Today is April 27, 2021. I'm hearing a lot of chatter and handwringing on CNBC, Bloomberg TV, and other financial media web sites concerning inflation worries. Members of the Biden administration, (i.e. Janet Yellen, Jared Bernstein, Fed Chairman Jerome Powell, et al.), are insisting that they have inflation under control so there's nothing to worry about.

On the other side of the coin, folks like former Commerce Secretary and [former?] Harvard President Lawrence Summers are sounding the alarm. With all the money being pumped into the economy, Mr. Summers thinks we have plenty to worry about vis-a-vis future inflation. (Remembering the 1970's, my gut instinct is that Mr. Summers may have the clearer crystal ball and a better read on the situation than perhaps Secretary Yellen and Mr. Powell, but what do I know?)

So here's your chance to show your macroeconomic chops. Choose among the following options for what the inflation rate will be running - as measured by the Consumer Price Index - on April 27, 2022 which is one year from now.

Since I'm starting this poll, I'll go first with my prediction. I seem to recall from my college economics class that the textbook definition of "inflation" is: Too much money chasing too few goods and services. I'm not sure about the "too few goods and services" part, but I definitely agree that too much money is being pumped into the economy. When this has happened in the past, the result tends to be a spike in inflation. So, I'm going with the third option, (i.e. an inflation rate running at 4-6 percent on April 27, 2022), although I fear option 4 or option 5 may be the more accurate prediction.

I was going to append a comment to the effect that "The longer you wait to make your prediction, the less "weight" your prediction will have, but ... never mind.

Don't like the poll options. I'm sure CPI will lie as it always does. Traditionally, inflation in USA has been around 5-6%/year. Currently, it's estimated to be around 11-12%.

The 2% reported is a total joke if you use your brain at all and consider the rising costs of basically any stable/normal item and relate that back in time.

Please cite a [verifiable] source for the bolded.

CPI probably between 2 and 3% for certain. Real inflation will be a lot higher.

Poll needs a negative option (deflation)

lol deflation

its gonna be bad plus not like the gov give u accurate stats anyways

someone invite shuffle over to get that 8%+ line bumpin upward

Not a bad rule of thumb but it doesn't really apply to what's currently going on. There's a global multi-trillion USD shortage needed to service dollar-denominated debt. That's where most of the money we're printing is going, not into the consumer economy bidding up the prices of consumer goods and services, i.e., causing inflation. We could basically pump another $10T into the economy they way the Fed's been doing it and consumer prices won't see much impact. Different story with financial assets.

Not that this guy is any more (or any less) enlightened than the rest of us, but billionaire investor Lee Cooperman was on CNBC's "Squawk Box" this morning declaring that interest rates (and inflation) are "going up" and "... nobody knows where this is going to end." (I suppose if he's voting in this poll he would select option 5, (i.e. inflation running at 8 percent or higher a year from now.)

Yet you sold your crypto?

What did you buy to hedge agaisnt inflation?

Shadowstats for default. http://www.shadowstats.com/alternate...flation-charts

As far as the 11-12% figure, I saw this pretty neat data chart displaying the projected inflation given the current coronavirus situation, spent a few minutes, couldn't find it for you.

Regardless, getting back to the main subject at hand, the basket of goods the CPI used changed around 1980. This is where you can see the delta emerge by no coincidence on shadowstats. The CPI also went from a basket of goods of public information to private information. Thus best case scenario you have to trust that the CPI is honest, but there's no way of knowing what it is.

Can you really honestly believe that 2% is remotely accurate, as in prices have only doubled in ~35 years?
https://twitter.com/AltcoinDailyio/s...326224898?s=20

It's going to be nearly impossible to give you some bulletproof verifiable source because the government decides what is accurate and what isn't. So it'll all be done by independent organizations. But use some common sense.

As for why the government would choose to under report inflation numbers, this is rather obvious. All the major ponzi schemes like social security, veteran's benefits, welfare, etc, are all pegged to the CPI. By inflating more than the CPI, they effectively scam all of these programs by some % per year to allow them to persist longer. If they didn't, social security would combust in a few decades absolute best case scenario, but probably sooner. By doing the inflation scam, they can perpetuate the social security ponzi for potentially hundreds of years, until the program is so useless that some major reform takes place.

I don't think anyone has put forward that it has only been 2% for 35 years.

Didace:

One possible (non-scientific?) inflation gauge is the minimum wage. Forty-seven years ago, when I started doing my radio gig fresh out of high school, the [federal] minimum wage was $1.25 per hour. Not sure about this, but I think the current federal minimum wage is somewhere in the neighborhood of $7.75 per hour. Taking the $6.50 differential and dividing it by 47 years gives an [average] wage inflation rate of approximately 13.8 percent per year. (This seems high to me, so I'm not sure it's correct. I'm hoping a math major or a statistician will correct my [faulty?] math.

