Inflation Manifestation

The PPI (Producer Price Index) was 300% more than expected. The producers will pass that cost onto us as consumers. Food prices are rising in stores but corn wheat and soybeans futures are much lower than 10 years ago. Tomorrow will mark the end to the most accomadating monetary policy our country has ever seen. These policies didn't create enough growth to service the $65 trillion in debt that we now have. The debt ceiling expires tomorrow as well. 3/15/17 11am PST . God Speed Everyone. Federal Rate Change

a reply to: tonycodes

That cheap credit has resulted in a lot of capital investment. That investment will not go away because credit is not quite as cheap.

a reply to: tonycodes

And to think the global world debt is at around 150 trillions. Almost half of all debts on earth are American.

a reply to: tonycodes

Congress Will be Forced to Raise the Debt Ceiling Again . How Long can they Keep this Sheeit Up ? .........(

originally posted by: Phage
a reply to: tonycodes

That cheap credit has resulted in a lot of capital investment. That investment will not go away because credit is not quite as cheap.

Unfortunately capital investment in the US has remained well below pre 2008 levels.

originally posted by: Milehigh
a reply to: tonycodes

And to think the global world debt is at around 150 trillions. Almost half of all debts on earth are American.

My almost half the world's wealth is also American.

a reply to: ScepticScot

Out of curiosity, how much of that investment was based on subprime mortgages and inflated real property pricing?

originally posted by: Phage
a reply to: ScepticScot

Out of curiosity, how much of that investment was based on subprime mortgages and inflated real property pricing?

A good question.

As it is measured as a % of GDP then the bubble effect would be less, however over valuation of assets certainly have some effect.

Arguably it could make it even worse if general economic transactions were more inflated than capital investment ones.

I think the difference is significant enough, that even allowing for above, that the level of capital investment has certainly fallen despite extremely low interest rates.

a reply to: ScepticScot

I'm pretty happy about my refi.
I'm pretty sure developers are happy about theirs.


I wouldn't be be bummed if my money market account started looking better.

a reply to: Phage

If think it is safe to say the economy isn't doing too bad, it just could be doing a lot better.

The UK economy is doing similar and I can at least look at my pension statements again without squinting between my fingers.

If the last 8 years demonstrate anything it is the limits of monetary policy.

a reply to: ScepticScot

it just could be doing a lot better.

Yup. Is there a limit to that point of view?

originally posted by: Phage
a reply to: ScepticScot

it just could be doing a lot better.

Yup. Is there a limit to that point of view?

The same limit that applies when people say things could be worse.

a reply to: tonycodes

WAAAAAAAR!

The #1 Debt Consolidation Technique since...Forever! Let's Start Raining Some Iron Gate and Let The Doorkicking Begin!

a reply to: Phage

The problem is not the productive investment, which you are probably referring to, which will not go away, but rather it is the copious malinvestment in the system (non productive assets and serious unserviceable debt), which may go *poof*.

Hey on the bright side, more and more states are re-monetizing gold and silver bullion by removing taxes on it.
Idaho Ends Gold And Silver Taxation, Arizona is Next

Gold and Silver Are Money

In a first and significant step towards the remonetization of Gold and Silver, Idaho voted tonight to remove income tax on precious metals. This is the first step in what will likely be a cascade of other states following suit.

Last week we discussed here the Arizona Senate Finance and Rules Committees' calling out the Fed on Gold Taxation by considering legislation (HB 2014) officially defining gold, silver, and other precious metals as legal tender. The bill also exempts transactions in precious metals from state capital gains taxes, thus ensuring that people are not punished by the taxman for rejecting Federal Reserve notes in favor of gold or silver.



The main arguments in favor of removing taxation on Precious metals can be summarized as this:

taxation on any appreciation in Gold's value undermines its value as an inflationary hedge
If gold and silver are priced in USD, then their price changes are a reflection on the USD buying power, nothing more
You don't pay tax when the buying power of the USD increases when buying EU goods. So why should Gold be treated differently?
The removal of income tax and capital gains tax puts Precious Metals on a level playing field with FIAT currencies

Hey guys.. Looks like the fed is going to not try and front run the inflation so real rates should stay low... which should make inflation rise... For years.

Also note that Yellen said that GDP is a "noisy" indicator. 👌

a reply to: tonycodes
you will also notice that the bullion market responded nicely to that revelation. It looks to me like they will go with the %0.25 hike for each quarter give or take. Thats actually a very responsible way to get back to normal.

Either way the States are ahead of the game, and one by one are removing taxes on precious metals faster than states legalize cannabis. I think there is some writing on the wall.

a reply to: tonycodes
double. may as well make it count.

In the news recently Gander, Sports Authority, Radio Shack, Gordmans all filed for bankruptcy.
Kmart and Walmart have closed a lot of stores and Sams club is under financial stress.
Caterpillar is off its January highs possibly in response to a perceived threat from the rate hikes.
Home prices are probably not going to increase much without wage inflation.
Maybe this will be the last rate hike for 6 months?

Buy Gold