Has inflation pushed you over the edge?

[tranquility]

Originally Posted by DenverSteve

[/B]

What's causing the inflation (simply) is the cost of business is going up. That means that as manufacturing, materials and transportation costs increase, the final (retail) price of all affected products go up proportionally. When you choose to move from a manufacturing economy to an importing economy, you bow to the manufacturer's whose exports you import. There's no scam. The cost of manufacturing in a pandemic and transportation has driven prices up. The extra cost of ships sitting in harbors waiting for months to offload and imports waiting for trucks to transport them around the country for consumer use, raises prices to all end users. There's nothing to complain about, we all experience the same increases.

I'm typing tongue-in-cheek but if no one raises prices, then there wouldn't be a cascading effect. Dumb it down, say there are only 10 ppl in the world and they all make different widgets and have prescribed prices and costs, where did this inflation come from?

[wtwo3]

Originally Posted by TiMSport

On a side note, I have feared McDonald's fries ever since I watched "Supersize Me" years ago. Lol.

In case you never saw that, you should. Those damn fries NEVER change in appearance nor texture after many months of aging. There's something very unnatural about that.

Totally off topic but gonna have to raise my hand here...

1) Supersize me was grossly exaggerated and misleading. If it's still available, I urge you to watch "fathead", which more or less refutes everything in supersize me.

2) Yeah, McDonald's food doesn't go bad... but so does a lot of other food. For food to spoil it needs 2 things: moisture and air. During the cooking process a lot of the moisture is naturally removed through the use of high heat and salt. Then as it's exposed to air, evaporation occurs further removing moisture. So yeah, a McDonald's burger or fries may not rot, but a home cooked burger will also not rot, nor any food of similar property. McDonald's just gets the bad rap because it's an easy target.

[wtwo3]

Originally Posted by tranquility

I'm typing tongue-in-cheek but if no one raises prices, then there wouldn't be a cascading effect. Dumb it down, say there are only 10 ppl in the world and they all make different widgets and have prescribed prices and costs, where did this inflation come from?

I'll dumb it down for you.

Cost push inflation:
There are 10 widgets which cost $1 each to make and are sold sold at $2 each.

The people making the widgets demand higher pay, and as a result the cost of producing the widget is now $2. To maintain the profit, the widgets now have to be sold at $3 each. Inflation.

Demand-pull inflation:
There are 10 widgets which are sold at $2 each. There are 10 customers who want one widget each. All is well.

Those 10 customets are handed stimulus checks and now have extra money to spend, and they each want 2 widgets instead of 1. Only 10 can be produced. The company producing widgets sees an opportunity to maintain sales while increasing prices. Instead of selling 10 widgets at $2, they can sell 10 widgets at $3 because of increase in demand and make a higher profit. Inflation.

[DenverSteve]

Originally Posted by tranquility

... say there are only 10 ppl in the world and they all make different widgets and have prescribed prices and costs, where did this inflation come from?

You'll have to ask the other 9...........

[///d]

I'm slightly concerned about going home to the prices and shortages I keep reading about. I've been overseas for the military for almost a year and haven't had to worry about prices or anything. But at the same time, it is what it is and there is nothing I can do about it.

[tranquility]

Originally Posted by wtwo3

I'll dumb it down for you.

Cost push inflation:
There are 10 widgets which cost $1 each to make and are sold sold at $2 each.

The people making the widgets demand higher pay, and as a result the cost of producing the widget is now $2. To maintain the profit, the widgets now have to be sold at $3 each. Inflation.

Demand-pull inflation:
There are 10 widgets which are sold at $2 each. There are 10 customers who want one widget each. All is well.

Those 10 customets are handed stimulus checks and now have extra money to spend, and they each want 2 widgets instead of 1. Only 10 can be produced. The company producing widgets sees an opportunity to maintain sales while increasing prices. Instead of selling 10 widgets at $2, they can sell 10 widgets at $3 because of increase in demand and make a higher profit. Inflation.

