Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal


edited June 2020 in Off-Topic
This might also fit under “other investing” because inflation trends impact investment decisions. For a decade or longer the prevailing intelligence has described our situation as either “low inflation” or “disinflation” (slowing inflation). You may remember that for at least 2 of those years SS recipients received 0 COLA adjustments because the govt. stats saw no inflation. And the COLA increases that were granted, tended to be meager. Some countries like Japan have experienced actual deflation. All of the preceding favor fixed income investments or longer dated bonds.

Where’s inflation now? Where is it heading? Others have noted the recent food inflation here at home. To some extent that’s attributable to the food hoarding we witnessed March thru April and disruptions in the supply chain from Covid 9. But why would the identical chainsaw jump 11% in less than a year? The Oregon CS-300 16” 40V battery operated saw replaced my old gas powered saw last July. Paid just under $270 at Amazon at that time. Decent saw for light and moderately heavy use as long as you have an extra battery. Clear a lot of brush and cut firewood, so it gets heavy use and can’t be without it. Buying all the spare parts separately (charger, battery, bar, chain) would cost nearly as much as a whole new saw, so I elected to go with a new saw. Now it’s just under $300 at Amazon (which I went with). That’s an 11% increase in less than a year. Nothing cheaper unless you buy the one with no battery or charger Lowe’s is selling for $219.

Others may have anecdotal or statistical evidence of big cost increases over the past year to help impart a better feel for what’s going on. Not being an investment adviser, I won’t pontificate on how one might alter investments should hotter inflation be sustained. But it does make a difference. Re gas prices - It’s very hard to draw conclusions about inflation. Has always fluctuated widely depending on demand. And any comparisons need to take into consideration the heavy taxes imbedded in the pump price. I know online retailers are pressed for capacity right now. However, the saw at Lowe’s required picking it up at an outlet, so I don’t think that’s much of a factor in the jump in price.

One more thought: Isn’t paying the same price for reduced service inflation too? For 3 months now Amazon has been using the Covid-9 crisis to deprive Prime paying customers of the 1-2 day shipping they were “guaranteed” when they signed up for Prime and paid the hefty annual fee (over $100 annually). The order I referenced above is pretty typical of their current Prime delivery time. Ordered on Saturday. Should arrive Tuesday or Wednesday. But won’t arrive until Friday. They’re saving $$ on processing & shipping costs now, but not passing it on to consumers in form of a rebate. Expect a class action suit on that one! FWIW - I agree with Elon Musk that Amazon needs to be broken up. It’s a monopolistic trap. You may need two or three of its features (ie Prime music, Kindle ebooks or Prime Pantry) but you’re pretty much forced to become a Prime Member and be part of the vast monopolistic empire. And the customer phone service, should you need it, has gone from poor to miserable IMHO.


  • Hi Hank,

    As I posted elsewhere, has alternative statistics as calculated according to older formulae. If the CPI was calculated as it was during the Reagan admin, it'd be 8% points higher right now.

    CPI for April went down because of the weight of energy and the drop in oil prices and gas. Thank God we were all able to save so much on gas because food went up 16.7%. Now this isn't to hang on Trump, just like the dysfunction in DC isn't all his fault. Hell, the last 5 Presidents have lied to us as have both sides of the aisle.

    All I can suggest is that people watch prices like you have, behave based upon what you see and feel and live and don't believe ANYTHING the authorities tell you about how wonderful things are. They're only wonderful for you if they're wonderful at your house.

    They're always playing us, but right now it's particularly bad.

    Don't fight the Fed, but be damn careful.

    and so it goes,

    peace and flatten the curve,

  • shadowstats is complete conspiracy bunk
  • Do you remember the inflated TP prices a few years back ? Less sheets, then less width !
    Appears to me that now shaving cream is under attack. The last can I bought would be considered the next can size down. Honestly I can't say the can was less costly or the same price, but the reduction in size was noted.
    While here lets talk packaging . A few months back I purchased two cans of coffee. Why two, because the larger size was sold out. For that purchased I paid around $1.50 more than if the larger size was bought. Did it cost $1.50 to fill that other can !!??

