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The Inflation thread, Discussion
nipper
post Posted: Aug 29 2017, 07:48 AM
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these components always seem to be cited - another indicator of low numbers ahead?

QUOTE
...a fruit and vegetable oversupply [is] causing prices to plummet. Crops have been thriving in this year's unseasonably warm Queensland winter, pushing them to mature faster and earlier than usual; a stark contrast to six months ago, when stock was low in the wake of Cyclone Debbie.

Ipswich grocer Tracey Castellana said prices had fallen by more than 50 per cent. "A lot of the vegetables, the prices were through the roof and the customers were very unhappy about it, but now it seems to be a flood in the market," she said....
http://www.abc.net.au/news/2017-08-29/frui...r-crops/8848694



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
marketwinner
post Posted: Apr 8 2017, 07:23 AM
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In Reply To: nipper's post @ Mar 22 2017, 11:04 AM

http://www.nzherald.co.nz/world/news/artic...jectid=11829757

Eurozone inflation falls back below target in March - World - NZ Herald ...

http://www.feedstuffs.com/news/fao-index-s...e-decline-march

FAO index shows global food price decline in March


 
nipper
post Posted: Mar 22 2017, 11:04 AM
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QUOTE
Paul Moore: It's time to think differently

Interest rates and inflation have been on a downward trajectory since the late 80s, a 30 year trend. Paul Moore says 2016 was an inflection point and expects inflation to return. For the majority of investors this represents unchartered territory, so how do you approach such a foreign outlook?
https://www.livewiremarkets.com/wires/34945

QUOTE
The world's most influential central bank is raising rates, and has telegraphed several more this year and next.
The PBOC has adopted a more restrictive monetary policy whether they want to admit it or not.
Mario Draghi is much happier now and very keen to tell the Germans how successful his monetary experiment has been.
The Bank of Japan, however, spoilt my story by not doing anything at its meeting this week and not really saying anything at all.
But even in Japan the bar room chatter is about the BOJ reversing course by the end of the year.
Then we had the Bank of England leaving rates unchanged, but buried in the Monetary Policy Committee minutes was this observation..... "with inflation rising sharply, and only mixed evidence on slowing activity domestically, some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted."

So, is it different this time?
Yes

Do we believe the FED this time.
Yes.

Will the FED raise rates three times this year?
Yes.

Is the global economy recovering?
Yes.

Will inflation continue to rise?
Yes.

Do I believe global government bond yields will rise further?
Yes.

Do I think the PBOC has commenced tightening?
Yes.

Will the ECB and BOJ reverse course over the next 12 months?
Yes.

One thing I have learnt is that if you name a price, don't name a date and if you name a date, don't name a price!

Do I think fiscal policy has replaced monetary policy as the key driver of global economic growth?
Yes.

Will investors continue to sell long duration fixed income assets?
Yes.

Are we likely to see violent eruptions of volatility as the markets realise that it really is different this time and the abnormal becomes more normal?
Yes.

Are the world's central banks at risk of falling behind the curve?
Yes.

Is the Reserve Bank of Australia (RBA) behind or in front of the curve?
They cannot find the curve!
Jonathan Pain



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 
nipper
post Posted: May 6 2016, 12:21 PM
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In its quarterly Statement on Monetary Policy the RBA retained a forecast for GDP growth to come within a range of 2.5 per cent and 3.5 per cent in 2016.

However, it sharply revised its inflation forecast down from 2-3 per cent to 1-2 per cent. The central bank targets an inflation rate of between 2 and 3 per cent, with the new figures hinting at the prospect of a further move on rates this year.

Its long-term forecasts for inflation were also trimmed, with previous expectations of 2-3 per cent through 2017 and 2018 reduced to a range of 1.5 to 2.5 per cent.
QUOTE
"The broad-based nature of the weakness in non-tradables inflation and the fact that wage outcomes were lower than expected over 2015 has resulted in a reassessment of the extent of domestic inflationary pressures, leading to downward revisions to the forecasts for inflation and wage growth,"

The central bank retained confidence in the strength of the labour market, but warned employment growth was "likely to remain lower than last year". Limited wage inflation was showing no signs of turning around, but the RBA said it still expected robust household spending to drive economic growth. "Low interest rates and gains to employment are expected to support continued strength in household demand, despite only modest growth in household income in the near term."

"Forecasts for growth in real household disposable income have been revised down as a result of a somewhat weaker outlook for nominal wage growth, which has been offset to some extent by downward revisions to the outlook for inflation.

"Nevertheless, consumption growth is projected to be a little above its longer-term average over the forecast period, consistent with the forecasts in the February Statement."




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
flower
post Posted: Jan 25 2015, 04:27 PM
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In Reply To: nipper's post @ Jan 25 2015, 03:16 PM

QUOTE
wren, you could point out to others (I won't bother) the difference between

- Monetary policy; decided by, in Australia's case, the RBA, and

- Fiscal policy; largely guided by government of the day through the mechanism of budget settings in order to enact social policy


nipper, and one does not influence the other?

btw; the difference is already understood.



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Combining Fundamental comments with Fundamental charts.
 
nipper
post Posted: Jan 25 2015, 03:16 PM
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In Reply To: wren's post @ Jan 25 2015, 01:48 PM

wren, you could point out to others (I won't bother) the difference between

- Monetary policy; decided by, in Australia's case, the RBA, and

- Fiscal policy; largely guided by government of the day through the mechanism of budget settings in order to enact social policy






--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 


flower
post Posted: Jan 25 2015, 02:07 PM
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In Reply To: wren's post @ Jan 25 2015, 01:48 PM

QUOTE
Flower are you seriously suggesting that the income pensioners receive from bank deposits is a consideration when setting monetary policy?