Like the other poster, that's explaining the how but not the why. If it's the status quo, why are ppl suddenly demanding higher pay? Why are ppl getting stimulus checks? Kinda like the chicken-egg scenario as the source/cause is never determined. Many ppl describe inflation as reactionary, so who is the troublemaker who decided to rock the boat?

[vanguard8]

Originally Posted by M_Six

That's why we support the local food bank with a monthly donation. Probably the best option when it comes to "Think Globally, Act Locally."

We donate a turkey (or two) to the food bank around this time of year. Every little bit helps!

[vanguard8]

Originally Posted by M_Six

We grabbed lunch at a McD's today for the first time in months. Two quarter pounders and two medium fries came to just over $16. We were a bit surprised. I hadn't considered the minimum wage hike causing that, but you're probably right.

Hamburger is over $5. at my supermarket, making my 1/4 pounder cost ~ $2.00?

[King_Leonard]

Still over-tipping at restaurants, coffee shops, etc.
When should I go back to normal customary tipping?
Perhaps I'm part of the problem...

[ryan stewart]

Originally Posted by vanguard13

Hamburger is over $5. at my supermarket, making my 1/4 pounder cost ~ $2.00?

Yeah pretending this is wages 1:1 is asinine. That stuff is expensive in my state, which hasn't mandated a 15+ minimum wage. Beef is insanely high right now and labor is a small part of the cost of a burger.

[vreihen16]

Originally Posted by dreamingat30fps

Panera??? Of all the places the Panera employees make you feel horrible? I never go to Panera, I hate it, but the few times I’ve been it’s usually some snot nosed kids back there playing with their phones.

We went to Panera down in SC back in the spring. A soup, sandwich, salad entree, and two drinks cost us $38! I'd rather support a local deli than go back to Panera.....

[wtwo3]

Originally Posted by tranquility

Like the other poster, that's explaining the how but not the why. If it's the status quo, why are ppl suddenly demanding higher pay? Why are ppl getting stimulus checks? Kinda like the chicken-egg scenario as the source/cause is never determined. Many ppl describe inflation as reactionary, so who is the troublemaker who decided to rock the boat?

I don't know if demanding higher pay is a "sudden" thing. As for why people are demanding higher pay... well why do you ever want anything more than what you have now?

WHY inflation happens is because it's human nature to want more. Thats not a recent phenomenon. At its most basic level, when demand is higher than supply (regardless of reason for that imbalance) the value placed on those items becomes greater.

Perhaps what you're asking is, why does demand exceed supply sometimes and not other times? Well... shit happens. It's not a static value.

[2000cs]

Originally Posted by wtwo3

I don't know if demanding higher pay is a "sudden" thing. As for why people are demanding higher pay... well why do you ever want anything more than what you have now?

WHY inflation happens is because it's human nature to want more. Thats not a recent phenomenon. At its most basic level, when demand is higher than supply (regardless of reason for that imbalance) the value placed on those items becomes greater.

Perhaps what you're asking is, why does demand exceed supply sometimes and not other times? Well... shit happens. It's not a static value.

On higher pay, of course everyone wants that for themselves. But it isn’t given when the employer has the ability to replace at the same cost (in other words, a pool of available labor with the needed skills). This year a lot of restaurant and other workers decided not to return to the same jobs, leaving a shortage of available workers for those jobs. The employers had to raise pay to attract new workers -and this generally leads to existing employees demanding a similar increase. A minimum wage hike does the same thing. The great resignation fuels more of this across job categories and wage strata. So that’s more of the “why” to the original questions. We have something like 10 million open jobs in the USA now, so demand far exceeds supply (and yes, there is “friction” as not all unemployed are qualified/mobile or interested in those jobs)

Your explanations are spot on.

[ASAP]

There is a couple of things at play here-
1) Interest rates have not risen for years (drastic mistake by the Fed and both administrations).

2) A lot of pumping of money into the economy - not needed for a lot of reasons and a lot went into the wrong hands... rich hands and corporations in many ways.

