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Old 11-05-2019, 08:03 PM
 
2,003 posts, read 491,997 times
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So the title of the article from MarketWatch is, "Inflation expectations hit record low, suggesting Fed may have more to do" and shows people grocery shopping under the headline. Clearly this is a propaganda piece attempting to desensitize people to more Fed intervention and rate cuts. But it is funny they chose a grocery store of all places to try this propaganda piece considering the grocery store is one of the easiest places to see prices rising and package sizes shrinking.

How stupid do they think people are running an article like this with the headline picture at the grocery store? "Damn it, Honey! Prices are too low at the grocery store today. We might save some money. I wanted to pay more for my groceries and have smaller package sizes if possible too!" LOL.

Article
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Old 11-05-2019, 08:33 PM
 
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Inflation expectations are derived from bond yields. Since the central bank is the main purchaser of the bonds, they can manipulate it if they're predisposed to signal more aggressive easing.
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Old 11-05-2019, 09:51 PM
 
Location: Vienna, VA
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I don't see much inflation at the grocery store, if anything it's gone down since Aldi, lidl and other discount grocery stores have been taking over.
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Old 11-06-2019, 02:55 AM
 
75,686 posts, read 75,090,806 times
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Quote:
Originally Posted by 22003yo View Post
I don't see much inflation at the grocery store, if anything it's gone down since Aldi, lidl and other discount grocery stores have been taking over.
our shopping bills fell a lot since now we do grocery shopping on line keeping me out of the store with all the extras i would buy that i shouldn't be buying
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Old 11-06-2019, 07:11 AM
 
Location: Guadalajara, MX
6,696 posts, read 3,243,730 times
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Quote:
Originally Posted by heart84 View Post
Clearly this is a propaganda piece attempting to desensitize people to more Fed intervention and rate cuts.
So this article by a reporter who's been writing financial pieces for 14 years is actually a government plant?

Active imagination.
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Old 11-06-2019, 08:49 AM
 
Location: 5,400 feet
2,812 posts, read 2,744,948 times
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Yet another reason I no longer read anything on MarketWatch.
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Old 11-06-2019, 09:03 AM
 
8,537 posts, read 7,683,325 times
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There are actual surveys of inflation expectations, not the data derived from bond markets that are essentially owned by central banks. Those figures run around 3 percent.

university of michigan survey

Also, large investors use currency swaps to get a higher yield from government bonds that are closer to 3.5 percent as compared to what they're currently yielding. The main problem is there's too much debt. The current administration has already issued 172 billion dollars in the first month of the new fiscal year. Hence, the panic by the Fed to cover the bill.
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Old 11-06-2019, 09:05 AM
 
8,993 posts, read 9,640,938 times
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Quote:
Originally Posted by heart84 View Post
So the title of the article from MarketWatch is, "Inflation expectations hit record low, suggesting Fed may have more to do" and shows people grocery shopping under the headline. Clearly this is a propaganda piece attempting to desensitize people to more Fed intervention and rate cuts. But it is funny they chose a grocery store of all places to try this propaganda piece considering the grocery store is one of the easiest places to see prices rising and package sizes shrinking.

How stupid do they think people are running an article like this with the headline picture at the grocery store? "Damn it, Honey! Prices are too low at the grocery store today. We might save some money. I wanted to pay more for my groceries and have smaller package sizes if possible too!" LOL.

Article
Well.............not to point fingers but the EQ (economics quotient) around here is very low.

1. The piece isn't propaganda.
2. The piece is actually nicely executed as the author touches on several points regarding inflation and expectations that most people are clueless about re: the tie in between inflationary expectations and measured inflation over time and the bit about real incomes rising etc.
3. The picture of food is entirely appropriate as food accounts for ~15% share of "all items" measured in both CPI-U and CPI-W.
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Old 11-06-2019, 09:48 AM
 
8,537 posts, read 7,683,325 times
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Grocery store food is only 7 percent.

Like most financial pieces, they muddle the picture on inflation by mixing different inflation expectations, measured or reported inflation, and so on without going into actual inflation experiences. While in the grocery store, they could've actually delved into that area. This might be the more favorable time for lower grocery prices because of the reduced exports of agricultural products to China. I haven't seen much of it. Prices have actually been rising faster for eating out. As with grocery stores, portion sizes have been shrinking and quality has been declining for both product and consumer service.

The main reason the Fed jumped in to cut rates and provide liquidity is to bolster the banks. Too much debt supply from the federal government and the impact of negative interest rates on Deutsche Bank and other European banks' credit is forcing the Fed to facilitate lending to the banks. A similar situation occurred in 2008 as the prices of equities, preferred securities, and derivatives linked to troubled banks that were held by large US banks started to fall. None of that can be talked about since they view it as damaging to public confidence in how the economic system is regulated.
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Old 11-06-2019, 10:12 AM
 
8,993 posts, read 9,640,938 times
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Quote:
Originally Posted by lchoro View Post
Grocery store food is only 7 percent.

Like most financial pieces, they muddle the picture on inflation by mixing different inflation expectations, measured or reported inflation, and so on without going into actual inflation experiences. While in the grocery store, they could've actually delved into that area. This might be the more favorable time for lower grocery prices because of the reduced exports of agricultural products to China. I haven't seen much of it. Prices have actually been rising faster for eating out. As with grocery stores, portion sizes have been shrinking and quality has been declining for both product and consumer service.

The main reason the Fed jumped in to cut rates and provide liquidity is to bolster the banks. Too much debt supply from the federal government and the impact of negative interest rates on Deutsche Bank and other European banks' credit is forcing the Fed to facilitate lending to the banks. A similar situation occurred in 2008 as the prices of equities, preferred securities, and derivatives linked to troubled banks that were held by large US banks started to fall. None of that can be talked about since they view it as damaging to public confidence in how the economic system is regulated.
All of this is talked about and written about on an ongoing basis. There are no secrets.
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