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2021 - Is inflation finally back in the conversation?

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41 minutes ago, Snake Diggity said:

Although I do also think more and more that inflation is also reflecting corporate opportunism, not just supply chain issues.

As someone who runs a business, I can tell you that supply chain issues and rising costs are real. I wish we were just jacking our prices up to make more profit...

Rarely a day goes by that I don't hear from a supplier with an increase. It's real, and it's not spectacular. 

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1 minute ago, Cheeseweasel said:

As someone who runs a business, I can tell you that supply chain issues and rising costs are real. I wish we were just jacking our prices up to make more profit...

Rarely a day goes by that I don't hear from a supplier with an increase. It's real, and it's not spectacular. 

Don’t get me wrong I still think supply issues represent the bulk of the cause of inflation.  I am just seeing signs that it is being supplemented by opportunism and that there are cases where companies are raising prices beyond what is warranted by their increased costs.  In some cases that is just testing the margins the market will bear, but in others it may just be companies trying to get ahead of projected cost increases.

25 minutes ago, Snake Diggity said:

but in others it may just be companies trying to get ahead of projected cost increases.

Possibly. If you can't sell on "spot price" you have to fudge a bit. We've had several customers come to us asking if we could hold prices thru the summer. We said "sure" if you can promise us our prices won't go up.

2 hours ago, Immaculate Vibes said:

 

Maybe I’m getting old enough I can’t distinguish those ages anymore, but at first glance….
 

chris remake GIF

4 hours ago, Cheeseweasel said:

I wish we were just jacking our prices up to make more profit...

Rarely a day goes by that I don't hear from a supplier with an increase. It's real, and it's not spectacular. 

Maybe your suppliers are just jacking up prices to make more profit.

8 minutes ago, Fudge Nuggets said:

Maybe your suppliers are just jacking up prices to make more profit.

That’s right. Need to lower costs. 

I won’t link the interview because CR but one Senator on cnn interview just agreed with assessment that we could see $300 oil after next round of sanctions come up. Also said we’ll be in a global energy crisis. I wasnt alive for much of the 70s but we may get to see something similar again here. 

16 minutes ago, Immaculate Vibes said:

I wasnt alive for much of the 70s but we may get to see something similar again here. 

The music was great. The fashion was weird. 

59 minutes ago, Immaculate Vibes said:

I won’t link the interview because CR but one Senator on cnn interview just agreed with assessment that we could see $300 oil after next round of sanctions come up. Also said we’ll be in a global energy crisis. I wasnt alive for much of the 70s but we may get to see something similar again here. 

Would that even equal the 70s prices when adjusted for inflation?  Didn’t oil hit $100 back then?

Wow. Ok. Was not quite alive. One of the older guys around here seems to remember it in the 100s, and he’s not an idiot. Guess that’s what you get for getting old. 

2 hours ago, Immaculate Vibes said:

I won’t link the interview because CR but one Senator on cnn interview just agreed with assessment that we could see $300 oil after next round of sanctions come up.

So can I order my new F Tree Fiddy or nah?

7.9% inflation, unemployment is sub 4%, the Fed themselves have said that they were slow to react...

And rates are still at 0%.

I feel like I'm taking crazy pills.

22 minutes ago, FirstTimeCaller said:

7.9% inflation, unemployment is sub 4%, the Fed themselves have said that they were slow to react...

And rates are still at 0%.

I feel like I'm taking crazy pills.

Some dual mandate. 

21 minutes ago, Cheeseweasel said:

"Transitory" 

Exactly. Epic policy blunder. Now we’re running very hot heading into an inflationary geopolitical conflict. We live in “interesting” times. 

1 minute ago, StruggleBus said:

It will end any day now!

2 weeks to flatten the rate curve!

19 minutes ago, Immaculate Vibes said:

Some dual mandate. 

Exactly. Epic policy blunder. Now we’re running very hot heading into an inflationary geopolitical conflict. We live in “interesting” times. 

it is time for us to do what we have been doing, and the time is now

CNBC should listen to Barry Habib.  He was saying 7.9 all week. He nailed it again.  The guy is a witch.  I can help pitch in for their subscription if that's the problem...

