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The INFLATION Thread


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5 minutes ago, Stealthycat said:

did anyone think that raising minimum wages so fast and raising taxes on the rich wouldn't result in higher goods and services ?

I mean really ... and the lower income people will be even poorer for it and wonder how in the world its happening 

its baffling to me :( 

It really doesn't appear that your hypothesis is the primary reason we are seeing these increases (so far).   At least not from what I've read or from most of the examples being shared so far.   Why do you see it differently?   Serious question.

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6 minutes ago, Stealthycat said:

did anyone think that raising minimum wages so fast and raising taxes on the rich wouldn't result in higher goods and services ?

I mean really ... and the lower income people will be even poorer for it and wonder how in the world its happening 

its baffling to me :( 

When did wages go up and when did we raise taxes on the rich?

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29 minutes ago, stlrams said:

I believe part of the problem is there was a global slow down in the supply chain due to the pandemic resulting in less supplies.  Now we have demand increasing putting pressure on prices. 

This is a big part too.  Tons of people haven't been working and now they are trying to staff back up.

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Posted (edited)
1 hour ago, Alex P Keaton said:

The question is whether or not A) this is widespread in all/most categories, B) this is a sign of pervasive future inflation or just a short-term blip as the economy recovers.  Since we all haven't gone through a global pandemic that massively distorts the economy recently, it's difficult to differentiate between the two.

That said, it sure seems like we are seeing huge spikes in the price of a wide range of goods and inputs......the price of lumber, for example, is insane right now.  Some of that is due to short-term issues like northern mills being temporarily offline, or Canada shutting down exports to the US.   It will stabilize eventually......supposedly.

Would be interested to hear the story behind beef/poultry/etc or coffee/sugar/corn.   

Just spitballing, but I do see lumber coming back down some.  The bottleneck is mills, not wood (tree farmers are getting low prices).  There is a huge amount of inflation on container ship costs which affects a lot of worldwide commodities - sugar, coffee, etc.  Those should moderate somewhat down the line.  The industrial commodities - silver, gold, steel probably don't crash back down.  Used cars is a bubble that will pop when Americans don't have govt. slush funds burning a hole in their pocket, but housing will stay very high - housing supply is incredibly low.

Edited by Sand
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41 minutes ago, Alex P Keaton said:

It really doesn't appear that your hypothesis is the primary reason we are seeing these increases (so far).   At least not from what I've read or from most of the examples being shared so far.   Why do you see it differently?   Serious question.

I'm a simple guy with simple thought

When a company's labor costs increase, they're not going to just bit the bullet and take lower profits - they're going to pass those costs to the consumer .... that's not hypothesis, its real

When has tax increases for the rich really ever resulted in rich having less money? Never is the answer - and part of that is new ways of avoiding taxations but another way is, shockingly, passing the tax increases on down the lines

 

but some people will call it all coincidence, they'll say it's global results or covid or blame it on Trump .... anything but realizing that Democrat policies might actually be the core problem and class warfare is real. Gotta keep those poor people poor right?

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46 minutes ago, Mile High said:

When did wages go up and when did we raise taxes on the rich?

over the past few years on wages and right now with taxes

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17 minutes ago, Sand said:

Just spitballing, but I do see lumber coming back down some.  The bottleneck is mills, not wood (tree farmers are getting low prices).  There is a huge amount of inflation on container ship costs which affects a lot of worldwide commodities - sugar, coffee, etc.  Those should moderate somewhat down the line.  The industrial commodities - silver, gold, steel probably don't crash back down.  Used cars is a bubble that will pop when Americans don't have govt. slush funds burning a hole in their pocket, but housing will stay very high - housing supply is incredibly low.

Thx for the reply.   I'm seeing/hearing the same thing on lumber.   Is that the whole story on used cars?  I've heard anecdotally that there are auto part supply chain issues affecting manufacturers' ability to churn out new cars.  Housing might stay high, but what is driving the low housing supply?  Is it a temporary, artificial decline in geographic mobility because fewer people moved during the pandemic?  Is it a flight from urban to suburban areas?   A flight from multi-family (e.g. apartments, condos) to single-family housing?   It's not clear to me what the underlying trends really are.

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4 minutes ago, Stealthycat said:

I'm a simple guy with simple thought

When a company's labor costs increase, they're not going to just bit the bullet and take lower profits - they're going to pass those costs to the consumer .... that's not hypothesis, its real

When has tax increases for the rich really ever resulted in rich having less money? Never is the answer - and part of that is new ways of avoiding taxations but another way is, shockingly, passing the tax increases on down the lines

 

but some people will call it all coincidence, they'll say it's global results or covid or blame it on Trump .... anything but realizing that Democrat policies might actually be the core problem and class warfare is real. Gotta keep those poor people poor right?

I'm not disagreeing with you that tax increases and minimum wage increases will lead to inflation.  I'm just asking out loud whether that is the #1 reason we are seeing inflation right now.   @Sand for example has offered reasons that are specific to individual products (e.g. lumber) that have nothing to do with the minimum wage or tax increases.

