RIP US Economy v. We shrinking

cooly

OT Supporter
Jan 23, 2006
51,243
i have never been one of the "the end is coming" types, but it really really feels like we are almost to that breaking point.

Now granted most of my news comes from twitter and twitter isnt a real place, but man if you stick around there long enough you can really be convinced this shit is bending and about to break
The world has been "ending" since the beginning of time. It doesn't take a far look back in history to see.

IE:

Cold War and risk of nuke fallout
Peak oil in the 70s/80s
Black Plague

Etc etc
 
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6SpeedTA95

OT Supporter
Jun 12, 2003
65,975
Oklahoma
This but it should be 100bp aka +1%
Why? I don't necessarily disagree (sent a buddy a text this morning and said the same thing) but consider a few things. Much of this inflationary problem is driven by things beyond the Fed's control unless they bring a sledge hammer to the economy. Food and fuel prices are not particularly rate sensitive because the demand is pretty inelastic. Rents the fed can control to a degree, but are they really going to try to totally crash the real estate market? I have my doubts. Additionally, some short -term supply chain issues are fixed with factories restarting, others should be in Q3 with China mostly reopening by August/Sept, lots of tech capacity coming on in Q3. That means by end of year we should see some relief regardless of the fed.

I'd also say their 2% target is arbitrary and kind of dumb. I'd rather see 4% inflation if it means we're diversifying supply chains and investing in the US, Canada and Europe a bit.

We spent 30 years building out efficient supply chains but it turns out they're not very resilient. Let's spend 5-7 years making them resilient, that will be inflationary, at least relatively speaking. The last 30 years of supply chain development plus demographics have been somewhat deflationary and made achieving 2% easy. Now 2% probably means we don't make necessary investments here or abroad.

I'd like to see the fed get back to 3-3.5% as quickly as possible and then pause for a bit.
 

10dementianal

Well-Known Member
Mar 29, 2007
15,170
Why? I don't necessarily disagree (sent a buddy a text this morning and said the same thing) but consider a few things. Much of this inflationary problem is driven by things beyond the Fed's control unless they bring a sledge hammer to the economy. Food and fuel prices are not particularly rate sensitive because the demand is pretty inelastic. Rents the fed can control to a degree, but are they really going to try to totally crash the real estate market? I have my doubts. Additionally, some short -term supply chain issues are fixed with factories restarting, others should be in Q3 with China mostly reopening by August/Sept, lots of tech capacity coming on in Q3. That means by end of year we should see some relief regardless of the fed.

I'd also say their 2% target is arbitrary and kind of dumb. I'd rather see 4% inflation if it means we're diversifying supply chains and investing in the US, Canada and Europe a bit.

We spent 30 years building out efficient supply chains but it turns out they're not very resilient. Let's spend 5-7 years making them resilient, that will be inflationary, at least relatively speaking. The last 30 years of supply chain development plus demographics have been somewhat deflationary and made achieving 2% easy. Now 2% probably means we don't make necessary investments here or abroad.

I'd like to see the fed get back to 3-3.5% as quickly as possible and then pause for a bit.
Counterpoint, we didn't spend 30 years building out efficient supply chains. Some private companies spent 20 years perfecting their part of the supply chain to fit their needs. The supply chain as a whole is not efficient.
 

stevezissou

OT Supporter
Jul 15, 2009
39,376
US
Why? I don't necessarily disagree (sent a buddy a text this morning and said the same thing) but consider a few things. Much of this inflationary problem is driven by things beyond the Fed's control unless they bring a sledge hammer to the economy. Food and fuel prices are not particularly rate sensitive because the demand is pretty inelastic. Rents the fed can control to a degree, but are they really going to try to totally crash the real estate market? I have my doubts. Additionally, some short -term supply chain issues are fixed with factories restarting, others should be in Q3 with China mostly reopening by August/Sept, lots of tech capacity coming on in Q3. That means by end of year we should see some relief regardless of the fed.

I'd also say their 2% target is arbitrary and kind of dumb. I'd rather see 4% inflation if it means we're diversifying supply chains and investing in the US, Canada and Europe a bit.

We spent 30 years building out efficient supply chains but it turns out they're not very resilient. Let's spend 5-7 years making them resilient, that will be inflationary, at least relatively speaking. The last 30 years of supply chain development plus demographics have been somewhat deflationary and made achieving 2% easy. Now 2% probably means we don't make necessary investments here or abroad.

I'd like to see the fed get back to 3-3.5% as quickly as possible and then pause for a bit.
What would you have the fed do? You think 9.1% inflation is sustainable and we should just "live with it?" It is actually much higher on certain items as well BTW. That is just the "cooked" number
 
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gimpshiznit

Totally not Larry
Aug 9, 2003
192,293
Twin Shitties
Why? I don't necessarily disagree (sent a buddy a text this morning and said the same thing) but consider a few things. Much of this inflationary problem is driven by things beyond the Fed's control unless they bring a sledge hammer to the economy. Food and fuel prices are not particularly rate sensitive because the demand is pretty inelastic. Rents the fed can control to a degree, but are they really going to try to totally crash the real estate market? I have my doubts. Additionally, some short -term supply chain issues are fixed with factories restarting, others should be in Q3 with China mostly reopening by August/Sept, lots of tech capacity coming on in Q3. That means by end of year we should see some relief regardless of the fed.

