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Aug 25, 2021 | 07:10 1 Purchasers Managers Index (PMI) has been a pretty decent predictor of US Real GDP. This is a bell-weather indicator of economic health. And it now suggests the US economy really is cooling off in the 3rd quarter - way, way off.

Big economic / financial problems incoming quickly (IMO). But meanwhile in the unrealistic equity world, record breaking stock indexes continue to be cocooned by central bankers. More record profits with banks. Reply With Quote
jazz's Avatar Aug 25, 2021 | 07:20 2 errol with the fed so entrenched in the economy these indicators have been thrown off IMO.

There is $6T in Biden stimulus coming. Reply With Quote
Aug 25, 2021 | 07:22 3 Or maybe the just in time ordering isn't working anymore and the people that are paid to think in advance have to actually do their job? And don't have the skill set.? Reply With Quote
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  • biglentil's Avatar Aug 25, 2021 | 08:12 4 Nasty stagflation with major supply chain disruptions on the horizon. Those that are pro jab passport and pro mandatory jab are not going to like the tyrannical world they advocated for. 20%+ of the Truckers, medical staff, factory workers.... are about to walk away. Better have a bucket and mop ready shit is about to hit the fan.
    Last edited by biglentil; Aug 25, 2021 at 08:14.
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    Aug 25, 2021 | 08:32 5 Equities in-wait right now on Jackson Hole Wyoming virtual meeting of global central bankers. More easy money seen. (Daddy is at the family dinner table with his cheque book open.)

    But, central bank influence is now fading sharply. The money printing gig is up. And the Fed wants to slow the printing presses in 2022. Any hint that the cocoon is starting to be pulled-apart, these markets are in real trouble (IMO).

    But money printing or no money printing, the PMI index doesn't lie . . . . Reply With Quote
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  • biglentil's Avatar Aug 25, 2021 | 08:39 6
    Quote Originally Posted by errolanderson View Post
    Equities in-wait right now on Jackson Hole Wyoming virtual meeting of global central bankers. More easy money seen. (Daddy is at the family dinner table with his cheque book open.)

    But, central bank influence is now fading sharply. The money printing gig is up. And the Fed wants to slow the printing presses in 2022. Any hint that the cocoon is starting to be pulled-apart, these markets are in real trouble (IMO).

    But money printing or no money printing, the PMI index doesn't lie . . . .
    So are you predicting inflation is dead again? Even though the money supply has expanded more this year than the previous two centuries, combined with unprecedented supply chain disruptions.
    Last edited by biglentil; Aug 25, 2021 at 08:43.
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    Aug 25, 2021 | 08:43 7
    Quote Originally Posted by biglentil View Post
    So are you predicting inflation is dead again? Even though the money supply has expanded more this year than the previous two centuries, combined with unprecedented supply chain disruptions.
    Yup . . . . Reply With Quote
    Aug 25, 2021 | 08:51 8 What does this do to the commodity markets? People still have to eat and the supply is low after the troubles this growing season. Reply With Quote
    Aug 25, 2021 | 08:59 9
    Quote Originally Posted by 4GFarms View Post
    What does this do to the commodity markets? People still have to eat and the supply is low after the troubles this growing season.
    Global commodity price trend is now down (particularly industrials) from iron ore, copper, precious metals This is incoming 'deflation in-progress' folks. And this is occurring despite mass money printing, go-figure.

    So how effective is central bank policy since 2008? And at what cost? Reply With Quote
    GDR
    Aug 25, 2021 | 09:00 10
    Quote Originally Posted by bucket View Post
    Or maybe the just in time ordering isn't working anymore and the people that are paid to think in advance have to actually do their job? And don't have the skill set.?
    Lack of supply is affecting everything. You cant buy something that's not for sale and when one component is unavailable it makes all the other parts of the same thing not for sale either. It's not just vehicles, its the whole supply chain broken, I'm really surprised in this modern time that it can't be ramped up faster. Reply With Quote
    jazz's Avatar Aug 25, 2021 | 09:26 11
    Quote Originally Posted by errolanderson View Post
    Global commodity price trend is now down (particularly industrials) from iron ore, copper, precious metals This is incoming 'deflation in-progress' folks. And this is occurring despite mass money printing, go-figure.

    So how effective is central bank policy since 2008? And at what cost?
    There is speculative money hiding in commodities expecting inflation. Thats what could turn the tide quickly more than supply demand imbalances.

