• Last Updated:
  • Feb 26th, 2021 10:24 pm
[OP]
Jr. Member
Jan 5, 2018
153 posts
121 upvotes

Hyperinflation 2021

Hey guys,

I am sure that we all noticed this covid 19 has introduced us to extraordinary economic conditions that benefit many and also push down many as well.

Of course those that benefit has mainly been those with assets and property, like real estate and stock securities.

What I'd like to discuss here is your personal experience with inevitable inflationary environment in Canada.

Just now I visited Costco and a lot of the prices seem okay. But I just purchased a 30-egg pack that normally would cost 6.45 now priced at 7.25.

That makes each egg effectively costing you a quarter.

I look at stable food that has set amount of cost mandated by the government like milk, egg, wheat, and basic commodities.

We are witnessing some of the most incredible price appreciation on so many of these resources that hasn't seen a massive fluctuation in price since 2007-2008.


I think that we are just getting started. Money velocity remains the lowest in generation which is pushing the asset prices higher. Soon or later they are going to cash out their assets and start spending like cows.

We have to remember that CPI or inflation metric set by Canada and United States are lies, tweeked to represent as little inflation as possible, and with hedonistic metric that penalizes progress in inflation, I do not trust the official inflation rate one bit. How can anybody really claim that these is no or minimal inflation? It's here and we are all seeing them in asset classes at level we have never seen.

Honestly though,
What do you think is going to happen in 2021? How are you preparing yourself and your family for incoming inflationary environment?
NOT A WOMAN. JUST GOT A WEIRD NAME. I AM A MAN. THANKS.
35 replies
Deal Fanatic
Apr 5, 2016
5055 posts
3586 upvotes
Calgary/Vancouver
Take what assets you have and make them appreciate above inflation. That's probably why a lot of people are now looking towards the stock markets, precious metals, cryptocurrency.
Current Fido and Rogers customer.
Ex Koodo customer.
Sr. Member
Sep 7, 2018
818 posts
844 upvotes
As long as you ride the wave up by being in highly inflatable assets you'll be ok

Only the ones who hold plain old cash and use plain old savings will get screwed.
Deal Addict
Mar 3, 2018
1862 posts
1845 upvotes
GTA
You need an increase in money supply or increased velocity of money for high inflation. We have the increase in money supply but velocity has decreased countering the inflation effect. This happened after the 2008 stimulus money as well where inflation remained below 2% for years after. Where did all that money go. Real estate and stocks that increased dramatically. Usually what happens is poorer people spend their stimulus money whereby richer people invest it driving up asset prices.
Jr. Member
User avatar
May 9, 2019
145 posts
241 upvotes
GTA
In 2020/2021, cash is trash... outside of emergency fund, all in on real estate and stocks. Those with their cash just sitting in a 0.5% interest savings account will be the ones left behind. Savers are punished as usual in this country. Gotta invest!
Some say they're sick of my crap.
Deal Addict
User avatar
Dec 3, 2017
2614 posts
2212 upvotes
K-W/Guelph
The title is overdramatic however,

Inflation is definitely going up by more than the BoC says. Interest rates have been too low for too long and in turn have created a horrendous asset bubble in the housing market.

On the essentials side of things, inflation on food has to be upwards of 5% per year. COVID has helped to expedite this.

Honestly I expect to see upwards of 3% inflation in general this year and I also expect the BoC to do **** all to fix it. If possible, invest your money now.
DUCA credit union member
Sr. Member
Jun 4, 2013
690 posts
236 upvotes
Vancouver
Wife is seeing this also. Compare to the same items from last year is more expensive. Even if the same item is on sale is not as cheap as last year. I haven't notice it but I did notice there seems to be less sales overall.
Sr. Member
User avatar
Jan 15, 2017
967 posts
514 upvotes
jacnel wrote: The title is overdramatic however,

Inflation is definitely going up by more than the BoC says. Interest rates have been too low for too long and in turn have created a horrendous asset bubble in the housing market.

On the essentials side of things, inflation on food has to be upwards of 5% per year. COVID has helped to expedite this.

