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Replies: 42
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CU Medallion [55653]
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Inflation is for real, yo.
Apr 27, 2021, 10:17 AM
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APM won't bore you with the details of how he has encountered all the inflation of late, but DAYUM thangs is gettin' high. Gas. Any house/home-related stuff. Food.
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All-In [46796]
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Demand is through the roof, supply is sluggish to catch up
Apr 27, 2021, 10:19 AM
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prices go up
Stonks
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Hall of Famer [21858]
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yes...this is just a supply / demand issue
Apr 27, 2021, 10:24 AM
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and has nothing to do with the $6T in liquidity that's been dumped into the market in the past 17 months.
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All-In [46796]
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Consumer products like OP mentioned, yes. Supply/demand
Apr 27, 2021, 10:33 AM
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Reserve policy isn't the reason 15000 Joe Blows are using their 3 stimulus checks to remodel their house.
Or Sally Businessowner had to buy a ton of OSB to increase seating capacity at her restaurant so she could stay open due to COVID protocols.
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Hall of Famer [21858]
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I can never figure out if you're trolling or just not very
Apr 27, 2021, 10:44 AM
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smart.
You can't say that Fed policy isn't the reason Joe Blows are spending their STIMULUS CHECKS on stuff without taking into consideration that the STIMULUS CHECKS are causing the demand, right?
Like, you just proved my point.
The original issue with lumber prices was actually a supply issue due to the mills being closed because of COVID, so I'll give you that. That ship has since sailed.
However, the broader issue is undoubtedly due to a sudden influx of capital in the market.
You have a bunch of idiots with a surge in capital who got helicopter money from the Fed, spending it on high margin, overpriced, worthless goods (driving foreign GDP). And then you have investment entities who have even more helicopter money from the Fed spending it on other investment classes to balance portfolios (mostly real estate, but I'm seeing unprecedented investment in my sector).
The Fed drives our economy man. And quite frankly, the global economy. If you don't understand that then put your whistle back on and re-run 58 sweep and enjoy your helicopter money.
Don't you teach economics?
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All-In [46796]
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I took your "fed policy" comment as QE
Apr 27, 2021, 10:48 AM
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Stimulus checks plus COVID has created a perfect storm for inflation.
Will it go down? Probably.
When? Who knows.
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All-In [46796]
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Let me also make it clear that it's not either/or
Apr 27, 2021, 10:52 AM
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it's both.
I'm arguing that global shortages due to COVID lockdowns, increased demand through stimulus checks, and destroyed supply chains are causing prices of consumer goods to rise more-so than QE policies.
But both are at play
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Hall of Famer [21858]
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that has some merit
Apr 27, 2021, 11:26 AM
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on a macro scale, the capital injection will cause and has caused more issues. I think we're aligned on the artificial demand creation by the Fed, so I won't keep beating that horse to death.
The workforce isn't ramping up to satisfy this demand (hello, Fed) so we have prices skyrocketing until they reach a point of equilibrium. At which point, we can all assume, we'll get another round of helicopter money b/c "people are struggling due to covid"...this is artificial demand creation that is not sustainable.
Throwing Fed money at this problem isn't the answer. But it's very popular b/c all of these people get this free money to invest in overpriced ####, because well, everyone else has all this free money.
Just wait until the market realizes that we can't meet the demand to boost the productivity in the supply chain. We, and all of my competitors, are at max capacity. Most of us are booked through the end of the year. And this is just for your food, your wife's panties, your beer, your kid's school supplies, servers that provide your internet, the Fed's cash, your car's spare parts, and all the line side delivery solutions that guys like us provide. There's no labor to execute this work, and the folks who can automate it can't keep up.
I think we have at least another 18-24 months of inflationary issues based on what I'm seeing, at which point, all of this helicopter money the Fed dumped to citizens will be right back in the hands of the shareholders, and we'll all be complaining about all these rich guys again.
It's like watching what would happen if you dumped a truck load of crack in the middle of Bankhead. Fun as hell week or two coming out of it, then a nice, violent crash after it runs out and everyone wants more.
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Oculus Spirit [80977]
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I don't think we have that long of a run.
Apr 27, 2021, 11:42 AM
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I bet last Oct it would 6-12 months; I'm willing to say now that might be 18 months (so by march of next year).
