Topic: US Inflation (Read 1356 times)

It seems to me that the Americans understood this and now will start to operate. Bitcoins have had the chance to become number one currency. But the greed of all those involved in the bitcoin community have turned the bitcoin bubble. A lot of people thought that bitcoin would allow them to become millionaires. Now we fully depend on what tactics you will choose America. If they decide to destroy bitcoin they would do it.

The US is raising interest rates - that should squeeze any inflation out of the system. I predict that US rates will be over 2% by the end of this year.

I just hear this inflation issue just now on CNN and I think this should create Btc/usd bullish market. I think in Asia section dollars fall again all others currency today. In days to come dollars is going to get weaking against bit coin. I will still be holding my bitcoin as I have confidence that it is going to bance back very soon.

Warning: The Financial System Just Made a Tectonic Shift
https://www.zerohedge.com/news/2018-01-23/warning-financial-system-just-made-tectonic-shift

*the sound of trumpets*
"Inflation is coming! Inflation is coming!"

Gary Cohn, the White House Chief Economic Adviser on tape admitting that job growth and wage growth have flatlined:

http://video.foxnews.com/v/5717818506001/

Quote:
".... for the last 3,4,5 years, we've had no wage growth in the United States, and the [employment] participation rate has remained stagnant at best.... we NEED to see wage growth in this country, something we haven't seen in almost a decade."

Finally we have someone from the U.S. Administration admitting the problem!

I agree with everything you said.

Additionally, rising rents probably are another reason for the lack of disposable income.
If you pay more than half of your after-tax income for rent/housing you don´t have any
funds for fun/needless things.

The real question is how long this situation can continue. People, who are equally worried about
rising Inflation have been predicting a collapse of the economy that hasn´t happened, because
the central banks keep on expanding the money supply. We will see how far they can kick
the can down the road...

The fact is that in the U.S., mom and pop Average Joe are up to their eyeballs in peak debt and bills, and therefore have no free cash flow to spend on fun/needless things and services like they were in the last two decades. They've cut back just about everywhere they can, and any discretionary money they get is now going straight to debt servicing. That's why money is not moving domestically. Meanwhile over the last decade they've seen their wages go nowhere, and thus their purchasing power has declined 20-35% in that same time frame. All their bills went up.

And look at the chart, the current M2 money velocity is even lower that the ~1.7 average going all the way back to the 1960's. It's at the lowest level in 55 years!

Couldn´t the steep decline in the velocity of money be explained by the huge
inflow of money in real estate and the capital markets? These funds are tied up for longer
periods of time and therefore can´t circulate in the economy.

Of course this is fueled by the expansion of the money supply by the central banks
all over the world.

I´m just unsure how reliable the velocity statistic is as an indicator of general
economic activity in the US. Anyway, I obviously agree with your argument that
the US inflation rate is much higher than the official statistics suggest.

The information is useful and it confirms the data you see in reality, many people complain about the rising prices but they never take the time to make a comparison of prices of the same thing in different years if they did they will realize very quickly the official stats are a lie.

Suuuuure it was. Is that why the dollar fell 10% in 2017 alone?   /s 

Btw if anyone was wondering, the US economy has completely flatlined and is going nowhere. Expect inflation to keep rising.

Evidence:

https://fred.stlouisfed.org/series/M2V

U.S. Inflation Rate, 2014-2017 ($ 100)

According to the Bureau of Labor Statistics consumer price index, the dollar experienced an average inflation rate of 1.12% per year. Prices in 2017 are 3.4% higher than prices in 2014.

In other words, $ 100 in the year 2014 is equivalent to $ 103.40 in 2017, a difference of $ 3.40 over 3 years.

The inflation rate in 2017 was 1.99%.

you can see here = http://www.in2013dollars.com/2014-dollars-in-2017

in contrast to the bitcoin that will not experience inflation because the number is only 21 million and every 4 years the amount of bitcoin is released relative to the previous cycle and this will keep repeating so it will not cause inflation.

