Thank you for defining Stagflation. and yet the markets are up up and away - but what I'm paying at the pump and for groceries is eating up any increase in retirement accounts. I do hope Stagflation stays restrained.
Stock markets became largely divorced from reality some years back. That the stock market is moving up even as stagflation is starting to bite into the US economy is a contrarian signal, historically speaking, but is quite a bit less remarkable when viewed against more recent data.
The Producer Price Index shows we still have significant inflation to digest, but that we may not see much future inflation to digest. We are seeing the initial phases of stagflation in both the global and the United States economies, but how much more we see beyond that could be a good deal less likely than we might realize.
I'll be discussing the PPI in greater detail in tomorrrow's article.
Just about every process has lead and lag times. Too much is in flux to make calculations, but Trump needs to “guess” how much time he has to win the war, with time for gas prices, especially, to decline before the midterm elections. Peter, do you have any sense of how much time he has (let’s assume that rates of most variables remain static)? On the current path, I’d guess maybe three weeks. Your guesstimate?
The longer the war continues the higher prices will go and the greater the stagflation crisis we are likely to see. That much is made plain by the data we have.
What is not plain is the magnitude of future price increases. While the Producer Price Index shows a major factory gate inflation surge in April, which suggests we will be seeing elevated inflation figures in the CPI for May and June, we cannot make clean correlations of magnitude between the two indices. A 6 percent rise year on year in the PPI does not mean in May or June we will get a six percent rise in the CPI. If anything, the historical norm is that we will see an inflation surge in the CPI that is less than 6 percent year on year.
How does this play in the midterms? Obviously, inflation is not going to make President Trump or his policies more popular. But President Trump is not on the ballot, and other than blocking War Powers Resolutions, Congressional Republicans have little to do with this war--and may see less baggage because of the war as a result.
How much more time does President Trump have before the electoral concerns become critical? There is no neat formulation that will tell us that. I do suspect that the actual window Trump has may be larger than corporate media wants us to believe, and corporate media's tendency to lie to make trump look bad is one reason why that is.
Perhaps you don’t want to touch this question, and I can’t fault you on that. As I said, there’s too much in flux to make calculations. Nevertheless, Trump has to make a judgement call: how many more days or weeks can he afford to negotiate - while gas prices continue to climb - before he runs out of time to get gas prices down well before the election?
Trump has control over his own actions, and partial control (influence) over the actions of allies such as Netanyahu and the heads of UAE and Saudi Arabia. He can obtain fairly accurate figures from oil industry executives regarding volumes and routing times for additional oil production. I imagine there are detailed algorithms in the election campaign industry for the effects of policy decisions (number of days to be understood by the voters vs severity of policy change, etc.).
Peter, I ask for your guesstimate because you’ve always shown such as depth and breadth of knowledge and insight that I’d find your sense of the situation highly intriguing. Yours is always an opinion worth hearing, Magnificent Man!
Thank you for defining Stagflation. and yet the markets are up up and away - but what I'm paying at the pump and for groceries is eating up any increase in retirement accounts. I do hope Stagflation stays restrained.
Stock markets became largely divorced from reality some years back. That the stock market is moving up even as stagflation is starting to bite into the US economy is a contrarian signal, historically speaking, but is quite a bit less remarkable when viewed against more recent data.
The Producer Price Index shows we still have significant inflation to digest, but that we may not see much future inflation to digest. We are seeing the initial phases of stagflation in both the global and the United States economies, but how much more we see beyond that could be a good deal less likely than we might realize.
I'll be discussing the PPI in greater detail in tomorrrow's article.
Just about every process has lead and lag times. Too much is in flux to make calculations, but Trump needs to “guess” how much time he has to win the war, with time for gas prices, especially, to decline before the midterm elections. Peter, do you have any sense of how much time he has (let’s assume that rates of most variables remain static)? On the current path, I’d guess maybe three weeks. Your guesstimate?
The longer the war continues the higher prices will go and the greater the stagflation crisis we are likely to see. That much is made plain by the data we have.
What is not plain is the magnitude of future price increases. While the Producer Price Index shows a major factory gate inflation surge in April, which suggests we will be seeing elevated inflation figures in the CPI for May and June, we cannot make clean correlations of magnitude between the two indices. A 6 percent rise year on year in the PPI does not mean in May or June we will get a six percent rise in the CPI. If anything, the historical norm is that we will see an inflation surge in the CPI that is less than 6 percent year on year.
How does this play in the midterms? Obviously, inflation is not going to make President Trump or his policies more popular. But President Trump is not on the ballot, and other than blocking War Powers Resolutions, Congressional Republicans have little to do with this war--and may see less baggage because of the war as a result.
How much more time does President Trump have before the electoral concerns become critical? There is no neat formulation that will tell us that. I do suspect that the actual window Trump has may be larger than corporate media wants us to believe, and corporate media's tendency to lie to make trump look bad is one reason why that is.
Perhaps you don’t want to touch this question, and I can’t fault you on that. As I said, there’s too much in flux to make calculations. Nevertheless, Trump has to make a judgement call: how many more days or weeks can he afford to negotiate - while gas prices continue to climb - before he runs out of time to get gas prices down well before the election?
Trump has control over his own actions, and partial control (influence) over the actions of allies such as Netanyahu and the heads of UAE and Saudi Arabia. He can obtain fairly accurate figures from oil industry executives regarding volumes and routing times for additional oil production. I imagine there are detailed algorithms in the election campaign industry for the effects of policy decisions (number of days to be understood by the voters vs severity of policy change, etc.).
Peter, I ask for your guesstimate because you’ve always shown such as depth and breadth of knowledge and insight that I’d find your sense of the situation highly intriguing. Yours is always an opinion worth hearing, Magnificent Man!