With a growing band of retirees presumably no government wants to countenance open ended/never ending state pension support, maybe the RB totally ignore that sector, but the pollies certainly cannot, probably of even greater concern is housing which is totally overblown pricewise and would explode following a rate cut.

Cannot see any conservative government stopping negative gearing, putting CGT on housing, all to reign in housing costs, don't suppose the big four want to loose that section of their deposit base either. Any further financial pressure on retirees will see them forced to enter the stockmarket in search of yields with likely disastrous results if the world economies weaken.

At this stage the RB is not yet stuck between a rock and a hard place and should sit pat--IMO.



--------------------
Combining Fundamental comments with Fundamental charts.
 
wren
post Posted: Jan 25 2015, 01:48 PM
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In Reply To: flower's post @ Jan 25 2015, 01:40 PM

Flower are you seriously suggesting that the income pensioners receive from bank deposits is a consideration when setting monetary policy?

 
flower
post Posted: Jan 25 2015, 01:40 PM
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In Reply To: nipper's post @ Jan 25 2015, 12:19 PM

QUOTE
That's all in jeopardy now, however, as Stevens, governor of the Reserve Bank of Australia, stands still while China's slowdown and deflationary forces close in. Markets are registering their disappointment by driving the Aussie dollar below 80 US cents for the first time since 2009. The message from traders: It's time for a rate cut. The question is, will Stevens act ahead of, or at, the central bank's February 3 policy meeting?


Hi nipper, heaven help us if the RBA start down this track---pensioners already screaming, domestic property way overvalued, and US rates supposedly to rise?

For pity's sake--NO to any rate cut.



--------------------
Combining Fundamental comments with Fundamental charts.
 
nipper
post Posted: Jan 25 2015, 12:19 PM
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In Reply To: nipper's post @ Jan 21 2015, 09:03 PM

Wiliam Pesak seems to be a Bloomberg outlier, their 'man in Asia'. To me, sometimes he makes sense; sometimes not. (the trouble when you are paid by the column inches)

Glenn Stevens must act fast to rescue Australia's economy
QUOTE
Few central bankers in modern history have had a better run than Australia's Glenn Stevens. He steered his country around the global financial crisis, drove its currency to record highs and extended its recession-free run past the two-decade mark.

That's all in jeopardy now, however, as Stevens, governor of the Reserve Bank of Australia, stands still while China's slowdown and deflationary forces close in. Markets are registering their disappointment by driving the Aussie dollar below 80 US cents for the first time since 2009. The message from traders: It's time for a rate cut. The question is, will Stevens act ahead of, or at, the central bank's February 3 policy meeting?

The odds he will are rising, but remain too low for comfort. The European Central Bank's quantitative-easing program and the Bank of Canada's surprise rate cut add to the pressure on Stevens to trim a benchmark rate he's held at 2.5 per cent for 17 months.

The most immediate danger is China, to which commodity-rich Australia has increasingly hitched its fortunes. The collapse in global commodity prices challenges Beijing's claim that its economy is growing by 7.3 per cent. Even more than the plunge in crude oil, iron ore at its lowest price in more than five years suggests China is growing slower. Such metals fuel the Chinese urbanisation trend that's been lifting world growth. As Premier Li Keqiang explained at Davos this week, China's move to a consumer-led economy from an investment-led one is real, and the fallout will be felt everywhere. China's "new normal" is particularly bad news for Australia's mining industry.

Advertisement "People are covering their eyes and refusing to believe that what is happening now is not just a cyclical story, but also a structural story," economist Dong Tao of Credit Suisse told Bloomberg News.

As Goldman Sachs and others call an end to the commodities supercycle, the Australian government's fiscal policies are anachronistic. Prime Minister Tony Abbott's efforts to trim the budget deficit are out of sync with a deflationary world. The nation's 2.7 per cent growth rate has lulled the Canberra establishment - and, unfortunately, the central bank - into a dangerous complacency.

Though the ECB's bond-buying dominated the week, the more important action for Australia came in Canada, a fellow "commodity currency" nation. Its January 21 move to cut its benchmark rate a quarter of a percentage point to 0.75 per cent "led to a mini-explosion in speculation" that Australia might be next, says Nick Parsons of National Australia Bank. And rightly so, considering that Australia's key rate is at least 1.25 percentage points higher than that of any other major developed economy outside New Zealand.

Central bank policy must lead economic dynamics, not follow them. Today's 2.3 per cent inflation rate in Australia leaves Stevens reluctant to ease policy. But more important is where prices are headed six to 12 months from now. Here, events in Singapore may be instructive. (For the Asia region, its small but open economy often acts a weathervane.) At the moment, Singapore - where consumer prices fell 0.2 per cent in December - points to deflation ahead.

Stevens should be preparing Australia for its arrival. Why isn't he? Perhaps it's the RBA's strict mandate to keep inflation between 2 per cent and 3 per cent. Or the same doctrinaire fear of overheating that has central banks from Seoul to Jakarta maintaining tight policies. But these blind spots can cause even the best central bankers to lose their way in this fast-changing world. Stevens must get his bearings to avoid a big policy mistake.
William Pesek, a Bloomberg View columnist based in Tokyo, writes on economics, markets and politics in the Asia-Pacific region

Bloomberg



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 


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