Inflation

[JohnDe]

You are putting the cart before the horse, he has not even been sworn in yet.
We have yet to see any official nominations for the multitude of positions becoming available, only a few throw away lines.
When we see some real names, then you can make a guess about what they may or may not do.
Some of his choices last time around were not great.
Trump has shown in the past to be somewhat erratic, a tad arrogant towards just about everyone else, and has no interest or acumen in the world outside of the US.
It is to be hoped that those he does put in charge display the interest and acumen he lacks.
Mick

Yes. And like I said, time will tell.

 

[divs4ever]

i note a statement by Jerome Powell saying he can't be sacked ( protected by law )

now that may be true , BUT Jerome's term expires sometime in the next two years , and there is some chance that term will not be extended

watch to see if Ron Paul gets a job in the Trump administration , he has been disappointed with the Fed, for over a decade , if Ron has some genuine authority the Federal Reserve might have some uncomfortable moments coming

 

[farmerge]

You are putting the cart before the horse, he has not even been sworn in yet.
We have yet to see any official nominations for the multitude of positions becoming available, only a few throw away lines.
When we see some real names, then you can make a guess about what they may or may not do.
Some of his choices last time around were not great.
Trump has shown in the past to be somewhat erratic, a tad arrogant towards just about everyone else, and has no interest or acumen in the world outside of the US.
It is to be hoped that those he does put in charge display the interest and acumen he lacks.
Mick

And here is me thinking that the US of A was the world, the whole world and the only world.
Wrong again.

 

[sptrawler]

If the Trump administration can drastically reduce government expenditure, that will help take some of the load off of inflation and lending.

Figures from the Treasury Department show the federal government spent north of $6.7 trillion over the yearlong period that ended in September, running a deficit of more than $1.8 trillion during the time frame.​

Trump is putting business minded people into positions to help reduce costs of duplication and waste, and also to find new innovation for productivity.

Increasing tariffs would increase the Govt coffers I would expect.
It would just be another indirect tax, as long as it is spent in a productive way creating jobs, it should be acceptable if it is squandered well there will be an outcry.

 

[mullokintyre]

Increasing tariffs would increase the Govt coffers I would expect.
It would just be another indirect tax, as long as it is spent in a productive way creating jobs, it should be acceptable if it is squandered well there will be an outcry.

Increasing revenue will not be enough, they have to reign in spending.
And trump has already signalled a drop in company tax.
I don't see how he can really do much at all.
The level of debt is just so big and must be serviced.
Borrowing money to pay interest on the money you have already borrowed is only going to end one way.
the only debate is when.
So much of the financial decisions, both good and bad, are determined at a state level.
There are state income taxes, state sales taxes, excise taxes, royalty fees, license fees and property taxes.
As much as I would like to join in with the joy of those celebrating a trump victory, I really don't see a lot changing internally for its beleaguered citizens.
Mick

 

[sptrawler]

Increasing revenue will not be enough, they have to reign in spending.
And trump has already signalled a drop in company tax.
I don't see how he can really do much at all.
The level of debt is just so big and must be serviced.
Borrowing money to pay interest on the money you have already borrowed is only going to end one way.
the only debate is when.
So much of the financial decisions, both good and bad, are determined at a state level.
There are state income taxes, state sales taxes, excise taxes, royalty fees, license fees and property taxes.
As much as I would like to join in with the joy of those celebrating a trump victory, I really don't see a lot changing internally for its beleaguered citizens.
Mick

Being the reserve currency opens a lot more options than are available to second tier currencies, as was proven when the GFC hit and is a major reason for the BRICS forming.

One thing about the U.S they have some really smart people, so I would guess a plan will be developed.
They just have to work out how to throttle the tap on globalisation, the West is inflating itself into poverty, to support their lifestyle.

Which in itself isn't bad, but if the Govts aren't putting in place systems to support their economic growth, then it is just like any loser re drawing on their mortgaging to spend it on lifestyle.
Just my 2 cents worth.