    Have a nice Sunday, Derf
  • shadowstats is complete conspiracy bunk

    geez, David, so am I. ;-)


  • One more thought: Isn’t paying the same price for reduced service inflation too?
    I've noticed THAT for DECADES. Which came first, chicken or egg? The cultural shift? Or did corporate style affect the culture? I can recall when "the customer was always right." Now you have to argue to get a refund on an item, for instance. And often, it's not in the cards. You just get screwed.... This is to say nothing of the fact that when you entered a store years ago, you were greeted, given immediate attention. Now, you have to look to see where the (too few) employees are hiding. They could even be standing in front of you, but something on their hopeless little screen is more important than we are. I grant that companies are milking every penny out of every moment from those employees.
  • edited June 2020
    @davidrmoran, to make a statement like that encumbers you, IMO, to provide some substantiating evidence re the actual inflation rate and perhaps do some specific comparisons between your “non-bunk” and somebody else’s bunk. Harsh dismissive words deserve at least some additional constructive commentary on your part. So I’m eagerly awaiting your 100 word or longer thoughtful and illuminating commentary on the subject of inflation complete with your non-bunk documented statistics.

    Here’s the deal. An intelligent observor ought to be able to take in, weigh, analyze and consider opinions from every angle in his / her decision making process. It’s called critical thinking. Been some years, but I think the CT folks narrow that skilll down to what they term synthesis. After reading and / or listening to all the various competing opinions and interpretations, one is better able to develop his own opinion / course of action.

    I do that all the time with investing. I listen to the bears, the bulls, the inflation and deflation people. And I listen to the technical analysts, the momentum driven folks, the P/E driven and the deep value voices. From all that I feel I am better able to understand the bigger picture and make informed decisions, I do appreciate that hearing and processing all this conflicting information might overload your brain. So be careful. But please give it a try.:)
  • Historical Perspective of Interest Rates and Inflation:

  • @hank,
    I enjoy condescension and fingerwagging, but get serious and do just little bit of actual digging work before posting. (Encumbrance is not on me, actually.)
    This means reading, not just googling. Also for @rono, of course.

    This MIT project may be shy on services info, as noted, unless 'commodities' really covers it all.

    More specifically on your long-wacko, laughable JWilliams:
    plus some of the comments

    Some of the good DeLong and Romer papers on inflation are paywalled, alas.

    Even Cato dude:
  • re: original post re: chainsaw Do we think tariffs are magically going to be swallowed by the corporations? Nope..... they' are working their way to the consumer.
  • edited June 2020
    @Davidrmoran - Not every comment here needs to be concrete, verifiable or even true. It is a discussion board and folks, including myself, sometimes make comments without full documentation or explanation. I can live with that. A bunch of folks with like interests gabbing. What is harder to accept is when one member dismisses another member’s comment as “bunk” without so much as offering any confirming / contradictory fact, statement, explanation or document.

    I’m not impressed by 8 links (or 80) to other people’s thinking, although it appears you came close to the 100 (original) words I requested.:)

    My original post wasn’t so much a call for tons of documentation as a request for personal experiences. I cited a $270 saw that jumped to $300 in less than a year. Perhaps that’s not representative. Likely, it’s imported and there are trade tensions and new tariffs. Perhaps the lith-ion battery, which elicits environmental concern, has encountered some new recovery tax or delivery fee? And these tools are subject to accident and personal injury. Maybe the seller’s cost of insurance increased. I don’t really know, but I thought by everyone pooling their personal experience or data banks we might arrive at a greater understanding of where inflation is and where it’s going.

    What ought to be said before we bunk or debunk somebody else‘s post is that inflation is a very individual matter. Varies by age, location, etc. @Mark mentioned maybe a month ago the difference in heating costs. We have no natural gas here. Winters are cold with 35-50 mph gale winds off Lake Michigan not uncommon. We rely on truck delivered propane which is a very expensive fuel. Many of us, self included, supplement the propane with wood - usually scrap chunks / cut-offs we purchase from area saw mills by the truck load.

    Points being - inflation is very difficult to measure. Inflation is very much an individual matter.

    Just one article here: Inflation - What’s in a number?

    “Historically, few economic measures have outweighed inflation in terms of importance, as inflation impacts nearly every facet of the economy. As consumers, everyone is subject to changes in the prices of goods and services. As investors we are beholden to inflation by way of its impact on interest rates on borrowed funds and interest income earned from savings options. Assets that produce no cash flow are particularly sensitive to expectations of inflation imputed on their future values when sold.