The thought last month was that this was going to be the peak YOY number. Not sure if that is true anymore, with commodities pricing being so awesome. I think I'm going to go sit in a bath tub with a toaster plugged in.  

8 minutes ago, bernorange said:

Prices are rising mostly because of supply chain issues. 

We shot ourselves in the foot and are complaining about the pain.

31 minutes ago, bernorange said:

I'm not really so sure that we are truly "running hot".  Prices are rising mostly because of supply chain issues.  The velocity of money appears to be down.

https://fred.stlouisfed.org/categories/32242

 

I mean, the number is the number, and you know as well as anyone that it’s structured to not really capture the increased cost of living. 
 

As for supply chain contributions, a couple times I’ve shared the link from the IMF that attributed 1% of last year’s number to it. 

The CPI reading is unimportant to me because I, as a sophisticate, do not eat Frankfurters or canned meats.

 

image.thumb.png.b754f1b2dd0e8200bf728f23e69c9be6.png

22 minutes ago, Cheeseweasel said:

We shot ourselves in the foot ...

Covid created some supply chain issues with people getting sick and having to quarantine (or go to the hospital and/or die).  There were disruptions in labor.

Government response to Covid hurt a lot of retail businesses (including entertainment, travel, etc.).  But I don't know that this really impacted supply chain issues for manufacturing/processing other than maybe causing companies to slow production/spending out of caution.

Russia/Ukraine war is disrupting commodity markets (oil, wheat, etc.).  That either is or is going to be a huge issue for manufactiring and processing supply chains.

My point is that the two biggest factors in the supply chain boogaloo were largely force majeure as far as America (people or government) are concerned.  While we can argue over the reasonableness of various govco responses to Covid, I'm not so sure they really were significant factors compared to the actual problems with Covid itself and the Russia/Ukraine war.

So anyway, the report released today is measured from February.  Next month's report when it takes into account recent energy prices is gonna blow this sucker off the roof.

 

 

13 minutes ago, 52-80 said:

So anyway, the report released today is measured from February.  Next month's report when it takes into account recent energy prices is gonna blow this sucker off the roof.

 

 

Yeah, no doubt. But I'm sure 0.25% will be the salve.

10 minutes ago, Immaculate Vibes said:

I mean, the number is the number, and you know as well as anyone that it’s structured to not really capture the increased cost of living. 

As for supply chain contributions, a couple times I’ve shared the link from the IMF that attributed 1% of last year’s number to it. 

Yes, the CPI is reflecting an inflation in the cost of goods/services (not housing).  I believe this is largely due to supply chain problems (input costs going up, labor shortages).  I didn't see your IMF link though.  I'd be interested to see their work.  That said, I haven't seen any analysis indicating that expansive monetary policy is driving the inflation in the cost of goods/services.  Most of the monetary policy excess seems to have fueled an investment bubble (equities and more speculative things like crypto).

Usually, velocity of money increases as inflation rises.  I'm not sure we are seeing that yet (St. Louis Fed reporting is quarterly, so we don't have up to date info on 2022 yet).

5 minutes ago, bernorange said:

Yes, the CPI is reflecting an inflation in the cost of goods/services (not housing).  I believe this is largely due to supply chain problems (input costs going up, labor shortages).  I didn't see your IMF link though.  I'd be interested to see their work.  That said, I haven't seen any analysis indicating that expansive monetary policy is driving the inflation in the cost of goods/services.  Most of the monetary policy excess seems to have fueled an investment bubble (equities and more speculative things like crypto).

Usually, velocity of money increases as inflation rises.  I'm not sure we are seeing that yet (St. Louis Fed reporting is quarterly, so we don't have up to date info on 2022 yet).

 

17 minutes ago, bernorange said:

Covid created some supply chain issues with people getting sick and having to quarantine (or go to the hospital and/or die).  There were disruptions in labor.

Government response to Covid hurt a lot of retail businesses (including entertainment, travel, etc.).  But I don't know that this really impacted supply chain issues for manufacturing/processing other than maybe causing companies to slow production/spending out of caution.

Russia/Ukraine war is disrupting commodity markets (oil, wheat, etc.).  That either is or is going to be a huge issue for manufactiring and processing supply chains.

