Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

BlackRock: It's Way Too Early To Worry About Inflation
TBI ^ | 2-10-2012 | Sam Ro

Posted on 02/10/2013 8:51:29 AM PST by blam

BlackRock: It's Way Too Early To Worry About Inflation

Sam Ro
February 10, 2013, 8:20 AM

There's no shortage of people who are freaking out about inflation, thanks to the Fed's ultra-easy monetary policy.

However, convincing evidence of inflation has yet to appear in the economic data.

Russ Koesterich, Chief Investment Strategist at BlackRock, has a new post on the iShares blog titled When to Worry About Inflation.

He says concerns of inflation are premature for at least two reasons (verbatim):

1.There is no wage inflation. Overall wage growth in the United States remains sluggish. The reason: The labor market is healing at an agonizingly slow pace. U-6, a broad measure of unemployment that also includes part-time workers looking for full-time work, is still indicating that about one in six American workers are unemployed or underemployed. Until this changes, raises will be hard to come by, and without wage inflation, overall inflation is likely to remain muted.

2.Bank lending is only starting to pick up. While the Fed has been busy in recent years with the modern equivalent of a printing press, the newly created money has been mostly sitting on bank balance sheets. Without much bank lending, growth in the money supply has been modest, lowering the risk of inflation. Though bank lending is starting to rise again, at least to businesses, it will take time before credit creation leads to any meaningful pickup in inflation.

Koesterich, however, says that inflation is something we may have to worry about in 2014 and beyond.

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: economy; inflation; investing; prepping

1 posted on 02/10/2013 8:51:35 AM PST by blam
[ Post Reply | Private Reply | View Replies]

To: blam

Until it starts to happen, then it will be something to worry about.

It’s better to worry about it, in its absence, and prepare for the possibility.


2 posted on 02/10/2013 8:53:24 AM PST by Jonty30 (What Islam and secularism have in common is that they are both death cults.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jonty30

I have to learn not to trust my own damn lying eyes.


3 posted on 02/10/2013 8:56:50 AM PST by Ouchthatonehurt
[ Post Reply | Private Reply | To 2 | View Replies]

To: blam
No doubt the thing keeping the lid on is that 1/6 un-underemployment. When that changes the lid will explode.

Anyone who thinks current inflation isn't a problem hasn't been to a grocery store recently.

4 posted on 02/10/2013 9:02:41 AM PST by stevem
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

No inflation?

What country are they talking about.
It can’t be the USA.

Of course the government inflation data doesn’t show it - the measurements are structured and manipulated to do just that.

They are just about as distorted and untruthful as the government employment/unemployment figures.

But one trip around the supermarket tells the true story.


5 posted on 02/10/2013 9:05:05 AM PST by Iron Munro (I miss America, don't you?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Iron Munro

So I guess stagflation is a term of no meaning then.

Dumb ass.


6 posted on 02/10/2013 9:11:14 AM PST by jimpick
[ Post Reply | Private Reply | To 5 | View Replies]

To: Ouchthatonehurt
I have to learn not to trust my own damn lying eyes.

Gas at an all time high for February. Natural gas rising, food prices rising fast. Health insurance premiums rising. Taxes rising. Yeah, better to just keep one's eyes closed and trust the experts.

7 posted on 02/10/2013 9:16:09 AM PST by hinckley buzzard
[ Post Reply | Private Reply | To 3 | View Replies]

To: blam

My wages are the same, but the cost of most necessities like food and fuel are going up.

In that sense, if my wages were inflated I would be better off - my purchasing power has declined in this administration. It will be worse if wages stay the same and commodity prices continue to rise.


8 posted on 02/10/2013 9:29:18 AM PST by volunbeer (We must embrace austerity or austerity will embrace us)
[ Post Reply | Private Reply | To 1 | View Replies]

To: hinckley buzzard
And the one thing they claim neutralizes all the other inflation, dropping housing prices, they have recently started bragging is reversing. It's like building a house of hyperinflation cards and then getting excited that the bottom cards are wiggling.
9 posted on 02/10/2013 9:30:55 AM PST by KarlInOhio (Choose one: the yellow and black flag of the Tea Party or the white flag of the Republican Party.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: blam

not a crisis they can exploit yet.


10 posted on 02/10/2013 9:45:22 AM PST by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Iron Munro

But one trip around the supermarket tells the true story.