 

[over9k]

It's depressing how fiscally irresponsible being the reserve currency enables the americans to be. If worse comes to worst they can just monetise the debt (print money to pay it off) with far far far less severe consequences than literally anyone else.

Just another admittedly depressing reason to bet on america.

 

[mullokintyre]

In line with so many others, the Insurance on or EV has gone from $830 last year to $1378 this year.
RACV explanation for this increase is because the cost of repairs to EV's have increased.
Private health insurance has also just gone up.
May have to go out and het a job at this rate.
mick

 

[over9k]

May have to go out and get a job at this rate.

 

[mullokintyre]

US core inflation is still refusing to die.
Did Jerome pull the pin too early?
Mick

 

[mullokintyre]

Removing the faked subsidies from the government in Electricity, it is worth noting that inflation in Australia in September quarter was higher than it was 12 months ago.
Mick

 

[over9k]

AUD now down a full two cents off its pre-election peak. Seems to have bottomed for now but you know there will be more policies announced soon enough.

 

[sptrawler]

At last a great explanation of the situation, maybe the ABC is getting its mojo back.

Why Australia is lagging the pack on rate cuts

While other central banks have reacted to a sudden drop in inflation, the Reserve Bank of Australia has been reluctant to move, raising questions about whether it may leave rates too high as the economy cools.

www.abc.net.au

 

[over9k]

Aus never raised as much as everyone else.

 

[Value Hunter]

Aus never raised as much as everyone else.

There is a lot of evidence showing that interest rate moves have a greater impact in Australia i.e. stronger transmission mechanism because we have high household debt coupled with a high percentage of variable rate loans.

The RBA has talked about this before.

In countries such as the USA and Germany they have a far higher percentage of loans being fixed rate. Therefore a 1% increase in interest rates in Australia has a lot more impact than a 1% increase in rates in USA or Germany or England, etc. Hence why Australian rates did not go as high this cycle as certain other countries.

Personally for what its worth I think all central banks should be abolished and markets should set interest rates.

 

[over9k]

Rapid rise in ukraine war tensions. Should things get hotter it's likely that the first things targeted will be infrastructure (think how a strategic bombing campaign works).

 

[qldfrog]

There is a lot of evidence showing that interest rate moves have a greater impact in Australia i.e. stronger transmission mechanism because we have high household debt coupled with a high percentage of variable rate loans.

The RBA has talked about this before.

In countries such as the USA and Germany they have a far higher percentage of loans being fixed rate. Therefore a 1% increase in interest rates in Australia has a lot more impact than a 1% increase in rates in USA or Germany or England, etc. Hence why Australian rates did not go as high this cycle as certain other countries.

Personally for what its worth I think all central banks should be abolished and markets should set interest rates.

And question is why can not Australian get a 20y loan on a fixed term if it is available elsewhere? We..aka RBA sell long term debt/bond.
That would benefit everyone , smooth inflation but i believe it is due to our currency risk and the lack of self funding abilities.
We have billions in super, some supposedly in low risks fixed return.
Would that help inflation, probably a bit but it would also help home owners to sleep better at night

 

[divs4ever]

And question is why can not Australian get a 20y loan on a fixed term if it is available elsewhere? We..aka RBA sell long term debt/bond.
That would benefit everyone , smooth inflation but i believe it is due to our currency risk and the lack of self funding abilities.
We have billions in super, some supposedly in low risks fixed return.
Would that help inflation, probably a bit but it would also help home owners to sleep better at night

they would rather quietly flush your super money into ' Green dream unicorn' projects ' whilst claiming the future growth potential

 

[sptrawler]

they would rather quietly flush your super money into ' Green dream unicorn' projects ' whilst claiming the future growth potential

That could become a huge issue.

 

[divs4ever]

That could become a huge issue.

indeed , at MIGHT be slowly happening already

when i had Super ( about 20 years back ) i noticed some intriguing decisions made by the 'trustees ' ( 50% employees and 50% management ) of an employer-run super fund

i suspect newer boards which are often infested by those with political agendas might be even worse