I know that Donald Trump does not want a dollar with strong value, the dollar dropped against the Euro and the British Pound. I think inflation rates are not right, I think US inflation is more. So misleading inflation is being shown.

US has the biggest inflation that has ever been seen during the last few years, they are printing more than 160 million dollars a day, that is more money than what i am ever going to see.
It is insane, they are the only country that doesn't stop creating more debt.

Inflation update.

Was at the grocery store the other day.

6 oz. package of raspberries cost $2.99/ea. $3.99/ea.

16 oz. package of strawberries cost $3.99/ea. $5.00/ea.

Cucumbers now $1.69/ea. !!!!!!!

But....b.but... the govt says inflation is less than 2%! Inflation isn't a concern! 

Some good reading:

http://gulfcoastcommentary.blogspot.com/2018/01/why-our-economy-is-in-depression-and.html

http://gulfcoastcommentary.blogspot.com/2016/09/were-reaching-end-of-road.html

http://gulfcoastcommentary.blogspot.com/2016/09/declining-global-money-supply-taking.html

TL/DR:
Buy Bitcoin, PMs, real estate, and other deflationary assets. Get your long terms savings out of the dollar!

The US dollar is built on debt.
There is more debt than money.
The system was made to accept an ever growing debt....

Nobody needs BTC to fix the US dollar because the US dollar is working as built.
But it would be cool to see a country as the US using Bitcoin to get their economy boosted

I agree with the basic premise of your post. However, you forgot
to mention the most important factor of influence - eventual interest
rate hikes or interest rate cuts by the Federal Reserve.

If the Fed is going to increase interest rates multiple times in 2018 this
could prevent the inevitable rise in yearly inflation from happening.

Anyway, inflation is going to rise in the next few years, which obviously makes
Bitcoin and precious metals a mandatory part of every investment portfolio.

Inflation update for 2018:

Welp, Uncle Sam changed the tax laws this year so that corporations will enjoy a one-time lower corporate rate to repatriate dollars held in their offshore accounts. Which means that boat loads of fresh dollars will begin to flood back into the U.S. next year.

Couple that with M2 money supply velocity still going nowhere, and a flood of new dollars chasing fewer domestic goods and services, and what do you get? Higher inflation.

So you better back up the truck on deflationary assets like Bitcoin, PMs, real estate, etc. You're going to need to offset that inevitable rise in yearly inflation that will be felt by 3rd or 4th quarter of 2018, and well into the next decade.

Inflation update.

Was at the grocery store the other day.

6 oz. package of raspberries cost $2.99/ea. !  Was $1.99 just 12 months ago.

6 oz. package of blackberries cost $3.99/ea. ! Was $2.99 just 12 months ago.

1 pint of blueberries cost $3.99/ea. ! Was $2.99 just 12-18 months ago.

16 oz. package of strawberries cost $3.99/ea. ! Was $2.99 just 12 months ago.

Not to mention that the store has gone with lower quality distributors now, as the fruit is always starting to mold and rot now in the packaging at the store before you've even bought it. Just last year and before that, it was always pristine looking and would last days.


But....b.but... the govt says inflation is less than 2%! Inflation isn't a concern!  

Every time you make those kind of exercises you see the real inflation, I have keep track of the price of milk in my country and I get similar results, according to our government the inflation is something like 3% or 4% per year but when I track the price of milk I get something close to 10% per year, you can do this with almost any product and you will get the same results in my country.

The US dollar is growing weaker, it is just considered a paper note, it is not backed up by gold or any assets, it is just used to buy oil, but you can still use any other currency to buy oil, they just turn the US dollar to petrodollar, which in turn will lead to the us dollar's fall, and as we had seen in so many depressions, an increase in the value of oil, means a decrease in the value of the dollar and loosing it's buying power. It is much better to invest in cryptocurrencies today, rather than just on dollar alone, since dollar will soon be obsolete, because people will realize, there money is of no value.

Again like others I cannot seem to grasp how the inflation rate could be above ~2%, all market data tends to point to this.

