Inflation

PRCD

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Feb 25, 2020
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this

for the first time Debit Card spend has outdone Credit Card spend.
Now that's a telling point.
the supply chain cannot keep up with the demand generated by people buying tons of crap
people buying tons of crap was a way for them to deal with the frustration and restrictions of the pandemic but all these demand buyers which is the current engine of the US economy forgot that about the negative impact of the pandemic to the supply side. Remember when there was a meat crisis last year? Multiply that by every type of goods and you can see why things go up with scarcity.

Quit buying crap and maybe the supply side can catch up.
but in the US we are programmed to buy buy buy buy buy buy buy
for happiness
TV and the internet made it too easy...One click
Right? I’m programmed to buy food at the grocery store which is why groceries are up 20%. Do you have evidence that this is consumer demand side inflation rather than money supply side? Besides UMC corporate yuppies such as yourself, is everyone out buying more dumb sh!t or are prices up because there is more money chasing the same number of goods while demand remains the same? It’s definitely the matter in my case. And my neighbors’ case. They’re Lebanese and have already lived through a ton of inflation and know what it’s like. In Lebanon right now there’s such rampant inflation that people can’t afford food. How exactly is that due to people just buying more dumb sh!t?

Thanks for this nuclear level Boomer gaslighting
 
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casa_mugrienta

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Apr 13, 2008
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for the first time Debit Card spend has outdone Credit Card spend.
Now that's a telling point

the supply chain cannot keep up with the demand generated by people buying tons of crap
people buying tons of crap was a way for them to deal with the frustration and restrictions of the pandemic but all these demand buyers which is the current engine of the US economy forgot that about the negative impact of the pandemic to the supply side. Remember when there was a meat crisis last year? Multiply that by every type of goods and you can see why things go up with scarcity.

Quit buying crap and maybe the supply side can catch up.
but in the US we are programmed to buy buy buy buy buy buy buy
for happiness
TV and the internet made it too easy...One click
Right? I’m programmed to buy food at the grocery store which is why groceries are up 20%. Do you have evidence that this is consumer demand side inflation rather than money supply side? Besides UMC corporate yuppies such as yourself, is everyone out buying more dumb sh!t or are prices up because there is more money chasing the same number of goods while demand remains the same? It’s definitely the matter in my case. And my neighbors’ case. They’re Lebanese and have already lived through a ton of inflation and know what it’s like. In Lebanon right now there’s such rampant inflation that people can’t afford food. How exactly is that due to people just buying more dumb sh!t?

Thanks for this nuclear level Boomer gaslighting
You're both right.

A) When you print a bunch of money it's inflationary. Period.

B) A lot of people are still afraid to leave the house. More than you would think. The money they normally spent to do sh!t they are using to buy sh!t.

C) The effect of work from home
a) less commuting costs

b) Many people can work from anywhere and have relocated - they can get paid a Bay Area salary but live in Billings, Montana. This frees up cash to spend on stuff. Lots of it.

c) I'm starting to hear some full-time work from homers have so much free time/boredom they are picking up second full-time work from home jobs that pay the equivalent of their primary job. So they are doubling their income...more money to spend on stuff. Lots more money.
 
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PRCD

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You're both right.

A) When you print a bunch of money it's inflationary. Period.

B) A lot of people are still afraid to leave the house. More than you would think. The money they normally spent to do sh!t they are using to buy sh!t.

C) The effect of work from home
a) less commuting costs

b) Many people can work from anywhere and have relocated - they can get paid a Bay Area salary but live in Billings, Montana. This frees up cash to spend on stuff. Lots of it.

c) I'm starting to hear some full-time work from homers have so much free time/boredom they are picking up second full-time work from home jobs that pay the equivalent of their primary job. So they are doubling their income...more money to spend on stuff. Lots more money.
There aren't that many people pulling down that kind of money in this country. Look at the BLS wage distribution. At least 4/5ths of the economy spends most money on basics. Granted, we need to learn frugality and there are people buying dumb stuff, but the stimulus payments didn't suddenly send most people out to buy tons of dumb sh1t. In fact, most people are earning less this year than last due to inflation and the price of basics has gone up at least 6.8%. IOW, we're all HOARDING cash rather than spending it.

This is a better explanation of inflation:

Let's look at two categories of goods discussed ITT: groceries and housing. Are groceries up 20% because we've used our meager Bidenbux - an unreliable periodic payment - to increase our calorie consumption 20%? Maybe we ate at restaurants a bit more in the summer, but for the most part restaurants were closed and when people saw grocery prices increasing, they started cutting back. Groceries purchases don't change much for most families. Rather, when it comes to groceries, people have had to spend more to keep the level of groceries the same. It's like you're running on a treadmill and someone turns up the speed.

