The inflation thread

[Core Shot]

http://www.shadowstats.com/alternate_data

[Danno]

Fred's rant is good, but is there data to back up his point about spending on credit? IOW, are people borrowing to buy crazy shit, or is there just flat out too much cash?

[Benny Profane]

To the Moon Alice...

Attachment 373487

Talking their book.

Anybody bought a flat screen lately? Clothes? Washing machine? Car?

And, no, bicycles don't count. Virus demand. Soon gone. I'm waiting for really cheap gravel bikes, barely used.

[Jax]

^^ You're gonna be waiting awhile.

[dunfree]

Fred's rant is good, but is there data to back up his point about spending on credit? IOW, are people borrowing to buy crazy shit, or is there just flat out too much cash?

Or is it people competing for certain commodities (lumber*) and entire other categories aren’t particularly inflated? Sure it’s May, but there’s a gear swap, are people going crazy?

clearly people want to find inflation based on this thread.

*edit to clarify - framing lumber and construction sheet goods. Hardwood lumber & cabinet birch plywood hasn’t gone up much at all near me.

[MontuckyFried]

Fred's rant is good, but is there data to back up his point about spending on credit? IOW, are people borrowing to buy crazy shit, or is there just flat out too much cash?

I dunno. I've been wondering how there are SO many "average" assholes running around out there with shiny new SUVs now that the average car price has recently surpassed $40K. But then I found that 84-month car loans are now a thing, and apparently even sometimes 10-year (120 month) car loans. WTF?! Now it all makes sense. People are gonna LOVE making those big car payments after their warranty's fried and their car starts having expensive repairs.
https://www.marketwatch.com/story/th...ar-11613683827
I'm also hearing about more and more people cashing in HELOCs to take advantage of record high RE prices. Yet another driver of remodeling going bonkers. Is it the majority? Probably not, but enough to have an impact.

I think there's a LOT more borrowing going on than people want to let on to.

[dunfree]

Uh, there’s numbers
https://www.federalreserve.gov/releases/g19/current/

[old_newguy]

Fred's rant is good, but is there data to back up his point about spending on credit? IOW, are people borrowing to buy crazy shit, or is there just flat out too much cash?

I sometimes sit and ponder how much cash I would have on hand if my two kids who have been in daycare for the last year had been at home the entire time.

Then I think about my retired parents who typically ate out weekly or more and flew cross country 2x or more with a side trip to Europe every other year. The SS and pension checks didn’t stop coming in...

[old goat]

Between supply chain disruptions and retired and WFH people with money to spend it's not surprising there's inflation. The federal unemployment is still keeping some workers at home until it ends in Sept. so labor shortages. (Might be good to end that sooner rather than later--if people have to go back to work the holdouts might get shots.) Remember the TP shortage? Remember the big stuck boat? Remember the pile up of ships waiting to unload? I don't think people understand the extent to which the pandemic has disrupted the global economy and is still disrupting it.
The question is how long it will take before we find out if price hikes are a blip or permanent. I figure at least a year, maybe longer considering how much of the world is unvaccinated.
While there are a lot of people with money to burn, there are an awful lot of Americans living in tents.
A lot of the inflation warnings are coming from corporations who don't want their taxes raised. A lot of it is coming from the right, now that they are out of power. Big deficits didn't bother them in 2017.
People have been warning of inflation since the Great Recession started to turn around--sooner or later they'll be right. But sooner or later?


Good piece on 60 minutes sunday about the chip shortage. A lot of chip capacity went into computers and other WFH electronics. The scary thing is--China has been unsuccessful in trying to build an advanced chip industry, the world's biggest chip maker is in Taiwan . . . .

[CarlMega]

so all your financial jeniuses - how do I protect all my pillow-cases full of cash in this inflation scenario? Are there pre-emptive moves - best assets? Or just wait and then bury it in treasury bonds?

[climberevan]

I agree with most of what FF said, but the assessment that the pres/gov isn't interested in doing any real infrastructure work is incorrect. The proposed infrastructure bill is very ambitious, and certainly not indicative of anyone being asleep at the wheel. Obviously the Party of No is opposed, but that's just how they are. If the blues can get this through it will be the biggest expansion of government involvement in society in generations.

I've seen the same huge increases in framing lumber costs but zero diminution in demand from consumers. They see the hypothetical values of their homes going to the moon and just pay whatever we ask. I recently raised my labor rates and didn't hear a peep. I've also found that costs for hardwood and cabinet grade ply have been stable.

Here's a great article about lumber. https://www.vox.com/22410713/lumber-prices-shortage

A friend who has a factory in Taiwan confirms the container problems. They are making things like crazy but then they just sit around on boats or at docks for weeks. The increased cost is absorbable for his business since the products are high value, but bulkier, lower value stuff will get more expensive.