3) Covid - which shut down some factories and workers that switched industries have not yet returned - this would have already been resolved had everyone played fair.

4) Price collusion - many industries are trying to starve smaller business to further level the playing game towards major corporations.

5) Demand - it rose, it however did not rise 2 fold like everyone think it did.

Basically everyone is playing everybody right now like a fiddle and taking max advantage of the situation to max profits. Think this will end anytime soon? You are drastically wrong and this will not be transitionary. Also know, that as prices rise, people want to work even less as it's even less worth it and things become further out of reach.

The only fix - sadly and I mean very sadly, a total collapse of the economy where we restart - kind of 2008 style.

[DenverSteve]

Originally Posted by tranquility

Like the other poster, that's explaining the how but not the why. If it's the status quo, why are ppl suddenly demanding higher pay? Why are ppl getting stimulus checks? Kinda like the chicken-egg scenario as the source/cause is never determined. Many ppl describe inflation as reactionary, so who is the troublemaker who decided to rock the boat?

People aren't suddenly demanding more money. People always do. The situation of gross underpayment for labor, like not paying servers a minimum or living wage, has always existed. When the majority of people are maintaining equilibrium not much happens but to answer the last question, COVID happened to upset the worldwide apple cart. Everyone was knocked out of their seats, much of the workforce - especially those at the bottom who were working 2-3 minimum-wage jobs lost all income during lockdowns and shutdowns. Businesses closed and people started to scramble. We're witnessing the fallout or, as you put it, the boat rocking. People also became more aware of issues (social, political, economical...) that showed just how many people are below an acceptable-living situation and they found solace with hundreds of thousands of people in similar situations because all of them were suddenly out of work, underpaid, under water, underinsured when they got sick..... and the boat started rocking. Generally speaking, when conditions are right, change happens.

[maul3d]

This may only get worse...

Klaus Schwab is literally masturbating as we speak.

[2000cs]

Originally Posted by ASAP

There is a couple of things at play here-
1) Interest rates have not risen for years (drastic mistake by the Fed and both administrations).

2) A lot of pumping of money into the economy - not needed for a lot of reasons and a lot went into the wrong hands... rich hands and corporations in many ways.

3) Covid - which shut down some factories and workers that switched industries have not yet returned - this would have already been resolved had everyone played fair.

4) Price collusion - many industries are trying to starve smaller business to further level the playing game towards major corporations.

5) Demand - it rose, it however did not rise 2 fold like everyone think it did.

Basically everyone is playing everybody right now like a fiddle and taking max advantage of the situation to max profits. Think this will end anytime soon? You are drastically wrong and this will not be transitionary. Also know, that as prices rise, people want to work even less as it's even less worth it and things become further out of reach.

The only fix - sadly and I mean very sadly, a total collapse of the economy where we restart - kind of 2008 style.

You identify several problems and then assert the only fix is total collapse? How about fixing the individual causes:

1. Tighten money supply, gently (Federal Reserve), including interest rate hike(s).
2. End fiscal stimulus (BBB is highly stimulative, kill it)
3. Increase supply where possible, fastest is to relax constricting regulations. US Oil production is one obvious area, perhaps trucking regulations esp in CA?
4. Eliminate mandates (OSHA and others) that result in even more labor shortages. Find a better way to achieve the public health goals.
5. Demand will self limit as prices rise faster than wages and people become sated (temporarily). In the past governments have tried rationing very unsuccessfully, so not worth intervening.

[ASAP]

Originally Posted by 2000cs

You identify several problems and then assert the only fix is total collapse? How about fixing the individual causes:

1. Tighten money supply, gently (Federal Reserve), including interest rate hike(s).
2. End fiscal stimulus (BBB is highly stimulative, kill it)
3. Increase supply where possible, fastest is to relax constricting regulations. US Oil production is one obvious area, perhaps trucking regulations esp in CA?
4. Eliminate mandates (OSHA and others) that result in even more labor shortages. Find a better way to achieve the public health goals.
5. Demand will self limit as prices rise faster than wages and people become sated (temporarily). In the past governments have tried rationing very unsuccessfully, so not worth intervening.

