Excess M2 not creating inflation

You missed the point. This is not investment. This is more of a gamble. It was calculated gamble. You don't do this like any other investment. You keep a portfolio and risk 3 to 5% per play as you would in sports betting. As for the root call option, it was suggested as a high risk lotto play anyways. It was suggested at 40 cents back in april. 3 times it was recommended to average down by topping up. I first bought at 40 cents. Then some at 35 cents. Then some at 15 cents and i doubled the positions at 5 cents. I owned 150 contracts at avg price of about 15 cents for about $2250. When the price of these contracts reached $2, i sold 75 of the contracts and pocketed $15000. Other half i let it ride and now its back to around 30 cents. I am hoping it will squeeze up.  The guy gave a full explanation for the reason for this play. You don't just buy and sell any options. When playing out of the money options you have to play the volatility.  Yes, not all will pan out but that is why you need a good bankroll/money management strategy. You don't risk more than 3 to 5% of your bankroll when playing options like this. 

You cant throw out long shots like this in one or two you have to tell all the plays and you cannot promote a site or a service and believe me I noticed you did that and on this site there are many of you guys who have solicited for that site and we do not allow it.

You are welcome to associate here and list plays, participate and follow the rules and we welcome that but we do not allow you promoting or spamming at all. So if you suggest others go and pay for a service you wont be around here for long. On the other hand if you want to make threads, post actual stock plays or betting plays then we welcome that.

I am not promoting anything guy. Every quarter there are few plays. This quarter is almost ending and cashed enough plays to make hefty profit. Obviously all won't hit. Just wait till i post the plays for the 2nd quarter. I will post them as soon as i get them. THere will probably plenty of opportunities to get in even at lower than suggested price. If you play it right you can make a ton.

The website you mentioned has been spammed on our forums for years and is a paid service. I am not just creating drama rather you do not know the spamming we have faced from that site so I was NICELY suggesting that you enjoy Covers and follow the guidelines we require and one of them is to not promote or solicit.

Do you think the fed will hint at raising rates tomorrow? 

Currently in a btc long and thinking a hint will dump everything. 

Got your answer, but the ramp time is so long that they feel the inflation will have moved along and the baseline will return then in mid 2022 they can retract the verbage.

Who says that transitory inflation means a rate raise in two years? Someone that has little to no intention on raising them or at least is putting it off until core goes berzerk. They know a single rate raise would destroy the banks and their house of cards would fall and take the bloated bond and stock market with it...and corporate rates would buckle causing default for MANY companies hooked on no interest debt.

@wallstreetcappers

 I think you're the guy preaching to people on the street corner as they walk by.  Most of these members don't even know or understand what you're talking about. My laughable credentials:

-self taught through the internet on investing in the stock market, bonds, options (my options portion of the account had limited use due to my <$100,000 balance) investopedia.c o m   Never got into forex. Was not a fan of the leveraged accounts.. 

-took intro to macro and micro econ in college so I am familiar with the inflation terms

-took intro to business classes (sophomore level MAX, I was a biology major, just needed some other "easy" gen ed's)

I consider myself a 6 month-1 year trader and don't even touch that day trading crap.  I would and will not buy any stock under $10. "Back then" the commissions would kill the day trader's profits and the market spread made it unprofitable. Average, un-informed Joes see nothing but  but don't work out the comission fees when thinking about the trade. All they see is . Like a .10 cent stock will jump up to $1.. Yeah right..  That's like saying a $50 blue chip stock will jump up to $500 in a week. IT's possible but highly unlikely.. 

Good stuff though.  I will have to read this thread tomorrow after I come home from work.. 

https://twitter.com/raoulgmi/status/1431771957792497679?s=21

This made me think of this thread 

The original thread was made to discuss inflation in general not stock market prices or real estate prices. The twitter link references only the stock market and that is 100% correct and I state that and have stated this 1000 times. The inflation we are seeing is in speculative pockets and in areas where artificial interest rates impact pricing. So real estate has massive inflation and that is because the impact of the FED neutering interest rates has a direct result, so the FED keeps rates down and it directly benefits mortgage rates, thus their impact is amplified. The artificial interest rate benefit also hits financial markets because again the FED keeping rates here directly benefits margin/borrowing rates for institutional users of the FED facilities. So banks can borrow from unlimited FED at zero or less than 1% and speculate in bonds and stocks using leverage for a guaranteed return. These are direct benefits of FED policy. 

Inflation to the consumer has only existed in areas where the impacts of the FED are direct but especially given the extreme level of monetary policy the inflationary impact to the economy in general is extremely minimal and in my opinion the only reason there is inflation to the consumer now has nothing to do with the FED and everything to do with the supply function of the supply/demand curve. So in electronics the chip issue has to do with supply constraints for production and that is not a domestic issue and is actually partially an issue with using a just in time inventory approach. I have a neighbor who has worked in the semiconductor industry for 30 years and has worked at Intel for over 20 and I asked him how it is possible that a company large like Intel who has ten years of inventory needs mapped out could have issue with supply and he said it was due to JIT inventory and the supply chain is the bottleneck, so suppliers in countries where lockdowns were more extreme and the impact of the pandemic was heavier have not been able to maintain their parts of the supply chain and so Intel and most all other semi companies are bottlenecked with waiting for parts to complete production. 

