Why inflation is going to be a lot more persistent than people believe

[KhunLA]

4 minutes ago, Gecko123 said:

This isn't a debate about what is causing climate change. Irrespective of what you may or may not believe is causing it, the climate IS changing. The question is what impact this will have on inflation.

CG isn't the problem.  Poor water & people management is the problem.

[Walker88]

I can be convinced that inflation is just a temporary problem, and what is coming is the opposite: deflation. Perhaps even hyper-deflation.

 

Here's why I might think this is the case:

 

In most industrialized countries the fertility rate is tumbling. In South Korea it is .9, which means not even one half of a couple replaces itself. Population is becoming an inverted pyramid. That is going to be felt the most in fixed asset prices, particularly housing. Fewer people means less demand. Also, since so many seniors did not save well for retirement, reverse mortgages will fund their golden years. That means banks are going to be assuming lots of homes, and they will be trying to unload into a shrinking population.

 

There is also excess productive capacity worldwide. China has added more steel production capacity since 2011 than existed on Earth before 2011...but there isn't another China to build to absorb all of that production. Plus, any new plant and equipment will utilize the latest technology, which means less human labor, which will eventually evidence itself in rising UE across the industrialized world. High UE impacts demand, which impacts prices.

 

I agree that food and water will be a counteracting issue, but I think overall we're more likely to see deflation in the next 20 years.

 

I end with a kind of Biblical quote that considers both sides of this issue, inflation or deflation?

 

Assets to ashes or debts to dust......

 

[Gecko123]

9 minutes ago, Walker88 said:

I can be convinced that inflation is just a temporary problem, and what is coming is the opposite: deflation. Perhaps even hyper-deflation.

 

Here's why I might think this is the case:

 

In most industrialized countries the fertility rate is tumbling. In South Korea it is .9, which means not even one half of a couple replaces itself. Population is becoming an inverted pyramid. That is going to be felt the most in fixed asset prices, particularly housing. Fewer people means less demand. Also, since so many seniors did not save well for retirement, reverse mortgages will fund their golden years. That means banks are going to be assuming lots of homes, and they will be trying to unload into a shrinking population.

 

There is also excess productive capacity worldwide. China has added more steel production capacity since 2011 than existed on Earth before 2011...but there isn't another China to build to absorb all of that production. Plus, any new plant and equipment will utilize the latest technology, which means less human labor, which will eventually evidence itself in rising UE across the industrialized world. High UE impacts demand, which impacts prices.

 

I agree that food and water will be a counteracting issue, but I think overall we're more likely to see deflation in the next 20 years.

 

I end with a kind of Biblical quote that considers both sides of this issue, inflation or deflation?

 

Assets to ashes or debts to dust......

 

Thank you for your thoughtful reply. Is it safe to say that you're in the Harry Dent school of thought that long cycle demographics drive markets? I agree with this analysis, but I have started to see things in terms of a structural supply-demand imbalance with supply shrinking (due to diminishing resources) and the amount of money chasing that demand seemingly spiraling forever upwards.

 

I can definitely envision a scenario where inflation forces interest rates ever higher until asset prices collapse and there's Japan style deflation. But in the US's case, even though I think the Fed is going to push interest rates higher than anyone expects right now, sooner or latter they're gonna back off and a bloated money supply and inflation still hanging around. Do you have any thoughts about the inflationary impact of entitlement spending and COLA adjustments? That's a big part of the reason I think that inflation is going to be around for a long time.

[gamb00ler]

2 hours ago, Sparktrader said:

So why was the hottest day recorded in 1913?

Do you base your entire assessment of climate science on this one event that lasted only a few hours?

[1FinickyOne]

It simply makes government debt cheaper.. pay it back in less valuable currency

[Sparktrader]

1 hour ago, gamb00ler said:

Do you base your entire assessment of climate science on this one event that lasted only a few hours?

No i look at all the records, temps, droughts, floods etc.

 

If things were so bad they would all be last 10 years. They arent.

 

 

 

 

[Rohe60]

3 hours ago, Sparktrader said:

So why was the hottest day recorded in 1913?

Yes, back in 1913.....
Really hot it was. The engine of my Tin Lizzie was boiling over again and again....

[gamb00ler]

9 minutes ago, Sparktrader said:

No i look at all the records, temps, droughts, floods etc.

 

If things were so bad they would all be last 10 years. They arent.

Using outlier weather events is not how to do climate science.  Please brush up on weather vs climate.

Edited August 20, 2022 by gamb00ler

[Sparktrader]

Just now, gamb00ler said:

Using outlier weather events is not how to do climate science.

Isnt cc supposed to cause worse droughts? You cant have your cake and eat it too.

