DawgTalkers.net Forums DawgTalk Palus Politicus Deflation arriving soon ?

I have seen multiple articles and opinions recently suggesting the efforts to curb inflation are too aggressive - have gone too far - and deflation (which can be just as bad for the economy as inflation) will be here in the 'near' future.

Since every Trump or Anti-Biden poster was quick to rail and blame Biden for inflation - something the entire world has experienced but somehow it was all Joe's fault. And since everyone typically reacts to events AFTER they happen instead of commenting on what should be done BEFORE the events take place. . . . I wanted to get some opinions on record now:

Is Biden doing enough on inflation ?
Should he do more to counter inflation ?
Has he and the Fed done too much and should start looking to take action to prevent deflation?
Or do you just want to wait and see what happens and that way - no matter what - you can point the finger regardless?

Joe is limited in what he can do as far as I am concerned. We got to this point because of a bad combination of supply shortages and insatiable consumer demand, the latter of which I feel was created primarily through low interest rates and secondarily from too much fiscal stimulus. Joe doesn't control rates obviously, and what's done is done regarding stimulus, so what's left to look at is supply chain disruptions/shortages. He took steps where he could - for example, releasing some oil from the strategic reserve. Did this actually translate to the lower prices we saw or was it something else, like reduced consumer demand for fuel? Difficult to say at this point, but at least it was something that could have had an impact (as opposed to other measures/proposals that both sides like to take purely for political points). Most of the other steps needed to improve supply constraints are much longer term prospects which make measuring his action/inaction more difficult.

On the flip side, he essentially unilaterally decided to cancel a sizeable portion of student loan debt. The majority of economists seem to agree that this will not have a major impact on inflation, but it will have an impact nevertheless, and it should be considered as part of a balanced evaluation.



In my estimation the Fed has not done too much, and they need to continue to do more, in terms of rate increases. Not much more, but more. By the technical definition, if prices drop back to pre-pandemic levels, or just above pre-pandemic levels, we will have experienced deflation, however I look at it as a correction, not a trend. I would view inflation as an average over the 2-3 year period vs the year over year and not be worried. Some goods/services are really sticky and are more or less permanent, like rents and wages (to some degree), making this outlook more difficult to realize. But just as the stock market has ups and downs, it also has a long-term average trend.

In short, I am not opposed to deflation at this point in time. Prolonged inflation is more of a threat in my opinion.

The Fed (and to some degree, the Oval Office) really misread the situation when they labeled rising inflation as transitory. I'm happy they realized it and are taking steps to curb it. Their late action will create more pain than what could have been, but there was always going to be some pain no matter what. Frankly I'd rather have pain than a deep recession.

We as a country live and die by credit. At the consumer level it's all about the monthly payment. Housing shot up because consumers could afford to offer larger bids due to historically low rates.

The stock market shot up during the pandemic because of the easy, cheap money. Fundamentals were disconnected from stock prices, speculation was up. The markets are down, but still up compared to pre-pandemic. Like I said before, the long-term trend is about right despite the (unwarranted) peak and subsequent valley (correction).

On the topic of the market and rates - isn't it a little concerning that the market is actually rooting for unemployment to go up so that the Fed will possibly lower rates? It's almost like an addict trying to get their fix. I don't want a world where the "long" side of the market roots against the success of our economy - that is so backwards.

https://thehill.com/opinion/congress-blog/3723474-congress-must-act-to-stop-rising-inflation/

Inflation is impacting every person in this country, particularly those of us living in the so-called “flyover” states like Wyoming and Missouri. Families are being forced to make difficult decisions about what to buy at the grocery store, what bills to pay each month, and what trips to take, if any. On average, inflation is costing people in Wyoming more than $9,900 per year, and Missourians $8,900. The Congressional Budget Office (CBO) has also confirmed that inflation in rural communities — many of which we represent — is 130 percent that of urban areas. Rising prices are crippling Americans’ budgets, and at its core, inflation is a tax on rural Americans and the poor. Not a day goes by that we don’t rightfully hear about this from the folks back home.

The Federal Reserve is doing its part to try to combat inflation, but despite asset sales and the constant rate hikes — up 3.75 percent to date, the fastest increase in 40 years and larger than the past 15 years combined — inflation continues to persist. The Fed has a tall task because almost a third (29 percent) of all money in circulation in the economy today was created since February 2020. Higher interest rates so far have not had a significant impact on lowering inflation, but they are having a major impact on the housing market, as families are being priced out of the market. The average rate on a 30-year mortgage is 7 percent, more than double the average rate a year ago. Americans are also now being hit with the double whammy of not always being able to find the goods they need and paying higher prices when they do.


One of the chief culprits driving the spike in cost of living is Congress. At the beginning of 2021, Congress had already spent approximately $4 trillion since the start of the pandemic on the response. The CBO warned that no more federal stimulus was needed. Ignoring those facts, in March of 2021, Democrats chose to add $2 trillion to that total through the American Rescue Plan Act, even though there was still over $1 trillion in unspent COVID funds remaining on the books. Democrats should have known the catastrophic impact their excessive, inflationary spending would have on our economy. However, instead of heeding the warnings and focusing on targeted relief while curbing spending as the pandemic subsided, the Democrat majority in Congress used the excuse of a pandemic to continue to spend well beyond the country’s means, overheating the economy.

