Inflation/stagflation Thread

Isn’t it supposed to be shrinking during retirement?

You’re not doing too badly as a retiree if you’re in the 33% bracket on fixed interest/divident income…

And for most, the drop is nowhere near 50% unless fixed interest income is their only source of income (no social security). Also assumes you invest only in taxable accounts and you’re living off the interest only vs. say a 30-yr TIPS ladder in which your income stream is part interest, part principal.

Some retirees have annuities though. And those are typically not indexed on inflation so those will get hammered by high inflation.

But that shows that you have to build your retirement income with some inflation protection. You cannot assume it’s gonna stay 1-2% for 30 years. Historically, that’s never been the case. You’d want to build it for withstanding at least a decade like the 70s and early 80s with double digit inflation. Social security taken at 70 + TIPS ladder in a Roth IRA :wink:


Cal democrats say minimum wage increase for thee but not for me


Maybe they’re realizing arbitrary wage increases can backfire? Just look at what happened in Seattle with the minimum wage for app drivers.


Sounds like it was very poorly thought out. It’s frustrating that the bill was known to cause a $4B annual deficit and that estimate could totally be ignored by the legislature and governor.

I wish the cost estimates on new laws would be binding so that they could not be enacted without including either spending cuts or higher tax revenues to pay for them. Same would apply to anything causing budget deficits such as tax cuts which would have to come with specific spending cuts.

Cooling rate of inflation still doesnt get prices back down. A look back at the last several years of price inflation by sector

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Nobody should expect prices to go down. That’s deflation, and deflation is a big no-no.

Walking through Walmart this weekend I noticed “rollbacks” have resumed being a thing. A number of things are cheaper now then they have been, although still higher than they were before the inflation bug hit.

Well, I agree that it’s in the governments interest to be inflating their debt, so I would not expect monetary or fiscal policy to cause any type of actual price reduction.

On the other hand, it would not be unreasonable to think we want price reductions. After all, if everyone agrees the 5-10% inflation rates we had during various periods of the last several years was “too high”, then we should have a period of less than the target 2% inflation to return us to our prior state. Not gonna happen of course.

Fwiw I don’t buy the argument that the deflation is inherently bad, just because the only time economists like to point to is the great depression. Deflation has been happening for decades in the tech sector, with many technology products getting cheaper as newer ones get better, and the tech sector has been doing just great in spite of this (or may be because of it!). Of course, I have net assets so deflation is better for me. If I didn’t, I would be happy with inflation, which makes it easier for debtors to repay their loans in devalued dollars.


Very hard to see it happen in this climate. Companies that’d look at lowering their prices would have the choice between lowering profit expectations (and see their stock tank, CEO replaced by the board, etc) or lower costs, especially labor cost which would not work terribly well for employee retention. Only way it’d be palatable to the workforce would be if they truly feel it’s either that or the company goes under. Maybe either of these could happen amidst a deep recession but not with sub-4% unemployment.

Plus I imagine the Fed would intervene hard in case of deflationary environment. They often react too slowly but I don’t think they’d let deflation run for too long. The last time we had a short deflation period, they kept rates at 0% and some central banks in Europe even went to negative interest rates.

Some stuff has become cheaper over time, such as televisions, computers, hard drives…

I used to have to pay $20 for a CD and bought several per year - now I can stream whatever I want for substantially less.

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So far the only examples of deflation above have been tech related. Tech has been improving at break-neck speeds. I’m not sure deflation is the correct term to use here. I’d say improved productivity and competition is what has been driving the prices. But even then it’s not like any of the CPU manufacturers price their new top-of-the-line CPUs or GPUs cheaper than they priced the top-of-the-line CPUs or GPUs the year before. I think the starting MSRP for i3, i5, i7, i9 has been slowly climbing (IIRC, when the i9 came out it was more expensive than any i7 before it). Storage is only getting cheaper because it’s getting more dense, but if you ignore density, the most popular device does not cost less than the last year’s most popular device cost a year ago, it just has more storage. And some tech items have gone up in price – cameras, keyboards, mice, game controllers (I’m ignoring the fly-by-night unbranded crap from China), and some of the better cell phones (for example, Pixel 6a MSRP was $449, but Pixel 8a is $499).

The music industry is a whole other subject. It got kind-of destroyed by the internet trends and the same thing is happening with video.

Minimum wage is zero, the CA edition. 10k jobs lost with the new $20 min wages for fast food chains not owned by the governor.


Fed interest rate futures currently showing an expectation by the market of 1 rate cut, either in Sept or Nov, and then probably nothing else for the year.


I did not see anything on the source of the data for the 10k job losses. Is it just whatever the CA business group guesstimated or publicly reported data?

Perspective on today’s jobs data dump.

I’m not sure - the head of that business group said it. There have been some recent bankruptcies like Rubios there, Red Lobster everywhere, etc, so definitely some job losses are real.

“California businesses have been under total attack and total assault for years,” the [California Business and Industrial Alliance] president and founder Tom Manzo told Fox Business. Manzo said nearly 10,000 jobs have been cut across fast food restaurants since Newsom signed California Assembly Bill 1287 into law last year…

Yeah, not sure how much to trust ZH on their stats, but the immigration vs jobs picture they paint looks quite bad.

This seems to be the source of the data. From the zerohedge article

The first Wall Street analyst daring to point out that the employment emperor is naked, is Standard Chartered’s global head of macro, Steve Englander who in a note titled simply enough “Immigration leading to labor-market surge” (and available to pro subscribers in the usualk place), writes that according to his estimates “undocumented immigrants account for half of job growth in FY24 so far” (the actual number is far higher but we understand his initial conservatism), and adds that “asylum seekers and humanitarian parolees explain the surge in undocumented immigrants” before concluding that the continued rise in EAD approvals likely will extend strong employment growth in 2024 . In other words, “strong employment growth” for American citizens, always was and remains a fabulation, and the only job growth in the US is for illegals, who will work for below minimum wage, which also explains why inflation hasn’t spiked in the past year as millions of illegals were hired.

Does it mean that a substantial number of illegals are highly trained in STEM professions? Or are those jobs mostly construction and service sectors? I thought most of the employment growth was in technical areas.

The label on the chart says foreign born, not necessarily illegal alien. Many of the tech workers enter on H1B visas. They are here legally but are still counted as foreign born.

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