Like Tree33Likes

Inflation or Deflation ahead?

Reply
Page 4 of 5 FirstFirst 1 2 3 4 5 LastLast
  1. #31

    Join Date
    Jun 2010
    Location
    SoCal
    Posts
    7,063

  2. #32

    Join Date
    Jun 2010
    Location
    SoCal
    Posts
    7,063
    Quote Originally Posted by hullexile:
    I don't predict deflation. Demand is down but so is supply. Inflation will lower but for the large majority of countries stay positive.

    Calculating inflation must be a bugger at the moment because the normal basket of goods is no longer applicable.

    Agreed that the traditional basket of goods is not reflective of consumer spending these past three-plus months.

    A related but whole 'nother issue is if on the other side of this, consumers'/companies' (spending) habits will have changed for good.

    Will people be more cautious with spending because of the uncertainty of their jobs in the future?

    Will they be less likely to eat in restaurants for safety/health issues?

    Will companies make offsite workers a permanent thing thus reducing the need for office space?

    Will offsite workers lack of travel needs depress all the businesses in the transportation sector? (i.e. cars, oil, airlines, etc).

    Yes to any of these questions (and a hundred more) certainly depress prices.
    Skyhook likes this.

  3. #33

    Join Date
    Jun 2010
    Location
    SoCal
    Posts
    7,063
    Quote Originally Posted by hullexile:
    Demand is down but so is supply.
    What is in short supply that is jumping in price?

    I'm worried about the opposite. I.e. auto manufacturers so very eager to restart assembly lines banking on a V-shaped sales recovery when it's just as likely consumers will keep their powder dry.

  4. #34

    Join Date
    Dec 2002
    Location
    ???
    Posts
    32,075

    Seeing the term disinflation or disflation being thrown around. This is probably driven by the the lack of a sales recovery in high ticket items and consumer habits changing / low confidence in recovery scenarios.

    Keep in mind, right after the virus problem is solved in few weeks (!) the US will head into a vicious election cycle.


  5. #35

    Join Date
    May 2006
    Location
    Pampanga, Philippines
    Posts
    21,715
    Quote Originally Posted by huja:
    What is in short supply that is jumping in price?

    I'm worried about the opposite. I.e. auto manufacturers so very eager to restart assembly lines banking on a V-shaped sales recovery when it's just as likely consumers will keep their powder dry.
    I didn't say anything was jumping in price nor that anything was in short supply.

    I said inflation would fall but stay positive and that supply was falling as well as demand.

    Supply has fallen because workers are not working and because of logistics issues.

  6. #36

    Join Date
    Jun 2010
    Location
    SoCal
    Posts
    7,063
    Quote Originally Posted by hullexile:
    I didn't say anything was jumping in price nor that anything was in short supply.

    I said inflation would fall but stay positive and that supply was falling as well as demand.

    Supply has fallen because workers are not working and because of logistics issues.
    I wasn't questioning you, I was asking a question as my info can be rather myopic being US-based. Also, with decreased supply typically comes increased price, that's where my mind went.

  7. #37

    Join Date
    Dec 2002
    Location
    ???
    Posts
    32,075

    Both, the chicken and the egg are on life support and inedible. Which one is supply and which is demand... Which will recover first?

    huja and LoganH like this.

  8. #38

    Join Date
    May 2006
    Location
    Pampanga, Philippines
    Posts
    21,715
    Quote Originally Posted by huja:
    I wasn't questioning you, I was asking a question as my info can be rather myopic being US-based. Also, with decreased supply typically comes increased price, that's where my mind went.

    Yes with the lockdowns many of our worlds have shrunk, mine included.

    So in the Philippines while inflation is down food price inflation increased because of problems getting produce moved and some food processing factories are closed.

    There are also big issues with the supply chain for the electronics industry (the Philippines main export) so wherever that chain ends will face a fall in supply.

  9. #39

  10. #40

    Join Date
    Jan 2018
    Posts
    806

    Consumer expectations of inflation have not changed much - but uncertainty is up.
    https://www.newyorkfed.org/microecon...xpectations/g1

    Longer term has to be inflation - unless the Magic Money Tree is real.


Reply
Page 4 of 5 FirstFirst 1 2 3 4 5 LastLast