______________________

Yep. And it’s not just prices. It’s the quantity being packaged now as well. It seems to be shrinking with several items. Anyone else notice this?


11 posted on 02/10/2013 9:59:52 AM PST by SumProVita (Cogito, ergo....Sum Pro Vita - Modified Descartes)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Iron Munro
You'll like this one. Everything is okay.

Stock Market Recovery Continues To Topple ‘Big-Picture’ Theories!

"There’s never a shortage of ‘big picture’ theories, usually of the gloom and doom variety. They certainly sell books; often cause anxiety, sometimes even fear. But they almost never come to pass."

12 posted on 02/10/2013 10:00:33 AM PST by blam
[ Post Reply | Private Reply | To 5 | View Replies]


Freepers, your Contributions make every difference!
Please keep ‘em coming! Thank you all very much!

13 posted on 02/10/2013 10:07:56 AM PST by RedMDer (Support Free Republic)
[ Post Reply | Private Reply | View Replies]

To: SumProVita

I bought some Triscuits because I had a decent coupon and they had a new flavor that interested me. The size of the box is dramatically reduced from what it used to be, and then you open it up and half of the plastic bag inside is empty. Regular price is just under $4. I paid half that and was still ripped off. The escalations in price and reductions in quantity will lead to brand extinctions someday. Someday being when the EBT crowd can’t buy them with our money anymore.


14 posted on 02/10/2013 10:09:20 AM PST by LostInBayport (When there are more people riding in the cart than there are pulling it, the cart stops moving...)
[ Post Reply | Private Reply | To 11 | View Replies]

To: LostInBayport

“I bought some Triscuits because I had a decent coupon and they had a new flavor that interested me. The size of the box is dramatically reduced from what it used to be, and then you open it up and half of the plastic bag inside is empty.”

My favorite is the Chips Ahoy cookies. They are virtually the size of jacket buttons now.


15 posted on 02/10/2013 10:15:23 AM PST by headstamp 2 (What would Scooby do?)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Jonty30

its folly at any time not to have extra food supplies stored....folly not to have some cash on hand....


16 posted on 02/10/2013 10:31:11 AM PST by cherry
[ Post Reply | Private Reply | To 2 | View Replies]

To: Iron Munro

just follow the price of a small can of tuna over the last 3 yrs....you could buy it on sale for 3 cans/$1..name brand...now, if one can is $.79 its a “sale”....


17 posted on 02/10/2013 10:32:46 AM PST by cherry
[ Post Reply | Private Reply | To 5 | View Replies]

To: cherry

Yup, Tuna, Beans, Spaghettio’s....

There is no inflation according to the Gov, but the “Chef Boyardee Index” shows that there is.


18 posted on 02/10/2013 10:42:59 AM PST by mylife (The Roar Of The Masses Could Be Farts)
[ Post Reply | Private Reply | To 17 | View Replies]

To: blam

My California inflation index-

Gas- $4.10
Mayonnaise- $5
Milk $5.99 Gallon
Bread $4 a loaf
New Lighbulbs $5 each
Toilet paper- $18
Paper towels $15 for 12
Lunch Sandwich/Drink $12
Electricity Bill- Up 33%
.22LR ammo-.20cents a round up from .05


19 posted on 02/10/2013 10:43:50 AM PST by samadams2000 (Someone important make......The Call!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam
Wages are the last price to rise in an inflation. We haven't got to "last" yet. Average prices are rising at somewhere between 6% and 10%. That is somewhat masked at first by substitution of cheaper products for the customary purchases and delaying large expenditures and such. It is officially masked by periodic tinkering with the CPI, the official measure of inflation to remove the items that are rising the fastest and add in those items that might actually be stagnant (due, in part, to substitution and abjuration)or even falling in price- there are such things in an inflation as some goods go out of favor and thus fall in price because people see that they can actually do without them and concentrate their buying on other more necessary things.
20 posted on 02/10/2013 10:46:18 AM PST by arthurus (Read Hazlitt's Economics In One Lesson ONLINE www.fee.org/library/books/economics-in-one-lesson)
[ Post Reply | Private Reply | To 1 | View Replies]

To: cherry

A soda pop from the vending machine at work is $1.50!
A bottle of water from the machine is $1.50!!!

I will not pay that price gouging BS.