 

 

[Sparktrader]

6 minutes ago, gamb00ler said:

Using outlier weather events is not how to do climate science.  Please brush up on weather vs climate.

 https://www.climatecouncil.org.au/resources/climate-change-floods/#:~:text=Climate change is affecting our,a greater risk of floods.

 

They claim otherwise, getting worse

 

Yet the worst floods many years ago

 

https://en.wikipedia.org/wiki/List_of_deadliest_floods

Edited August 20, 2022 by Sparktrader

[talahtnut]

CO2, known as the gas of life, 

Yeah, go ahead and reduce it!

[mikeymike100]

4 hours ago, gamb00ler said:

I don't think you've been alive long enough to collect enough data about the climate "always" changing.  That implies that for you to know that fact, you must have relied on scientists who have actually studied climate.  It seems you wish to accept some of that science but reject that which you find inconvenient.

The climate has been changing since the Earth formed, a very long time ago, around 4,5 billion years. So the climate has been always changing!

[Denim]

5 hours ago, Sparktrader said:

Opposite. Co2 feeds plants. Basic science.

These plants have been on a Co2 bender and overdone it a bit.

 

[Sparktrader]

8 minutes ago, Denim said:

These plants have been on a Co2 bender and overdone it a bit.

 

Looks like old dead crops which is a yearly thing

[talahtnut]

In the paper, which published Friday in Science Advances,

the researchers lay out the vast anatomical changes that

took place in many reptile groups, including the forerunners

of crocodiles and dinosaurs, in direct response to major

climate shifts concentrated between 260 to 230 million years ago.

 

[Aussieroaming]

I think what will happen is a redistribution of optimal growing zones, so agricentric activity centre's will need to shift.

Areas that were too dry/cold might become the new potential bread baskets as temperature and rainfall profiles change.

 

[Denim]

36 minutes ago, talahtnut said:

In the paper, which published Friday in Science Advances,

the researchers lay out the vast anatomical changes that

took place in many reptile groups, including the forerunners

of crocodiles and dinosaurs, in direct response to major

climate shifts concentrated between 260 to 230 million years ago.

 

But  it could be a few million years yet before I grow an extra penis. I'm so exited.

[gamb00ler]

1 hour ago, mikeymike100 said:

The climate has been changing since the Earth formed, a very long time ago, around 4,5 billion years. So the climate has been always changing!

Of course it has.  And, the climate scientists have a decent understanding of what events or geologic changes led to those climate changes.  That's why they understand what's happening now.

Edited August 20, 2022 by gamb00ler

[SportRider]

I think the initial proposition needs some clarification about scale of inflation.  Economists actually like modest inflation and central banks plan for it, eg around 2pc pa.  So inflation will 'persist' indefinitely in this environment, regardless of whether we agree or not with the points raised.

 

If we're talking about the decades-high inflation currently, it will come down again but will take a serious programme of rate rises to get there (tinkering with the demand side).   The only uncertainty is how long and how deep the created recession will be.

 

[The Theory]

Things will turn ugly next decade. ????????

[talahtnut]

3 hours ago, Denim said:

But  it could be a few million years yet before I grow an extra penis. I'm so exited.

That'll make 4" altogether then?

[placnx]

9 hours ago, worgeordie said:

Here's an example , due to historically high heat in the UK, EU , in some areas

grass has died off, and the famers are having to use their winter stocks of feed

to feed their livestock now, that's grass a plant you may not think of as a crop

but is, 

regards worgeordie

Today I was watching BBC News interviewing a French farmer in her field of dried up maize. She scooped the powdered soil which reminded me of the 1930s Dust Bowl in the Oklahoma plains.

[runamok27]

12 hours ago, Gecko123 said:

This isn't a debate about what is causing climate change. Irrespective of what you may or may not believe is causing it, the climate IS changing. The question is what impact this will have on inflation.

The problem isn't climate change, the problem is all of these supposedly advanced countries not transitioning to clean energy in a smart and efficient way. They all are trying to kill anything driven by fossil fuels way, way before the clean energy replacement is viable. This lack of an intelligent transition plan is causing problems world wide, one of which is inflation but it is and will continue to cause more short term and long term problem because these supposedly intelligent people, not, are going to continue with there slash and burn policies with regards to fossil fuels without any intelligent transition plans to renewable energy. 

 

This incredible stupidity is going to cause a lot of unnecessary pain and suffering worldwide but the advanced economies don't really care because most of the deadly pain suffering will happen in the less developed world. 

[sezze]

Nr 1 , i do not deny climate change but having anything to do with inflation is crazy . Inflation is something right now , and something for a couple of years . It is a economic thing , and like exchange rates they do make waves . Climate change will change the way farmers will need to use , you are correct on that . However , climate change unlike economics are slow movements , even if it goes extremely fast . This has got no effect on inflation by itself . Yes some years maybe hotter and dryer , but maybe next year you got floodings and a cold summer . The year after you suddenly got a perfect season for crops , and so on and so on . In 20-50-80years then the climate change will require other crops and change of techniques , but in general 1 hot summer does not make climate change permanent .