Looking at FED data from the last 35 years (1982-2017), prices have increased by an average of 2.4x. This compounded yearly over 35 years yields: 2.5%.  Please someone explain how it is even remotely possible to have rates about 6-8%???

The high inflation in the United States and around the world is one reason why scarce commodities like cryptocurrencies and gold will do well in the future.

Fiat currencies are worth less with each passing year but Bitcoin (and most altcoins) were designed to have a limited supply to make them deflationary.

However, someone did point out that the cryptocurrency market is being flooded with new coins so in a way, there is a huge supply. Some will succeed, but most will fail. I think the cryptocurrency market might be better off if there were only 10 or 12 cryptocurrencies that were widely used.

I am not a supporter of the government but in this case I think they are right. The government's duty is to ensure the stability of the economy. Can you imagine what will happen in the country if you are a banker, or Minister and say that next year you will buy for $ 2-3 times less goods than it is now.

https://www.forbes.com/sites/perianneboring/2014/02/03/if-you-want-to-know-the-real-rate-of-inflation-dont-bother-with-the-cpi/#11474e3a200b

Maybe some of you guys were too young to remember, or maybe you were in school at the time. But I remember the Financial Crisis of '08/'09 very well. It wasn't my first rodeo either living through a major market crash ('00/'01).

But when I saw all the talk about major financial institutions and banks failing, and talks of massive govt bailouts for the Central Banks, and at the same time all these sleazy, narcissistic banksters were still receiving massive $$$ million dollar bonuses, I knew that this time things really were different. Knowing the old saying about how the world's wealthy elites "Privatize successes and socialize losses", I knew that there was no way in hell that the Powers That Be were just going to let the free market run it's course and wipe out those ill managed financial institutions that the wealthy elites rely on for their wealth, status and positions. I KNEW that they were going to somehow "socialize all of the losses" of these massive bank bailouts, and now ten years later we are seeing the knock on effects of those socialized losses through lack of GDP growth dragged down by mega govt and corp debt, massive money printing, 0% interest rates, and thus lack of wage growth coupled with a significant increase in yearly inflation.

This how they had always planned to spread those losses throughout the population. This was by design. As if no one would notice. Every working man and woman has basically seen their total purchasing power cut in HALF during the last ten years, and their wealth decline, their debts level increase, etc. while the wealthy elites have actually gotten exponentially WEALTHIER during that same period. They never suffered a minute long, and never will. That's why they act so indifferent to what's really happening on the ground to Average Joe. Meanwhile the rest of us have suffered. The elites' paper wealth will also continue to rise, because the Central banks are committed to pumping cheap money into the stock markets pretty much indefinitely and buying up everything. In fact all of the FAANG stocks are in the process of being nationalized by the world banks right under our very noses. The U.S. stock market is in a melt up.

And I believe that it is gradually going to get worse. Over the next decade, GDP growth will continue to be anemic for the major countries, govt and corp debt will continue to balloon out of control, healthcare premiums will skyrocket, entitlements will suffer and start to default, inflation will still creep up at a steady 6-8%/yr rate, and wages will cap out for most of the middle and upper middle class.

The only way to combat all of this is to fight this insidious inflationary, stagnant environment that's going to be with us for some time. To invest in your future. Live a modest lifestyle based on what you can pay cash for. Stay active and healthy. Pay down and wipe out all of your personal debt, and invest like crazy in all of the deflationary assets that you can: Bitcoin, gold, silver, real estate, land, art, collectables, etc. Use it all to build up your wealth, and then diversify to have your money make more money.

There is no way there wont be some level of secrecy in government publications no matter how transparent they want to make themselves or independent the body publishing the report so far they are affiliated with the government. If they are reporting a bad scenario just know that the report has been painted to be less bad and if they are reporting a good report, have it at the back of your mind that something have been added to make it better than the original and real position.

This is not only happening in the United States but all other countries of the world that believes in Information Management and put themselves in a position of deciding what the public needs to know as against what they ought to know. Believing that the truth will do more damage if allowed to the public domain.

