Inflation | Page 7 | General financial discussion | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
June 3, 2021
8:28 am
Norman1
Member
Members
Forum Posts: 4116
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Bill said
pooreva, I've wondered that too, and I figure there's a fair bit from North American and European public and private sector workers' pension funds,…. Same with 1st world workers that have their own retirement (e.g. rrsp, 401(k) in USA) and other investment portfolios…. So I guess I'm saying it's us 1st world folks, to some degree. …

That's essentially the case: Pension funds and other investors.

As of 2018, Canadian Taxpayers Federation's Who do we owe our federal debt to? reports that about 76% of the debt is held by pension funds/benefits plans (24%), Canadian investors (33%), and foreign investors (19%).

Bank of Canada holds about 9%.

The part of the debt (61%) held by Canadian investors (33%), foreign investors (19%), and Bank of Canada (9%) is in the form of Government of Canada bonds.

June 3, 2021
10:52 am
Kidd
Member
Members
Forum Posts: 697
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline
122sp_Permalink sp_Print

Norman1 said

Alexandre said
Global inflation hasn't been this high since 2008

Rising prices are bad news for anyone on a fixed income, and central bankers may be tempted to combat inflation by hiking interest rates or paring back stimulus programs.

The April-to-April spike in the inflation rate is sensationalized fake news.

That increase in the inflation rate won't last. At the end of the CNN article, it admits that:

The OECD expects the jump in inflation will fade by the end of the year as supply chains disrupted by the pandemic get back up to speed and production capacity returns to normal. With many people still out of work, the group's economists don't expect a cycle of wage hikes and price increases to materialize — despite evidence of a shortage of workers in some industries.

  

Norman, i do value what you say. But calling the Canadian inflation april to April spike "fake news" is an error on your part.

Inflation in canada is REAL, just buy anything. Home insurance companies are saying, your rates are going UP even higher, due to the cost of lumber and global warming. Coffee and sugar prices are going up dramatically, due to flooding in Brazil. CRTC ruled, independent companies will be paying more to piggy back on the current bell, rogers infrastructure. Car prices are up, due to a chip shortage. My house value went up over 100k this last year.

Come on people... i can not be the only one seeing inflation? Inflation by my definition is... buying power of your dollar. What was bought then, compared to now.

I said in an earlier post in this thread, inflation numbers are manipulated, and they are. In the real world, where i live, inflation in cost, has to be running 5 percent a year, reduction in quantity and size is ALSO inflation. Reducing warranty and coverage, is a cost cutting measure BUT it's also inflationary.

June 3, 2021
10:54 am
Bud
Member
Members
Forum Posts: 1331
Member Since:
February 20, 2018
sp_UserOnlineSmall Online

There's little demand for long term government bonds without enforcement. For example its expected public pension funds will participate. By printing money creating bonds for themselves they are allowing some long bond holders mostly big investors to cash out. Nobody is stupid enough now to lend to government at artificially low rates without some sort of "inducement" 😉 Its trickle down economics. Others may see things in a linear way.

June 3, 2021
12:36 pm
Alexandre
Member
Members
Forum Posts: 402
Member Since:
November 8, 2018
sp_UserOfflineSmall Offline
124sp_Permalink sp_Print

Norman1 said

The April-to-April spike in the inflation rate is sensationalized fake news.

That increase in the inflation rate won't last.

I am willing to bet 35 quadrillion Zimbabwean dollars (equivalent to US$1) that higher inflation rate is with us to stay. When government abandons fiscal responsibility and starts printing money instead, inflation will follow.

June 3, 2021
1:34 pm
Righand
Member
Members
Forum Posts: 76
Member Since:
December 15, 2016
sp_UserOfflineSmall Offline

Alexandre said

Norman1 said

The April-to-April spike in the inflation rate is sensationalized fake news.

That increase in the inflation rate won't last.

I am willing to bet 35 quadrillion Zimbabwean dollars (equivalent to US$1) that higher inflation rate is with us to stay. When government abandons fiscal responsibility and starts printing money instead, inflation will follow.  

Alexandre,
I agree 100%. Now, what are you planning to do in order to protect yourself ?

June 3, 2021
3:23 pm
savemoresaveoften
Member
Members
Forum Posts: 577
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline
126sp_Permalink sp_Print

Kidd said

Come on people... i can not be the only one seeing inflation? Inflation by my definition is... buying power of your dollar. What was bought then, compared to now.

I am with you 100% Kidd. I look at my eat out expense, my gas, my insurance, my grocery bills, they all show an inflation much higher than what Stat Can recorded.

the StatCan CPI number is really only meaningful for someone who actually "consumes the basket of goods they measure and in exactly the same way".
In my case and as seen by you, I am experiencing much higher inflation every year for the past few years. This is what I know from day 1, GIC is for safety and one certainly loses out big time after inflation, esp in the long run.