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3 hours ago, stlrams said:

What is your argument?

My argument was that currently it doesn’t  appear wages are driving these prices and that some places  having raised wages is good for the workers.  That I would love to see wages keep pace with inflation over the years to keep people being able to afford things. That they too are “every day people” and I want the American workforce to be well compensated.

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1 hour ago, stlrams said:

I believe part of the problem is there was a global slow down in the supply chain due to the pandemic resulting in less supplies.  Now we have demand increasing putting pressure on prices. 

I agree that is a large part of it...which is why I took exception to someone blaming $15 and hour talk.

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5 minutes ago, Alex P Keaton said:

I'm not disagreeing with you that tax increases and minimum wage increases will lead to inflation.  I'm just asking out loud whether that is the #1 reason we are seeing inflation right now.   @Sand for example has offered reasons that are specific to individual products (e.g. lumber) that have nothing to do with the minimum wage or tax increases.

Add in cars and computers right now and the shortages due to computer chips being in high demand.

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12 minutes ago, Stealthycat said:

over the past few years on wages and right now with taxes

So the pay raises are not suddenly happening and no taxes so far have been risen on the rich. 

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20 minutes ago, Alex P Keaton said:

Thx for the reply.   I'm seeing/hearing the same thing on lumber.   Is that the whole story on used cars?  I've heard anecdotally that there are auto part supply chain issues affecting manufacturers' ability to churn out new cars.  Housing might stay high, but what is driving the low housing supply?  Is it a temporary, artificial decline in geographic mobility because fewer people moved during the pandemic?  Is it a flight from urban to suburban areas?   A flight from multi-family (e.g. apartments, condos) to single-family housing?   It's not clear to me what the underlying trends really are.

Used cars - consumers have stimmie checks and can't wait to spend them.  What to spend them on?  Yeah - cars.  Americans love cars.  Love cars way above their income capability.  So cars they are buying in all shapes and forms.  When that money dries up used cars will come back down.  I suspect a lot.

Housing - in the last decade we built like 6M homes.  The four previous decades before that it was like 20-25M.  We've way underbuilt and now we've just got a ton of folks wanting to buy homes and not a supply.  This doesn't get unwound for quite a while, IMO.  Just not enough supply.  It may flatline or moderate, but I don't see it popping.  In fact, I'm in the process of selling my beach house.  The iron is hot and all that.

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27 minutes ago, Rubiobot said:

Workers ARE the every day people. 

My point was increasing the minimum doesn’t give people more purchasing power as all goods and services increase stripping out minimum wage hikes. 

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13 minutes ago, stlrams said:

My point was increasing the minimum doesn’t give people more purchasing power as all goods and services increase stripping out minimum wage hikes. 

This is essentially true, but it takes time, sometimes a lot of time. In the interim those on minimum wage would have more spending power. But you’re right that eventually it goes away, creating a new demand to raise minimum wage. 

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1 hour ago, Alex P Keaton said:

Fortunately I’m sure all that money went to people who are struggling to feed their families or pay rent......

There is a reason that used cars have gone absolutely ape####.  Money in hand must be spent, so they are.  

BTW, credit card debt is back in a big way - seems the stimmies are wearing off and folks are keeping up the spending.

47 minutes ago, Thunderlips said:

Alot of this started during Trumps last year.  Just sayin.......

1.  Stimulus monies started under DJT (not political, just fact).  2.  Economy was roaring back under DJT (again, just a fact).  3.  Fed continues to hold at ZIRP (DJT, JB, same-same over both).  4.  Folks are coming out of this pandemic with a strong desire to make up for lost time.  Think 1920s.

All of these combine to feed into this inflationary pressure.  I'm hoping to have enough assets that inflate along with this to keep ahead of the cost part of it.

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3 hours ago, Stealthycat said:

did anyone think that raising minimum wages so fast and raising taxes on the rich wouldn't result in higher goods and services ?

I mean really ... and the lower income people will be even poorer for it and wonder how in the world its happening 

its baffling to me :( 

Neither of these things happened yet I find this to be a very informative post. 

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2 hours ago, Mile High said:

So the pay raises are not suddenly happening and no taxes so far have been risen on the rich. 

wages have increased because of liberals pushing the laws and Biden's administration seems very happy to escalate that as well as punishing successful wage earners so while the latter isn't yet a reality, it soon will be

what % of a business's costs are labor? 

 

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12 minutes ago, Stealthycat said:

wages have increased because of liberals pushing the laws and Biden's administration seems very happy to escalate that as well as punishing successful wage earners so while the latter isn't yet a reality, it soon will be

what % of a business's costs are labor? 

 

https://www.paycor.com/resource-center/articles/minimum-wage-by-state/.

Most states are no where close to a $15  minimum wage.

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8 hours ago, sho nuff said:

Sure...but we are seeing the price of goods rise prior to wages.  So shouldn’t we also then want to see wages rise of goods already are?

