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"When it comes to inflation, the Fed must consider inequality" - FT... (so must the Bank of England, yet of course they don't either!)


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https://www.ft.com/content/af4394f1-cc0b-4240-9170-daf5d08ed2b8

https://investingplanner.com/2021/06/when-it-comes-to-inflation-the-fed-must-consider-inequality/

"Inflation is already a painful tax on low, moderate and middle-income households...this will not end well unless the Fed recognises the profound impact inequality has on the US economy..."

A very good piece that references house price inflation, of course. 

Edited by gruffydd
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But does your previous FT thread not indicate that the inflation will be driven by wage inflation?

That's got be be OK for people with debt, and a wage.

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Posted (edited)
4 minutes ago, Timm said:

But does your previous FT thread not indicate that the inflation will be driven by wage inflation?

That's got be be OK for people with debt, and a wage.

Yes but this piece indicates that wage inflation will be outrun by asset prices (cars, houses, etc.)... as for the 2% figure for food... that has only just begun. 

They need wage inflation... to get away with the broader inflationary storm that's coming... but it's fakery imo. We will see wage inflation, but... 

https://www.bloomberg.com/news/articles/2021-06-07/inflation-outlook-economist-roger-bootle-sees-consumer-prices-surge-after-covid 

Edited by gruffydd
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11 minutes ago, Timm said:

But does your previous FT thread not indicate that the inflation will be driven by wage inflation?

That's got be be OK for people with debt, and a wage.

Outright theft of savings.


The bankers and establishment know exactly what they are doing.

 

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Posted (edited)
4 minutes ago, TheCountOfNowhere said:

Outright theft of savings.


The bankers and establishment know exactly what they are doing.

 

So wage inflation is now a policy goal in the USA... yet they're going to constrain broader inflation... and how might that work? Looks like fakery to me. They cannot do both. 

The priority is clearly to inflate away debt at the expense of the hoi polloi... using wage inflation as a smokescreen. 

Sadly, they're likely to drive the wider economy into a brick wall, at speed... although house prices will also crash (clutching at the positive here!).

Edited by gruffydd
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18 minutes ago, gruffydd said:

So wage inflation is now a policy goal in the USA... yet they're going to constrain broader inflation... and how might that work? Looks like fakery to me. They cannot do both. 

The priority is clearly to inflate away debt at the expense of the hoi polloi... using wage inflation as a smokescreen. 

Sadly, they're likely to drive the wider economy into a brick wall, at speed... although house prices will also crash (clutching at the positive here!).

I've been saying this for some time.

The whole system is ****ked.

Make a plan, protect yourself as best you can.

Property is the least of peoples worries.

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1 hour ago, gruffydd said:

Yes but this piece indicates that wage inflation will be outrun by asset prices (cars, houses, etc.)...

That has already happened.

Art as well, crypto of course, PMs to some extent.

There is of course the risk that funds will continue to flood to these places.

1 hour ago, gruffydd said:

as for the 2% figure for food... that has only just begun. 

They need wage inflation... to get away with the broader inflationary storm that's coming... but it's fakery imo. We will see wage inflation, but... 

https://www.bloomberg.com/news/articles/2021-06-07/inflation-outlook-economist-roger-bootle-sees-consumer-prices-surge-after-covid 

Sorry, can't get past the paywall.

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3 minutes ago, Timm said:

That has already happened.

Art as well, crypto of course, PMs to some extent.

There is of course the risk that funds will continue to flood to these places.

Sorry, can't get past the paywall.

Yes already happened... and will outpace wage inflation on an ongoing basis. Wage inflation won't exactly dent house price inflation alone... 

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Posted (edited)

"Year on year, the real cost of living in the US has skyrocketed — homes are up more than 12 per cent, a used car is up 21 per cent, and food costs have risen over 2 per cent. The Fed has recognised a few of these cost increases, but chalks them up to “transitory” factors that do not contribute to the sustained inflation it wants to see before it normalises policy. But it is hard to see which structural factors will reverse far enough and fast enough to erase these cost obstacles to family financial security." 

https://investingplanner.com/2021/06/when-it-comes-to-inflation-the-fed-must-consider-inequality/

Edited by gruffydd
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Posted (edited)
1 hour ago, TheCountOfNowhere said:

I've been saying this for some time.

The whole system is ****ked.

Make a plan, protect yourself as best you can.

Property is the least of peoples worries.

The policymakers have their policy goals... but the complexity is so huge it won't take much for things to move beyond their control... and there lies the big problem right now... the old guard don't understand the complexities of the modern world on so many levels, driven by tech change... I was speaking to a regulator the other day about crypto - they freely admitted they barely had a clue! That's how bad things are. 

And looking at housing/inflation/policy - this is a very good point: "Year on year, the real cost of living in the US has skyrocketed — homes are up more than 12 per cent, a used car is up 21 per cent, and food costs have risen over 2 per cent. The Fed has recognised a few of these cost increases, but chalks them up to “transitory” factors that do not contribute to the sustained inflation it wants to see before it normalises policy. But it is hard to see which structural factors will reverse far enough and fast enough to erase these cost obstacles to family financial security." 

Again, they don't have a handle on things. 

https://investingplanner.com/2021/06/when-it-comes-to-inflation-the-fed-must-consider-inequality/

Edited by gruffydd
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34 minutes ago, gruffydd said:

The policymakers have their policy goals... but the complexity is so huge it won't take much for things to move beyond their control... and there lies the big problem right now... the old guard don't understand the complexities of the modern world on so many levels, driven by tech change... I was speaking to a regulator the other day about crypto - they freely admitted they barely had a clue! That's how bad things are. 

And looking at housing/inflation/policy - this is a very good point: "Year on year, the real cost of living in the US has skyrocketed — homes are up more than 12 per cent, a used car is up 21 per cent, and food costs have risen over 2 per cent. The Fed has recognised a few of these cost increases, but chalks them up to “transitory” factors that do not contribute to the sustained inflation it wants to see before it normalises policy. But it is hard to see which structural factors will reverse far enough and fast enough to erase these cost obstacles to family financial security." 

Again, they don't have a handle on things. 

https://investingplanner.com/2021/06/when-it-comes-to-inflation-the-fed-must-consider-inequality/

Or they do have a handle on them and they're lying.

inflation isn't transitory as the prices dont come down again, and if they did they'd use it as an excuse to print more money.

This is permanent inflation and the establishment are using it to rob everyone.

I've said what my plan is and unless something changes dramatically before end of October then we will be buying a house with a 50% mortgage and letting the wage inflation clear it.

If they wont let prices fall nominally and inflation is taking off then I dont see what else anyone can do.

 

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10 hours ago, TheCountOfNowhere said:

Or they do have a handle on them and they're lying.

inflation isn't transitory as the prices dont come down again, and if they did they'd use it as an excuse to print more money.

This is permanent inflation and the establishment are using it to rob everyone.

I've said what my plan is and unless something changes dramatically before end of October then we will be buying a house with a 50% mortgage and letting the wage inflation clear it.

If they wont let prices fall nominally and inflation is taking off then I dont see what else anyone can do.

 

I would agree that they're lying... but because of the complexity of everything due to tech change... crypto, etc. - the complexity will quickly get the better of them... who knows what comes next. 

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