I'm personally in favor of a major correction in all of this nonsense, especially since I don't borrow money, ever, and inflation will just erode my savings. The stock market, especially, seems bubbly.

[Jax]

Interesting synopsis on durable goods and income:

https://wolfstreet.com/2021/04/30/wt...durable-goods/

And his take on the chip shortage:

https://wolfstreet.com/2021/05/03/in...chip-industry/

And it's about to get worse thanks to Chia (XCH)..

https://markets.businessinsider.com/...1-4-1030373374

[Hopeless Sinner]

Between supply chain disruptions and retired and WFH people with money to spend it's not surprising there's inflation. The federal unemployment is still keeping some workers at home until it ends in Sept. so labor shortages. (Might be good to end that sooner rather than later--if people have to go back to work the holdouts might get shots.) Remember the TP shortage? Remember the big stuck boat? Remember the pile up of ships waiting to unload? I don't think people understand the extent to which the pandemic has disrupted the global economy and is still disrupting it.
The question is how long it will take before we find out if price hikes are a blip or permanent. I figure at least a year, maybe longer considering how much of the world is unvaccinated.
While there are a lot of people with money to burn, there are an awful lot of Americans living in tents.
A lot of the inflation warnings are coming from corporations who don't want their taxes raised. A lot of it is coming from the right, now that they are out of power. Big deficits didn't bother them in 2017.
People have been warning of inflation since the Great Recession started to turn around--sooner or later they'll be right. But sooner or later?


Good piece on 60 minutes sunday about the chip shortage. A lot of chip capacity went into computers and other WFH electronics. The scary thing is--China has been unsuccessful in trying to build an advanced chip industry, the world's biggest chip maker is in Taiwan . . . .

Labor shortages stem from kids still learning from home, no daycare, fear of getting c19 in public facing jobs, caring for older relatives, and low wages/tips. Plenty of anti maskers and anti vaxxers out there making the work atmosphere extra difficult.


"A lot of the inflation warnings are coming from corporations who don't want their taxes raised. A lot of it is coming from the right, now that they are out of power. Big deficits didn't bother them in 2017."

100% agree w this. The money transfer (Tax Act of 2017) to people that didn't need any more money may have sparked this whole mess.

Tariffs are a big factor in the price rises too. Not only are the imports more expensive it allowed US producers to push up prices along w the foreign competition.

[XXX-er]

Don’t forget the Canada tariff.

Finishing a sidewall project. Red cedar shingles at $240 a bundle. And I can’t even get them.

thats always been there to protect you from those syrup suckers up narth

wood is a commodity it goes up/ down/ sideways/ into oversupply/ into undersupply

and thats why you can't get it right now

At a BBQ event (2008-ish) I was cooking a burger for the manager of the canfor super mill and I made coments about those americans fucking us over (again) on softwood duties and he said " thats not such a big deal I don't know why they even bothered to settle it (probably because the American will fuck with it agian) but i will tell you what really fucks us up if the exchange goes up even 5 cents we are screwed "

within a year the Canuck dollar had gone way up, I seem to remember lumber was 200$ a thousand board ft or sft every thing was way cheap which means mills & manu couldn't sell anything, it was real cheap for buddy lunchkit to buy shit on e-bay but maybe he should keep tht money for when he loses the job ?

if you can wait for the prices to drop I would do so

https://www.cclgroup.com/docs/defaul...rsn=ecc82fc8_4

2007 ish the dollar was at least par, in any case this is all above my pay grade, i should just shut my mouth and complain about the cost of a 2x4 like all you lunch kits

[Not DJSapp]

I'm not convinced it is true inflation, it's a short term shift in the market but a significant shift that will see a return. It is a definite shift in the market for disposable income as all things tourism, sports, service, entertainment and arts have suffered due to lockdowns and restrictions. All of the money that was being spent there isn't being saved, it just shifted to other things without an elastic supply. Home improvement DIY, appliances are seeing heavier use, computer gaming, etc. As the markets for tourism, sports, service, entertainment and arts reopen, the demand on all these other disposable income items will plummet rapidly as people go outside. Shipping will ease as consumer good demand drops.

Remember how much money Hollywood made in 2019? $45.8 Billion globally. In 2020 it was $12.4 Billion. $33 Billion in revenue went somewhere and it sure wasn't into savings. MLB, NBA, NFL all took massive hits too.

[Benny Profane]

I sometimes sit and ponder how much cash I would have on hand if my two kids who have been in daycare for the last year had been at home the entire time.

Then I think about my retired parents who typically ate out weekly or more and flew cross country 2x or more with a side trip to Europe every other year. The SS and pension checks didn’t stop coming in...

Yup.

Like rental car inflation.

[XXX-er]

some people just whine about the price, of everything all the time

Is that cuz they have no critical think skills about how the price got high or what it cost to get something to the end loser ?