Who knew in Dec of 2019 our economy would essentially stop < 3 months later? There's no way that, say the housing market, at least, is sustainable. Will it crash? I dunno, but someone asked me a few weeks ago if I had ever seen a housing market like this one..and I said yes, I have--in 2005-2006.
Forecasts are wrong. Longer forecasts are wronger.
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Hall of Famer [21858]
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It's certainly a fun conversation to have
Apr 27, 2021, 11:56 AM
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My 18-24 month projection was specifically related to the labor challenges within the supply chain, and our ability to ramp that up.
However, I do think we're going to have inflationary issues until the Fed starts tapering. The consensus on the Street is that we'll start tapering at the end of this year:
The bond market will be the focus of the Street here in the next few quarters...because in this day and age, it's all about the Fed!
Then we can move to the conversation of raising rates (JPow said 2023 like 9 months ago?).
The real question isn't IF they can control the inflation, but will they in time to do it without triggering a catastrophic scenario? Makes me all tingly inside haha
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Oculus Spirit [80977]
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I'm not sure how else they can control inflation other
Apr 27, 2021, 12:00 PM
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than by cooling the economy, and the fastest way to do that is either raising taxes or interest rates.
I can see them doing both though.
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All-In [46796]
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I agree. There are about to be a ton of winners and losers
Apr 27, 2021, 11:49 AM
[ in reply to that has some merit ] |
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in the business world.
Those businesses who invest in expanding their capital to meet current demands are going to be holding millions of dollars in no longer needed capital when Joe comes out and says no more checks and no more extra unemployment.
Then that 1.5 mil new machine put in to increase supply is going to be sold at a loss because demand is going to plummet again and we will be back to where we were.
Businesses who sit tight and output 100% of what they can will do fine because they may not be at 100% efficiency, but when the demand comes crashing down again, they will be close to it with less overhead.
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Hall of Famer [21858]
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Precisely. And if you know anyone looking
Apr 27, 2021, 11:57 AM
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for such piece of equipment, t-mail me bruh. I want a Yellowfin
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Oculus Spirit [80977]
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I still dont know what you are going to do with a Yellowfin
Apr 27, 2021, 12:01 PM
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in TN. You need a pontoon boat.
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Hall of Famer [21858]
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no way
Apr 27, 2021, 12:03 PM
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Lot o points [155627]
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HEY, you guys should just pay less and give good
Apr 27, 2021, 11:58 AM
[ in reply to that has some merit ] |
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health care.
#ThingsILearnedIntheLungeTodayAboutRunningaBusiness
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Oculus Spirit [80977]
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Except that single young people don't really care
Apr 27, 2021, 12:03 PM
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about healthcare.
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Lot o points [155627]
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thanks....that was my point too.***
Apr 27, 2021, 12:05 PM
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All-In [46796]
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So you're ok with cutting out a lot of available
Apr 27, 2021, 12:07 PM
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worker demographics?
Man I can solve this problem. I'll be your CFO for 60k and full benefits
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Lot o points [155627]
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Yes, that's true of most positions that require some form
Apr 27, 2021, 12:33 PM
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of labor. I can't go putting it in the ad or anything but a 75 year old man with a heart condition or 4 month pregnant lady probably can't handle the workload for my position I'm hiring for. Every job filters out demographics, regardless of whether it's stated.
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CU Medallion [56005]
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Stimulus checks come from the treasury and not the Fed
Apr 27, 2021, 11:25 AM
[ in reply to I can never figure out if you're trolling or just not very ] |
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right?
I think the fact that the current spike in inflation is due in part to a one time influx of cash means it's likely fleeting and not a sign of a larger trend.
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Hall of Famer [21858]
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although you ain't wrong, you ain't entirely right
Apr 27, 2021, 11:35 AM
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on the top of any dollar bill, it says "Federal Reserve Note"...no?
The Fed controls the money supply. The UST distributes the money. It's a circular relationship.
This also isn't a one time influx of cash. They've been buying bonds (QE) since October 2019. The capital is still here, with no signs of tapering in sight (I'd bet a grand we spend another $1.5T before we taper).
So, the issue is that there's over $8B on the Fed's balance sheet. There's 4 times the amount of capital in our economy right now than there was 17 months ago. And you can't just flip a switch and go back to normal. The Fed has to start tapering and buying back capital.
This is the house of cards many speak of.
