Inflation - temporary or long term?

[IlliniApp]

It's going to be a long slow process. The chicken issue relates in part to Tyson et al seeing much higher grain prices and added expenses in their processing plants for updated ventilation, barriers and slower line speeds due to fewer employees, fewer inspectors, and high absentee rates. The beef situation is worse and likewise hogs. Same feed issues. $7 corn means doubling the price of growing out stock to marketable weights. Tyson also screwed up trying to pacify the food Nazis who didn't want them to vaccinate chickens for a common protozoa disease, so they tried to develop a coccidiosis resistant bird...marginally failed on 2 fronts. The mortality rate is higher and the hens that produce the eggs for the hatchery are slower to come to their egg laying and produce fewer eggs.

Meanwhile truckers are scarce as hen's teeth with some short haul truckers charging $60 an hour to drive....plus, fuel surcharges kicked in when diesel hit $3 a gallon. My garbage hauler took $2 off the charge for several years. Three months ago that fuel charge got added back to my monthly bill....10%. That is real identifiable inflation. When it hits $4, add another $2 a month.

I think there might be a little bit of relief on feed costs-wondering what new crop corn is in your area, it's $5.50 here, cash is $6 now-but protein costs don't look to be decreasing any time soon. I don't think the supply of live animals is going to be the problem, at least for cattle and hogs, it's the processing and transportation where the difficulty is.

 

[Fernando]

I was at Costco yesterday filling my gas. Unleaded dropped 10 cents a gallon from last week to $3.99.
Good sign that prices have reached a peak and starting to go down.

 

[Terrel L. Shields]

Good sign that prices have reached a peak and starting to go down.

It is going to depend upon whether our reserves increase here, imports are cheap or not. And if the dollar goes below 93 while oil trades in dollars, then the Arabs will raise prices accordingly. The minor changes in prices are day to day - not the general trend. I paid $1.599 last October in Vinita, OK. I paid $2.999 yesterday in Maysville.

 

[Fernando]

I read the Dollar has increased last month due to issues with China's economy.
This is strange market with flooding of dollars into the market, in which Dollar doing well.

 

[Deleted member 126639]

There has been no inflation. The government has explicitly implemented austerity measures since 2012 as a matter of public policy.

Appraisers who are obsessed with this non-existent issue are an embarrassment to the profession.

This is coming from a right-wing thing tank. If even they are calling for austerity to end, you have to ask yourself if you really understand inflation. There are titanic geopolitical struggles over US hegemony, which were failing until this past summer when interest rates on treasury debt was increased combined with $1 trillion of reverse repo agreements issued by the Fed daily. This sufficiently attracted foreign central banks into the USD sphere, for now. But this is not a long-term solution, as the abandonment of gunboat diplomacy in Afghanistan should make clear. That said, USD devaluation is a foreign policy objective of every major world power, including the UK.

Banning LIBOR in the US was a direct attack.

USD devaluation has caused prices to rise, but this is not inflation in the sense the quantity of currency units available is chasing fewer goods and services. The goods are available, simply not at the price Americans desire.

Another reason to raise the Fed's inflation target: An employment and output boom

In 2012, the Federal Reserve formally adopted an inflation target and set it at 2 percent, in line with the level chosen by many other central banks. In hindsight, this setting left policymakers with too little room to cut interest rates when they want to fight recessions. Many researchers have...

www.piie.com

 

[Deleted member 126639]

I read the Dollar has increased last month due to issues with China's economy.
This is strange market with flooding of dollars into the market, in which Dollar doing well.

The dollar has done well because of the aforementioned massive issuance of reverse repo agreements combined with rising interest rates on all treasury debt. This is not a long-term solution, and compelling the Muslim world to trade oil exclusively in USD is over with the Afghanistan pullout.

The only thing that is propping up the dollar is the premium the federal reserve pays for this reverse repurchase agreements.

