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      12-02-2021, 08:33 AM   #62
DETRoadster
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Quote:
Originally Posted by 2000cs View Post
On the question of whether inflation has peaked, I would want to look at where prices are up specifically, to judge if they are done or continuing. For example, oil being up means plastics, gasoline, diesel, propane and natural gas will be up. That means any product that uses these as inputs, or for transportation/delivery will be up. This is a cascading inflationary pressure so the oil increases will percolate for some time. Oil, by the way, appears to have peaked, but its effect has likely not.

On the other hand, an increase in finished products, like food and furniture etc, would not percolate except to the extent those increases are so wide-spread that they result in wage increases, and the percolation begins anew.

My sense is inflation has probably either peaked or is near a peak, especially with the Fed focusing on it again. But I think it will remain near current levels for some time as the effects discussed above work their way through the economy.
Raw materials costs are up virtually across the board. My suppliers in China are paying 30% more for stainless steel. Zinc and Aluminum are up 50%. Labor in China is up and until recently production was being held artificially low by mandatory power limits forcing factories to shut down. And this container thing is bullshit. I've got a container worth of product at our factory that's been hanging out on the dock for 2 weeks waiting for a chassis to come pick it up but the port of Yantian is so backed up they are throttling containers coming in. Nevermind the bullshit on this side once the boat actually shows up. We've switched to rail going out of China for our EU customers but even that is seeing 2 to 3 week delays and crippling cost increases. All told our cost to manufacture and ship product is up 30% vs. 2019. We have to pass at least a portion of those costs on. Everyone who manufactures anything and then transports it is in the same situation. I just dont see this as transitory. Not in the next 12 months anyway. There's just too many interrelated variables that all need to chill out before costs and then prices, come back down.
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