canada, with an increase in the cost of shelter contributing the most to the overall rise in CPI

www.theglobeandmail.com

demand pull is the dangerous one where prices rise because the economy is running at full capacity , but clearly that's not the case right now (high unemployment rate, economy isn't fully open, etc) and some people blame the Canada Recovery Benefit for driving up prices ...hmm ya ...like $1000 a month (used to be 2k but even then not a lot of money unless you're a young adult living at home without any bills) is enabling unemployed people to buy cars, furniture , etc left and right and driving up prices....

speaking of furniture, that was driven not really by demand but govt tariffs ..fed govt imposed tariffs of about 300 percent on furniture from Vietnam and china ....so a recliner that used to cost $600 is now around $2600, according to one retailer

https://www.google.com/amp/s/www.cbc.ca/amp/1.6043863

housing...well ..that's been going up for a while in general and the reasons are multifaceted but put succinctly, due to low interest rates (in general low rates = higher asset prices ...look at the stock market as well...ATHs[all time highs])

I am pretty sure that "labor shortage" and "high unemployment" are two things can co-exist only if there is a wage ceiling

 

[Carvher]

No they coexist because the drama teacher is paying people to stay home

 

[Carvher]

I’m a business owner and all my raw materials have doubled (lots of silicone) and logistics and distribution has doubled (plus arrival times massively delayed). I’m a small business and I’ll be losing money at my current list price. Businesses will need to pass the cost to their customers. They have no choice.

Yes, my company is also paying more for all our parts by average of 20 percent. We have passed costs on to customers who have accepted as they have no choice. Lead times are up to 30 weeks on some parts because whole industry is running at capacity.

 

[sprite09]

No they coexist because the drama teacher is paying people to stay home

don't fully agree with this as. I mentioned $1000 a month isn't much , although I will say for people who were working , say , 10 hours a week at minimum wage ....ya I can see them being like ..."what's the point ?"


some sent home due to covid which causes sudden disruptions

some of it has to do with people changing careers ...and since we're on terb lol ...that includes strippers who have moved on from the industry

https://www.google.com/amp/s/www.cbc.ca/amp/1.6152353

as usual, the issue is multi faceted ....some as a result of muted immigration levels for skilled workers

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www.google.com

 

[fall]

No they coexist because the drama teacher is paying people to stay home

Well, only if you stretch the definition of employment and labor force. People who decide to stay home and collect the government payments are not a part of labor force and, by definition, are not "unemployed". That COVID payments did is they drastically reduce the labor force. This will lead to wage increase (or service fees demanded by private service contractors), and, together with the helicopter money, it will feed the inflation.

 

[fall]

some of it has to do with people changing careers ...and since we're on terb lol ...that includes strippers who have moved on from the industry

Based on the MP and SP price hikes, those strippers now working at Walmart .

 

[sprite09]

Based on the MP and SP price hikes, those strippers now working at Walmart .

obviously not ...but more like from stripper to escort ... surprisingly one stripper I know doesn't even escort anymore ...but few and far between for sure

 

[fall]

obviously not ...but more like from stripper to escort ... surprisingly one stripper I know doesn't even escort anymore ...but few and far between for sure

Not according to SP prices: an increase of supply would have led to lower prices .

 

[sprite09]

Not according to SP prices: an increase of supply would have led to lower prices .

me thinks potentially lower supply (no girls from other countries ) overall and actually higher demand , since SCs and many spas were closed and escorts are relatively cheaper, so they decided this was a good time to up prices