Inflation: Possible increase in the next US CPIs

[EarnOnVictor]

Inflation is a powerful factor in an economy or investment decision-making, it has driven Bitcoin to lower levels in recent years, which is why I don't like joking with it. I've also developed the habit of alerting my fellow BTT member about what I envisage on it before it actually happens.

That said, the US CPI and Core CPI are the highest-valued inflation gauge for investment plans all around the world, and the next of such news is on the 13th of December (next week Tuesday) at 2:30 PM CET.

See the expected figures:



It's a day that BTC will be volatile towards either side depending on the figures released. Also, it's worth mentioning that the last US CPIs were unexpectedly released lower last month as shown below;

CPI m/m:


CPI y/y:


Core CPI m/m:


This helps the risk-on assets to rise against the USD, and the effect has lasted for a full month, although Bitcoin and other cryptos did not benefit much from it as it coincided with the FTX-induced issues.

Now, I have my reservation about the next US CPIs figure to be released, it would possibly rise, and it might cause the risk-on assets like Bitcoin to sell. How do I know? The last US PPIs figures were released on Friday, this is another inflation gauge, only that it's not as powerful as the CPIs. The news was released higher than the expectations of the economists as shown below, which is a clue to know what to expect for the CPIs news on Tuesday.




Note: As much as I would like to read your views about this, I hope it guides us better, but note that it's my personal view, anything could happen in the actual event.


Keywords:
CPI: Consumer Price Index
Core CPI: CPI where food and energy are excluded
PPI: Producer Price Index
Core PPI: Producer Price Index where food and energy are excluded

[Hydrogen]

We've deviated so far from textbook economics, that conventional norms no longer apply.

The science of finance and economics, involving numbers and math, should be accurate. Its an "exact science". For the same reasons most might agree that 2 + 2 = 4.

When many economists agree we cannot predict how this ends. Its an admission that math and science aspects were thrown out the window, decades ago. Now we have entered the realm of makeStuffUpAsWeGoism. Many prefer this format. As there are fewer details, numbers and statistics to consider. Some say facts are too confining. In which case, they prefer a "facts optional" approach to the economy and job market their lives depend upon. Its the type of mindset that led to individuals like SBF operating billion dollar crypto funds. What could go wrong? What indeed.

[paxmao]

We've deviated so far from textbook economics, that conventional norms no longer apply.

The science of finance and economics, involving numbers and math, should be accurate. Its an "exact science". For the same reasons most might agree that 2 + 2 = 4.
...

I would not say we are out of the books. There are some doubts on which direction each world area is heading - it can be stagflation, it can be sustained inflation or it can be back to low growth and low inflation. Potentially, it could even get to mid growth low inflation.

All these scenarios are possible, but my take now is that there should be more taxes and this being used to reduce debt, that is quite in general for the western developed worls.

[Darker45]

I think it's a bit odd to decide whether to buy or sell Bitcoin based on inflation, especially CPI, most especially US CPI. I don't think I will ever make Bitcoin investment decisions based on this monthly data. For one, Bitcoin is global. I'm not sure if Bitcoin investors or traders are taking this data as an indicator for them to either long or short or buy or sell.

That Bitcoin's price fell during the times when inflation rates of countries across the world have gone through the roof, was more of a result of global macroeconomic factors. Nothing was safe at that time. The entire global economy was suffering. There was the ongoing pandemic and the invasion in Europe and all their implications. Bitcoin's price was as much a victim as the high inflation numbers of many countries around the world.

[adaseb]

Most likely it will be 0.3% or higher. Besides last months CPI the prediction was always either spot on or it was too low, it rarely too high.

Inflation definitely hasn’t peaked. Job market is very tight. Demand is not decreasing. Groceries and rent is very expensive. Maybe housing, gas and cars have peaked in some markets but there is still a lot of room to run.