Take wood as an example...is the price of wood rising correlated to a rise in wages?

Sorry, just getting back this now, hectic day.   Employers are now competeting with the government for labor.  If people are making $2600/month on unemployment in Michigan, why would they work for $10-15/hour?  One of the big winners in this is owner-operator truckers.  They can basically name their price if you want goods hauled - and that will affect price.  

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1 hour ago, Mile High said:

https://www.paycor.com/resource-center/articles/minimum-wage-by-state/.

Most states are no where close to a $15  minimum wage.

Market forces are pushing it to $15/hour and they still can't be filled.  Lets pay them $20/hour, just don't complain when the price of goods and services rise because of it.  

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6 minutes ago, FairWarning said:

Sorry, just getting back this now, hectic day.   Employers are now competeting with the government for labor.  If people are making $2600/month on unemployment in Michigan, why would they work for $10-15/hour?  One of the big winners in this is owner-operator truckers.  They can basically name their price if you want goods hauled - and that will affect price.  

Sure. There are issues there.  But this current inflation and prices we are seeing don’t seem to be related to wage increases.

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5 minutes ago, FairWarning said:

Market forces are pushing it to $15/hour and they still can't be filled.  Lets pay them $20/hour, just don't complain when the price of goods and services rise because of it.  

Its already rising...part of the complaint should legitimately be about the extension of unemployment.  But when we see that fizzle...we will see more of those jobs filled, no?

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1 minute ago, sho nuff said:

Its already rising...part of the complaint should legitimately be about the extension of unemployment.  But when we see that fizzle...we will see more of those jobs filled, no?

I would eliminate the extra money today and most everyone will be looking for a job tomorrow.  

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Posted (edited)
16 minutes ago, FairWarning said:
16 minutes ago, FairWarning said:

Market forces are pushing it to $15/hour and they still can't be filled.  Lets pay them $20/hour, just don't complain when the price of goods and services rise because of it.  

 

Bunch of selfish Americans not willing to work for minimum wage for the man.

Edited by Mile High
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The entrepreneurial spirit isn't exactly strong sitting on the couch collecting $650/week, unless you are referring to going to Wal-mart and buying toys to flip on eBay.

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3 minutes ago, FairWarning said:

The entrepreneurial spirit isn't exactly strong sitting on the couch collecting $650/week, unless you are referring to going to Wal-mart and buying toys to flip on eBay.

Bunch of ingrates. Not willing to go back to work for $8.25 an hour.

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Posted (edited)
18 minutes ago, FairWarning said:

You can pay them to do nothing then.  

Do we get to decide that? Maybe I wouldn't mind that a few Americans are having their lives better for once instead of my tax dollars going to fix a bridge in bum #### Montana I'll never drive on.

Edited by Mile High
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1 minute ago, Mile High said:

Do we get to decide that? Maybe I wouldn't mind that a few Americans are having their lives better for once instead of my tax dollars going to fix a bridge in bum #### Montana I'll never drive on.

I am far more likely to pay for a bridge than you with the gas taxes I pay - that money goes to the roads.  

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Want to amend my initial comment in this thread on the impacts of supply/demand to include "panic" by individuals (watch what happens with gas prices after this hacking fiasco) who aren't educated on the situation.  My mother just called me from NC asking me why everyone was in line to get gas.  That's North Carolina folks.....for a pipeline that services the NE.  We as a society cause more of our problems than any particular economic principle :lol: 

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14 hours ago, Alex P Keaton said:

I'm not disagreeing with you that tax increases and minimum wage increases will lead to inflation.  I'm just asking out loud whether that is the #1 reason we are seeing inflation right now.   @Sand for example has offered reasons that are specific to individual products (e.g. lumber) that have nothing to do with the minimum wage or tax increases.

On a macro level we’ve pumped tons of stimulus into the economy. Take the stimulus checks alone. Think about if just a fraction of that was spent by every American who received it. What percentage increase in consumer spending would it be?  So we have money in the economy that we essentially printed to prop up the economy. Unless the economy is extraordinarily weak it will lead to inflation just from the demand side. There are also supply chain disruptions due to Covid that is causing some of it. Take furniture for example and couches in particular. They are months in arrears as some chemicals used in fabric treatment apparently are being rationed to those companies due to them being used in masks etc. 

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Just now, parasaurolophus said:

Houses, used cars, lumber, inflatable pools, weight sets...

What are some of the other price spikes that have happened from covid? 

Sports memorabilia especially older cards and ticket stubs, some furniture items, rental cars due to fleet sales

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4 minutes ago, timschochet said:

Main problem there is supply. Some furniture stores have waiting time of 6 months or more. 

Yep. I’ve got a new rental condo we are about 5 months in now on the sofas and they just finally gave up and gave us higher dollar ones that matched our other furnishings to get it settled. We are still down barstools, chaise loungers, and a dresser. We also are now over two months in waiting on shutters. Got renters showing up at first of June so have to get it fixed. 

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