I'm not an economist either, it was my field of study and my job is financial services which includes a lot of macroeconomic forecasting and scenario planning.

The way I see it you're conflating a few different things. PE is high and central bank QE will be having some effect, but that's an example of inflation in asset prices that could burst an asset price bubble and is not representative of inflation in consumer goods or house prices, which would be required for significant CPI or RPI inflation. Banks will be on the receiving end of most of the stimulus which will be used for accessible loans to SME's to pay their employees and bills. Even giving checks to every household wouldn't be likely to cause high inflation in the current crisis as it's replacing foregone income in many cases and would be used on continuing necessary expenditure like mortgage and food shopping, as opposed to speculative purchases like a house on negative equity for example.

This post was edited by dro94 on Apr 26 2020 05:16pm

yeah I wasn't proposing that the public distributed checks would be a significant cause of it, moreso the corporate fed injections. my question for you is this since you know more than I do about this:

dollar presently is being balanced by the oil prices, if that corrects dollar value should also correct again (downwards), QE + fed injections both will have a negative impact on this, correct? if so then just using linear logic wouldn't it be a safe correlation to say this resulted in depreciating the dollar

just to be clear when I used inflation and job loss together, I didn't mean they were connected as in both leading to inflation, but rather both leading to market correction. I understand your point that job loss does not translate to inflation

Inflation is a very real possibility when the economy starts to go full throttle again. You can't expect to shut in supply and once demand comes back online for that supply to magically be there immediately.

A very easy example is oil. Millions of barrels will and have come offline because mid & small sized firms that are leveraged that produce in high cost environments like the bakken or offshore will be wiped out. So lets say when demand snaps back in 12 months and everyone is traveling, consuming, etc, you might have close to pre corona consumption while the less economical suppliers that could barely survive in 40/barrel are out of business. What do you think happens to prices in that environment?

There are other very easy examples to point to. Google shortages of french fries or yeast. We bake our own bread and it's been impossible to find yeast in the store, if i want it i have to pay about a 1.5x online off amazon or ***

This post was edited by ofthevoid on Apr 26 2020 05:42pm

Correct. The former would push USD down relative to other countries and potentially be inflationary whereas the latter would be inflationary (I believe this is more likely to manifest in the stock and bond markets than in consumer goods for reasons explained in my previous post). Note the difference.

As demand for goods and services is so low now there isn't a high risk of inflation though. When I say it will be inflationary, I mean in the context of when demand is back to normal and money is changing hands frequently. I also think it will take a while for oil prices to increase back to normal considering the storage is at the highest level ever.

Unless you're in deep on forex markets why would you care if USD falls against the euro? You are investing in the US stock market presumably, USD's relative strength won't affect market returns much overall, even if it would for specific companies.

I'm not saying inflation won't happen, it's just quite easily controlled by central banks. They can issue bonds when they want.

Bazi was specifically talking about the possibility of high inflation, even hyperinflation. You've got to go back to the Weimar republic or dirt poor authoritarian states like Zimbabwe to find examples of hyperinflation.

I stand by my point that inflation risk is low.

yeah the actual strength of the dollar is of minimal concern to me, my main interest in it is just as a mechanism to move the market. basically looking for evidence to support my thesis that market will majorly correct and we haven't seen low yet.

Time for Spy puts. 290 is a little egregious.

I’m waiting til 293. Get calls when I do cuZ it will probably go to 300 when I place my bet lol

Correct in the short term. I think we are going to hit the limits of fiat currency in my lifetime.

Didn't hit my limit buy before it started fading :(.

At least i got in for a 110 DIS put already up 10% on it.