There's now a big push to raise the federal minimum wage to $15.00 per hour. (This proposed minimum wage standard would apply to all federal Government contractors.) If private employers are forced or compelled to raise their labor costs by nearly double what they currently are, does anybody believe they will "eat" those increased costs? I doubt it ...

President Biden better hope inflation doesn't take off like a rocket. In 1980 Jimmy Carter didn't lose the White House to Ronald Reagan because voters were unhappy with his handling of the Iran hostage crisis. People were fed up with high inflation, double-digit interest rates and high unemployment. (The economic term for this morass was "stagflation".) I was working two jobs while simultaneously going to college at night. Trying to control my food costs, I was eating a steady diet of Hormel Chili & Beans with saltine crackers. (I farted a lot.) I remember a trip to the grocery store when I noticed a can of Hormel Chili & Beans had been marked up by ten cents a can from the previous week! I couldn't believe it. That was what inflation was like circa 1980.

Believe it or not, inflation and high interest rates were destroying the stock market. (At one point, circa late 1973 or early 1974, the Dow Jones Industrial Average bottomed out at somewhere in the $570.00 to $575.00 neighborhood.) In 1980 the price of an ounce of gold set a record at over $1,000.00 per ounce - which some "experts" had thought could never happen. (The CBS "60 Minutes" program did a segment interviewing gold traders who were selling their gold convinced the market [for gold] was at a top.)

Once he was elected and ensconced in the Oval Office, Reagan had a talk with Fed Chairman Paul Volcker. President Reagan wanted to know what Mr. Volcker could do to get this "inflation monster" under control? Mr. Volcker assured President Reagan with words to the effect of: "Oh, I can get inflation under control, but you're going to have to accept a recession as the price for taming this monster." Realizing he would be a one-term President if inflation wasn't brought under control, Reagan nodded his consent and Mr. Volcker went to work. Paul Volcker and the Fed jacked the prime interest rate up to 21 percent. It was shock therapy, but it worked. It took a couple of years, (along with the promised recession), for the inflation rate to start falling - and the stock market to resume rising from its below-600 point low. (This is the real reason why Lee Cooperman and other Wall Street types are so opposed to President Biden's proposed tax & spend policies. They know what exploding inflation will do to their equity assets.)

Are we headed for a repeat of the 1970's? We should be starting to get an indication by this time next year.

I'm not sure what that has to do with my comment, but whatever.


Also, minimum wage is not a measure of anything - it is a political decision.

Simply Orange juice reduced their small bottle size from 11.5oz to 8oz.

Shrinkflation has been a thing for decades, that drop is fairly major tho

Is simply orange pepsico? Fritolay also reduced the amount of chips in their bags quite a bit recently

someone's gotta save the fatties from themselves

My question to everyone who is suddenly arguing hyper inflation is going to occur because of increased money supply have you seen the graph of money supply for last 10 years? If they were able to convince everyone inflation was 0-2% during that time why won’t they be able to convince everyone it’s 3-5% now? Interest rates and gdp growth are just as if not more important to inflation as money supply as well so there needs to be some other things happen for a disaster to be possible

sc99:

Some of those "other things" may be happening. I was watching Squawk Box this morning on CNBC. They were playing clips from Warren Buffett's weekend Q&A session during Berkshire-Hathaway's annual shareholders meeting. Mr. Buffett was specifically asked about inflation and whether he was seeing evidence of rising prices? He responded by reciting a string of Berkshire-Hathaway owned subsidiary companies where "... we are seeing rises in material costs," so "yes," there is evidence of inflation. (I'm paraphrasing slightly.)

Fed Chairman Jerome Powell and Janet Yellen are insisting they can keep inflation within the Fed's "target range" of 1-2 percent. When I hear confident reassurances such as that from folks like Mr. Powell and Ms. Yellen, I'm reminded of what [former] Fed Chairman Ben Bernanke told a Congressional oversight committee prior to the 2008 financial crisis. After noting that, historically, housing prices in the United States have never fallen, Mr. Bernanke proceeded to assure our elected representatives that the problems in the subprime housing market would not spread to the broader housing market. We all know how that "prediction" turned out ...

+1

+1.
Unlikely but certainly possible .


I’m surprised we agreeing ...

The biggest question is imo, will it be a sustainable inflation , not lasting just 1 year but multiple years ?

I posted this in another thread before I saw this 1 but Yellen said rates may need to rise because of economic overheating, wouldn't that crush asset prices?