Yes, for sure. I spent all this year studying US inflation data, I found a lot of indicators that suggests a much higher inflation than govt has been presenting(2%). There are many inflation indicators between 6-10%(if you use 80s method you will reach 10%) and it scares me because we all know that to an inflation became a hyperinflation is quick as flash. Although the current US inflation calculation methods are not transparent the evidences is very solid. I never thought about the iphone but it really makes sense as another great example. Regards, phrost.

And it's no wonder that Bitcoin shows up as the best investment of the past 2 years.

-x-

Keep calm buy bitcoins and be phrost.

In my opinion bitcoin had rise significantly big right now that even the people that don't know what to do with bitcoin have the most interest in earning it even if they don't have any idea how to, you can surely use that term of an Iphone changing it's price significantly too, that is a big leap of price we can see that a lot of people are doing right now and that is to convert their Fiat to bitcoin.

LOL.
You just summed this thread up with this example.
Thank you.
EOT;

First iPhone ever released $400 (June 2007)

10 years later

iPhone 8 cost $700
iPhone X cost $1000
take average of these 2.
----------------------


I'd say its a pretty accurate inflation indicator

Yeah, there's no way that China and Russia would be importing and stockpiling Gold like crazy if they didn't know that the PetroDollar as reserve currency is one day going to end. When exactly, no one knows, but from the rate of increase in their Gold holdings we could be as little as a decade away, or still two decades out. But make no mistake, the dollar is slowly dying. Everyone needs to be prepared by stocking up on a little Gold, Silver, Bitcoin, and other deflationary assets.

The problem with those countries is they have no option left, if they dump those dollars then the dollar becomes valueless and the economy of the world crumbles because of it, but if they keep those dollars then the US keeps printing more dollars and they keep storing them, they have no way to win the game and they know it, that is why they are not doing anything except spending some of those dollars to get some assets in return.

Terrifying for the foreign governments who will be left holding worthless US dollars. If you are talking about other participants in the global economy, if the US government doesn't screw up, others will. Different central banks seem to be competing amongst themselves to  do the largest quantitative easing. When the inflation demon pops up, they will run in the opposite direction.

US government has tried its best in the past to restore the dollar value.But i think that it would not be successful any more in doing so.We al know that the US government prints dollars not based on the gold value it holds.Also,USD ha enjoyed almost seventy years as the global reserve currency and now,it is in its final stage.USD mainly gained value due to OPEC countries deciding to sell crude oil only for dollars.But now,china and russia have started to buy petrol from iran not in USD ,but in their own currency.So,its really a bad time for US.

Lol the numbers seem to be on steroids and the government is reporting statistics which are way off than what is actually happening. This is bad, and could really lead into a big financial crisis yet again. The US have been enjoying their time printing their lovely dollar without knowing that other countries have just lost faith about it.

Oh boy this is exciting and terrifying at the same time.

Interesting charts, phrost!

However, the Chinese also have problems of their own:
https://www.ft.com/content/a6086a9a-5059-11e7-bfb8-997009366969


http://www.telegraph.co.uk/business/2017/10/04/soaring-rates-shadow-banking-add-fears-chinese-debt-warns-world/

Maybe they are not only accumulating gold due to the loss of trust in their $ holdings, but also to be able
to stay in power when the shit hits the fan in their own country.

US printed a lot since 2008 and also nations are buying gold. Things are getting weird and they will not stop printing.

http://dzswc0o8s13dx.cloudfront.net/goldcore_bloomberg_chart2_11-04-13.png

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/05/20150527_russ_0.jpg

Excellent observation! I agree.

Take a look at this article: https://dailyreckoning.com/revealing-real-rate-inflation-crash-system/

Govt took out health care, energy and some types of foods from CPI-U method of calculation and also made this method unclear.