    “Inflation is like sin; every government denounces it and every government practices it.” - Sir Frederick Leith-Ross

    If inflation has been preeminent, it has been just as difficult to measure accurately. As consumers, our lives are too complex to generalize and at the same time our experiences are highly localized and driven by where we live, or where most of our consumption occurs. Forward-looking expectations of inflation by investors are notoriously trend-following and perceived inflation is often widely askew of actual or observed inflation. Simply put, inflation—as with beauty—is in the eye of the beholder.”
  • edited June 2020
    Fuck, man, stay on target. I am not trying to impress you but to answer in good faith your complaint that I said something was bunk by giving you the reasons for my saying that. Go read before whining at me further! So much for the effort I gave it.
    I am done here with you.
    Chainsaw was probably due to tariffs. Else because-we-can profiteering. Else, if HDepot, the CEO's massive underwriting of Trump.
    You post some facile stupidity by asset managers on inflation without having read any of the economics scholars I directed you to. No, it's not very difficult to measure in aggregate, and of course it is individual. Duh. Go read, go read, go read some real material.
  • If inflation is an individual matter, than shadowstats must be wrong because it is no more individualized than the CPI-U data it purports to be improving upon. This view of inflation as purely personal doesn't support rono's suggestion that shadowstats are more accurate.

    As far as individual experience goes, I refer you to the plethora of risk metrics that overweight or count only bad deviations in performance. They do that not because it's objective, but because people pay more attention to the pain.

    The battery recovery tax? Sure that adds to your pain. But did you subtract the costs of cleanup and residual environmental damage that you're no longer incurring. Probably not, since saving a cost, especially one you're not as directly aware of, isn't a pain point.

    Sure propane is expensive. But that doesn't say how fast the cost is rising, or whether it is rising at all. In fact, last winter residential propane cost less than any time since the 2005-2006 winter.

    Commenting on the absolute price of propane (which is irrelevant to the rate of inflation) while disregarding the decline in its still high price (which goes directly to inflation) illustrates the bias in how people perceive inflation. Notice the pain, disregard the deflation.

    This isn't just you, it's most people. Again, that's why there are all these one-sided risk metrics. People don't care if they make more than they expect or if they pay less than they expect. People care very much if they lose money or if they pay more than they expect.

    Inflation may be in the eye of the beholder, but that eye tends to be jaundiced.
  • @msf,
    I was thinking li-ion batteries were probably part of any (passalong) tariffs, and (so) depending on when the purchase was made, it could be honest, real-time cgs accounting by the store, or gouging from why-not-keep-the-price-high? inertia.

    The U.S. Trade Representative lowered tariffs on Chinese lithium-ion batteries to 7.5 percent from 15 percent. The new rate goes into effect on Feb. 14 [2020]. ...
  • I was addressing the comment: "Perhaps the lith-ion battery, which elicits environmental concern, has encountered some new recovery tax or delivery fee?"

    A quick search turned up these couple of paragraphs:
    Li-ion and most other chemistries yield too little in precious metals to make recycling a viable business without subsidies. The major expense with modern batteries is not so much the raw materials, as with lead acid, but lengthy preparations, purifications and processing down to micro- and nano-levels. Nevertheless, batteries contain valuable material that can be re-used for new products.

    To make recycling feasible in the meantime, subsidies are created by adding a tax to each pack sold. The goal goes beyond retrieving metals for re-use to preventing toxic batteries from entering landfills.

    That doesn't say how new this tax is though, or whether it has changed recently.
  • edited June 2020
    Fuck, man, stay on target. I am not trying to impress you but to answer in good faith your complaint that I said something was bunk by giving you the reasons for my saying that. Go read before whining at me further! So much for the effort I gave it.
    I am done here with you.

    Well, that’s enlightening. Rather than expanding on one of your articles with some of your own analysis, you dump a bunch of links here. Reminds me of one who used to be with us. No disrespect intended. OK, I’ll read them.

    This one ( does little but flaunt its academic project and direct reader to a number of additional links, which again, mostly promote the importance of the ongoing research project. Sure, there’s some data if you sort through it all - but it takes you to point out which data is pertinent here and why. I’m not sure I care about the difference between inflation rates in Argentina and those in the U.S.

    The Paul Krugman article in the NYT is not accessible. Link brings up: “subscription required.” That’s OK. I can stomach Krugman to a point. His articles usually have a “slant” ISTM.

    This one: “Why won't inflation conspiracy theories just die ... ?” Says: “ But the trouble with inflation is that it is hard to measure, because personal experience of it can massively deviate from the real level.” Exactly the point I was trying to make earlier. The article is from 2014 so deals only with computation methodology up to than - not with how much you and I are paying for new cars or a dozen eggs in 2020.