Congress must take real action to reduce wasteful government spending. Since President Joe Biden took office, federal spending has increased by $10 trillion over what was projected at the start of his presidency, a record increase for a president’s first 20 months. Giant, all-inclusive spending bills that no one has or takes the time to read or legislation that just maintains the status quo will not cut it any more. Congress must stop fueling inflation and stop throwing endless amounts of money at problems; it must carefully target where to spend Americans’ hard-earned tax dollars.

By cutting spending, Congress can send a powerful signal that it has heard the concerns of the American people and that it is serious about getting inflation under control and holding Washington accountable. With a realization that both Republicans and Democrats have culpability for our current $31 trillion debt, the last 20 months of single party Democrat rule in Washington has broken records for the size of debt added at $3.4 trillion. While we will fight efforts by Washington Democrats and the White House to use the upcoming lame duck session as an opportunity to increase spending even more before they pass the gavels of congressional leadership to Republicans, when Republicans gain control of Congress we must focus on fiscal restraint and getting our economy back on the right track.

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It is time to stop spending money we do not have on things we can live without. We must use every tool at our disposal and every opportunity that comes — including the next time Congress is forced to confront the debt ceiling — to combat the inflationary crisis created by President Biden.

Every American is making hard decisions regarding spending right now, and it is time Congress does the same.

Not the news I was hoping for...

https://www.kitco.com/commentaries/...ay-s-CPI-inflation-data-for-October.html

Inflation Nowcasting is currently indicating that the CPI (Consumer Price Index) is up 0.76% month over month for October and 0.71% month over month for the first week of November. It also shows that inflation continues to be persistent and exceedingly hot over 8% with the CPI currently at 8.09% year-over-year for October as well as November.

It is still early to predict what the Federal Reserve will do at the December 14 FOMC meeting. However, according to the CME's FedWatch tool, Fed fund futures traders are split almost equally between whether or not the fed will raise rates by 50 or 75 basis points. There is a 52 % probability that the Federal Reserve will raise rates by 50 basis points and a 48% probability that the Fed will raise their benchmark rates by 75 basis points.

I bought a bottle of desani water...$2.11. The inflation I spoke about months ago is here in full force.

For those of you who actually still pay for your groceries, you know how far $100 goes. Not very.

Deflation is worse. That means some other currency has overtaken ours as the "standard". If that happens, the house of cards comes down.

I think that is the goal of some.

Man, is that a dig against the poor? You could have said that without sounding salty. And yes, I pay cash for every damn dime's worth of my groceries. You people just ooze vileness, always worried somebody in need is making out better than you.

They’re salty and vile because they think they’re being replaced in society by minorities, women, and foreigners.

It's the current typical GOP response. Inflation is bad and deflation is bad. As long as a Democrat is president. Heads they win tails you lose. And thinking posters on Dawgtalk are paying for their groceries with food assistance? Yeah, that is shouting his core beliefs even louder. You know, anyone whose politics is different than his own must be poor.

I will give credit to Nixon on inflation. He handled high inflation rates by freezing employee’s pay for six MO’s. Then froze prices on all commodities for six MO’s. But republicans don’t want to talk about solutions anymore.

Let a Democrat try a wage and price freeze. All we would here is about how they're a bunch of communists. They said what a great leader Nixon was when he did it and how well he fought against inflation. Like I've said many times, it's often times not actually about what our politicians do. It's about which politicians do it.

Different times more then which politicians. I had respect for republican leaders in the house and senate when they told Nixon to resign or we’ll impeach and convict. And I voted for Nixon. Today the GOPer leadership cower to trump like he’s King Don and do nothing but point middle fingers at the left as if they should be his servants as well. It’s no wonder these mad MAGA violent extremists are coming out of the woodwork. It’s a way to get the Kings attention.

No, it wasn't.

How should I have worded it to pass your judgement?

The only problem is that didn't work.

Arguably it did. The point is he had a plan. GOPers have no plans anymore. Just talk. Then when they win on their false talking points the economy will be still be bad. And then they move the priority to lower taxes on the rich and take away SS, Medicare and other freedoms and equalities from the masses.

https://www.linkedin.com/news/story/ceos-now-freely-saying-recession-6061386/

CEOs now freely saying 'recession'

By Jake Perez, Editor at LinkedIn News
Updated 2 hours ago


CEOs of major corporations have no doubt been thinking about the likelihood of a recession for some time, but now the actual word is being discussed more openly in public settings. The word "recession" was used in 42 earnings calls during the third quarter of 2021, according to market data, compared to the 165 times it's come up so far this quarter. Companies are being cautious and expect the Fed's rate hikes to slow business — if they haven't already — even though other economic metrics, such as GDP and jobs numbers, are strong.

CEO's looking for that QE.

Deflation only happens when supply exceeds demand.

We will see how supply goes, but for now demand is still high, as we still have supply issues.