3Mon·

🇺🇸 Inflation: Today vs. 1970s

$CSPX (+1.47%)
$SPY (+1.52%)
$CSNDX (+1.72%)
$IWDA (+1.3%)
$ISAC (+1.66%)
$WSML (+1.23%)

found an interesting comparison, I wonder if that's the case ? 🧐🤔

I don't think so, what do you think?

Otherwise it could get pretty uncomfortable 😬

14 Comments

Olli@EisenEnte

3Mon

If you only process the curves long enough, in this case using different "% yoy" scales, then everything correlates with each other. So I generally don't think much of such comparisons 🤷

•

BamBamInvest@BamBamInvest

3Mon

@EisenEnte you're right, you can always find similarities if you want to ☺️

•

lt@lt00

3Mon

Difficult, because the framework conditions and individual factors vary considerably. To name just one important factor: Oil prices, which developed into an oil crisis at the time -> sharp price increase -> economic downturn.

•

BamBamInvest@BamBamInvest

3Mon

@lt00 I agree, especially as Trump wants to keep oil prices low and produce more.

••

MKR_@MKR_

3Mon

sounds stupid, but it would give you a certain "planning security" 🤔

•

BamBamInvest@BamBamInvest

3Mon

@MKR_ I just think that the economy is much more robust today than it was back then and Trump also wants to keep the oil price low and produce more. If it were that simple, things usually turn out differently than you think anyway 😁

•

Mo@BigMo

3Mon

I wouldn't rule it out and am sharing my detailed thoughts on the subject here:

After World War II, the US Navy secured global trade routes as part of the Bretton Woods order. This allowed for stable globalization.

The US did this for geopolitical and economic reasons to protect its allies, stabilize global trade and ensure access to cheap energy.

In a bipolar or multipolar world, this security could change. If the US withdraws, China and other regional powers could impose their own maritime rules.

A nationalist America could focus on its own interests and regional security and abandon the protection of global trade routes.
This could lead to a decline in globalization, with more regional trading blocs and a restructuring of supply chains.

There is a higher risk of conflict over maritime trade routes, especially at strategic chokepoints such as the Strait of Hormuz or the South China Sea.

Here we come to the impact on inflation:

Container freight has enabled globalization and lowered transportation costs, making goods cheaper worldwide.

Uncertain trade routes increase inflation as insurance premiums, fuel costs and detours become more expensive.

Rising freight costs make consumer goods, energy and food more expensive as supply chains have to be interrupted or rerouted.

Companies could hold more stock, causing additional costs and making just-in-time production more difficult.

If the US withdraws its maritime security guarantee, this could mean the end of low-cost global supply chains.

•

BamBamInvest@BamBamInvest

3Mon

@BigMo let's hope it doesn't come to that

••

Teo@teoo

3Mon

So what we here for the longterm. I hope we get some discounted prices. Black fridays everymonth letsgo

•

BamBamInvest@BamBamInvest

3Mon

@teoo That's right, the only question is who pays for it and who is harmed by it, it's not as if everyone benefits from it and Europe could suffer enormous damage as a result. We will see.

•

Teo@teoo

3Mon

@BamBamInvest market would recover in years to come and would rise to the new ATH. But ofc not everyone would benefit from it. Especially people betting on the risky companies. As i am very diversified with my world etf as a core. I am sleeping well.

•

Jo@oeffi

3Mon

A coincidental correlation. You can find something like this everywhere if you look hard enough.

https://www.business-punk.com/2018/07/korrelation-bizarr/

•

Mister_ultra@Mister_ultra

3Mon

When there are 30-year US government bonds with 12-13% interest rates again: all-in. Then I'll even turn my neighbor's cat into cash 😂

•

BamBamInvest@BamBamInvest

3Mon

@Mister_ultra the poor cat 😂😂

•