Inflation - is anyone noticing it?

It would seem that the market and reserve banks are entering a period of dispute over what the right price for credit is. I don't even care to guess what the eventual outcome may be, it could be the end of the great bond bull market or not. But at the very least I think certainty that central banks can dictate low rates for the extended periods they have indicated will be lost.

Yes theoretically they can print enough to beat the market, unless the market is correct then fighting will create hyper inflation. It's up for debate who is right. The bankers will change tune if the market is getting inflation gauge in real time more accurate than the economic models predicted.

If people lose certainty that interest rates won't jump around couple of percentage points in a couple of months, asset pricing markets are going to get volatile, especially highly leveraged financial structures or assets without tangible near term cashflows.

 

Will be interesting is the bond yields will break the 30 year trend of declines.

 

LOL a Toyota Yaris, the small "economy" car, brand new can be over $30k today. Surely it was barely a decade ago a similar one was the doorbuster $13,990 driveaway price....

My hobby of aquarium keeping - pet shops were already making massive markups due to the way people treat their pets not unlike their children; nowadays it's priced even higher as nothing goes on sale anymore. No bargains, no discounts - all full recommended retail prices.

At least with supermarket price rises in fruits and veges there's still the weekly half price catalog of specials.

 

Mine is nudging $40k. It would have been over $40k if I'd have gone with the Hybrid (which I wanted), but since there was going to be a 4 month wait I just took what they had. Mine you, this is not the cheap Yaris, this is the Yaris Crossover which looks nothing like a Yaris.

 

Money market madness: How the RBA and every central bank have been left humiliated — ABC News

Thoughts?

 

Fascinating read.

The current frenzy in the property market was not predicted by many this time last year, as the threat of a global pandemic led recession was transitioning into reality.

An interest rate hike would be another surprising turn of events that would really throw the cat among the pigeons.

 

i think it will be affordability that will put the brakes on, in particular Syd/Melb markets. Wages have not been rising

Perth, Brissy coming off from lower base, also rents are rising, unlike Syd/Melb rents are falling/oversupply

 

Agreed. I recently started a thread on affordability / price ceiling with .. interesting results. The current boom in prices are due to (1) rock bottom rates (I recently got a pre-approval from a major bank for a 1.1M loan, with 1.8% fixed for 2 years, 1.99% fixed for 3 years) (2) FOMO a.k.a the toilet paper phenomenon (3) a post-COVID (at least in AUS) optimism in consumer confidence and projected economic growth and recovery.

Investors who've lived through many cycles assure me the growth and doubling of prices over a few short years will continue, but I wonder how many of those boom cycles happened through the kind of stagnant wages we've seen? Inflation will ensure the average house price goes up, but will the growth vastly outstrip inflation/ CPI rises like before?

 

i have invested in at least 7 boom/bust cycles, never seen interest rates this low, this is the buffer imho

 

I think what is more likely to take the wind out of current markets is further tightening in lending, I don't see IR increasing in the immediate future.

 

Yowsers. Firstly, congrats on your new car! I had heard when the new Rav4s came out a year or two ago there was huge demand and some people were waiting upto 12 months to get their car. It seems the next step down in SUV size is also selling like hotcakes. Just curious if you cross-shopped the CHR. They seem to be similarly priced I don't know if it's meant to be below or above the Yaris Cross (the hybrid CHR also went for around $40k).

 

Yep! Loved the colour choice in the CHR, but the windows are dinky on the inside, and it didn't have all the features I've got, PLUS there's that four month wait. Since Hubby advertised my old car on Facebook and sold it immediately, I'd be without wheels for a long time.

 

Yes, just started noticing it in consumer goods. The exact same models of products (technology, outdoor equipment) I purchased late-last/early-this year are now ~20% more expensive... usually from the same retailer. These are products that usually get updated every year and should be going on sale.

 

I've read through all of these comments and I would agree. One thing nobody bought up was when there is inflation:

The rich get richer and the poor get poorer.

The poor can still buy milk, bread and netflix, but that's about it. The rich will continue to buy more property and shares furthering the divide.

 

That's because the rich have a certain mindset the 'poor' don't have.

Inflation, busts, flat markets, recessions, gfc, covid etc are just smoke screens.

Regardless the situation, the rich tend to make money and the 'poor' tend to not.

The difference is in mindset.

 

You're missing my point. Even if you have the right mindset and you are poor, you will become even poorer. Ie. Everything becomes more expensive that only the rich can afford to buy - specifically appreciating assets.

 

I agree, but I think it is also about policy that increasingly reduces social mobility (not just in this country, but globally).

 

I disagree.

 

Yes inflation on my Aussie Wagyu beef.
Used to be $42 per kg = today it is $50 per kg
That’s how I measure inflation by beef.

 

Whole eye fillets were $70/kg at our Woolworths yesterday, don’t recall ever seeing them that pricey before.