My point is that the two biggest factors in the supply chain boogaloo were largely force majeure as far as America (people or government) are concerned.  While we can argue over the reasonableness of various govco responses to Covid, I'm not so sure they really were significant factors compared to the actual problems with Covid itself and the Russia/Ukraine war.

 

2 minutes ago, bernorange said:

Yes, the CPI is reflecting an inflation in the cost of goods/services (not housing).  I believe this is largely due to supply chain problems (input costs going up, labor shortages).

CPI takes in a heavy component of Housing/Shelter, as "rent" or "rent-equivalent."  

We can and should accept that inflation is a confluence of ALL these things: monetary policy (qe, zirp), fiscal policy (stimuli, overspending), health policies (lockdowns), the virus, the war, the energy policy.

It's made worse by them all compounding simultaneously.  What's maddening is the political double-speak in refusing to accept that, and just cherry picking single points.  Cloak Roomers brushing it off their party, but fine when they claim a 10c victory in the drop of gas price.  Or just pointing it at the Russians, as if this war kicked a year ago...

 

image.thumb.png.6a065dfa48a5e8370ac839a1b3feabbe.png 

13 minutes ago, Cheeseweasel said:

So the rest of it is the FED's fault. Cool.

I think a lot of it here at home is that consumers have gone insane. Retail sales rocketed way above trend and have stayed there. Too many dollars facing too few goods.

IUSRRS_chart.png

 

10 minutes ago, FirstTimeCaller said:

think a lot of it here at home is that consumers have gone insane.

Free money!

My pool cleaning company: cost for a bucket of chlorine was $75 as of August this past year and is now $210.

when companies raise prices it’s usually in response to the material costs.

40 minutes ago, Immaculate Vibes said:

<IMF Tweet>

Their analysis covers global GDP and, presumably, global inflation.  I wonder if they have published analysis more specific to just the USA.

OK.  So I read a bit of the IMF page linked in the tweet above.  It says this:

Quote

... Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging market and developing economies. The ongoing retrenchment of China’s real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects.

Global growth is expected to moderate from 5.9 in 2021 to 4.4 percent in 2022—half a percentage point lower for 2022 than in the October World Economic Outlook (WEO), largely reflecting forecast markdowns in the two largest economies. A revised assumption removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage-points revision for the United States. ...

Elevated inflation is expected to persist for longer than envisioned in the October WEO, with ongoing supply chain disruptions and high energy prices continuing in 2022. Assuming inflation expectations stay well anchored, inflation should gradually decrease as supply-demand imbalances wane in 2022 and monetary policy in major economies responds.
...

The numbers they are "analyzing" are the differential of actual from estimates (which appear to include the effects of expected monetary policy per middle quoted paragraph).  Take the %s with a grain of salt because estimates by their nature are best guesses (and GDP #s skewed by China real estate sector).  That said, I bolded the parts where the IMF blames supply chain disruptions and rising energy costs as the primary reason for economic dislocations.

Finished just yesterday. 
 

Just in the nick of time!!!

Fed is so far behind the curve it’s not even funny.


Sent from my iPhone using Tapatalk
So anyway, the report released today is measured from February.  Next month's report when it takes into account recent energy prices is gonna blow this sucker off the roof.
 
 

“Double Digit Inflation” coming to a theatre near you!

I’m calling it now.


Sent from my iPhone using Tapatalk

Atleast our 4th of July cookout was 16 cents cheaper than last year !!!

12 hours ago, Wulaw Horn said:

I think I'm going to go sit in a bath tub with a toaster plugged in.  

With energy prices going up, you’re going to have to be more creative. Unless you’re on solar.

One thing I haven’t seen mentioned (recently) in this thread is that the savings rate skyrocketed to its highest point ever during the first 18 months of the pandemic.  That surely is contributing to dramatically increased demand for good and services over the last few months and will likely continue to contribute to it over the next 6-9 months.  I’m still of the opinion that the inflation we are seeing is very temporary.

8 hours ago, Newdoc said:

With energy prices going up, you’re going to have to be more creative. Unless you’re on solar.

I feel like you’ve been posting here long enough you should be Olddoc by now. 

For the next time politicians and their minions point fingers at "corporate greed", let's see how Mom & Pop are reactin

2022 Survey from the National Federation of Independent Businesses..

image.png.242e630e0b27a9d7aaa32b3561b6549a.png

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