 

how about right now we're on the journey to find something new ?
what i mean is human is a weird existence they will never satisfy with what they have,
right now we have U.S as our money but everytime it get worse,
do not you think it's a bit odd in your view ?
and i believe U.S will not be the first one and will not be the last one either.
right now U.S has lost its credibility,
but it does not mean Bitcoin has it right now.

some people said U.S inflation caused a huge boost for Bitcoin,
may be yes may be no,
because everything can be happen with it and i believe fundamental analysis will not show us what is going on fully.
let see what will it be in the future

This conclusion is kind of problematic. Bitcoin has outperformed every other currency and every other asset class
on this planet as well. Therefore you can´t really argue that the dollar is losing credibility, because compared to
Bitcoin everything has lost credibility.

However, you are probably right that the dollar has lost credibility.

Take a look at the development of the purchasing power of the $ over the last decades:

The U.S. dollar is experiencing not easy times. I think that inflation will only grow. I do think that the growth of bitcoin prices is kind of an indication that the dollar is losing credibility. This will inevitably lead to higher inflation. Perhaps 6-8% inflation in the year the Americans seem happy in a few years.

There are probably several reasons for this.

Off the top of my head:
-women entering higher education and (later) the workforce in higher numbers, which obviously enhances the pool of potential employees for companies
-the slow decline of several labor-intensive industries (e.g. coal mining) industries
-automation, which enables companies to achieve the same output with fewer human workers
-downward pressure due to actual outsourcing of jobs to low-cost countries in Asia (I´d argue that even the threat of it keeps wages down)
-less powerful unions compared to a few decades ago in most countries
...

chesthing, I'm gonna have to flat out disagree with you on that. Do you even pay bills, bro?

My electric bill has doubled since 2009
My health insurance monthly premium has doubled since 2007
My haircuts have doubled since 2007
My grocery bill is up about 40% per shop since 2009
My oil changes have doubled since 2007
My water bill is up about 50% since 2009
New cars cost 30-40% more than they did in 2007
Most fast food is up about 25-30% since 2009
A sit down fine dining experience is up about 50% since 2009 (just look at the cost of a single cocktail now!)

Things that don't affect me, but I've heard that:
Rent is up about 20% over the last 4-5 years in major metro areas.
Real estate is back up to pre-2008 crash levels, and climbing higher still.
Cost of an average college degree up about 30-40% since 2007.

You're right though in that gas has gone down, and shit from China (ie., clothes, tools, home supplies, etc.) hasn't gone up all that much. But everything else has!

And the MAJOR thing that hasn't budged in a decade across the board is.... WAGES.

The united states has been affected a lot by the crisis of the Petroleum in the last decade, and this is one of the major reasons of why their economy has dropped a lot in the last years.
But 6 or 7 % of inflation every year is crazy, they really need to stop right now because they are a potency.
There are 3rd world countries that are having at least 15% - 20% of inflation a year and nobody is worried about that, this is how the world works, everybody is worried about US right now.

Well in that case, 6-8% is complete bullshit. Gas is very cheap compared to the last decade, groceries aside from beef show very little price change, things like car parts, clothes, utility bills, home improvement supplies, tools, etc etc etc do not show any significant inflation. What has gone through the roof is real estate in many parts of the US, and of course stocks are way up.
I see no signs of the kind of inflation in everyday purchaes that people are talking about in this thread. It may happen, but it's not happening  as far as I can tell.Most likely it is just hype to get the btc price to keep rising, but it has no basis in fact.

If this were the case then no one would be able to afford anything. Try compounding even 6% every year for 40 years... everything would cost 10x as much.  I can't find a scenario where their numbers actually make sense.

Yeah, the reason why the savings rate hasn't increased in the U.S. during the same time period, is that people are up to their eyeballs in debt! Every extra dollar they make is going to service their existing debt interest payments instead of into their savings. And they haven't really paid down their existing debt very much. Savers are also punished now holding dollars in bank accounts, since they get no savings interest in return.

Couple that with the fact that 6-7%/ yearly inflation over the past decade has probably caused at least a 40% decrease to their purchasing power (because wages have remained flat over that same period), and people have had no choice but to shut down all extraneous consumption, including consumption that would include taking on more debt. Hence the M2 money velocity dropping like a rock to the lowest levels in over half a century.