If you don't like the price figure out why you don't like the price and try to act according ly

[Not DJSapp]

some people just whine about the price, of everything all the time

Is that cuz they have no critical think skills about how the price got high or what it cost to get something to the end loser ?

If you don't like the price figure out why you don't like the price and try to act according ly

Yup. Rental cars are a great example here. Last year the headlines were all about how the car rental co's were dying and liquidating fleets because they couldn't afford to park them. Now everything is opening back up and they don't have a fleet to meet the return of demand. Prices spike. They'll get the cars and prices will come back, it will just take 4-6 months. Meanwhile I'll be doing some rallycross in a privately owned Honda Fit across the state of MT.

[Toadman]

My dad could get a 40ft container from Shenzhen to western NC for $3,400 this time last year. It is now $12,000.


Sent from my iPhone using TGR Forums

It's about $7,500-$9,000 to the West Coast from China. No end in sight. American appetite for cheap Chinese goods is insatiable. Rolled steel going for about 30% increase YOY. Aluminum up about 13%. Lumber, well, lumber has gone bonkers at around 250%.

More price hikes coming down the pipeline as fuel prices march upward. And try hiring someone to work in a mfg. or warehouse facility. Let alone find someone with a Class C drivers license that wants to run long haul routes.

[Percy Rideout]

I'm not convinced it is true inflation, it's a short term shift in the market but a significant shift that will see a return. It is a definite shift in the market for disposable income as all things tourism, sports, service, entertainment and arts have suffered due to lockdowns and restrictions. All of the money that was being spent there isn't being saved, it just shifted to other things without an elastic supply. Home improvement DIY, appliances are seeing heavier use, computer gaming, etc. As the markets for tourism, sports, service, entertainment and arts reopen, the demand on all these other disposable income items will plummet rapidly as people go outside. Shipping will ease as consumer good demand drops.

Remember how much money Hollywood made in 2019? $45.8 Billion globally. In 2020 it was $12.4 Billion. $33 Billion in revenue went somewhere and it sure wasn't into savings. MLB, NBA, NFL all took massive hits too.

Interesting take that nobody else seems to be talking about.

You're not wrong.

[climberevan]

I'm not convinced it is true inflation, it's a short term shift in the market but a significant shift that will see a return. .

My economist GF agrees with you. She says real inflation must include a supply side driver (increasing wages) or something like that. Why say do we call what's happening now, then? Just cost increases in various products?

[ötzi]

Interesting take that nobody else seems to be talking about.

You're not wrong.

I think he's right and Buffet touched on it briefly, only mentioning intenational air travel, but there are many sectors that are languishing and others that are thriving. If you look at the numbers, linked in dinfree's post above, average credit card debt went down in 2020, the first time sinc I think '08 and only the third time ever I believe.

The money's moving around but I don't believe there's that much more of it in circulation overall.

[Benny Profane]

My economist GF agrees with you. She says real inflation must include a supply side driver (increasing wages) or something like that. Why say do we call what's happening now, then? Just cost increases in various products?

We're not out of this yet. As Sapp said, entire billion dollar industries have been decimated for over a year. We're starting to see a big recovery just begin in domestic travel and restaraunts, but, commercial RE, international travel and tourism, and theater and stadium events still have a long way to go. We really won't know what's going on for a year or two (Lord help us if a vaccine resistant variant takes hold), but, a lot of underlying conditions still exist from pre pandemic times. Our industrial base is still halfway around the world and not coming back, personal debt is at all time highs, including 1.5 trillion in student debt, let alone all the frivolous credit card debt all around us, and now there's millions taking on high mortgage debt in a bubbled market, and, demographics. Covid didn't kill all the Boomers, sorry. It will still be another ten years before the last one turns 65, so they'll be with us for most of your lives. Old people, in general, don't spend a lot of money. Prime spending age is about 45. Besides, almost half of Boomers have nothing to spend besides SS in "retirement" anyway. They'll be a drag on the rest of the economy for years.

Oh, and that defeat of the Amazon union forming in Alabama is just a mockery of modern labor organizing. No way wages are going up if that can't happen.

[Toadman]

Pretty sure $12k is more normal than $3,400. Inflation has been here for years, the BLS and the FED just massage the numbers so as to not freak out the sheeple. If you pay for things it is obvious. As far as needing a crash, nope, no thanks. Just keep kicking that can please.

Normal cntr freight rates have been in the $3k range for a 40' dry van. All depends on what you are shipping.

I just paid $3.45/ reg. unleaded in Bend. Last week I paid $2.90 in CT. NJ was mid $2.80 range. Wait until the summer hoards hit the roads at the end of the month. $4 gas is right around the corner.

[Not DJSapp]

Why say do we call what's happening now, then? Just cost increases in various products?

A bubble. Similar to steel prices in the early 2000's when China was building like crazy. Not all bubbles pop, some just deflate. Demand will wain as people find other places to spend their money giving supply a chance to catch up.