[franky1]

CPI is not a prediction of the future.. its a report of the past to present. same with inflation and recession

these reports just say how much
(CPI)consumer goods have already risen by monthly-over the year
(GDP) inflation and recession has happened in last6 months

we have already had 2.9 years of inflation so ofcourse we are now entering a recession(correction) of that inflation of QE

there is however a recession of the non-food CPI (housing prices drop) while a continued inflation of the food-goods CPI
which authorities hope would balance out the overall inflation/recession rate to net 0 rate

yep
yep a drop of house prices by 10%
and an increase of food/bills by 20%.. "supposedly" balances out in authorities eyes
(200k=180k =1000 a year loss on a 20 year investment)..
is a -$1k per capita CPI
vs
($5k food bill a year becoming $6k,)
is a +$1k per capita CPI..

but in normal peoples prospective. home owners just dont sell at a loss but everyone is still feeling the extra $1k added to food bill

[philipma1957]

CPI is not a prediction of the future.. its a report of the past to present. same with inflation and recession

these reports just say how much
(CPI)consumer goods have already risen by monthly-over the year
(GDP) inflation and recession has happened in last6 months

we have already had 2.9 years of inflation so ofcourse we are now entering a recession(correction) of that inflation of QE

there is however a recession of the non-food CPI (housing prices drop) while a continued inflation of the food-goods CPI
which authorities hope would balance out the overall inflation/recession rate to net 0 rate

yep
yep a drop of house prices by 10%
and an increase of food/bills by 20%.. "supposedly" balances out in authorities eyes
(200k=180k =1000 a year loss on a 20 year investment)..
is a -$1k per capita CPI
vs
($5k food bill a year becoming $6k,)
is a +$1k per capita CPI..

but in normal peoples prospective. home owners just dont sell at a loss but everyone is still feeling the extra $1k added to food bill

Well said you gotta eat
and you do not gotta sell.

Food numbers are crazy fucking high.
I can wear an older shirt
I can wear an older pair of pants.
I can put off replacing an old roof.

But I gotta eat

I see this going on for at least Dec-April

Fed rates are due
Dec 14, 2022.        up > 0.50
February 1, 2023.   up > 0.50
March 22, 2023.     up > 0.25
May 3, 2023.          up > 0.25. brings us to around 5.75-6.00

all of those number are bad for crypto.

here is why I can get 6.85% on staked eth on coinbase this is pegged to nothing and most crypto does variations on this.

or I can get 6.89% on a USA I Saving bond. This is  perfectly pegged to the USD


People are flocking to usa bonds and bills

2 year t bill is 4.28% soon to rise
5 year t bill is 3.638%  soon to rise
10 year t bill is 3.57% soon to rise

these numbers = pressure on crypto

[Flexystar]

CPI is not a prediction of the future.. its a report of the past to present. same with inflation and recession

these reports just say how much
(CPI)consumer goods have already risen by monthly-over the year
(GDP) inflation and recession has happened in last6 months

we have already had 2.9 years of inflation so ofcourse we are now entering a recession(correction) of that inflation of QE

there is however a recession of the non-food CPI (housing prices drop) while a continued inflation of the food-goods CPI
which authorities hope would balance out the overall inflation/recession rate to net 0 rate

yep
yep a drop of house prices by 10%
and an increase of food/bills by 20%.. "supposedly" balances out in authorities eyes
(200k=180k =1000 a year loss on a 20 year investment)..
is a -$1k per capita CPI
vs
($5k food bill a year becoming $6k,)
is a +$1k per capita CPI..

but in normal peoples prospective. home owners just dont sell at a loss but everyone is still feeling the extra $1k added to food bill

Taking these factors in consideration one can easily understand why bitcoin is going down. Though bitcoin should be different part and must not be included into CPI because it is neither providing any service nor its a good that can be utilized in the world.

It's merely alternate medium for the current fiat system. To date everyone understands it as virtual currency or often as an asset which really confuses how it is considered in the traditional books anyways.

What would balance bitcoin?

Unfortunately, BTC has come very far but its always measured in terms of USD and with the time the volume of BTC-USD is rising a lot. Most of them are here to use it as means of earning more money by trading it and not utilizing it as medium of transaction. For example sending money to your aunt overseas or may be buying street food in Thailand with it.

So this particular relation between USD and BTC is what making it move just like the way fiat is moving.