What is driving inflation right now is the energy shock , which is like the perfect storm scenario . Thinking about war Russia/Ukraine in a aftermath of Covid and global disruption of chains . Maybe many forgot that also the Suez canal was blocked for a while , another long disruption of chain of distribution/manufacturing . Maybe 1 leads to another ( in fact myself thought in 2008 that a big war is/was coming , never even imagined it was Russia , and i don't think it is over just yet ... no further comment on it , watch the future ...) , but the facts are that the disruptions created massive problems . There is enough everywhere , but it is all in the wrong places in the wrong time , creating inflation .

[SportRider]

8 hours ago, runamok27 said:

The problem isn't climate change, the problem is all of these supposedly advanced countries not transitioning to clean energy in a smart and efficient way. They all are trying to kill anything driven by fossil fuels way, way before the clean energy replacement is viable. This lack of an intelligent transition plan is causing problems world wide, one of which is inflation but it is and will continue to cause more short term and long term problem because these supposedly intelligent people, not, are going to continue with there slash and burn policies with regards to fossil fuels without any intelligent transition plans to renewable energy. 

 

This incredible stupidity is going to cause a lot of unnecessary pain and suffering worldwide but the advanced economies don't really care because most of the deadly pain suffering will happen in the less developed world. 

I think it's slightly misleading to say the advanced economies don't care about the developing world.  Most intelligent people do care. It's the idiot do-gooders who bully policymakers into rushed decisions.  I'm talking about the demonstrators who hold society to ransom with their stupid protests that affect ordinary people (UK is a big victim of this). And people like you-know-who teenager who has the world stage but she wants immediate action!

 

There are huge huge resources both financial and intellectual being applied to the transition.

 

 

[berrec]

What the hell, the CC money spinner.

 

Look who enriches themselves from these CC initiatives.

 

Always follow the money to hone in on the real facts.

 

Man-made CC impact, Real or Rubbish; up to each individual to make their own assessment. 

 

"Correlation does not imply Causation" refers to the inability to legitimately deduce a cause-and-effect relationship between two events or variables solely on the basis of an observed association or correlation between them.

 

My only opinion, 500 million years of CC has passed us by, and I will not be here for the next 500 million year anniversary of CC.

 

Neither will any of you, so chill out!

[Thingamabob]

Inflation will occur while the West tries to reduce it's dependence on products manufactured im China. It has very little to do with climate change unless, of course, Western govts over-spend on net zero.

[placnx]

On 8/21/2022 at 6:45 AM, sezze said:

Nr 1 , i do not deny climate change but having anything to do with inflation is crazy . Inflation is something right now , and something for a couple of years . It is a economic thing , and like exchange rates they do make waves . Climate change will change the way farmers will need to use , you are correct on that . However , climate change unlike economics are slow movements , even if it goes extremely fast . This has got no effect on inflation by itself . Yes some years maybe hotter and dryer , but maybe next year you got floodings and a cold summer . The year after you suddenly got a perfect season for crops , and so on and so on . In 20-50-80years then the climate change will require other crops and change of techniques , but in general 1 hot summer does not make climate change permanent .

What is driving inflation right now is the energy shock , which is like the perfect storm scenario . Thinking about war Russia/Ukraine in a aftermath of Covid and global disruption of chains . Maybe many forgot that also the Suez canal was blocked for a while , another long disruption of chain of distribution/manufacturing . Maybe 1 leads to another ( in fact myself thought in 2008 that a big war is/was coming , never even imagined it was Russia , and i don't think it is over just yet ... no further comment on it , watch the future ...) , but the facts are that the disruptions created massive problems . There is enough everywhere , but it is all in the wrong places in the wrong time , creating inflation .

There is an effect of climate change causing inflation because of droughts and shortfall in harvests, but also in finance banks are loath to finance fossil fuel projects, so now the supply of petroleum and natural gas is limited. The lack of follow on investment in existing fields is now compounded with the disruption of Russian supplies.

[Stocky]

On 8/20/2022 at 11:39 AM, Sparktrader said:

Climate has always changed.

Sure, but there weren't 8 billion humans on the planet then. Worse over 1 billion live in low lying areas susceptible to flooding or rises in sea level, whilst over 2 billion are living in drought prone areas. These 3 billion plus aren't going to stay put - most likely moving to an area near you.

[Sparktrader]

30 minutes ago, Stocky said:

Sure, but there weren't 8 billion humans on the planet then. Worse over 1 billion live in low lying areas susceptible to flooding or rises in sea level, whilst over 2 billion are living in drought prone areas. These 3 billion plus aren't going to stay put - most likely moving to an area near you.

Not allowed to move 3bn people. Thing called immigration.