And sadly this is not going to get better for most U.S. citizens... if they continue to just feeding their debt interest payments. Sure their debt will inflate away somewhat over time, but if their wages don't keep up with the REAL inflation, they will not be able to build 'wealth' and retire with anything.

Interesting chart, Torque!

However, I don´t really know what to say about these stats. The US economy is obviously heavily reliant on consumption and most people happily
oblige by wasting their entire paycheck on consumption. A big part of the population goes even further by going into debt for the purchase
of consumer goods.

Nonetheless, the chart implies a falling velocity of money, which in my opinion would indicate that people have shifted their preferences from
pure consumption to saving money for the future (lower time preference). It gets really interesting when you look at the saving rate development in the
same time frame from the same source:
https://fred.stlouisfed.org/series/PSAVERT

As you can see the savings rate hasn´t really increased and most people are still busy with pure consumption. However, as the chart posted by you shows the
velocity of money has been on a constant decline, which is rather contradictory.

How about this lovely chart? See anything odd for one of the largest countries in the world whose GDP is comprised of 70+% pure consumption?

https://fred.stlouisfed.org/series/M2V

This isn´t as exciting as you claim it to be. Open up a 5-year chart of the EUR/USD trading pair.
You will see that in 2013-2014 the exchange rate was roughly 1.35 for quite a long time.

The Euro is just gaining back a bit of the ground that he lost compared to the Dollar since 2014.
However, both of these currencies are subject to a high inflation, which makes assets
like Bitcoin even more attractive.

Inflation is not what a government indicator says. Inflation is what the man on the street experiences, when he takes his dollar to a store. The government cannot hide inflation for too long.
These kind of monetary policies will provide a boost to Bitcoin, once people realize it.

I dont know why dollar is going so bad, during this year they had more than 8% of inflation, and only 11 months have passed since this year started.
They are not having a good government, i know that they are one of the most biggest countries if we talk about money, but they have a lot of debt.
Euro is ganing much more power than Dollar at the moment, just look at the charts, it is 1.17 eur/usd, and it is increasing day by day.

well, maybe it's worse than that:

http://alt-market.com/articles/3310-the-economic-end-game-continues

But being the best of the worst is not really that good, even if the dollar is not losing as much value as other currencies the most important thing is that it is losing value at an alarming rate, if you hold a million dollars in fiat form another million in gold and another in bitcoin for 10 years you will find that your bitcoin buys a lot more than it could originally and most likely gold will have a similar effect but your 1 million in fiat buys a lot less.

Relative to other world currencies maybe. But NOT relative to U.S. purchasable goods and services! 6-8% rise/year! And ALL world currencies are devaluing together relative to world GDP output.

I disagree. If you look at dollar charts, it spent 1980 to 2014 falling in value against other currencies. Then in 2014 it started rising and has continued that way. That means the dollar is getting more valuable.

Bitcoin really poses a threat to the currencies of the weak countries in the world - Venezuela, Argentina, Zimbabwe, those are the places most likely to adopt it. The dollar will be one of the few currencies unscathed by it.

This is only the beginning. The emergence of bitcoin may have the most negative impact on the dollar. In many countries people used to keep their money in dollars. The local currency is too weak to store savings in them. Now people prefer bitcoin. All released dollars will begin to put pressure on the US economy. 6-8% inflation is just the beginning of this process.

Yep, it's bad. WAAAYY higher than the govt is reporting. And could actually get worse.

If people really sat down and thought about the implications of ~6-8%/year inflation rate on their lives and standard of living over the next decade or two, they'd be buying up every deflationary asset they could get their hands on RIGHT NOW and holding on for dear life.

Bitcoin, people! Buy it! Wake the fk up! Or continue to get poorer by the minute.

Here's some more reading:
https://www.peakprosperity.com/blog/99392/burrito-index-consumer-prices-soared-160-2001

http://www.shadowstats.com/alternate_data/inflation-charts