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 Inflation Coming

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Thump

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Join date : 2008-05-13
Location : Central Florida

PostSubject: Inflation Coming   Thu Dec 24, 2015 12:57 pm

U.S. jobless claims near 42-year low as labor market tightens

I remember.  Outside of some major calamity we can't
forsee, this guarantees that inflation will start to take off
soon.  Don't remember how long ago I figured that out
but it was a long time.  Didn't think of it until  I saw the
title of the article.  I didn't read the story, just remembered.

Going to be bad for bonds and worse for bond funds.
Probably no problem for stocks until the market gets
white hot.
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rockhump

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PostSubject: Re: Inflation Coming   Fri Dec 25, 2015 8:20 am

Yeah, I suspect you're correct. We haven't had any semblance of inflation for some time.

I've never been a big fan of the "core inflation" numbers excluding food and energy. Energy is down for sure and likely to stay low for some time. Food might be up a bit but there's so much more competition now than there used to be (at least locally). We have 5 grocery stores within 6 miles providing a competitive landscape on pricing. Same with restaurants.

I have a little money in a bond ETF that has been basically flat this year ( down a bit but divy puts me about even). Probably dump it as there are likely better options for those funds.

The dogs of the dow didn't work very well this year but I might take a look at adding some of those to what is a heavy trove of ETF's in my portfolio.
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Thump

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PostSubject: Re: Inflation Coming   Fri Dec 25, 2015 1:02 pm

It hasn't even started yet but yes, you're right about the
"core Inflation" reading.  It's always behind.  One of the
early signs it's already starting will be things getting
higher at the stores while the "Core" will still come in
steady until it's read again.  Interest rates and low
unemployment are just forecasters. Core lags.

The first actual inflation will be in wholesale prices.
Food will be a little slower because of the benefits of
low fuel prices.  The number of grocery stores is not
really important, if they have to pay more to restock
they will raise prices.

Glad your bond ETF was able to break even but rates
were only raised once this year.  Lucky for you they
decided to put off the first hike so long, who knew?
And glad no one has panicked yet on bonds.

It's going to rise slowly for a long time.  I miss our
steady high dividend paying utilities that can safely
add high dividends to the portolio but they move
with bonds so I have none now.  Except AT&T and I
do think it's a little different with cell phones now.
Probably still be three or four years until I think it's
safe enough to buy some and recommend them for
widows and orphans again.
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