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Inflation Predictions

1356

Comments

  • Registered Users Posts: 3,284 ✭✭✭ brainboru1104


    The Fed are indicating at least three rises in 2022 AND 2023.

    The ECB are still in the denial phase.



  • Registered Users Posts: 8,240 ✭✭✭ Pussyhands


    It's really dangerous and just shows they don't give a crap about the common person and their money. The last decade has shown it's possible to have strong economies and low inflation. The whole "2% inflation target" is supposed to encourage people to spend to have a strong economy but we don't need the 2%. The 2% is for them, so they can inflate away their debts while stealing from our savings.

    It's a bad sign when the yanks are the responsible ones and are raising rates to lower inflation. Meanwhile the boyos in the ECB are telling us it's "just a pandemic cycle"....as if they knew this was going to happen...why didn't we hear of any possibility of a pandemic cycle 18 months ago??? The confidence in which Lane says inflation will lower next year...he's bluffing. He knows behind those eyes it's not coming down below 2%



  • Registered Users Posts: 8,240 ✭✭✭ Pussyhands


    🚨 🚨 🚨 US Inflation rises 7% over the past year, highest since 1982🚨 🚨 🚨




  • Registered Users Posts: 26,565 ✭✭✭✭ Wanderer78


    debt accumulation is dangerous now, its preventing us from advancing and doing what needs to be done, in order to increase our longevity on the planet, we need some inflation, in order to try deal with these historic levels of debt, but inflation alone probably wont solve this issue, we may need to enact radical polices such as debt jubilee's, in order to truly deal with it



  • Registered Users Posts: 3,284 ✭✭✭ brainboru1104




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  • Registered Users Posts: 26,565 ✭✭✭✭ Wanderer78




  • Registered Users Posts: 973 ✭✭✭ greenfield21


    Fed rate hike almost guaranteed now at March meeting. Could even get a shock one for January. Ecb will be much slower if they react at all. Interesting times.



  • Registered Users Posts: 11,659 ✭✭✭✭ recode the site


    With the end of the pandemic crisis hopefully in sight, I would foresee considerable improvements over coming year in supply chain logistics. All else withstanding, this should surely see the start of some stabilisation on the economy, although the ripples will be felt, se specially in some sectors, for years to come.

    Do one thing every day that scares you



  • Registered Users Posts: 26,565 ✭✭✭✭ Wanderer78


    JPMORGAN CEO: 'COULD BE SIX OR SEVEN RATE HIKES THIS YEAR'!



  • Registered Users Posts: 973 ✭✭✭ greenfield21


    Yes, the era of free money is finally coming to an end. It seems that they really did pump too much stimulus...



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  • Registered Users Posts: 26,565 ✭✭✭✭ Wanderer78


    ah the myth of free money, all money begins its life as debt, but most of it comes from the private domain, i.e. credit markets, and central banks dont create this!





  • Registered Users Posts: 3,284 ✭✭✭ brainboru1104


    So inflation is real now?



  • Registered Users Posts: 26,565 ✭✭✭✭ Wanderer78


    yes of course, we re experiencing inflation, largely due to supply issues, the bulk of money created, has made its way into the private domain, its sitting on the books of private creditors/debtors, and is largely being used to inflate asset prices such as stocks and shares, share buy backs etc, i.e. it largely actually hasnt made its way into the real world economy at all....



  • Registered Users Posts: 973 ✭✭✭ greenfield21


    Yes, in the US retail sales are up massively compared to 2019 and have exploded...port volumes way over 2019 levels. The issue is demand...along with inventories low. Also consumer balance sheets are in great shape.



  • Registered Users Posts: 8,240 ✭✭✭ Pussyhands


    The ECB have their fingers in their ears. They're basically gambling livelihoods of hundreds of millions of people that inflation will come down to normal levels. I don't think it will because the ball has already started rolling with wage increases. When wages increase, prices go up. And when prices go up, wages increase and it's a feedback loop.

    Philip Lane came out the other week and said this was a "pandemic cycle of inflation"....yet we heard nothing of this possibility 6 months ago!



  • Registered Users Posts: 289 ✭✭ techman1


    Its a big game with the ECB they might talk the big talk as regards inflation and pretend that inflation is not the issue it is. They are in deliberate denial for one reason they are unable to raise interest rates to quench out inflation because of the indebtedness of european governments most notably our own. Already interest rates are rising now because the bond markets don't believe the ECB.

    If they started now talking of stopping the bond buying well then interest rates would really take off and the governments would not be able to continue with the Covid supports and restrictions. Christine Lagarde is going to soon face her big test because the bond markets do not believe what she is saying. If the ECB does not raise interest rates when both dollar and sterling rates are going up well then the euro will fall on global currency markets which will only exasperate already high inflation rates especially energy.



  • Registered Users Posts: 11,174 ✭✭✭✭ Danzy


    If inflation beds in then the EU will have very hard choices.



    Growth in the EU but especially the Euro zone has varied from awful to weak and just occasionally moderate for 14 years.


    All that meagre meal has been achieved by rock bottom interests and massive stimulus.


    There is talk that the US fed might raise interest 5 times in the next year.


    If the ECB did that the Eurozone would be in such a crisis that it would be hard to see a resolution, as pointed out above its bluff may well be called.