Its complex. Bitcoin should have been left alone really.

[Gyfts]

Interestingly enough, the PPI figures have consistently dispelled the notion that the CPI increases are due to corporate greed and an increase in profits. Raw materials cost more and so if the price to manufacture goods increases, it shouldn't be a surprise that consumers are paying higher prices.

[karabiber]

Producer prices are seen as a leading indicator for the development of inflation. The higher-than-expected increase in November finished off hopes that inflationary pressures in the US would slow down. I do not think that a slowdown in inflation will occur in the coming periods. I can say that the world is preparing for the recession that will take place in 2023. The inconsistency of expected economic data supports this situation. I think that the figure announced in the November consumer price index report, which will be announced on 13 December, will be below the expectations. However, it is clear that chaos will not disappear without lowering producer prices.

[franky1]

Interestingly enough, the PPI figures have consistently dispelled the notion that the CPI increases are due to corporate greed and an increase in profits. Raw materials cost more and so if the price to manufacture goods increases, it shouldn't be a surprise that consumers are paying higher prices.

not always true

here in the UK we had no connection to russian oil or gas or electric. we are self managing from UK/EU
yet the price hikes in the uk for energy went up from car fuel of £1.30-> £2
where the big fuel/energy companies reported the most profits they made in years

picking cocoa plants and harvesting them into chocolate and sending it from brazil to th eUK has no russian impact either. they are not russian ships or russian fueled. yet again chocolate in the UK jumped massively. and again chocolate businesses are claiming healthy profits


what you actualy find is that when M0 money jumps from 3.5trill to 5.5trill.
everyone sees more money floating around and wants a piece of it

there is no organic COST increase. there is instead a greed increase that raises prices at retail level

yep retail milk prices have increased but local milk farmers income from selling milk has not increased.. in short dont blame the farmer for higher priced milk. blame the retailer for higher profiteering

[EarnOnVictor]

I think it's a bit odd to decide whether to buy or sell Bitcoin based on inflation, especially CPI, most especially US CPI.

Odd? I guess you are new in the investment environment, it's obvious you made the reply out of ignorance. Bitcoin is a risk-on market, there is nothing you can do about that. Or what do you think is causing the current selling of cryptos? It's the aftermath effect of the PPI released on Friday. Since it's higher, all risk-on assets, including crypto would start falling, that's the logic.

Most likely it will be 0.3% or higher. Besides last months CPI the prediction was always either spot on or it was too low, it rarely too high.

Inflation definitely hasn’t peaked. Job market is very tight. Demand is not decreasing. Groceries and rent is very expensive. Maybe housing, gas and cars have peaked in some markets but there is still a lot of room to run.

You are accurate on this, CPI will either be released the same or higher, but most possibly it will be released higher judging by the producers' price report of Friday.

Interestingly enough, the PPI figures have consistently dispelled the notion that the CPI increases are due to corporate greed and an increase in profits. Raw materials cost more and so if the price to manufacture goods increases, it shouldn't be a surprise that consumers are paying higher prices.

However, it is clear that chaos will not disappear without lowering producer prices.

What you guys have expressed is true and is a good correlation as the cost of finished products determines the producers' price, which will always have a direct impact on the consumer price. Since the PPIs figures were released higher on Friday, definitely, the CPI will be higher as it would definitely have a direct impact on it, which is envisaged to be higher.

[adaseb]

In a few hours we will know. I am assuming it’ll be a surprise by +0.1%, the markets will tank and then they will recovered and during the fed rate itll be the opposite, markets will rally and then fade. And at the end of the week we will be at the same price as we are right now.

I don’t see it being any higher or lower than 0.2% so it won’t be a massive hit or miss. Should be a volatile week. Bitcoins ATM IV is increasing slightly due to the increased volatility expected.

[Darker45]

I think it's a bit odd to decide whether to buy or sell Bitcoin based on inflation, especially CPI, most especially US CPI.

Odd? I guess you are new in the investment environment, it's obvious you made the reply out of ignorance. Bitcoin is a risk-on market, there is nothing you can do about that. Or what do you think is causing the current selling of cryptos? It's the aftermath effect of the PPI released on Friday. Since it's higher, all risk-on assets, including crypto would start falling, that's the logic.

