Inflation | Page 7 | General financial discussion | Discussion forum

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.

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 ?

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?

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.

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

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...

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.

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.

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.