No conspiracy here, Consumber price index rises sharply

[Freewill]

I included an article on both the CPI and the situation in Iraq which does not seem to be much of a concern to Obama, but maybe he knows something we do not. Any way none of this is good for ANYONE let alone America. How much longer till all on the left realizes this administration failed America?


MADRID (MarketWatch) — Crude-oil prices edged higher on Wednesday, with the U.S. benchmark pushing back toward $107 a barrel after militants in Iraq attacked the country's biggest oil refinery, underlining worries about potential threats to export facilities in the south.

The refinery, located in the northern city of Baiji, is the biggest producer of refined fuel for Iraq’s domestic markets. The attack doesn’t affect production or exports from the country’s main oil fields and facilities in the south. The attack, however, underlined concerns over the situation in the country.

Crude oil edges toward $107 after Iraq refinery attacked - Futures Movers - MarketWatch

Consumer prices rise sharply in May

Consumer prices last month posted their sharpest increase in 15 months as inflation continued a recent acceleration from unusually low levels.

The consumer price index jumped 0.4% after rising 0.3% in April, the Labor Department said Tuesday. Economists had expected a 0.2% increase.

Over the past 12 months, prices have increased 2.1%.

Core inflation, which excludes the volatile food and energy categories, was up 0.3% last month the most since August 2011.

Consumer prices rise sharply in May

 

[Mac1958]

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The possibility of stagflation is beginning to increase, as there is upward inflation pressure and the numbers on the economy remain mixed. The possibility isn't above 20% or so, chances are still better that we're going to see some increased economic growth, but 20% does make me a little nervous.

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[Freewill]

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The possibility of stagflation is beginning to increase, as there is upward inflation pressure and the numbers on the economy remain mixed. The possibility isn't above 20% or so, chances are still better that we're going to see some increased economic growth, but 20% does make me a little nervous.

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OK, consider your audience. Stagflation, slow growth, high inflation and high unemployment? We had negative growth in the first quarter, we have high inflation and what I would call high unemployment or a low job participation rate. So how we can not be considered in stagflation is interesting. How we get out will be even more interesting. To fix on problem it would seem that we would make another worse. What to do, what to do?

What is the 20 percent that I don't know what you mean.

 

[Freewill]

And remember folks, food isn't included in the CPI nor energy.

Gasoline at U.S. Pumps Set to Hit Six-Year Seasonal High

Price Index for Meats, Poultry, Fish & Eggs Rockets to All-Time High

This isn't just gloom and doom or partisanship, this is the reality of the situation.

 

[Mac1958]

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The possibility of stagflation is beginning to increase, as there is upward inflation pressure and the numbers on the economy remain mixed. The possibility isn't above 20% or so, chances are still better that we're going to see some increased economic growth, but 20% does make me a little nervous.

.

OK, consider your audience. Stagflation, slow growth, high inflation and high unemployment? We had negative growth in the first quarter, we have high inflation and what I would call high unemployment or a low job participation rate. So how we can not be considered in stagflation is interesting. How we get out will be even more interesting. To fix on problem it would seem that we would make another worse. What to do, what to do?

What is the 20 percent that I don't know what you mean.

Depends on the definition of "stagflation". And of course, terms like that are always essentially subjective.

Generally it's considered an environment in which inflation is high or rapidly increasing, combined with slow economic growth. Unemployment is a byproduct of that environment, of course, but it's usually looking at GDP relative to inflation.

Personally, I would consider stagflation to be maybe 2.0% GDP growth and below and inflation over 5% or 6%. If we hit that stage, both numbers could get much worse. Again, the term is in the eye of the beholder.

The Fed is counting on growth to mitigate the $4 trillion it has dumped into the economy. If it does not -- and they damn well know this -- the possibility of stagflation increases.

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[Freewill]

.

The possibility of stagflation is beginning to increase, as there is upward inflation pressure and the numbers on the economy remain mixed. The possibility isn't above 20% or so, chances are still better that we're going to see some increased economic growth, but 20% does make me a little nervous.

.

OK, consider your audience. Stagflation, slow growth, high inflation and high unemployment? We had negative growth in the first quarter, we have high inflation and what I would call high unemployment or a low job participation rate. So how we can not be considered in stagflation is interesting. How we get out will be even more interesting. To fix on problem it would seem that we would make another worse. What to do, what to do?

What is the 20 percent that I don't know what you mean.

Depends on the definition of "stagflation". And of course, terms like that are always essentially subjective.