Yeah, it's odd. And since you seem to know a lot, tell me more about it. This month, the US CPI-U has increased 0.1%. As far as all items are concerned, except food and energy, the increase is 0.2%.^[1] I also read an update by the Bitcoin magazine that the "Energy, gasoline, electricity and utility gas prices" in the US are in deflation, as shown by the same CPI release.^[2] So what now is your position in the Bitcoin market?

The current selling of crypto is an "aftermath effect of the PPI?" So shall we now forget about the rest of other factors and direct our focus on a single country's index? Is the fall of FTX even irrelevant?

Although by now Bitcoin or crypto in general is already widely considered as a risk-on asset, shall we be looking at the US' monthly CPI to decide on our Bitcoin positions? Shall the inflation rate in the US the basis for our Bitcoin positions? How about my country's inflation rate? How about your country's inflation rate?

In November, my country's inflation rate has increased to 8.0%. Whatever the data in the US says, I wouldn't sell my Bitcoin. November data shows inflation in the US has cooled down, but other countries still has double figures. Annually, some have 3-digit numbers. Shall we buy or sell?

[1] https://www.bls.gov/cpi/
[2] https://twitter.com/BitcoinMagazine/status/1602660521928540167

[EarnOnVictor]

In a few hours we will know. I am assuming it’ll be a surprise by +0.1%, the markets will tank and then they will recovered and during the fed rate itll be the opposite, markets will rally and then fade. And at the end of the week we will be at the same price as we are right now.

I don’t see it being any higher or lower than 0.2% so it won’t be a massive hit or miss. Should be a volatile week. Bitcoins ATM IV is increasing slightly due to the increased volatility expected.

A good analysis you have there, after all, you are clever enough to make your point so maturely. However, the US CPIs were released lower than expected by economists, and by virtue of that, BTC and other coins would rise for the rest of the week or more. That's the principle.

I think it's a bit odd to decide whether to buy or sell Bitcoin based on inflation, especially CPI, most especially US CPI.

Odd? I guess you are new in the investment environment, it's obvious you made the reply out of ignorance. Bitcoin is a risk-on market, there is nothing you can do about that. Or what do you think is causing the current selling of cryptos? It's the aftermath effect of the PPI released on Friday. Since it's higher, all risk-on assets, including crypto would start falling, that's the logic.

Yeah, it's odd. And since you seem to know a lot, tell me more about it. This month, the US CPI-U has increased 0.1%. As far as all items are concerned, except food and energy, the increase is 0.2%.^[1] I also read an update by the Bitcoin magazine that the "Energy, gasoline, electricity and utility gas prices" in the US are in deflation, as shown by the same CPI release.^[2] So what now is your position in the Bitcoin market?

The current selling of crypto is an "aftermath effect of the PPI?" So shall we now forget about the rest of other factors and direct our focus on a single country's index? Is the fall of FTX even irrelevant?

Although by now Bitcoin or crypto in general is already widely considered as a risk-on asset, shall we be looking at the US' monthly CPI to decide on our Bitcoin positions? Shall the inflation rate in the US the basis for our Bitcoin positions? How about my country's inflation rate? How about your country's inflation rate?

In November, my country's inflation rate has increased to 8.0%. Whatever the data in the US says, I wouldn't sell my Bitcoin. November data shows inflation in the US has cooled down, but other countries still has double figures. Annually, some have 3-digit numbers. Shall we buy or sell?

What are you saying? I guess you don't know the gist here as you are generalizing it and using the context of news to conclude here. Do you want to compare just two months of depreciation in CPIs to many months of appreciation in it? I bet not. And what I wrote was pure speculation which might be in line with the actual figure or not, my disclaimer was also attached.

My point was purely in line with economics where the producers' price could affect consumers' price in direct proportion. When you read the news, always digest it with what people say, and mind you, my point was made before the news, maybe a single month decrease in the CPI (then, before the last figure) could be called deflation as you seem to know better.