    The US has a some critical numbers to report on GDP and such but after that, all bets are off. The economy will be as far back as it can be which still wont be where it was pre covid. And how much more debt can be printed up. Place like Canada is at the end of the rope, but US, I dont know. They have a debt ceiling fight coming up in a month or so. Reply With Quote
    Aug 25, 2021 | 09:27 12
    Quote Originally Posted by GDR View Post
    Lack of supply is affecting everything. You cant buy something that's not for sale and when one component is unavailable it makes all the other parts of the same thing not for sale either. It's not just vehicles, its the whole supply chain broken, I'm really surprised in this modern time that it can't be ramped up faster.
    Ocean container shipping rates are up 10X, but unsustainable (IMO). Once the supply chain starts to normalize, these rates will plunge back to reality. To me, this is not inflation, this is a squeeze that will come 'n go ie; commodities . . . . Reply With Quote
    Aug 25, 2021 | 09:38 13
    Quote Originally Posted by GDR View Post
    Lack of supply is affecting everything. You cant buy something that's not for sale and when one component is unavailable it makes all the other parts of the same thing not for sale either. It's not just vehicles, its the whole supply chain broken, I'm really surprised in this modern time that it can't be ramped up faster.
    North America screwed its self by relying too much on China. Now we are all paying for the big cooperations profit margins over the past 10-20 years .

    Shipping jobs overseas , helping developing countries , ie India , China , Malaysia .... big part of Obama’s dream .
    Now what ...... we destroyed industry in North America. It will take years to get that back .
    Rather than look after our own citizens who are jobless , homeless and First Nations get decent jobs they gave all that away and maxed out social assistance meanwhile destroying wealth creating industry to pay for it all .
    It’s left a mess our kids and grandkids will pay for .
    Sad reality hitting home now Reply With Quote

  • blackpowder's Avatar Aug 25, 2021 | 09:51 14 I don't know what to think.
    Consumer inflation that I see has me concerned. As farmers we forget we are in the top 5-10%. Justin's new middle class, which now includes everyone else but the destitute.
    Imagining my semi retirement, I see most people living quite modestly in theirs. Remember those who retired in the mid 70s taking on employment in the 80s?, I do.

    On another note, local terminal offering 9- near 10$ wheat for fall 22.
    I'm not certain of anyone's crystal ball.. Reply With Quote
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  • jazz's Avatar Aug 25, 2021 | 10:01 15
    Quote Originally Posted by blackpowder View Post
    On another note, local terminal offering 9- near 10$ wheat for fall 22.
    I'm not certain of anyone's crystal ball..
    BP. I was thinking along the same lines as you. Anyone with a crop in the bin right now, some hedging skills and the balls to forward contract to 2022 could set themselves up for a lifetime. Reply With Quote
    Aug 25, 2021 | 10:06 16
    Quote Originally Posted by errolanderson View Post
    Global commodity price trend is now down (particularly industrials) from iron ore, copper, precious metals This is incoming 'deflation in-progress' folks. And this is occurring despite mass money printing, go-figure.

    So how effective is central bank policy since 2008? And at what cost?
    Back in the spring Chicoms announced they were going to do everything they could do as a central planer to control or moderate commodity prices.
    They certainly built stocks at lower prices last winter.
    They seem to be experts at manipulating markets although maybe not on such a wide range of products.
    How would you know how much influence they are having? Reply With Quote
    Aug 25, 2021 | 17:23 17 Keep an eye on debt defaults, not rising prices. Once those debt dominoes fall, the pandemic will seem like a sideshow. Reply With Quote

  • Aug 25, 2021 | 20:41 18
    Quote Originally Posted by shtferbrains View Post
    Back in the spring Chicoms announced they were going to do everything they could do as a central planer to control or moderate commodity prices.
    They certainly built stocks at lower prices last winter.
    They seem to be experts at manipulating markets although maybe not on such a wide range of products.
    How would you know how much influence they are having?

    yes, the chicoms have stocked up on all commodities in the last couple of years. with the extreme

    weakness coming from the white house recently, there is a real concern that taiwan is china's next target.

    if so, that is the black swan event to start things unravelling. Reply With Quote
    Aug 25, 2021 | 21:51 19 It shouldn't come as a surprise that the PMI is dropping.
    Demand was pulled forward drastically more than it should have been due to shortages perceived and real, and price increases on almost everything. Prudent purchasers had forsaken the usual just in time delivery instead stocking up on any and everything before the price went any higher or it wasn't available. Driving up the PMI beyond where it should have been.

    Now we have the double whammy of having the excess stockpiled inventory to use up, and falling prices (at least for most raw commodities) prompting purchasers to delay new purchases as long as possible, and living hand to mouth knowing that it will be cheaper tomorrow than it was today.

    Where it all shakes out when normalcy returns, if it ever does, I'm not so sure. Reply With Quote

  • Aug 26, 2021 | 06:43 20 A lot of that stock piled inventory is crap people don't need anyway and have forgot about buying it by now. Containers full of throwaway christmas lights block containers full of ag parts in the system. Does everybody need a TV in every room while they watch programs on their phone Reply With Quote
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  • Aug 26, 2021 | 11:31 21
    Quote Originally Posted by Old Cowzilla View Post
    A lot of that stock piled inventory is crap people don't need anyway and have forgot about buying it by now. Containers full of throwaway christmas lights block containers full of ag parts in the system. Does everybody need a TV in every room while they watch programs on their phone
    Some is unneeded, but much is industry stock in trade.

    We do metal fabricating here and have laid in extra materials to offset the supply chain shocks that have been felt everywhere. We basically increased inventory by 50%, and found some significant cost benefits in doubling up on orders.