Generally it's considered an environment in which inflation is high or rapidly increasing, combined with slow economic growth. Unemployment is a byproduct of that environment, of course, but it's usually looking at GDP relative to inflation.

Personally, I would consider stagflation to be maybe 2.0% GDP growth and below and inflation over 5% or 6%. If we hit that stage, both numbers could get much worse. Again, the term is in the eye of the beholder.

The Fed is counting on growth to mitigate the $4 trillion it has dumped into the economy. If it does not -- and they damn well know this -- the possibility of stagflation increases.

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Please take no offense but you answered just like I would expect a financial advisor to answer.

OK let us analyze.

First quarter growth of the GDP, not the stock market which is just being inflated by the Fed. At best it was .1 percent at worse it was below 0, So what is the criteria? Persistent negative growth? Or just sluggish growth?

There is no doubt in my mind that inflation is well about 5 percent. Maybe not if only the CPI is the measure but reality is greater then 5 percent.

So the only way I see we are not already in stagnation is to ignore reality. The US economy is stuck in the mud. The only way out is opening more trade but since manufacturing his gone and agriculture exports would only increase inflation I don't see a way out.

 

[Mac1958]

Please take no offense but you answered just like I would expect a financial advisor to answer.

LOL, okay, point taken. I joke with clients that the first two words you'll always get when you ask an advisor a question are "it depends".

OK let us analyze.

First quarter growth of the GDP, not the stock market which is just being inflated by the Fed. At best it was .1 percent at worse it was below 0, So what is the criteria? Persistent negative growth? Or just sluggish growth?

There is no doubt in my mind that inflation is well about 5 percent. Maybe not if only the CPI is the measure but reality is greater then 5 percent.

So the only way I see we are not already in stagnation is to ignore reality. The US economy is stuck in the mud. The only way out is opening more trade but since manufacturing his gone and agriculture exports would only increase inflation I don't see a way out.

No doubt there's been a great deal of conflicting data over the last, what, two years. Every freakin' time we get good data I get hopeful, then the next day there's some lousy data. At a time when we should be clearly expanding, we have a clearly hostile governmental posture towards business, business owners are being told they didn't build that, and successful people are being told they didn't earn that. The economy is ultimately based on psychology, and the psychology right now ain't good, despite the ignorant/naive/partisan denials of some.

So, GDP? I think it will be increasing over the next couple of quarters, but I don't see total 2014 GDP over 2.5%. I don't think that's fast enough to outpace core inflation, and that's what worries me. Is inflation much higher, as you think? Maybe. And holy shit, as you point out, it depends on the measuring stick.

It's about psychology right now, and a race between GDP and inflation. I hope you're wrong. And by the way, I'm not shorting bonds yet.

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[Freewill]

Please take no offense but you answered just like I would expect a financial advisor to answer.

LOL, okay, point taken. I joke with clients that the first two words you'll always get when you ask an advisor a question are "it depends".

OK let us analyze.

First quarter growth of the GDP, not the stock market which is just being inflated by the Fed. At best it was .1 percent at worse it was below 0, So what is the criteria? Persistent negative growth? Or just sluggish growth?

There is no doubt in my mind that inflation is well about 5 percent. Maybe not if only the CPI is the measure but reality is greater then 5 percent.

So the only way I see we are not already in stagnation is to ignore reality. The US economy is stuck in the mud. The only way out is opening more trade but since manufacturing his gone and agriculture exports would only increase inflation I don't see a way out.

No doubt there's been a great deal of conflicting data over the last, what, two years. Every freakin' time we get good data I get hopeful, then the next day there's some lousy data. At a time when we should be clearly expanding, we have a clearly hostile governmental posture towards business, business owners are being told they didn't build that, and successful people are being told they didn't earn that. The economy is ultimately based on psychology, and the psychology right now ain't good, despite the ignorant/naive/partisan denials of some.

So, GDP? I think it will be increasing over the next couple of quarters, but I don't see total 2014 GDP over 2.5%. I don't think that's fast enough to outpace core inflation, and that's what worries me. Is inflation much higher, as you think? Maybe. And holy shit, as you point out, it depends on the measuring stick.

It's about psychology right now, and a race between GDP and inflation. I hope you're wrong. And by the way, I'm not shorting bonds yet.

.

I guess not too many are interested in discussing the economy, can't blame either side. Neither seem to be doing a damn thing, if there is a thing they can do. Well nothing except inflating the money supply to prop up the stock market.

I was thinking of getting more into municipal bonds, but I sure wish I knew what you meant by the shorting bonds.