Good thing I dont hate banks like some, and I am a happy bank shareholder 🙂

June 3, 2021
6:03 pm
Bill
Member
Members
Forum Posts: 2449
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline
127sp_Permalink sp_Print

Hard to say anecdotally, people tend to focus on what went higher. I believe gas prices, even with all the new green religion taxes, have been below 2014 or so levels since then, to give one example, but no-one ever mentions that.

I agree the basket used for measuring cpi increases could be skewed - for example does it take into account the dramatic rise in house prices over the last few years?

June 3, 2021
8:00 pm
savemoresaveoften
Member
Members
Forum Posts: 577
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline
128sp_Permalink sp_Print

Bill said
I believe gas prices, even with all the new green religion taxes, have been below 2014 or so levels since then, to give one example, but no-one ever mentions that.

Not by much, if any. Back in 2014, US gasoline price were indeed higher, but USDCAD was at 1.05-1.10 area. So the CAD price is very similar to what we see today, I believe.

June 4, 2021
4:59 am
Bill
Member
Members
Forum Posts: 2449
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline
129sp_Permalink sp_Print

I don't see what USA has to do with it. I live in Canada and earn and pay in Canadian dollars, I paid $1.50/l for gas back in 2014 and I pay about $1.25/l now, that all that counts for Canada's cpi deflation/inflation numbers basket far as I can tell.

June 4, 2021
5:24 am
Kidd
Member
Members
Forum Posts: 697
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline
130sp_Permalink sp_Print

Morning.

By ratio, we are paying more today for gasoline than ever before.

Oil per barrel was $150, and we were in the ballpark of a 100 to 1 ratio for gasoline prices. Then oil tanked, Alberta's oil actually had a negative value. YET the pump prices never reflected the drop in world oil price.

Governments of canada saw the opportunity to pull a fast one, "hey... let's add more tax." In Ontario a campaign was started to put stickers on the gas pumps to indicate the latest government tax gouge.

June 4, 2021
6:34 am
Alexandre
Member
Members
Forum Posts: 402
Member Since:
November 8, 2018
sp_UserOfflineSmall Offline
131sp_Permalink sp_Print

This is the chart for gasoline prices in Toronto since 1990, in CAD.

Toronto-Gas-Prices.JPG

June 4, 2021
8:32 am
Bill
Member
Members
Forum Posts: 2449
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline
132sp_Permalink sp_Print

Thanks, Alexandre, you can see that we're paying about the same or even a bit less today compared to several years ago, and despite all the extra taxes. I do expect it to go higher as we get back to normal.

June 4, 2021
8:37 am
savemoresaveoften
Member
Members
Forum Posts: 577
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline
133sp_Permalink sp_Print

Bill said
I don't see what USA has to do with it. I live in Canada and earn and pay in Canadian dollars, I paid $1.50/l for gas back in 2014 and I pay about $1.25/l now, that all that counts for Canada's cpi deflation/inflation numbers basket far as I can tell.  

A barrel of oil is priced in USD. Gasoline is coming from a barrel of oil...

June 4, 2021
8:39 am
savemoresaveoften
Member
Members
Forum Posts: 577
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline
134sp_Permalink sp_Print

Kidd said
Morning.

By ratio, we are paying more today for gasoline than ever before.

Oil per barrel was $150, and we were in the ballpark of a 100 to 1 ratio for gasoline prices. Then oil tanked, Alberta's oil actually had a negative value. YET the pump prices never reflected the drop in world oil price.

Governments of canada saw the opportunity to pull a fast one, "hey... let's add more tax." In Ontario a campaign was started to put stickers on the gas pumps to indicate the latest government tax gouge.  

Right on. Focus on just the dollar price per litre is not that meaningful.

I filled up $70 yesterday, $20 of it are taxes !. That is "hidden inflation" thanks to carbon tax.

June 4, 2021
10:26 am
Norman1
Member
Members
Forum Posts: 4116
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline
135sp_Permalink sp_Print

Kidd said

Norman, i do value what you say. But calling the Canadian inflation april to April spike "fake news" is an error on your part.

It is fake because the April-to-April 3.4% CPI inflation number measures prices after a 0.8% drop from January 2020 to April 2020:

Norman1 said

Measuring from the bottom of a decline can give spectacular but highly misleading results. That's the case with stock prices and earnings. More significantly, it is true with the recent CPI inflation.

CPI went from the 135.7 to 140.3 from April 2020 to April 2021. That's what gives the +3.4% inflation for 12 months.

However, CPI was 136.8 in January 2020. CPI inflation was then

(140.3 - 136.8) / 136.8 = +2.6%

from January 2020 to April 2021. +2.6% over 15 months is just 2.1% per annum.

