Posted on 04/18/2022 2:58:11 AM PDT by RomanSoldier19
The latest consumer price index brought a collective sigh across Wall Street this week. Inflation has peaked, sang many economists, strategists, and headlines. But the logic behind the optimism is flawed.
First, consider the inflation report that followed CPI. The producer price index is often blown off because what matters most for the economy is what is happening with consumers, who make up two-thirds of gross domestic product and whose expectations for future prices help determine actual inflation. But investors should take the March PPI, which rose a record 11.2% from a year earlier, even more seriously than the corresponding CPI.
Before the pandemic, the PPI didn’t do a great job predicting the CPI, says Citi economist Veronica Clark. “But when we get big shifts, like over the past year, it is a more reliable leading indicator,” she says.
And the PPI details are striking. For wholesalers, the price of vegetables rose 82% last month from a year earlier. Grain prices increased 40% while meat and fish categories rose an average 23% compared with March 2021. Then there is energy. Home heating oil, diesel, and gasoline rose 106%, 64%, and 60%, respectively.
(Excerpt) Read more at barrons.com ...
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Expect interest rates to hil 10-11%.
If you were born after 1970 you have no clue what life is like as a 20 something trying to make it in a world where gas really does cost half your paycheck, and name brand food is a luxury .
A steak us something you eat 2 maybe 3 times a year. And your bank account is always less than $100.
My first new car was a 6 cylinder 4 speed f-150 that cost less than 12k In 1985,it cost me so much, my next new car wasnt bought until 2012.
Thats 27 years between new cars for those who want the math. Inflation sucks
“My first new car was a 6 cylinder 4 speed f-150 that cost less than 12k In 1985,it cost me so much, my next new car wasnt bought until 2012.”
I was born before 1970 and I bought my first car in 1988. I bought my first NEW car in 2016. I will NEVER buy NEW again.
True about younger people not knowing anything about inflation. In 1980, I was getting quarterly raises that barely kept up with it, and I was darned lucky. Someone I know had a mortgage of 18.9% bought in that era.
Yeah, my mortgage was 13 1/4%, possibly with a couple of points added up front. But that was 1984.
In retrospect, an adjustable would have been better, but it looked like the rates good go up as well as down,
Of course, I paid it down as fast as I could.
I worked retail in college. Graduated in 1981. At the onset of inflation in the late 70’s business was still good and people kept buying. By 1982, still working retail it dried up quick. I was working full time and barley making more than I was when working part time while in college.
Probably the Goldman Sachs gang that populate Brandan's administration. High inflation will not evaporate quickly even after it peaks, it takes significant time and proper government and monetary policy, which we do not have.
Just passed 1/4 million miles on the 2016.
................................................
Wow!
I have a 2016, just passed the 23,000 mark.
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