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Inflation & Interest Rates Discussion

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  • Mar 21st, 2024 10:11 pm
Deal Addict
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Oct 14, 2015
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Haha! I don't know if Tom is being facetious or what, but inflation has nothing to do with the Fed; it's climate change; or more accurately, temperature change.

http://www.321gold.com/editorials/mccle ... 22221.html

Snip:
The likely “cause” of why this works is agricultural. Higher temperatures, and rising temperatures, tend to be better for agricultural production. This leads to lower food costs, which trickles through to costs for lots of other things. But even if we cannot identify the root cause for this correlation, we have enough years’ worth of data to demonstrate that it is a real phenomenon, and it is up to us to guess at what the causes may be. Even if we don’t know the cause, we can still make use of the insights.
Deal Addict
Dec 13, 2007
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IrwinW wrote: Haha! I don't know if Tom is being facetious or what, but inflation has nothing to do with the Fed; it's climate change; or more accurately, temperature change.

http://www.321gold.com/editorials/mccle ... 22221.html

Snip:
If we measure weekly fart volumes of every person on the planet and chart it, I'm sure we'll find one or two guys whose chart will correlate perfectly with CPI
Member
Oct 31, 2006
294 posts
151 upvotes
According to Jpow and modern theory m2 supply increases dont add to inflation. I think its m2 anyways forgot...either way it seems that inflation is coming from somewhere else.
Sr. Member
Mar 12, 2017
832 posts
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I'm not an expert on the subject. So I'm interested to hear from people.

The fact that 2020 had barely no inflation is rarely mentionned. Shouldn't this year's figure be adjusted to consider that there was a lost year? Why don't people do it?

Banks have priced in a lot of hikes, but it advantages them to do so. Is a fast increase that could potentially create a recession really a better idea?

A lot of people expect inflation to go naturally back down in the next few months. Maybe they're wrong, but I'm not sure it's a certainty that going up by 2% in a year is necessary.

The earnings have been generally good so far. This correction is healthy and the market should have never gotten that high, but it seems that if if keeps going down a lot next week, the correction is going to be overdone. The SP500 to 4100-4200 makes a lot of sense if you look at how it performed in the last 10 years and the fact that we have seen a lot of earnings beat so far.

Then again, whatever I say should be taken lightly considering some experts on the subject also seem to be wrong a lot.
Last edited by leolozon on Jan 23rd, 2022 1:46 pm, edited 1 time in total.
Deal Guru
Aug 17, 2008
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leolozon wrote: I'm not an expert on the subject. So I'm interested to hear from people.

The fact that 2020 had barely no inflation is rarely mentionned. Shouldn't this year figure be adjusted to consider that there was a lost year?
You are correct.

It's called the Base Effect. You'll see some comparisons to 2019 for a more normalized comparison. My focus is on MoM vs YoY in my posts currently because of the base effect.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
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Jul 22, 2015
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Thought this was funny as you could apply it to the current inflation situation
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Deal Addict
Jul 30, 2012
2151 posts
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leolozon wrote: I'm not an expert on the subject. So I'm interested to hear from people.

The fact that 2020 had barely no inflation is rarely mentioned. Shouldn't this year's figure be adjusted to consider that there was a lost year? Why don't people do it?

The earnings have been generally good so far. This correction is healthy and the market should have never gotten that high, but it seems that if if keeps going down a lot next week, the correction is going to be overdone. The SP500 to 4100-4200 makes a lot of sense if you look at how it performed in the last 10 years and the fact that we have seen a lot of earnings beat so far.

Then again, whatever I say should be taken lightly considering some experts on the subject also seem to be wrong a lot.
YOY Comps apply to Earnings as well as Inflation...The headline Inflation number is what is spooking the markets (specifically on low earning/'high" growth tech) (i.e. 5>6% inflation rates) which is how pundits think the "market is too high".

That said, "I'll go out on a limb, lol" and say Earnings growth will come down (estimates already are) once inflation effects are more absorbed. YOY Comp earnings post Q1 aren't likely to be impressive on a YOY basis. In fact, some Q4 reports are showing weakness as I expected. Translation = YOY Headline Inflation number is likely to read high through 1H & EPS growth/outlooks low(er).

All that to say is the S&P500 / NASDAQ I expect are going to have a number of leadership changes that may affect the Indices points. Don't look for another +25% indices gains this year, Winking Face This is setting up to be a test of stock/sector picking skills this year IMO.
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Jun 2, 2020
1300 posts
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Van City
https://www.bloomberg.com/news/articles ... an-farmers

More of what some have been saying here - higher nat gas = higher fertilizer prices = higher food prices. Has me thinking about some Jan 2023 DBA calls contango be damned.
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Newbie
Apr 22, 2007
55 posts
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Richmond Hill
Liberal government is making inflation flying.
Sr. Member
Dec 8, 2013
887 posts
1347 upvotes
Blubbs wrote: Emergency Fed meeting Monday Feb 14 to address interest rates. Most expect 50 basis points by March, not sure if they will do 25 at this emergency meeting or 50:

https://www.federalreserve.gov/aboutthe ... closed.htm

Interest rates are finally going up.
Great, just in time for Valentines. Will have an excuse not to splurge. Sorry honey, doing my part to rein in inflation.
Deal Guru
Aug 17, 2008
10990 posts
13540 upvotes
Blubbs wrote: Emergency Fed meeting Monday Feb 14 to address interest rates. Most expect 50 basis points by March, not sure if they will do 25 at this emergency meeting or 50:

https://www.federalreserve.gov/aboutthe ... closed.htm
Please stop.
official-penny-stock-day-trade-short-te ... #p35718286
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience

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