That 3.4% CPI inflation is for those born in April 2020. Such people are likely not paying for anything!


I said in an earlier post in this thread, inflation numbers are manipulated, and they are. In the real world, where i live, inflation in cost, has to be running 5 percent a year, reduction in quantity and size is ALSO inflation. Reducing warranty and coverage, is a cost cutting measure BUT it's also inflationary.

Statistics Canada inflation numbers are not manipulated. You're just misinterpreting them, especially that one Canada CPI statistic.

Statistics Canada releases more than that Canada wide CPI inflation number. There is a large set of numbers Consumer Price Index, April 2021 that show price changes for various regions and categories of consumer goods and services.

Short term increases are not necessarily relevant. That car price increase because of the computer chip shortage is only relevant for those who are buying a car now. Computer chip supply will likely recover in a year or two after people are immunized and the chip factories can return to capacity.

I'm not updating my return expectations because of the remarkable 20%, 30%, and 40% May-to-May returns from stocks. Those returns represent recovery from the lows of May 2020 and are not representative of long term returns.

June 4, 2021
11:05 am
Vatox
Member
Members
Forum Posts: 902
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline
136sp_Permalink sp_Print

Norman1 is correct, you must look at the previous months in 2020 to get a better picture. If you take February 2020 to April2021 it is 2.1% inflation, which is perfectly within target range. Both April and May of 2020 were deflationary so May will also appear off.

However, the 3.4% is very important for indexation because the deflation last year would have retracted some of the yearly inflation gains from government benefits like CPP, TFSA contribution etc. So you definitely want that 3.4% added to the next calculations.

June 4, 2021
11:16 am
savemoresaveoften
Member
Members
Forum Posts: 577
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline
137sp_Permalink sp_Print

Norman is not wrong to point out the 2021 YoY change will be inflated for the obvious reason.

However, if you look at the things you have been buying, its hard not to notice inflation being higher than what CPI printed at least in the last few years. Or to look at it from another perspective, there are just a handful of things that have gone down in price in general, big screen TVs being one of them. But then even most technologies have increase in price, cellphone in particular. You are getting more but also paying more. Milk and egg are the other 2 things that has been stable in price due to govt subsidies. One cant live on those 2 anyways. I gauge items such as back ribs which can be had for 2.99 a lb when on sale, now the lowest sale price I have seen is 3.49. Thats comparing 2019 to 2021. Similar with a lot of other food items. Even when the dollar price stays the same, the amount they give u shrink, there are many many examples to support that hidden inflation.
Does the CPI basket takes into account of such details, such as mayo price per ml ? I doubt it and think they just look at mayo price per jar, except the jar keeps getting smaller for example.

June 4, 2021
12:33 pm
Vatox
Member
Members
Forum Posts: 902
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

We deal with what we get! If you don’t agree with what the reported inflation numbers are, then you might want to form a lobbying group to get changes. Arguing about the reported numbers will get you nothing, here on this site! But perhaps all you are looking for is supported opinion.

June 4, 2021
4:02 pm
HermanH
Member
Members
Forum Posts: 117
Member Since:
April 14, 2021
sp_UserOnlineSmall Online

savemoresaveoften said Milk and egg are the other 2 things that has been stable in price due to govt subsidies. One cant live on those 2 anyways. I gauge items such as back ribs which can be had for 2.99 a lb when on sale, now the lowest sale price I have seen is 3.49. Thats comparing 2019 to 2021. Similar with a lot of other food items. Even when the dollar price stays the same, the amount they give u shrink, there are many many examples to support that hidden inflation.
Does the CPI basket takes into account of such details, such as mayo price per ml ? I doubt it and think they just look at mayo price per jar, except the jar keeps getting smaller for example.  

I do notice some price increases, but not significantly so. I am constantly able to find cheaper items and my basic monthly grocery bill is about $100. I eat like a horse, but not the expensive stuff. Plenty of plain fare, for those willing to hold themselves to a budget.

You hold some items dear, such as back ribs, and watch how the prices evolve around them. I do the same for other food items and have not seen much inflation. I can still get basic hamburger or chicken for $1/lb and my fruits and veggies at about 30 to 50 cents / pound.

June 4, 2021
4:10 pm
Bill
Member
Members
Forum Posts: 2449
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

savemoresaveoften said

Right on. Focus on just the dollar price per litre is not that meaningful.

I filled up $70 yesterday, $20 of it are taxes !. That is "hidden inflation" thanks to carbon tax.  

I get that oil is priced in $US, and that gasoline comes from oil, and that included taxes are higher (you forgot to subtract the $450 rebate a couple in a metro area got for 2020) but that's all irrelevant. All that affects me is what comes out of my pocket at the pumps, i.e. 7 years on and 2021's $1.25 per litre beats 2014's $1.50, seems pretty obvious.

Please write your comments in the forum.