Look at Ammo prices too.
6 years ago a case of 7.62x39 ammo was $99.
Now it is $600
Of course most of that is due to supply and demand issues.

The Obama economy stinks on ice.


21 posted on 02/10/2013 10:47:38 AM PST by mylife (The Roar Of The Masses Could Be Farts)
[ Post Reply | Private Reply | To 17 | View Replies]

To: LostInBayport

I went to the store the other day to purchase the stuff to make my dog’s food (yes, she is spoiled). I commented to another lady who was also buying zucchini......these used to be 2 for a dollar, now they are 99c each. They have doubled in price.


22 posted on 02/10/2013 10:57:05 AM PST by sheana
[ Post Reply | Private Reply | To 14 | View Replies]

To: hinckley buzzard

Yea, I just got back from a week and a half in VA and the price of gas (in paper) in CA went up close to $0.50 in that period. The country is awash in reserves, and capacity to refine has to be well over falling consumption (we’re even exporting refined product now) and there isn’t any inflation???

And this spiel about “no inflation until wage pressure manifests” is bullshit. If there was an expanding force of well educated and skilled fabrication and manufacturing blue collar workers, maybe you’d see it, but they aren’t coming until the regulatory costs of building a structure that utilizes energy and heat to cast, pound and mill things drops to one commensurate with places like China where you can do same and emit all of the byproducts essentially without any treatment or after-processing.

I was looking at “Made in China” on the bottom of a coffee mug today. Something that doesn’t take a hell of a lot in the way of knowledge on the employee side to produce, but which the structure to make same, here, would take about 2 years to build, cost $200,000+ for the building permit, Lord knows how much for some lackeys business permit, and an additional half to million dollars to design and build out all the environmental crap (storm water, excess traffic fees, air handling and cleaning fees, NOx emmission credits purchase or fees if it’s gas fired, ad nauseum).

So there you are, needing to sell something on the line of 200,000 $10 coffee mugs just to break even on expenses, not even considering the in-production overhead costs (wages, health, OASHA compliance), and because of “Free Trade Agreements” agreed to by dog excrement swilling politicians your competitor merely faxes or emails an order for 500,000 of the same mugs to some schmuck in Zangschwing province China at Peoples Reeducation Ceramic Facility #324534 for $0.65/apiece, sells them for $8.99 and you’re screwed.

To add insult to injury, unless you greased the right palms for some sort of tax break here and are a large company, you have an additional 25%+ tax burden over PRCF #324534 costs, but on the opposite end of it the government takes 0 risk on the downside of the equation so when you go bust they say “Oh, to bad, time to think up something else that might make a buck utilizing YOUR capital with YOU taking the RISK, and don’t forget after going through our cornholing all over again to send us our cut if you heaven forbid actually do make money”...


23 posted on 02/10/2013 11:27:41 AM PST by Axenolith (Government blows, and that which governs least, blows least...)
[ Post Reply | Private Reply | To 7 | View Replies]

To: blam

Always do the opposite of whatever Blackrock or GS say to do.. they’re not your friends.


24 posted on 02/10/2013 2:54:19 PM PST by Neidermeyer (I used to be disgusted , now I'm just amused.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam
convincing evidence of inflation has yet to appear in the economic data

What? This person is either educated way beyond his intelligence or is frantically trying to cover the facts like a cat in the litter box. A simple trip to the grocery store provides all the evidence anyone should need to see - everything we buy has gone up dramatically in the past year and continues to rise. We are now resigned to $3.00 + gas and it continues to go up despite some short term drops to keep the frog in the pot. These two things impact us normal folks a whole lot more than whatever is in the "economic data".

25 posted on 02/10/2013 5:43:40 PM PST by Some Fat Guy in L.A. (Still bitterly clinging to rational thought despite it's unfashionability)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Axenolith
ut on the opposite end of it the government takes 0 risk on the downside of the equation so when you go bust they say “Oh, to bad, time to think up something else that might make a buck utilizing YOUR capital with YOU taking the RISK, and don’t forget after going through our cornholing all over again to send us our cut if you heaven forbid actually do make money

But at least the government has set up a healthcare exchange so you purchase the mandated healthcare coverage you won't be able to afford.

26 posted on 02/10/2013 5:55:13 PM PST by NittanyLion
[ Post Reply | Private Reply | To 23 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson