Say Hello to Hyperinflation

I remember a year or so ago people arguing with me about this.
I knew it was coming, and I guess they are going to do it via death by a thousand cuts!

Here

JPMorgan's Jamie Dimon: Fed to hike rates 'higher than the markets expect

the Fed is now in the early innings of an interest rate hike cycle that will likely include further interest rate hikes through the rest of 2022 — and likely beyond.

Dimon added that short-term borrowing costs need to be “substantially” higher to address the rapid pace of price increases.

There’s also the question of how fast the Fed needs to implement those rate hikes.

Some may ask what is hyperinflation? It is when prices raise very quickly, usually more than 50% in a short amount of time.
I think for some products this is already true, but not all, yet. Just stroll through the grocery store and take a video/pics of prices and then return in a week or two. You'll notice how much has gone up!

a reply to: JAGStorm
This was bound to happen. For my place, with the EU 0% and negative interest on parked money as punishment for not investing and providing fluidity to the market even more so. Not sure about your situation with interest loans.

I am not a financial expert but it's good to fortify with something physical even besides the precious metals. Like concrete gold. Buildings with useful purpose that can be rented out to business. Sure if WW3 breaks out you can not eat that but after recovery, life goes on and it is not something someone can steal from you, or loose it. At last one can live in it, pretty any building. At least a dry roof.

a reply to: JAGStorm

I don't think what we're seeing constitutes hyperinflation, although certain items have definitely gone up significantly in price.

The fed raising interest rates will not resolve supply chain issues, high energy prices, etc. Inflation will likely be here to stay for awhile

a reply to: FamCore

I don't think what we're seeing constitutes hyperinflation

I agree, we are not fully there, but I truly believe we are a lot closer than some would like to believe.

One of the things I've noticed in almost all stores, even the ones that are well stocked. Diversity of product is down.
They will spread the same item out instead of previously having five different types.

I also visited an Asian grocery. If that didn't scare the ... out of me. It was more than 50% empty. My guess is combination of shipping issues, and costs. Some lower profit margin items from overseas may just not be worth it to ship anymore, AND as a general rule a lot of Asians have been through a lot of wars, conflicts and economic turmoil. So runs on the grocery is a sure indicator of what they believe is to come.

originally posted by: JAGStorm
Some may ask what is hyperinflation? It is when prices raise very quickly, usually more than 50% in a short amount of time.

Which is why Dimon is calling for even larger increases to the prime rate as this helps stave off inflation. It still isn't in the realm of hyperinflation at this point which would be significantly higher.

a reply to: JAGStorm

www.forbes.com...

How To Prepare For Hyperinflation

Seek Stores of Value ASAP
Focus on the Bare Necessities
Have an Exit Strategy
Don’t Trust Government Readings, Verify

That last one!!!!!

And this:

If you figure out how to live with hyperinflation, trouble could be waiting on the other side, too. Hyperinflation squeezes entire communities, and desperate people do desperate things. For this reason, hyperinflation has been cited for prompting unrest, mass poverty, and war.

We just went out yesterday and bought three whole chickens from Walmart here, a buck four a pound. Then the daughter called and asked for chicken soup again, seems that they are still sick there, so I put the new chicks in the freezer and took out an older one, I rotate everything. We went through about seventeen pounds of chicken making soup in the last week and a half.....I sure hope chicken doesn't jump up double in price, right now a huge pot of soup costs about ten bucks to make, that is at about six bucks for a large chicken. Had to bring soup to both daughters and the granddaughter for her family, getting kind of tiring making soup every third day. The soup is medicinal and the ones who are sick do benefit, but the other kids that don't eat it for two meals still get the bug whatever it is and that needs to be souped out. On top of that, seems like there are many types of bugs going around, not just the flu, covid, or that stomach bug, they get all three days apart.

I'm really getting sick of cooking soup this year. I would rather make BBQ or oven fry chicken for ourselves. We go through a chicken once every two weeks for our own use, making soup out of the bones and scraps when I cut the chicken up and shake and bake, bbq, or stuff a bird once during that ten days...but every time we get two days supper from the chicken.

The sales prices seem to be disappearing lately on stuff, and the regular price is way more expensive most times, I like cooking stuff from scratch better than tossing TV dinners in the oven...although we do eat junk food once a week.

a reply to: JAGStorm

I remember warning people about the same thing only to be met with arguments stating the pandemic would result in deflation. Funnily enough those same posters who followed me around the forum with criticism of my every opinion no longer show their face in threads I post in.

a reply to: JAGStorm

Double post

originally posted by: Grenade
I remember warning people about the same thing only to be met with arguments stating the pandemic would result in deflation. Funnily enough those same posters who followed me around the forum with criticism of my every opinion no longer show their face in threads I post in.

Probably the same people who wanted to weld everyone in their homes.