How about housing. Were people using their Bidenbux to buy more/better houses? I don't think so. Rather BlackRock and other large financial institutions have been buying up housing. They can service the debt with future Fed stimulus in a way families can't with meager bidenbuck stimulus. What about renters. Are they renting more/better housing? Most renters have seen a rent increase for the same supply of housing with the same population. Many have moved back home. Meanwhile, according to my Lebanese neighbor, his daughter is now paying $1500 a month for a 1 BR apartment in Minneapolis as a medical resident.

In both categories of goods, I doubt that Joe Sixpack is buying more stuff. The rich are certainly getting richer, but everyone else is paying more money to maintain the same quality of life much like in poorer countries.
 
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casa_mugrienta

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There aren't that many people pulling down that kind of money in this country. Look at the BLS wage distribution. At least 4/5ths of the economy spends most money on basics. Granted, we need to learn frugality and there are people buying dumb stuff, but the stimulus payments didn't suddenly send most people out to buy tons of dumb sh1t. In fact, most people are earning less this year than last due to inflation and the price of basics has gone up at least 6.8%. IOW, we're all HOARDING cash rather than spending it.

This is a better explanation of inflation:

Let's look at two categories of goods discussed ITT: groceries and housing. Are groceries up 20% because we've used our meager Bidenbux - an unreliable periodic payment - to increase our calorie consumption 20%? Maybe we ate at restaurants a bit more in the summer, but for the most part restaurants were closed and when people saw grocery prices increasing, they started cutting back. Groceries purchases don't change much for most families. Rather, when it comes to groceries, people have had to spend more to keep the level of groceries the same. It's like you're running on a treadmill and someone turns up the speed.

How about housing. Were people using their Bidenbux to buy more/better houses? I don't think so. Rather BlackRock and other large financial institutions have been buying up housing. They can service the debt with future Fed stimulus in a way families can't with meager bidenbuck stimulus. What about renters. Are they renting more/better housing? Most renters have seen a rent increase for the same supply of housing with the same population. Many have moved back home. Meanwhile, according to my Lebanese neighbor, his daughter is now paying $1500 a month for a 1 BR apartment in Minneapolis as a medical resident.

In both categories of goods, I doubt that Joe Sixpack is buying more stuff. The rich are certainly getting richer, but everyone else is paying more money to maintain the same quality of life much like in poorer countries.
Yes, it's obvious inflation - as well as shrinkflation - is happening.

At the same time I think you're way underestimating the amount of cash that is flowing into the "people buying sh!t" category simply because they now have additional cash on hand, or a backlog of cash from the earlier days of the pandemic when they were still afraid to go outside and "travel" meant a trip to the grocery.

Anecdotally we see it all over the place. For example, the surfboard market is still pumping. Shapers who were doing 4 week turnarounds are now doing 12 week turnarounds with "no guarantee" caveats. Epoxy or colorwork add a month or two. JS even stopped taking US orders.

Further, look at all the costly things people still aren't doing. Travel for instance.

International travel has always been expensive for 1st world travelers and has become a major hassle. Quarantines - most people can't do them on their two weeks vacation time. Gotta get tested to leave, gotta get tested to come back. Can't come back if you come back positive so you're gonna be missing work. I know two people that barely made a boat yesterday because their COVID tests came back "inconclusive" (WTF?). It was a mad scramble to get another last minute test to show negative.

So that's $5-10K in the pocket of the person who didn't travel international this past year that they will have to spend on other stuff.

Another factor - alcohol. People spend a ton of money on it. Regular bars, nightclubs with bar/bottle service. When you're no longer paying $12 for a g&t (you'll drink 10 of those during a night out) or $500 for a bottle of Grey Goose at a VIP table that has a $1000 minimum tab, you have lot of cash to spend elsewhere.

Cruises are a big deal in a lot of the country too, people easily drop $10K on those between their ticket, excursions, bar tab, spending money in port, etc. Not anymore.

There's been a shift in the way people are spending money and these avenues can't keep up with demand, so prices are going up. At the same time there's more cash in circulation and more cash in people's bank accounts to spend.
 

oneula

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the economy like everything is life is a delicate balance of supply and demand
the pandemic should have had the same slow down effect on both sides from it's impact.