    A lot of the Steam driving inflation might be venting off but it may be embedded now at a higher rate than desirable.



    It's the one story that should keep one awake at night.

    Post edited by Danzy on


  • Registered Users Posts: 8,240 ✭✭✭ Pussyhands




  • Registered Users Posts: 3,284 ✭✭✭ brainboru1104


    Fed’s Bullard backs aggressive rate hike path


    https://www.marketwatch.com/story/feds-bullard-backs-aggressive-rate-hike-path-starting-with-50-basis-point-move-in-march-11644522363



  • Registered Users Posts: 5,045 ✭✭✭ Brussels Sprout


    The BoE have raised interest rates and the Fed have signaled that they will do so next month. This pits them squarely against the ECB and specifically their chief economist Philip Lane. He made comments the other day that implied that raising rates wouldn't have the desired affect due to the fact that the primary causes of inflation, supply chain bottlenecks and soaring energy prices, are actually external to the Eurozone. In fact he said that raising rates would be worse than that - since it would create its own problems without resolving those other ones:


    "The logic underpinning a hold-steady approach to monetary policy is reinforced if the bottlenecks are primarily external in nature, caused by global disruptions in supply or a surge in global demand," he said.

    "Since monetary policy steers domestic demand, a tightening of monetary policy in reaction to an external supply shock would mean that the economy would be simultaneously confronted with two adverse shocks," he added.


    So....who's right and who's wrong? Is Philip Lane playing a game of Chicken with Eurozone inflation rates?


    link



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  • Registered Users Posts: 3,284 ✭✭✭ brainboru1104


    Phillip Lane still thinks quantitative easing isn't a factor in causing inflation. 🤷‍♂️



  • Registered Users Posts: 8,240 ✭✭✭ Pussyhands


    Philip Lane 100% playing chicken.

    Sure he came out a few weeks ago and said this is just a pandemic cycle of inflation...yet where was he telling us this was a possibility or probability a year or two ago?

    It's too late to stop it in the short term now. Wages are going up across the board. I'll be expecting a 5% increase this year in my own wages.

    Any effect an increase in rates will have won't filter through for a couple of years. It's fcuked. Central banks thought they had the best of both worlds as they did in 2008 when they printed cash like fcuk and it didn't trigger inflation. So they did the same and much more 10 years later.

    They might have gotten away with it if there was no restrictions on movement or supply chains but there was big money in deposits pre covid and then they threw silly money at everyone while they suppressed demand and now everyone is out spending their money at once while businesses are upping prices because they can. people are accepting the prices so they're not going to come down.



  • Registered Users Posts: 11,455 ✭✭✭✭ Geuze


    How much of the current rise in inflation is due to energy costs?

    Versus how much is due to QE?



  • Registered Users Posts: 3,284 ✭✭✭ brainboru1104


    First question is easy to answer because it's recorded, which is a lot. But prices of all goods are rising, not just energy.

    Second question is harder to quantify, but generally increasing the money supply beyond what the economy produces leads to inflation.

    Inflation for all goods are increasing. The Fed seem willing to take action. The BoE likewise. Meanwhile the ECB are still in the denial phase the other CBs were in last year.



  • Registered Users Posts: 2,798 ✭✭✭ Timing belt


    The big question I have is how much of the inflation is down to changes in consumer spending habits that has not been taken into account in the basket of goods and services.

    During Covid people were unable to spend money on services and this lead to more money being spent on goods. As economies open up and money starts to be spent on services it will result in less money being spent on goods which should reduce the inflationary pressure if it is demand pull inflation.




  • Registered Users Posts: 5,317 ✭✭✭ timmyntc


    Pandemic payments are a big cause of inflation - the money is basically printed and given to people out of work to spend - these people were (through no fault of their own) out of work, and as they were not working they did not produce anything to merit the money they now had. Pandemic supports were an inflationary factor, albeit with a somewhat delayed impact.

    That combined with the sharp drop in demand during start of pandemic, and the impact that had on production, supply chains etc have caused material shortages and abnormally high demand despite it all.

    In a "normal" economy, a big dropoff in demand like that would cause less money to circulate and some people would lose a lot of money - and when economy picked back up the demand would not be as high, and would slowly rise. Income supports bridged that gap so that after suppliers curtailed production, demand jumped right back up when it shouldnt have.



  • Registered Users Posts: 973 ✭✭✭ greenfield21


    Well the yoy comparisons get harder from here on out, retail sales spiked in March April last year and are now coming back down. All the free handouts are over and no more stimulus to come this year in the US anyway. So that is behind us and with aggressive fed to provide the recession? Hard to know...




  • Registered Users Posts: 2,798 ✭✭✭ Timing belt


    the USA they have seen wage inflation which will create secondary inflation so as you say it is hard to know if Fed are raising rates as the economy starts to cool leading to a recession.



  • Registered Users Posts: 3,284 ✭✭✭ brainboru1104


    ECB chief economist shifts inflation stance to signal policy ‘normalisation’


    👍



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  • Registered Users Posts: 11,174 ✭✭✭✭ Danzy


    The ECB are comfortable with a longer period of inflation to eat away debt.


    Given the woeful growth in the Eurozone for the last 15 years there is capacity there.


    It's a bit of a blessing for the ECB.



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