I'd also say their 2% target is arbitrary and kind of dumb. I'd rather see 4% inflation if it means we're diversifying supply chains and investing in the US, Canada and Europe a bit.

We spent 30 years building out efficient supply chains but it turns out they're not very resilient. Let's spend 5-7 years making them resilient, that will be inflationary, at least relatively speaking. The last 30 years of supply chain development plus demographics have been somewhat deflationary and made achieving 2% easy. Now 2% probably means we don't make necessary investments here or abroad.

I'd like to see the fed get back to 3-3.5% as quickly as possible and then pause for a bit.
imho a good deal of increase in rents is due to speculative buying and pricing ppl out. if we can cool off the housing mkt by increasing rates a bit, we could see a leveling off in rents. idk tho, that is a real tricky problem
 

gimpshiznit

Totally not Larry
Aug 9, 2003
192,293
Twin Shitties
Counterpoint, we didn't spend 30 years building out efficient supply chains. Some private companies spent 20 years perfecting their part of the supply chain to fit their needs. The supply chain as a whole is not efficient.
just-in-time inventory has certainly been the status quo in B-schools for the last 35 years.
that method will be turned on its head going forward
 

10dementianal

Well-Known Member
Mar 29, 2007
15,170
just-in-time inventory has certainly been the status quo in B-schools for the last 35 years.
that method will be turned on its head going forward
JIT is still valid imo, buffers probably need to be adjusted or expanded though. But again the supply chain for target is vastly different than for someone like best buy. The breakdown happened when the ships, the ports, all of the companies that bring that shit across our inland could no longer depend on throwing bodies at a situation. That process in general has remained unchanged since intermodal started in the sixties. And every import runs through most of those steps coming off water. We (as a country) always threw bodies at a problem because they were available. We always ignored automation on a grand scale because the human cost was much cheaper.
 

morrowalnut

OT Supporter
Oct 28, 2004
46,498
Got .21c/hr base raise today :coolugh:

What should i do with my extra $437.80 minus annual taxes? H&B? I shudder to think of the garbage that only having $437 will be able to buy this time next year. In 2019 money I'll maybe be able to a 20 and a handy
 
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6SpeedTA95

OT Supporter
Jun 12, 2003
65,975
Oklahoma
What would you have the fed do? You think 9.1% inflation is sustainable and we should just "live with it?" It is actually much higher on certain items as well BTW. That is just the "cooked" number
No, it's not sustainable. Like I said I agree they need to raise rates, but core CPI is moving down. And yes some items are 20-30% it's pretty nuts. My point is the Fed isn't a miracle worker. Inflation will be naturally moving in the right direction as is already indicated by core CPI. Food/Fuel are a different animal.

What would I have the fed do? I'd get to 3-3.5% as quickly as possible and be prepared to hold it there. 0% was too low anyway, at least for the amount of time they kept it there.
 
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whatever

OT Supporter
Feb 18, 2004
211,829
JIT is almost universally misunderstood. JIT does not mean zero or near zero inventory. JTI does mean holding the right inventory at the right locations - actively interrogating inventory as a decoupling point, clearly defining targets and auditing adherence/performance

bottom dollar MBA's consulting at big firms told them the risk was minimal to run bare bones parts inventory. its not like the world would shut down for a time period. that would be crazy and we'd have bigger problems.


oh wait
 

SquirtRussel

OT Supporter
Oct 8, 2004
32,535
San Francisco
I don't see how this gets better anytime soon. The demand to maintain facilities that are already in place plus the increased demand from new facilities being built. It's going to be interesting to see if companies leave a machine down due to a lack of something like a safety switch or if they just start bypassing shit.
I had to leave an elevator down for 3+ months because the starter that is made in Germany had a 6 month lead time :rofl:

we (I) installed 4 used ones the company purchased as soon as they went on sale on ebay until one finally worked :rofl:
 

SquirtRussel

OT Supporter
Oct 8, 2004
32,535
San Francisco
No, it's not sustainable. Like I said I agree they need to raise rates, but core CPI is moving down. And yes some items are 20-30% it's pretty nuts. My point is the Fed isn't a miracle worker. Inflation will be naturally moving in the right direction as is already indicated by core CPI. Food/Fuel are a different animal.

What would I have the fed do? I'd get to 3-3.5% as quickly as possible and be prepared to hold it there. 0% was too low anyway, at least for the amount of time they kept it there.
I wonder how much automating our ports would help out with food and fuel.

I feel like so many jobs that are currently unionized would be extremely easy to automate relative to other trades and would have such a massive benefit for the country that we could just give the displaced workers UBI at their current rate (adjusted for inflation) and be done with it forever.
 

DasVWBabe

OT's Diamond and Gemstone Tutorial Creator
OT Supporter
Sep 25, 2002
61,958
Frisconia
I had to leave an elevator down for 3+ months because the starter that is made in Germany had a 6 month lead time :rofl:

we (I) installed 4 used ones the company purchased as soon as they went on sale on ebay until one finally worked :rofl:
This sentence doesn't make sense in any other timeline. :rofl::noes:
 

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