The inflation we see as consumers is not from an excess of demand due to people having more money via lending from banks (creation of money multiplier) especially with the TRILLIONS of printing we have seen because banks are not cycling it through via lending, so real wages are not growing and there is not an excess of cash to chase supply, supply is reduced artificially and demand is not accelerating remotely to the degree of monetary creation from the FED.

So yes the inflation we see is in risk assets and real estate since those are the only categories where low rates directly benefit..and of course corps can float their buyback debt at rates never seen before and that also accelerates stock prices and risk asset inflation.

JUST IN - NY Federal Reserve now sees inflation at 5.2% in one year, 4% in three years; a series high with "large expected price rises" in food, rent, and medical costs.

For the level of printing and the length of time, 5% is zero nothing nada...just think what would happen if banks were lending the money and actually increasing the multiplier instead of hoarding it in the stock and bond market and parking it at the FED overnight freebie hotel?

Highest year in over 30 years 

The money supply is now 25% higher than it was a few years ago? 

That doesn’t have anything to do with inflation? 

Money supply has been ramping for well past a decade, you can find that out easily yet the impact of the historical multiplier is muted for the reasons stated. Inflation by definition is rising prices due to more demand than supply, that is the concept with regard to monetary supply. Inflation can come from a lack of supply of course but for the conversation about M2 and the impact of the FED ramping money supply the equation is about how the money multiplier concept is not having the historical impact because banks are not lending or circulating.

So if the FED prints and prints and prints but the circulation is limited to the stock market, the bond market and a minor impact on the real estate market (since lending rates are correlated to bond rates and LIBOR and thus FED funds rate) how can we expect monetary inflation when lending is not higher even close to the level of monetary policy increase and real wages over the last 20 years are not even close to increasing near the level of monetary policy?

Its a simple concept if you were curious, if you want to find out about the money multiplier effect its been around longer than you and I. The FED does not want inflation, they want to act as if it is controlled because if they wanted inflation they would mandate banks lend and they havent.

The only real leak on inflation that has to do with monetary policy is the increase in government spending, that is really the only outlet that impacts CPI and the little guy, so this last two to three years we have seen a larger than usual increase in government spending and the last year this spending has not just gone to the military complex or corporate buybacks but to the consumer, so inflation from that perspective for sure has been impacted and the FED suppressing rates helps government interest costs so they can borrow more and this admin has decided to use spending more on social programs and less on corporate freebies and wars.

One last comment, another reason for quarter to quarter inflation is the fact we had the opposite during Covid to a degree so balancing the last two years might change the reality and I would expect next year will be lower than this year. The number that came out today for inflation was lower than estimates and that is why you see the market dropping....the market does not like seeing less inflation because it gives the FED a reason to reduce bond purchases and not be as concerned, the number today was tepid enough not to spook anything and gives the FED a green light to ease off the gas a little.

Reuters ¡ª China's major banks have been notified by the housing authority that Evergrande Group won't be able to pay loan interest due Sept. 20, a media report says, underlining the broadening impact of the property developer's liquidity crisis

China's Lehman moment? They¡¯ll print money for the bail out? 

China moment maybe but we have seen other bailouts in the past, this will not have any US impact unless it cracks their market and that impacts other markets and lenders and then it spreads, so for sure it is a long shot. Their government wont allow a moment, they are not a "free market"

From 1980 to 2020 the Big Mac went from $0.50 to $8 and lost ~40% of its size

That¡¯s like a 2500% increase if you combine the size/price. 

Why?

I like this thread and have tried to learn from your perspective here 

Look at McDonalds stock price, that is why.

12 stock splits 

$1 stock in 1981 

$239 today 

 Stagflation possibly on the horizon... 

Long shot?  I don't think anyone really knows the affect this is going to have on the US.  Asia then Euro markets should be first so there should be warning signs ahead (if not already).  

Why wouldn't Xi make another short term sacrifice for long term gain?  He's been doing this policy wise for most of the year.  I wouldn't be so convinced he'll bail them out by the definition we think of as US style bail out.  Regulation and reorganization within the CCP perog is more like it. 

China is too proud to allow their country to be taken down by a property developer they would rather cover it up like all the other defaults than to be shamed in the arena of public perception.

The difference as I mentioned between Lehman and this is that the financial system is intertwined in our economy and the level of unknown leverage that existed with Lehman and the credit default swaps took the markets by surprise, it was a domino effect and due primarily to the financial system where a property developer is not a financial firm that could take down the entire banking system.

If the market were worried, truly worried then we would see the markets here buckle, the Yuan start to be stressed AND more importantly our Federal Reserve would be taking immediate action...public and large to stem the tide...no question about it if the FED were worried they would be out with their trumpet taking public meetings with other central banks as a sign of solidarity and to show the market that it will not cascade any further...I do not see the FED panicking at all as of yet.