What Do You Think The REAL Inflation Rate Is?

HeWhoKnows on 06/01/2022 - 12:51
Last edited 06/01/2022 - 12:52

We all know the Government and the RBA are in cahoots to keep interest rates as low as possible.

This is because any increase in interest rates would have serious, far reaching consequences such as:

a) significantly increasing the government's loan interest bill due to our enormous govt debt. This in turn significantly reduces the govt's ability to fund services and social security payments
b) significantly increasing many people's home and investment loan interest payments so sending many borrowers to the wall or at least forcing significant cuts to consumer expenditure
c) sending the economy into a deep recession or long lasting depression for which our government and the RBA are not equipped to handle
d) a resulting property crash so damaging everyone's wealth and possibly making our banks insolvent

Yes my friends the RBA via these ridiculously low interest rates have placed themselves into a corner with no way out.

Hence they also "manipulate" the inflation rate to justify these ongoing low interest rates because if inflation was "reported" as going significantly higher, then the RBA would have to take action by increasing interest rates.

RECENT EVIDENCE OF INFLATION OUT OF CONTROL….
The price of fuel alone has gone up 100%. (which affects the price of everything)
Cheese up 18% in 12 months and 30% since just before COVID-19. Milk the same and more!.
Meat and seafood is skyrocketing every week right before our eyes…packets of home brand meat pies have increased by 33% this last year alone and they contain less than 30% meat.
Then there are all the packet size shrinkages not even taken into account in the inflation figure (deliberately)
If you eat out regularly you know that restaurant prices have increased 33% this year alone.
And any construction manager will tell you building material prices are going through the roof - if you can even get supplies.
Shipping container costs are up 700%. Yes that's correct!
And don't even get me started on skyrocketing property prices.
Now we have lots of people going on strike every week because they can see their pay packets buying less and less every week. And plenty of businesses are finding it difficult to attract workers so having to offer higher wages to get employees back.
How much more will all this add to inflation in 2022?
Yet our Reserve bank tries to tell us that inflation is still under 3%.
They must think people are stupid.

So my fellow and highly informed OBs how much do you think is the REAL rate of inflation?
Please indicate in the poll.

Also feel free to add your own observations of rapidly increasing prices in the comments

Poll Options expired

  • 63
    3%
  • 16
    5%
  • 43
    7%
  • 238
    10%
  • 65
    15%
  • 112
    20%
Financial

Comments

    • HeWhoKnows on 22/01/2022 - 16:10

      Brilliant article. Thank you!

      Its what Im suggesting
      Probably better worded
      Reported CPI and inflation are miles apart but the 2 are used interchangeably
      The govt "requires" low CPI numbers reported for many reasons
      How many people are in denial that the CPI is significantly understating "inflation"?

  • decc0 on 21/01/2022 - 15:32

    Relative price increases for commodities as the supply/demand curve is not in equilibrium doesn't mean inflation.

    Supermarkets in Australia are an oligopoly in theory, but in reality a duopoly (Coles and Woolies). They can both increase their price by $1 without much issue due to food (meat etc) being a fairly inelastic supply. Petrol is almost perfectly inelastic as people are so reliant on cars.
    What you're seeing now is a supply chain in the shit because of the market power the supermarkets hold.

    Until the wider society stops shopping at the 2 major supermarkets they can set the price how they like and people will pay. It took them way longer than it should've to realise they don't need to compete with each other if they set prices together.

    I agree there's a major problem, but this isn't inflation per se. Greater buying power due to not being able to go anywhere for 2 years (increased desire to work from home & freedom to live far from work) has increased house prices, not inflation.

    You're absolutely right they made this mess themselves. They never raised rates after the GFC and thus left themselves no wiggle room. Relative price increases for commodities as the supply/demand curve is not in equilibrium doesn't mean inflation.

    • HeWhoKnows on 22/01/2022 - 16:06

      Correct but inflation or price monitoring is not limited to just supermarkets

      • decc0 on 22/01/2022 - 17:41

        That was just one example I touched on, I also mentioned house prices and petrol. I focused on groceries because that what you seemed most upset by

        Housing shortage is a big issue but half assed attempts at quickly building apartment blocks that tbh aren't safe just escalates it

  • x2r9ypbj on 22/01/2022 - 10:02
    +1

    PUT UP INTEREST RATES US OLDIES ARE GETTING .018% INTEREST RATES WHILST THE CEO AND SHAREHOLDERS OF THE BANK ARE GETTING FILTHY RICHER THAT IS NOT RIGHT IS IT.

    • rektrading on 22/01/2022 - 11:13

      Oldies can eat cake by converting fiat savings to stonks.

      • x2r9ypbj on 23/01/2022 - 07:29

        WHAT SORT OF A CLOWN IS THIS MONEY TERY LIVING ON FRESH AID

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