Between you and me... why do you think 1 and 2 have not happened yet?

They both need to happen right now at a violent rate... 1 hasn't happened for like 5-6 years and our economy has been flying.

Both Trump, Biden and just about everyone else in sight is scared of this happening...

I am under the impression you would see a recession if it did... then perhaps an economic collapse due to massive asset bubbles?

[King Rudi]

Originally Posted by Mein11

If anything I'm just annoyed at the lack of raises from my company the past two years while getting 3x the responsibilities, which means getting paid LESS while prices are going up.

First world problem, so can't complain (too) much.

Same. I'm still in better shape than most, but it doesn't mean the stress isn't felt.

[Our03z4]

Originally Posted by 2000cs

You identify several problems and then assert the only fix is total collapse? How about fixing the individual causes:

1. Tighten money supply, gently (Federal Reserve), including interest rate hike(s).
2. End fiscal stimulus (BBB is highly stimulative, kill it)
3. Increase supply where possible, fastest is to relax constricting regulations. US Oil production is one obvious area, perhaps trucking regulations esp in CA?
4. Eliminate mandates (OSHA and others) that result in even more labor shortages. Find a better way to achieve the public health goals.
5. Demand will self limit as prices rise faster than wages and people become sated (temporarily). In the past governments have tried rationing very unsuccessfully, so not worth intervening.

Totally agree! Let the chips fall as they may, short term pain (collapse) for long term gain. Supplies for my businesses are absolutely out of control, seeing price increases of sometimes 30% in a few weeks. Poly and PVC piping have almost doubled in price. Suppliers recommend only a 10 to 14 day bid window. This can only last so long.

[2000cs]

Originally Posted by ASAP

Between you and me... why do you think 1 and 2 have not happened yet?

They both need to happen right now at a violent rate... 1 hasn't happened for like 5-6 years and our economy has been flying.

Both Trump, Biden and just about everyone else in sight is scared of this happening...

I am under the impression you would see a recession if it did... then perhaps an economic collapse due to massive asset bubbles?

1. because the Fed was caught by surprise by the inflation, and still wants us to believe it is “transitory”. I think this is classic “jawboning” and the Fed knows inflation is a bigger and more persistent problem than they are letting on. But if they pull the trigger too early on rate increases, they fear the recovery will stall or they’ll push the economy into recession. So they’re going slow. Secondarily, they probably want to see the fiscal actions by congress, which they may need to counter with monetary policy.

2. Because this administration believes it was voted in to enact major social program expansions and all politicians believe they can buy votes via pork-barrel legislation. There is really no check on congress’ spending any more as both parties benefit. Not trying to start a political debate, just my sense of how things operate. But even if these programs are well intentioned and even needed (certainly everything in BBB is not, but let’s run with the assumption), they are highly stimulative. In an economy that is beyond “full employment” because there are far more open jobs than job seekers, fiscal stimulation is pretty much all inflationary.

My own view is inflation is going to be with us for at least a few years (definitely past the mid-terms), although it should moderate to the 3-4% level as specific crunches are eased (lumber, chips, etc). There is a small possibility it could fall to the levels we’ve seen for the past two decades, but I think a greater possibility it will run higher than I currently expect.

[Tyga11]

Originally Posted by dreamingat30fps

Panera??? Of all the places the Panera employees make you feel horrible? I never go to Panera, I hate it, but the few times I’ve been it’s usually some snot nosed kids back there playing with their phones. I feel bad for the guys working at the car wash in the summer heat or the servers at the local Italian restaurant that gets packed every night with hundreds of old grumpy curmudgeons.

In my area, they are very hard working employees. There is also a major issue of people stealing the food on the counters (when you place a pick up order, they normally put the food on tables)