The Truck drivers were forced to get vaccinated, so the industry lot a lot of them; then, California passed new regulations and semis more than 12 years old were no longer allowed into the state. Products were slow to get to the stores, then quickly sold out.

What strikes me as odd was no shortage of goods for Valentine's day in 2021. Big box stores don't store seasonal goods for next year- they discount everything until it's gone. Holliday goods have been flowing smoothly ever since- so you would think thins are getting back on track, yet food and paper products are still hit and miss in the stores.

Now we're told there's a shortage of shipping containers, and there's a shortage of steel needed to built more. Over 100 cargo ships are still at sea waiting to get into port and unload. The largest cargo ships can hold 21,000 standard 20' containers.

Railroads are moving goods as much as possible, but unfortunately they began fazing out their use for transporting goods decades ago. Railroads across the country are a pittance of what they once were. (Saw this CF coming 40 years ago and was considered quite daft.)

Inflation is off the charts- I don't care what the 'official' records say. The PNW is facing another year of drought conditions, and farmers aren't going to be able to get the fertilizer they need to plant all their acreage. Crop yield has already been slowly dropping in recent years, so yes; this next year we will be seeing the food shortages in the stores. it has the potential to morph into a world-wide famine if current policies hold or even expand.

Increasing interest rates will not stop this runaway train, IMO. Making everything cost more is just going to hurt those barely scraping by even more. The minimum wage increases just get passed on to the consumer, so when goods are available suppliers can pretty much name their price.

The way of life we've known is no longer sustainable, and it's going to be really tough getting through this. I'm not sure how it can be down at this point without a one world government pooling resources in the coming years.

originally posted by: nugget1
Railroads are moving goods as much as possible, but unfortunately they began fazing out their use for transporting goods decades ago. Railroads across the country are a pittance of what they once were. (Saw this CF coming 40 years ago and was considered quite daft.)

Railroad freight tons are 25% higher than they were 40 year ago.

a reply to: JAGStorm

The way I understand things, it isn’t so much that things are going up 50%.

It’s more like the value of the dollar is going to drop 50%.

In the 1960s three silver dimes got you a gallon of gas. If you can find three of those dimes today the silver in them will still get you about the same quantity of gas.

Same with the horses that Solomon bought for so many shekels of silver. Worth similar today.

Fiat currency only lasts slightly longer than a Fiat car

a reply to: JAGStorm

YOU will own nothing and be HAPPY or else.

Do you follow me around just looking to find some point to disagree with?

Due to its ability to move major quantities at one time, rail has a lower cost-per-ton-mile (the cost of moving one ton one mile) than truck. In fact, a train requires less energy to move from Point A to Point B and can carry the freight equivalent of 300 trucks.
Rail is by far one of the most environmentally responsible transportation modes. On average, railroads move one ton of freight 444 miles per gallon of fuel, and trains are four times more fuel efficient than trucks. Plus, U.S. Environmental Protection Agency data show freight railroads account for only 0.6% of total U.S. greenhouse gas emissions and only 2.0% of the transportation-related sources.

www.up.com...

a reply to: nugget1

What's the point of that citation? It doesn't disprove what I posted earlier and this isn't a 'disagreement', what you posted was 100% erroneous.

originally posted by: Grenade
I remember warning people about the same thing only to be met with arguments stating the pandemic would result in deflation.

Which might have happened, if it wasn't for the helpful Feds keeping interest rates at zero, and printing money at full throttle.

Now even they realize they've kept money too cheap too long, and will have to scramble to catch their self-made monster.

As an aside, is everything besides daily consumables now priced/sold in terms of payments? Yes a major purchase like a home you'll be concerned about payments, but financing a $40 cell phone accessory "with four easy payments of only $9.99"??

originally posted by: gb540

originally posted by: Grenade
I remember warning people about the same thing only to be met with arguments stating the pandemic would result in deflation.

As an aside, is everything besides daily consumables now priced/sold in terms of payments? Yes a major purchase like a home you'll be concerned about payments, but financing a $40 cell phone accessory "with four easy payments of only $9.99"??

This has been sneaking in for a while, and is a symptom of fractional reserve lending.
Only it isn't $40 for four payments of $9.99... it's $40 for five payments of $12.99. And I'm sure there's a convenience fee in there somewhere.

With many consumers living paycheck to paycheck, there's a whole class of people who can't afford that $40 widget, but they want it.
But they CAN afford $12.99. Next month (or are they weekly payments when they get this small?) they'll want another $40 widget, but still won't have $40... and somehow they'll still have $12.99!

Well currently (this evening) I paid $22 for 1lb chicken tenders, 2 Roma tomatoes, a head of garlic, a bunch of cilantro, an avocado, a 8oz package of Mexican cheese and a chicken taco seasoning packet. That was for one meal for my wife and I. I've basically resigned myself to paying $20/per meal every time I go to the grocery store.

a reply to: gb540

Sure, anything's possible, when it comes to macroeconomics i'd rather take probability and history as my indicators.