 

[Deleted member 126639]

While the Fed Fiddles, the Dollar Burns: Dollar’s Purchasing Power Plunged at Fastest Pace since 1982​

by Wolf Richter • Jul 13, 2021 • 92 Comments​

Defying economists’ expectations for sixth month in a row, inflation heats up instead of easing off. And it’s a lot worse than it seems.​

By Wolf Richter for WOLF STREET.​

The Consumer Price Index jumped 0.9% in June from May, after having jumped 0.6% in May, and 0.8% in April – all of them the steepest month-to-month jumps since 2009, according to the Bureau of Labor Statistics today. The CPI without the volatile food and energy components (“core CPI”) jumped by 0.8% for the month and by 9.5% for the past three months annualized, the red-hottest “core CPI” since June 1982.

View attachment 54232

While the Fed Fiddles, the Dollar Burns: Dollar’s Purchasing Power Plunged at Fastest Pace since 1982 | Wolf Street

hey joe, send more stimulus money.

That is a very misleading graph, but China and Russia have been calling for a New Bretton Woods System since 2008. The "recovery" the moron who wrote this piece notes was in response to the passage of the 2010 IMF reforms, which Congress did not fully adopt and empower the President to act upon until March 27,2020 when the Bretton Woods Agreement Act of 1945 granted the president the power to borrower and unlimited quantity of special drawing rights from the IMF.

The demanded devaluation of the USD has been in the range of 25% to 33% 20 years. The world is not going to give dumb Americans free stuff anymore. Oh well, so sorry.

 

[Carlos Danger]

Bretton Woods is a below average ski area, in my opinion.

 

[alebrewer]

Appraisers who are obsessed with this non-existent issue are an embarrassment to the profession.

That might be a bit aggressive, as inflation is only indirectly associated with appraisal quality. And I've never considered ignorance to be an embarrassment - only an opportunity to learn. What is embarrassing to the profession is folks who intentionally mislead others - racial bias, other forms of bias, collusion, kickbacks, etc. That, my friend, is embarrassing. Do not castigate those who do not fully understand an issue, but rather embrace them. Castigate those who intentionally bring harm to our profession.

 

[Tim Hicks (Texas)]

There has been no inflation. The government has explicitly implemented austerity measures since 2012 as a matter of public policy.

Appraisers who are obsessed with this non-existent issue are an embarrassment to the profession.

This is coming from a right-wing thing tank. If even they are calling for austerity to end, you have to ask yourself if you really understand inflation. There are titanic geopolitical struggles over US hegemony, which were failing until this past summer when interest rates on treasury debt was increased combined with $1 trillion of reverse repo agreements issued by the Fed daily. This sufficiently attracted foreign central banks into the USD sphere, for now. But this is not a long-term solution, as the abandonment of gunboat diplomacy in Afghanistan should make clear. That said, USD devaluation is a foreign policy objective of every major world power, including the UK.

Banning LIBOR in the US was a direct attack.

USD devaluation has caused prices to rise, but this is not inflation in the sense the quantity of currency units available is chasing fewer goods and services. The goods are available, simply not at the price Americans desire.

Another reason to raise the Fed's inflation target: An employment and output boom

In 2012, the Federal Reserve formally adopted an inflation target and set it at 2 percent, in line with the level chosen by many other central banks. In hindsight, this setting left policymakers with too little room to cut interest rates when they want to fight recessions. Many researchers have...

www.piie.com

Inflation looks bad now, but it's pretty much sticking to the script

What's bad news for consumers has been good news for policymakers as well as investors when it comes to inflation.

www.cnbc.com

is CNBC a right wing outlet?

Boston Fed President Eric Rosengren said in a presentation that the area of rising inflation that concerns him the most is housing, with prices rising “with a steepness that is not dissimilar to what we were experiencing in the 2005 to 2007 period. … We do have to worry about housing prices in a boom-bust scenario.”

Overall, though, he said expecting inflation to keep up around the current level is “not a particularly good forecast.”