But we unnaturally changed one side of the equation with all the artificial stimulus and protections without addressing the fact that all these folks staying home or out sick especially in the third world or developing countries where they had had less access to vaccines are not making stuff or getting stuff to make stuff while sick, dying or at home.

Kind of like all those on the low end or top end of the labor force who got to take a "timeout" and are now rethinking their work options after enjoying a year or two of vacation. And yes working from home is also a mini vacation whether you accept it or not compared to trucking it it everyday for the back and forth work commute. And all the things in the economy related to going to work and sending kids to school.

And now that's led to a service industry labor shortage that increasing the cost of labor just to attract and hold applicants who want more because the cost of living has gone up because they keep consuming while not even participating in the cycle of parts of the economy that supports the going to and from work process each day.

It's a vicious cycle that will need a slap in the back of the head to reset. The Fed raising rates will eventually make it harder to get loans and the credit card interest will starting popping up again. I remember when it rates were like 20% back in the good old days. Maybe there's enough excess corporate cash out there to backstop the harder to get lending options.

This all highlights the negatives of an economy that based off of consumer consumption versus production/manufacturing. It also highlights the actual artificial nature of the cost of things that we have had the illusion of living under for decades. People want to make "x" but only want to pay "y" in order to live at an inflated level of self worth.

Those opting out of that image of what's a "socially accepted" level of living are probably less affected by what's going. I give them props for seeing through it all.

How many autos(and type), TVs(and size), computers, online subscription services and online orders exists in each household. If you get that number, that should tell you where the inflation really is.
 

casa_mugrienta

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It's a vicious cycle that will need a slap in the back of the head to reset. The Fed raising rates will eventually make it harder to get loans and the credit card interest will starting popping up again.
If we look historically, the Fed will not raise interest rates.

Once you go so low it's really hard to go back up.

And when you try to go up, you end up coming down real quick.

For instance, Japan hasn't been above 2% since 1990. Click "max" to get a good visual of the past 40 or so years.

 

PRCD

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Yes, it's obvious inflation - as well as shrinkflation - is happening.
I have no doubt this is true for luxury goods such as surfboards. The 2/5ths of the labor pool is compensated more in stocks in companies which benefited from the stimulus. The bottom 3/5ths are compensated mostly in wages that haven't kept up with inflation.

Kind of like all those on the low end or top end of the labor force who got to take a "timeout" and are now rethinking their work options after enjoying a year or two of vacation. And yes working from home is also a mini vacation whether you accept it or not compared to trucking it it everyday for the back and forth work commute. And all the things in the economy related to going to work and sending kids to school.
No, the low end didn't take a timeout, they just got poorer relative to rising prices. Remember, the poor were considered "essential." The laptop class took two years of vacation.
And now that's led to a service industry labor shortage that increasing the cost of labor just to attract and hold applicants who want more because the cost of living has gone up because they keep consuming while not even participating in the cycle of parts of the economy that supports the going to and from work process each day.
Restaurants and hotels are luxury services. These have handled labor shortages by cutting daily room cleaning and having you seat yourself. Let's focus on the categories I mentioned that are essential and parts of the CPI: groceries and housing. Are groceries so much more expensive because of a labor shortage? Is so, that would mean that grocery stores had to raise compensation 10-20% to attract workers from other industries or unemployment compensation. Has that happened? If so, are ALL of the price hikes at the grocery store due to these compensation increases?

It's a vicious cycle that will need a slap in the back of the head to reset. The Fed raising rates will eventually make it harder to get loans and the credit card interest will starting popping up again. I remember when it rates were like 20% back in the good old days. Maybe there's enough excess corporate cash out there to backstop the harder to get lending options.
In theory they'll raise interest rates, in practice they won't.
This all highlights the negatives of an economy that based off of consumer consumption versus production/manufacturing. It also highlights the actual artificial nature of the cost of things that we have had the illusion of living under for decades. People want to make "x" but only want to pay "y" in order to live at an inflated level of self worth.
These are Boomer banker talking points of the upper middle class. Look at the cost of health insurance and housing for the other 3/5ths of the labor pool not compensated in stock.
Those opting out of that image of what's a "socially accepted" level of living are probably less affected by what's going. I give them props for seeing through it all.

How many autos(and type), TVs(and size), computers, online subscription services and online orders exists in each household. If you get that number, that should tell you where the inflation really is.
I DO opt out of all these things. I'm not going to get into the details of my net worth, but let's just say I can absorb some of this inflation with no loss in QoL. And I'm quite concerned. So are my richer Lebanese neighbors.
 

hammies

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Dude if you are drinking 10 g&t's in a night out you've got a problem.
Another factor - alcohol. People spend a ton of money on it. Regular bars, nightclubs with bar/bottle service. When you're no longer paying $12 for a g&t (you'll drink 10 of those during a night out) or $500 for a bottle of Grey Goose at a VIP table that has a $1000 minimum tab, you have lot of cash to spend elsewhere.
 