I haven't had time to keep up w/ ECB or BOJ, but I think they're both sitting around $4-5T. I'd be willing to wager that in the global economy, there's 3-3.5x the amount of liquidity that there was 12 months ago.
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Hall of Famer [21858]
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yup - and it's being heard on the street
Apr 27, 2021, 10:23 AM
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For you old farts round here - what was the investment strategy in the Carter years? Pull pants down, bend over and grab ankles?
Speaking of the Carter years, any correlation to the inflation experienced during that period, and the fact that a former Fed Chair was then put in the US Sec of Treasury position? G. William Miller was his name.
Asking because we have that now as well.
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Oculus Spirit [80977]
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The strategy was "hope to keep a job until Carter is gone"
Apr 27, 2021, 10:24 AM
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Don't buy or sell anything unless you have to.
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Oculus Spirit [75673]
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Average folks didn't need to invest in the Carter years.
Apr 27, 2021, 10:30 AM
[ in reply to yup - and it's being heard on the street ] |
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Houses cost like $40k and folks didn't survive heart attacks quite as often.
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Lot o points [163010]
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Bought a new 1800 sq ft house in 1981 for $60k. Nice large
Apr 27, 2021, 10:52 AM
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lot in a new subdivision. Interest rate was 12.5% and we had a negative amortization loan. My salary was probably around $20,000. LOL.
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CU Medallion [55653]
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The good news is that if interest rates rise, your money is
Apr 27, 2021, 10:38 AM
[ in reply to yup - and it's being heard on the street ] |
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worth something. You can literally make money by keeping it in a saving account at the bank. Imagine that. Not really worth the tradeoff of inflation, but at least money has value.
My sincere prayer is that this isn't the beginning of the whole house of cards (QE) tumbling down. We've been using smoke and mirrors for a long time.
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All-In [46796]
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I need interest rates to go to about 5% starting in June***
Apr 27, 2021, 10:41 AM
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CU Medallion [55653]
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oy***
Apr 27, 2021, 10:42 AM
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All-In [46796]
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It won't. Too much money going on right now
Apr 27, 2021, 10:44 AM
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in real estate, mortgages, refinancing, etc.
But I need cheap lumber for the remodel. I figured a good 5% would do that
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Hall of Famer [21858]
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so the Fed raising rates
Apr 27, 2021, 10:45 AM
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lowers the cost of lumber.
but....
supply / demand, amirite?
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Oculus Spirit [75673]
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Oculus Spirit [80977]
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I hope so.
Apr 27, 2021, 10:48 AM
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It won't affect where I want to buy in the slightest though.
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Oculus Spirit [80977]
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All-In [46796]
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That would be terrible if I was planning to sale***
Apr 27, 2021, 10:49 AM
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Oculus Spirit [75673]
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You have a point. How many people have to die
Apr 27, 2021, 10:55 AM
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before you'd be allowed to "Sell the family house?"
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All-In [46796]
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A lot. Already got requested not to tear down the old shed
Apr 27, 2021, 10:57 AM
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that's about to fall in.
Was going to try to repair it anyways but if the insurance company says tear it down, I won't have a choice.
We shall see
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Oculus Spirit [80977]
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Nothing like being forced into living in a house that
Apr 27, 2021, 11:09 AM
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you have to pay for, but have other people determining what you need to do it to live in it.
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All-In [46796]
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I enjoy living in the house so far. It's a lot less fighting
Apr 27, 2021, 11:16 AM
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####.
Toilet clogged but that's because I had to flush 3 fish down it. No septic issues that I'm fighting.
Water heater is PLENTY big enough to take long showers and back to back washings of everybody (see "no septic tank" part above).
AC/Gas unit works amazing. Rooms are ice cold at night which helps me sleep better.
3 bedrooms so the kids are not sharing a bedroom.
Great neighbors and a great community with a lot of kids that my kids can roam and play with.
So far so good.
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Oculus Spirit [80977]
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Let's hope that continues
Apr 27, 2021, 11:22 AM
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Moving/living somewhere that fits your lifestyle is always better than being trying to fit a square peg into a round hole.
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Oculus Spirit [97657]
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Oculus Spirit [80977]
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Oculus Spirit [97657]
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Re: planning to sale?
Apr 27, 2021, 1:49 PM
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Maybe
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Replies: 42
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