 

[editec]

Let us stop pretending that there is one -- and only one --US economy.

How the economy is doing depends on what socioeconomic class you belong to.

For most working people the economy is shit.

For the more affluent working classes and of course for the investment classes it appears (note that word, please) to be on the mend.

 

[Freewill]

Let us stop pretending that there is one -- and only one --US economy.

How the economy is doing depends on what socioeconomic class you belong to.

For most working people the economy is shit.

For the more affluent working classes and of course for the investment classes it appears (note that word, please) to be on the mend.

Your point is well made and I think it is the way it has always been. Consider that in the most simplest of terms inflation means that the money supply is inflated. Thus in Capitalism more money means higher prices. So who gets all this newly printed money? Not the person on a fixed income or one who gets raises that are far below the inflation rate but the rich. It is just the way life works, fair or not. So the rich, unless incredibly stupid, never suffer no matter what happens.

 

[Iceweasel]

Are you shitting me? I can barely afford consumbers now.

 

[Mac1958]

I was thinking of getting more into municipal bonds, but I sure wish I knew what you meant by the shorting bonds.

[MENTION=33456]Freewill[/MENTION]: Long story, but here's essentially what it means to "short" a stock or a bond:

When you "short" a security, you're betting that it will go down in value. I can go more into detail if you'd like, but that's the bottom line. You can do this either with individual securities or with ETF's (Exchange Traded Funds), which are similar to mutual funds.

Now, when a bond goes down in value, that means that the yield is increasing. Think of it as a teeter totter, one side goes up, the other goes down.

So, when interest rates start going up, that will mean that the value of your bond or your bond mutual fund is going down, it's worth less. So, if you buy into an ETF that shorts bonds, you're betting that their value will go down, that interest rates will go up, you'll ride them up.

Here's a link to TBT, an ETF that DOUBLE shorts bonds: TBT Fund Quote - ProShares UltraShort Lehman 20+ Year Treasury Fund Price Today (TBT:NAR) - MarketWatch. When interest rates are going up, its value goes up about 1.75x that rate.

If you're looking at investing in bonds for retirement income, I'd suggest diversifying them so that some of the bonds you're holding will react well to inflation. Diversify! Franklin Templeton has a few nice strategies here, you can invest directly with them: https://www.franklintempleton.com/retail/pages/generic_content/home/splash_PUB/rising-rates-pub.jsf

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[Freewill]

Are you shitting me? I can barely afford consumbers now.

Sigh, I was waiting.

Have you priced tamatoes?

 

[Freewill]

I was thinking of getting more into municipal bonds, but I sure wish I knew what you meant by the shorting bonds.

[MENTION=33456]Freewill[/MENTION]: Long story, but here's essentially what it means to "short" a stock or a bond:

When you "short" a security, you're betting that it will go down in value. I can go more into detail if you'd like, but that's the bottom line. You can do this either with individual securities or with ETF's (Exchange Traded Funds), which are similar to mutual funds.

Now, when a bond goes down in value, that means that the yield is increasing. Think of it as a teeter totter, one side goes up, the other goes down.

So, when interest rates start going up, that will mean that the value of your bond or your bond mutual fund is going down, it's worth less. So, if you buy into an ETF that shorts bonds, you're betting that their value will go down, that interest rates will go up, you'll ride them up.

Here's a link to TBT, an ETF that DOUBLE shorts bonds: TBT Fund Quote - ProShares UltraShort Lehman 20+ Year Treasury Fund Price Today (TBT:NAR) - MarketWatch. When interest rates are going up, its value goes up about 1.75x that rate.

If you're looking at investing in bonds for retirement income, I'd suggest diversifying them so that some of the bonds you're holding will react well to inflation. Diversify! Franklin Templeton has a few nice strategies here, you can invest directly with them: https://www.franklintempleton.com/retail/pages/generic_content/home/splash_PUB/rising-rates-pub.jsf

.

Thanks, that is what I thought I just like hearing it from someone in the know. Betting always seems to be the end with stocks and bonds and the casinos. Maybe educated guess would be a better term. I'll talk to my FA but I think he will say, "it depends."

 

[Mac1958]

I was thinking of getting more into municipal bonds, but I sure wish I knew what you meant by the shorting bonds.

[MENTION=33456]Freewill[/MENTION]: Long story, but here's essentially what it means to "short" a stock or a bond:

When you "short" a security, you're betting that it will go down in value. I can go more into detail if you'd like, but that's the bottom line. You can do this either with individual securities or with ETF's (Exchange Traded Funds), which are similar to mutual funds.

