Suncor Energy Inc T.SU

Canada’s true inflation rate

[Torontojay]

If one wants to know the real inflation rate instead of the bogus numbers the government spits out, all you have to do is figure out how much homes have risen in the last decade and you get a "true" inflation rate. Home prices tend to follow wages which tends to track inflation. This is a better indication of the decline in purchasing power  even well before the pandemic. We've been lied to for many years and they continue to get away with telling people that everything is just fine. 

Not only is the inflation figure an outright lie, the packaging at the grocery stores have been shrinking too. We have companies increasing prices and shrinking the packaging simultaneously. How do you think StatsCan handles that kind of information? How convenient for statisticians to add used car prices in the basket of CPI goods just to capture car prices on its way down. They consistently change the cpi basket to make the headline numbers appear better than they really are. 

Anyway, all one needs to do is figure out how much home prices in Canada rise every year and now you've captured the true inflation rate. 

My rant for the day.

[mrbb]

and rent September 2023 Rentals.ca Report

[mrbb]

more liberal taxes will reduce inflation. just like how carbon tax reduces climate change Canada could tax big grocery chains over rising food prices - Trudeau (msn.com)

[Experienced]

Posted quite some time ago that the way inflation was calculated changed in 1982 from calculating the change in the price for a fixed basket of goods to what was a called a standard of living approach.  The standard of living approach had as a primary objective to reduce the calculated inflation number. In short, the way it works is for example if the price of beef goes up a lot and the

[Experienced]

Jay....your last comment is certainly worth noting. About 20 years ago after the last of our kids moved out on their own, my wife and I decided to downsize and move to a smaller home.  In that intervening time, the current market value of our home has more than tripled while the CPI has gone up 50%.

[matt2018]

Can't really include residential real estate in these numbers. Serviced land to build new homes is not something you can manufacture more of. There's not much left to be had in the surrounding area's of the most populated cities so naturally the values are just going to keep going higher.  Not enough supply for the growing pop. Higher interest rates are certainly slowing down home

[Torontojay]

Hi Matt.  Inflation can be plotted using a simple supply and demand graph. All else being equal, if demand is constant and supply is shrinking (land is finite) then home prices go up. If demand is increasing (population growth) and supply is shrinking, then home prices rise even more. This is one of the reasons why investing in real estate is a great inflation hedge because it tends to

[matt2018]

thanks TJ.  Interesting stats.  No easy fix there.  Keep rates higher for longer and most don't have income to qualify for mortgage as banks criteria has gotten tougher to go along with the increased carrying costs. Drop the rates and the home prices will make their way higher again. With Oil price, I believe a bottom of sorts is settling in.  Few want to take on more debt

[liljohnnyjoke]

Oil has gone from @ $68 in July to $91 in mid September and looks to be headed to $100 near term driven by a fabricated oil shortage and Hedge funds using that to continuously drie prices up. So oil prices will be up +40% in a couple months. Of course the Fed doesnt factor energy prices in to inflation so will likely not increase rates at Sept meeting. But wait until they get the inflation numbers

[matt2018]

What do you mean by "fabricated oil shortage"? Are you saying the weekly EIA reports are bogus? If sleepy Joe hadn't drawn the 180M bbls out of the SPR in the last year and a half and those 180M bbls had to be drawn from regular Commercial stocks to meet the demand, price of oil would likely now be closer to US$150+ bbl.

[mrbb]

late to the convo. i have problem with lilhjohhnyjoke post too.  If he believe oil shortage is fabricated, then i can also say oil surplus can be fabricated too. Biden can release all of the remaining SPR and drive oil price down, for the short term.  There are also the medium term, and long term aspect of oil when discussing oil supply and its price. 

[liljohnnyjoke]

if the economy is as robust as they state they would normally have to be increasing output to try and meet demand and oil price would still be going up, not making big cuts to supply to prop prices up. and part of that is likely revenge on Biden for trying to dictate world oil prices himself.

[matt2018]

Its about the supply meeting the demand. For 2023 world demand is up appr 2.2M bbl/day to appr 102.2M bbl/day. Opec is expecting appr same increase of 2.2M bbl/day on top of that for 2024. Sure there is capacity for some to ramp up even higher. Same could be said for many products. Coco-Cola plants around the world could probably produce more Coke than they presently produce if the demand for it

[Experienced]

Matt..good question One thing that you need to keep in mind is the activity of people trading in oil futures market.  This market is actually much larger than the physical market. Their activity can have a big effect on the EIA numbers. Right now, the oil futures market is in backwardation and so those in the oil futures market are reducing their oil inventories and selling off their stored