    Your Daily Online Price Index Chart Provided by Mark J. Perry does a nice job showing low inflation. Unfortunately, it stops with 2012 - the date of the article.

    And from your James Pethokoukis article: “To be sure, the prices of some things have gone up a lot and continue to rise, such as college tuition. But overall inflation has been quiescent.”
    Pethokoukis was correct when he wrote that in 2014. He even quotes Fed Chair Janet Yellen to substantiate his claim.

    I have no use for CATO. However, what the writer is looking at is past low inflation and Fed efforts to reach a target inflation rate (2% as I recall). Personally, I have no problem with the Fed’s concerns in that regard. My OP alluded to the low inflation / disinflationary period we have been through. I was addressing more recent developments since Powell and gang turned on the money spigots last April.

    But your Cato writer adds a warning shot : “Don't get me wrong: I'm not saying that we have no reason at all to fear a recrudescence of high inflation some time in the future. Inflation may be knocked-out for now; but that doesn't mean it's dead. I'm neither optimistic nor pessimistic enough to suppose it will never spring back to life again. Furthermore, even before the present crisis I perceived threats to the Fed's already tenuous independence that could eventually undermine its commitment to low inflation.”

    Of the eight links, a mixed bag. The azizonomics was the least biased and most insightful IMHO.

  • edited June 2020
    @rono cited shadowstat. I pointed out it was famous conspiracy crap. You jumped in and said what's your evidence and I did the digging and gave a bunch of expert thoughts on it and inflation. You whined that it was all dumped links. I suggested you read them. You did except for the one for which you did not think to use a private browser and concluded but but they are all historical and a mixed bag, whatever that might mean, cherrypicking lines about individual circumstance, but not the conclusions.
    So I am defeated by you. Inflation in aggregate is measurable and has been accurately measured for some time --- and by the usual suspects. Not by shadowstat.
    And of course inflation for each of us depends on what we buy.
  • Howdy folks,

    Chill TF out.

    Separate the BLS civil servants from the politicians. Anyone that doesn't understand this differential chasm just doesn't understand the reality of working for the government. Will any of them tell outright lies? Historically, No. Today? Sorry folks, but I no longer believe anything coming out of Washington. The federal government is dead.

    As for massaging the data for different implications has been going on for 1000s of years. Dammit, read Frogs about the government debasing the currency.

    Of recent times how about Hedonic adjustments. This is when the product is 'new and improved' it's OK to charge more. OK, IFF the old unimproved product is still available. He'll, Greenspan said it was ok to substitute burger for steak.

    The bottom line is that the CPI numbers have very little to do with the prices we are paying -- Just to stay alive. Geez, I it's sort of like the stock market hitting new highs while unemployment is at 20%.

    Bullshit is bullshit. I don't care to dine.

    And so it goes

    Peace and flatten the curve


  • edited June 2020
    @Davidrmoran said, “ So I am defeated by you.” - No. Not defeated. Perhaps we’re both humbled a bit.

    - Possibly we both have tunnel vision. I see emerging inflation and more than one way to measure it. You don’t.

    - Maybe we learn in different ways. You value linked opinions and research. I value somebody taking a single documented fact or statement, than interpreting and relating it to the bigger picture. 25 thoughtful coherent words beats 100 linked articles for me (possibly related to my pea-size brain).

    - @bee provided a great video link that got lost in all of this. The speaker has an exemplary resume and relates the Covid 19 pandemic and recent central bank actions to the likely inflationary outcomes. Thanks @bee for sharing.

    - @msf provided some rational data and analysis without injecting vitriol. OK - Propane prices have been low in recent years. I wonder if the CPI charts even show the cost of scrap chunk-wood from sawmills in Michigan this summer. Some have been forced closed by the Covid 19 related issues. My point: Inflation varies by life style, age, location etc. More: Do take a look at the spike in energy and commodities over the past month. That’s a sharp U-turn from what we’ve witnessed over the past couple decades. Maybe inflation watchers should take note?

    Thanks for the thoughts and any additional folks.

  • Inflation.... gas from $3-$4/gallon to under $2/gallon takes away a lot of inflation. I have "heard" inflation more in the last couple months from various sources. i.e. some cnbc folks I listen too. Time for TIPS? Cape Code on M* always said the time for TIPS is after inflation arrives.
Sign In or Register to comment.