Now, when a bond goes down in value, that means that the yield is increasing. Think of it as a teeter totter, one side goes up, the other goes down.

So, when interest rates start going up, that will mean that the value of your bond or your bond mutual fund is going down, it's worth less. So, if you buy into an ETF that shorts bonds, you're betting that their value will go down, that interest rates will go up, you'll ride them up.

Here's a link to TBT, an ETF that DOUBLE shorts bonds: TBT Fund Quote - ProShares UltraShort Lehman 20+ Year Treasury Fund Price Today (TBT:NAR) - MarketWatch. When interest rates are going up, its value goes up about 1.75x that rate.

If you're looking at investing in bonds for retirement income, I'd suggest diversifying them so that some of the bonds you're holding will react well to inflation. Diversify! Franklin Templeton has a few nice strategies here, you can invest directly with them: https://www.franklintempleton.com/retail/pages/generic_content/home/splash_PUB/rising-rates-pub.jsf

.

Thanks, that is what I thought I just like hearing it from someone in the know. Betting always seems to be the end with stocks and bonds and the casinos. Maybe educated guess would be a better term. I'll talk to my FA but I think he will say, "it depends."

Yeah, understood.

Maybe "betting" wasn't a good word for me to use. I don't consider it "betting" because we research the hell out of something before we make a move, and as it turns out I'm pretty good at recognizing macro economic environments and reacting appropriately. So maybe "educated and experienced guessing" would be closer.

Funny thing, and you can ask your FA about this, for us investing isn't the big, crazy, wild, mysterious casino that people outside our business think it is. To me, there is very little risk in portfolios that we run. The risk is that the client will freak out and pull out at just the wrong time. So we have to keep lines of communication open, ALWAYS, and talk them off the ledge now and then.

.

 

[longknife]

Inflation? Only If You Look At Food, Water, Gas, Electricity And Everything Else

You and I know this. But, why doesn't the Lame Street Media and the goons inside the Beltway? Apparently they are doing so well these things don't bother them.

June 20, 2014

Have you noticed that prices are going up rapidly?

A video and lots and lots of links @ Prison Planet.com » Inflation? Only If You Look At Food, Water, Gas, Electricity And Everything Else

 

[waltky]

Deflation settles in...

US consumer prices fell 0.1 percent in August
16 Sept.`15 | WASHINGTON (AP) — U.S. consumer prices edged down in August, marking the first decline in seven months and fueled by a big drop in gasoline prices.

The Labor Department said Wednesday its consumer price index slipped 0.1 percent in August after a small 0.1 percent rise in July. Gas prices, which had been rising for three months, dropped 4.1 percent amid the recent fall in global oil prices. The report comes as the Federal Reserve begins two days of meetings to decide whether it will raise interest rates for the first time in nine years. It watches consumer prices closely, and the latest figures may add fuel to arguments that inflation isn't strong enough yet.

Economists said Fed policymakers were caught between evidence of a strengthening economy and persistently low inflation. "Despite many signs of stronger growth — jobs, retail sales, auto sales, home sales — there is very mild inflation pressure," said Jennifer Lee, senior economist at BMO Capital Markets. "This is a tough call for the Fed." Steve Murphy, an economist at Capital Economics, said the August report did not change his view that the forces dragging inflation lower are only temporary. "The deflationary pressure from low energy prices and a strong dollar will begin to fade next year," he said. "Together with the fact that the economy is already very close to full employment, this suggests that both wages and core inflation will surprise on the upside next year."

Food prices were up 0.2 percent last month, led by another surge in egg prices. Core inflation, which excludes volatile energy and food costs, rose a modest 0.1 percent in August, indicating cost pressures remain a no-show in the economy. Over the past 12 months, overall prices are up just 0.2 percent, while core inflation is up a modest 1.8 percent. A key inflation gauge that the Fed monitors is up just 1.2 percent excluding food and energy over the 12 months ending in July, marking more than three years that inflation in this index has been running below the Fed's 2 percent target for inflation.

Economists were evenly split on a Fed move. Many believe the central bank will start pushing rates higher given that unemployment has dropped to a seven-year low of 5.1 percent, within the Fed's target range for full employment. But other analysts argue that the Fed will wait to see how much impact recent events such as a slowdown in China and financial market turbulence will have on the U.S. economy. These analysts argue that with inflation so far below the Fed's target and moving lower due to a strong dollar and falling oil prices, it is in no hurry to raise rates.

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