    Some of that has been absorbed by strong sales, but certainly not all of it.

    So we are going to have a slowdown in purchasing over the next......term, and if our sales drop off to more normal levels, that will take a while to use up this stock.

    If our sales drop to below normal - you know where that goes.

    Extrapolate that scenario across all sectors of industry and retail and it's really bad news.

    My one steel supplier said back in the late spring that they were doubling up on steel inventory for quite a while now. They deal in thousands of tonnes of material in many different forms.

    I wouldn't want to be in their shoes if prices start to drop very much at all. It can turn into double trouble. Reply With Quote
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  • Aug 27, 2021 | 23:48 22
    Quote Originally Posted by burnt View Post
    Some is unneeded, but much is industry stock in trade.

    We do metal fabricating here and have laid in extra materials to offset the supply chain shocks that have been felt everywhere. We basically increased inventory by 50%, and found some significant cost benefits in doubling up on orders.

    Some of that has been absorbed by strong sales, but certainly not all of it.

    So we are going to have a slowdown in purchasing over the next......term, and if our sales drop off to more normal levels, that will take a while to use up this stock.

    If our sales drop to below normal - you know where that goes.

    Extrapolate that scenario across all sectors of industry and retail and it's really bad news.

    My one steel supplier said back in the late spring that they were doubling up on steel inventory for quite a while now. They deal in thousands of tonnes of material in many different forms.

    I wouldn't want to be in their shoes if prices start to drop very much at all. It can turn into double trouble.
    Wishing you good demand, good markets, and good nerves. pars. Reply With Quote
    Aug 28, 2021 | 06:19 23 Still waiting for some CAT parts guys said they are coming from Belgium . Might have been quicker to fly over and stuff them in my suitcase going on 20 days. By the way remember the big DECKING shortage that was going on a few months ago well I drive past a yard where they make that stuff ( used to work there ) and the yard is packed full of finnished material. Reply With Quote
    Aug 28, 2021 | 06:47 24
    Quote Originally Posted by parsley View Post
    Wishing you good demand, good markets, and good nerves. pars.
    Thank you for your kind wishes.

    You likely know from your own experience what I'm about to say - at this stage of life, I no longer worry about what "might" happen as far as my business prospects are concerned.

    Not that I am independently wealthy (I'm not) but that after nearly 50 years in business, we have survived and thrived through so many ups and downs that the next one no longer seems like an imminent threat.

    Of course, I'm also aware that the next one could be like no other before. But as far as that goes, you could say that I've about spent my worry quotient. :-)

    Coincidentally, we are working on some transition plans and hopefully it will soon be someone else that will be making the decisions. Reply With Quote

  • Aug 28, 2021 | 08:02 25
    Quote Originally Posted by biglentil View Post
    So are you predicting inflation is dead again? Even though the money supply has expanded more this year than the previous two centuries, combined with unprecedented supply chain disruptions.
    When we had the double digit interest rates a large part of the inflation was due to rising wages.

    I have to think wages are going up with the North America wide Labour shortage?

    If you don't have workers you can't run your buisness. All kinds of poaching and workers changing jobs. 3 jobs for everyone.
    Do wages go down?
    Guess they did in the oilfield. Reply With Quote
    Aug 31, 2021 | 23:13 26 Canada’s 2nd quarter GDP was a total bust . . . contracting 1.1 percent annualized despite massive government spending.

    This is just the beginning folks. Watch for the 3rd and 4th quarter results. The loonie may be a sitting duck.

    Debt rearing-its-head. Real estate fallout just in early stages (IMO) . . . .
    Last edited by errolanderson; Sep 1, 2021 at 08:21.
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    Sep 1, 2021 | 07:47 27 Continued low interest rates

    And the offset to that is lower commodity prices Reply With Quote
    jazz's Avatar Sep 1, 2021 | 08:05 28
    Quote Originally Posted by errolanderson View Post
    This is just the beginning folks. Watch for the 3rd and 4th quarter results. The loonie may be a sitting duck.

    .
    A recession is in the cards for Canada for sure. The rest of the yr will be same as this quarter. Thats what happens when you spend your treasure buying votes instead of increasing productivity. We have all the inflation and no growth and no powder to throw at the next problem.

    The loon will be 65c and it will be preceded by a credit downgrade and then interest rate increases. I dont like to think about monetary policy. Reply With Quote
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  • jazz's Avatar Sep 1, 2021 | 08:26 29
    Quote Originally Posted by jwab View Post
    How soon does the dollar drop? Might be good for grain prices, no?
    IMO, a down grade in the spring combined with BoC tightening.

    The bigger question is what brings us out now? There is no more treasury money to throw at the economy, the BoC balance sheet must be bursting at the seams, consumer tapped right the f out or struggling to pay bills.

    And ZERO policies to expanding our economy to pay for any of it - NONE, just more debt thrown around. Reply With Quote

  • Sep 1, 2021 | 12:46 30 And why would the BOC raise interest rates? Reply With Quote