$kully

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When corporations are pulling in record profits can we just call it price gouging?



You’re paying more while they profit more and we all scream LETS GO BRANDON!
 

oneula

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it's all about the truckers
start there..
they are an important component in the economy
They've had/have a bad run lately

its easy to complain when you should be trying to fix things
how are you fixing the problem?
and don't say its too big, that's a cop out
you don't like how things are?
Then run for politics and change the system
cudos to those that do
 

PRCD

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Upper middle class - the 4th 5th of the labor pool. This is where Burnham's managerial class sits. It's hard to get them to understand something when their compensation depends on them not understanding it. Bankers, for example, will blame inflation on supply and demand because they are conduits for the Fed's monetary stimulus. Therefore, they refuse to see inflation as a monetary phenomenon.
 
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hammies

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Upper middle class - the 4th 5th of the labor pool. This is where Burnham's managerial class sits. It's hard to get them to understand something when their compensation depends on them not understanding it. Bankers, for example, will blame inflation on supply and demand because they are conduits for the Fed's monetary stimulus. Therefore, they refuse to see inflation as a monetary phenomenon.
If that's the case then those who have tendencies to distrust governments and trust private businesses will be more likely to blame inflation on the Fed or some governmental policy as opposed to the economics of supply vs demand.
 
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oneula

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well if any of you own stocks, you're the source of the problem.
unless you're self/employee owned, the need for profit is driven by shareholders or investors not the company and it's employees.

also if anyone's an accredited economist and not a day trader or internet sleuth of facts I'd like to hear your take. We get our input to make decisions from folks like UHERO and Paul Brewbaker.
The Fed is more about economic policy and governance than the day to day economy that runs off loans and lines of credit from financial institutions or the private sector.

Is the scarcity being artificially manipulated by some dark demon or a possible result of a bunch of little compounding factors related to the epidemic and a ever growing wallstreet black hole venturing on another cycle of collapse.

you know there's reason why we created the label ha'ole
Don't be another reason
 

Mr Doof

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well if any of you own stocks, you're the source of the problem.
Isn't there some (de)motivational poster in a Human Resources Department somewhere that says, "I am the problem and the solution"?

Edit:

Ah, here is the type of poster I am thinking of:

1639598817060.png
 
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PRCD

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well if any of you own stocks, you're the source of the problem. unless you're self/employee owned, the need for profit is driven by shareholders or investors not the company and it's employees.
You are constantly shifting the goalposts here, but I'll play along. Can Joe Sixpack just leave his money in the bank and save it for retirement, or will inflation erode it if he does? If he doesn't fund his own retirement, who does? What are the investment vehicles available to him? Is his responsibility for the problems we discuss as great as large institutional shareholders or the Fed?
also if anyone's an accredited economist and not a day trader or internet sleuth of facts I'd like to hear your take. We get our input to make decisions from folks like UHERO and Paul Brewbaker.
You gave several takes for which I asked clarification in two categories on the CPI. Your first take was, "People are running up their credit cards buying dumb stuff and trying to live rich!" It's quite possible people are running up the credit card to buy necessities in the face of inflation, but you never qualified this or explained it. Then you blamed the low end of the labor pool for the service industry shortage and told me to look into trucking. You never explained how these affected the price of groceries nor housing. In Lebanon where there is high inflation, there is also high unemployment. This sounds strangely similar, so it's like you're blaming the victim. Either way, you're all over the map.
The Fed is more about economic policy and governance than the day to day economy that runs off loans and lines of credit from financial institutions or the private sector.

Is the scarcity being artificially manipulated by some dark demon or a possible result of a bunch of little compounding factors related to the epidemic and a ever growing wallstreet black hole venturing on another cycle of collapse.
The Fed distributes new money through banks. This is how our money creation system works. The fact is the Fed printed trillions of dollars - $30 trillion in M3 which roughly doubled it. Printing too much money causes inflation. Everyone knows this. It's in economics textbooks including the new ones on MMT. Stop evading this.

you know there's reason why we created the label ha'ole
Don't be another reason
Come on, man, a corporate banker warning me not to be ha'ole. Do you think you can hang if we talk religion, or did you just intend to give me some managerial scolding then scoot?
 
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