Honestly I expect to see upwards of 3% inflation in general this year and I also expect the BoC to do **** all to fix it. If possible, invest your money now.
Sure, no inflation, just people over-bidding on homes by multiples of what I paid for my starter home in the 1980s, nevermind the 1000% increase in home prices.

The only thing that isn't getting inflated are salaries.

People need to start deleveraging and fight back. Save more and borrow less. In recent weeks, I watched Loblaws raise the price on Cadbury chocolate bars from $1.99 to $2.99. I stopped buying them...at least from Loblaws. This past weekend, the price returned to $1.99.
Deal Addict
User avatar
Feb 3, 2005
4201 posts
547 upvotes
Georgetown
This trend has always existed... and yes, the published inflation rate is a bit muted due to shenanigans... However, I don't see things getting wildly out of control, etc.

However, the real risk I believe is more subtle. To stimulate the economy, you want low interest rates (which come with side effects... like the crazy housing market here in Canada). Inflationary pressures will create a pull to move fiscal policy in the opposite direction. If interest rates rise to combat inflation, that will mute the economy, and more importantly to Canada.... push down the housing market.

I actually believe the housing market getting pushed down makes perfect sense and should occur, but the ripple effect of that could be detrimental to Canadians in general (weaker economy and falling house prices... = increased bankruptcies, etc.) The housing market actually has been a primary driver of wealth creation in Canada while much of the rest of our economy has flatlined... take that away, or worse shrink it rapidly... and it will have broader impact.

Having said that - I'm not convinced that will occur by any means. At least not yet. A small interest rate rise muting the housing market would probably be beneficial at this point... and wouldn't tip it.
Sr. Member
Feb 11, 2007
572 posts
264 upvotes
East
Image
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Sr. Member
Jan 23, 2009
735 posts
748 upvotes
Ontario
Some of us think the stock market will only goes up, up and up for ever. The house price will double every couple of years for ever and the gov will spend $$$ they don't have. The hedge fund mgr selling stock they don't even own (shorting) We've being living in an artificial financial world for last 10-15 years. Tesla is worth more than all Big Car Companies in the World Combined, worth over $800 billion that has never turned a profit selling cars.

U.S. 10 Year Treasury recovering for all time low of 0.52% in Feb 2020 to 1.348% today. The recent rise in bond yields = inflation expectations

Always remember CASH IS KING
Sr. Member
User avatar
Jun 25, 2008
606 posts
316 upvotes
Did this turn into jcdogg's personal blog or something?

As for OP, predicting Hyperinflation in 2021 is incredibly overdramatic.
Deal Fanatic
Dec 5, 2006
9248 posts
4533 upvotes
Markham
Wondering whether this thread should be moved to investing forum
Sr. Member
Mar 3, 2009
871 posts
341 upvotes
Ottawa, ON
MikeMontrealer wrote: Did this turn into jcdogg's personal blog or something?
If you look at his / her post history every single post is about Bitcoin.
Deal Addict
Jan 29, 2017
2623 posts
1752 upvotes
Statistics Canada hastily revises inflation higher after concerns about methodology

Statistics Canada revised its measures of core inflation less than a week after receiving negative feedback over its methodological changes.

Revisions published Monday show price pressures are stronger than initially reported. They pushed the average of the Bank of Canada’s preferred measures of core inflation to a yearly increase of 1.77 per cent in January, from 1.5 per cent in the statistics agency’s initial release.

The updated numbers come just five days after the Feb. 17 release, which included a methodological change that left economists, analysts and other market participants puzzled.
https://financialpost.com/news/economy/ ... y-concerns

Why change the methodology in the first place?
Jr. Member
Jul 10, 2020
124 posts
149 upvotes
Current methodology includes rent (government restricted) and cost of servicing a mortgage (artificially low thanks to the FED) They do not care about the downpayment (open market) requirement doubling the last 8 years or 4xing since 2000.

This is probably the best and most pure measurement of inflation, the total money supply:

https://fred.stlouisfed.org/graph/?graph_id=248494

About 7% a year, accounting for population growth closer to 5%. As for this year... you get the idea.
Last edited by LookingForStuffNow on Feb 23rd, 2021 8:28 am, edited 1 time in total.
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