Lessen you are not disrespecting me.
This is right up my alley. First off I do real estate financing for a living and have for most of the last 25 years. You are right about not seeing hyper-inflation that I was hinting towards in my post but non-the-less we are seeing the signs of inflation. It is already happening at the wholesale level. We will see it at the retail level once the retail inventories deplete and contract prices have expired. We probably will not see large spikes, just a series of upticks until it is all priced in.
My first mortgage purchase/refinance loans had price tags of 16-18% back in the early 80's. I doubt that we will see that again with the aggressive stance by the Fed in this day and age.
When the Fed looks at the state of the economy they look at the whole picture and all of its components separately. When you read or hear the numbers that they represent you will also read or hear that by removing certain components they come up with indications of whether or not it is wide spread or contained to specific areas (this pertains to more than inflation). The largest movers have been the auto sector and removing that component the economy has not grown by very much.
Now energy will affect almost every aspect of our economy. As a matter-of fact we will go as far as to war over it like all industrialized countries do.
Here is the latest quote from my service at noon EST; I can give you more complex data if you want it. Energy is in the last paragraph.
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July's PPI came in the strongest since last October at 1.0% versus Bloomberg expectations of 0.5%. Energy contributed the most by increasing 4.4%. The core PPI increased by 0.4%, which was also above expectations of 0.1%. Today's data follows yesterday's Consumer Price Index data that showed headline prices moved up 0.5%, while core costs remained quite contained at 0.1%. Car prices contributed the most to the difference in the two reports' core rates. Excluding cars and light trucks, core PPI was only 0.2%. Nonetheless, year-over-year, the core rate is up 2.8%, the fastest pace in 10 years. Additionally, increased wholesale costs in excess of retail costs could pressure corporate profits if increasing prices cannot be passed along to the consumer.
In other economic news, the Mortgage Bankers Association Refinancing Index increased 5.0% to 2285.5 in the latest week. The Purchase Index edged up 0.1% to 499.3, signaling the home market remains solid.
The Energy Information Administration reported crude oil inventories increased by 0.3 million barrels from the previous week, which was above analyst expectations for a decline of 1.3 million barrels, per Bloomberg. U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Distillate fuels, which include heating oil and diesel, increased 1.2 million barrels, but that was less than analyst expectations for an increase of 1.9 million barrels. Gasoline inventories sank by 5.0 million barrels, expectations were for a decline of 1.5 million barrels. Despite the bullish report, the price of crude declined following the news, which suggests recent prices could have been supported by speculative buying.
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The only reason that interest rates have remained low is because of the lackluster showing of equities (stocks). It makes bonds (loans) very attractive. Inflation is the worst enemy of the bond market. Believe me; I'm well in tune to that one.
Just my personal take; the price of gas will not drop to $1.50 again. With the adjustment for inflation why should it plus there is too much uncertainty in the Middle East, strike problems still plague Venezuela not to mention we’re headed for a probable huge hurricane season.
God, I hate this boring s*!t…!!!
Now it is getting closer to the time for me to program a brushless and a tx/rx.
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