12 replies to this topic

[Douglas]

This past weekend I threw out a bucket of pool paint I bought six years ago at a local warehouse store with the little $34 price tag still attached. When I went to buy a new bucket of the exact same paint, same brand at the very same store this weekend, it cost $58.75. That works out to better than 9% inflation. This weekend I also got my property tax bill which was increased 10% over last year. Gas is, well, you get the picture. If you don't buy it at Walmart, its rising very rapidly in price. My total spend at Walmart just doesn't offset the other things. What has this got to do with stock prices? Well, if inflation is 5 or 6% and interest rates are 5% more or less, your total return is zero. If Blackhawk Ben keeps rates here, zero real interest rates will support a very high PE for stocks.

[market speculator]

Inflation is too many dollars chasing too few goods...it is not prices going higher

[Douglas]

Inflation is too many dollars chasing too few goods...it is not prices going higher

Well, I don't have too many dollars, and the pool warehouse had plenty of buckets of this 58 dollar paint on the self so there are too few of them. The anti-inflation eveyone always points to is flat panel TV's which are falling in price, but that costs me too. When my old tube TV died, my wife insisted on a new flat panel one to keep up with the Jones. This new flat panel TV cost me twice what my tube TV cost. From my point of view my cost of living went up. Same with computers, Bill Gates keeps making his stinking software bigger and bigger requiring faster computers with more memory. Every dang computer I buy costs more than the last one despite all the so called deflation in their price. My cost of living just goes one way - up.

[arbman]

Inflation is too many dollars chasing too few goods...it is not prices going higher

Well, it eventually results in a few dumb investors with too much money paying more than they should've for the goods attracting too much attention though...

[arbman]

My cost of living just goes one way - up.

Decades after decades, there is more people and less of everything else... The prices must go up until the number of people goes down, it is a fine balance though. When you invest for the long term, you are actually betting that there will be eventually less supply held or needed by more people, that's betting on the population growth in fact...

The inflation under a 10 yr period is something that the rich can manipulate to control the populations and it has nothing to do with the rising prices with the less supply in the long term. The central banks' monetary policy is directly controlled by the political agendas of the rich...

You really need to distinguish when you are being manipulated and when you are seeing a truly increasing demand. All of the inflationary efforts will eventually revert to the mean, but anybody with less money than the central banks --that's pretty much everybody-- will run out of money fighting it until it happens since your money fighting against the inflation is actually the collateral the central bank needs to print more money until you give up...

The system is not a zero sum game with the background growth tied to the population rate, it is actually rigged temporarily for the ones controling the inflation or interest rates...

[TradeMark]

Doug, Your costs aren't going up. They are going down. You just don't understand the proper Bureau of Labor Statistics methods to measure these things. Take your new computer, it has a faster processor, so it does not cost more, in fact the price has gone dwon. And that flat screen TV, it is actually worth more to you than that old curved screen. So, even though you paid twice as much, its cost has gone dwon too. So you see, actually your costs are going down. You just need to adopt the BLS approach to measure these things. Just ask the Gubmt. They are there to help you. TM

[Douglas]

Doug,

Your costs aren't going up. They are going down. You just don't understand the proper Bureau of Labor Statistics methods to measure these things. Take your new computer, it has a faster processor, so it does not cost more, in fact the price has gone dwon. And that flat screen TV, it is actually worth more to you than that old curved screen. So, even though you paid twice as much, its cost has gone dwon too.



So you see, actually your costs are going down. You just need to adopt the BLS approach to measure these things. Just ask the Gubmt. They are there to help you.



TM

With help like this, I'm going to be eating dog food in my retirement especially if I can't get back in the grove of this crazy stock market. Every cotton picking indicator I track says it should be rolling over, but like the little pink battery powered bunny, it just keeps on going and going, etc. I think it's these zero interest rates making people want to buy anything tangible. XOM, GE, etc. are tangible, they own buildings, oil wells, property, etc. plus their overseas earnings are getting juiced by the falling dollar.

The one weird thing is sentiment. I've been tracking AAII, II, Market Vane and Bullish Consensus for donkey's years and just added TSP. Half are very high and bearish and the other half have recently been very low and bullish. Dangdest thing. I guess it averages out to neutral.

[kc135a]

Inflation is too many dollars chasing too few goods...it is not prices going higher

Inflation is a tax!!!!

When some day my house of the last 28 years gets sold, I am going to pay the Fed and State a nice 6 figure capital gains tax after all of the deductions just because I have lived in the same house for such a long time without a boat load of improvements. Ticks me off.

Again, inflation is a just another tax, ..., sweet and simple.

KC

[pdx5]

With help like this, I'm going to be eating dog food in my retirement especially if I can't get back in the grove of this crazy stock market. Every cotton picking indicator I track says it should be rolling over, but like the little pink battery powered bunny, it just keeps on going and going, etc. I think it's these zero interest rates making people want to buy anything tangible. XOM, GE, etc. are tangible, they own buildings, oil wells, property, etc. plus their overseas earnings are getting juiced by the falling dollar.

The one weird thing is sentiment. I've been tracking AAII, II, Market Vane and Bullish Consensus for donkey's years and just added TSP. Half are very high and bearish and the other half have recently been very low and bullish. Dangdest thing. I guess it averages out to neutral.

Don't be berating dog food! My 3 year old dog has never been sick even once, while everyone
in my family got the cold, flu, cough, and some have hypertension, too many pounds, lack of
energy, indigestion....you get my drift? My dog has tremendous energy, never gets constipated,
does not need toilet paper, does not need glasses etc....just a bundle of health. Gotta be the dog
food

[arbman]

I think it's these zero interest rates making people want to buy anything tangible.

As I said, the central banks want no savings at the moment, by inflating they are telling you to put that savings into work immediately, the low rates mean you have to own something, anything or inflation will erode the value of the currency! The money you have as your savings --or short position in the markets-- is the collateral that the central bank needs to inflate against. In fact, as soon as you buy, they start draining hence depreciating the value of the goods, what a nice game to funnel your money into their pockets one way or another!!!

Again, inflation is a just another tax, ..., sweet and simple.

That's what I am talking about!