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Thread: Inflation

  1. #21
    Quote Originally Posted by -jk View Post
    Well, of course you sell incredibly tiny ventilators! Can't put the full sized ones in newborns!

    -jk
    Ha! Well played!

  2. #22
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    Quote Originally Posted by CrazyNotCrazie View Post
    Lumber is an item that is scarce. As are rental cars (companies sold off much of their fleets last summer when business was slow and they needed cash). And some microchips (some of which go into cars).

    At the same time, interest rates are at record lows so if you are financing your addition you can do it ridiculously cheaply. I refinanced my mortgage earlier this year and many people I know are doing the same. That's why it is a really good time for infrastructure spending, but I digress...

    And this is not investment advice but if you are so alarmed about inflation, there are hedges against it
    I am a little alarmed about inflation as I worked as a young teacher for years of ridiculous inflation in the 70ís. I had to teach, coach football and track, and then work at homework hotline until nine each weekday. We received no raises to compensate for it. Those were tough years for teachers but we kept on.

  3. #23
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    Quote Originally Posted by TeacherTom View Post
    I am a little alarmed about inflation as I worked as a young teacher for years of ridiculous inflation in the 70ís. I had to teach, coach football and track, and then work at homework hotline until nine each weekday. We received no raises to compensate for it. Those were tough years for teachers but we kept on.
    I strongly believe that teachers are underpaid and should be better compensated as they are among those doing society's most important work. So thank you for your service.

    That being said, you are falling on deaf ears complaining about the impact of inflation on your life when you led the thread talking about building an addition on your second home. It sounds like inflation won't force you to a life of poverty.

    Complaining about inflation seems to be becoming code for "Biden is screwing up the economy."

  4. #24
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    Nov 2007
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    Vermont
    Quote Originally Posted by TeacherTom View Post
    I am a little alarmed about inflation as I worked as a young teacher for years of ridiculous inflation in the 70ís. I had to teach, coach football and track, and then work at homework hotline until nine each weekday. We received no raises to compensate for it. Those were tough years for teachers but we kept on.
    I really don't think it's a problem as it was in the seventies. Unique circumstances now, amazing pent up demand meets supply chain issues, both caused by the pandemic. I've been spending like a drunken sailor on the house, because we've been unable to travel...got a new TV (in short supply), heat pump (ditto), furniture (ordered in December, may arrive in July), a whole house generator (waiting). As BusinessWeek has pointed out, "goods" experiencing massive demand because services (restaurants, travel et al) have been dead in the water.

    There will probably be some modest inflation due to salaries increasing (saw an article on a restaurant chain in the Atlanta area having to increase typical wages from the $7-$10 hourly range up to $10-$12, which hardly seems unreasonable).

  5. #25
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    Quote Originally Posted by CrazyNotCrazie View Post
    I strongly believe that teachers are underpaid and should be better compensated as they are among those doing society's most important work. So thank you for your service.

    That being said, you are falling on deaf ears complaining about the impact of inflation on your life when you led the thread talking about building an addition on your second home. It sounds like inflation won't force you to a life of poverty.

    Complaining about inflation seems to be becoming code for "Biden is screwing up the economy."
    I guess you are right. I should be grateful for what I have and not complain.

  6. #26
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    Feb 2007
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    Washington, DC area
    I suspect the post-pandemic economy will look different (the food services and uber/lyft sectors are among the first to see it). Prices will have to renormalize after that and some specific shortages get worked out.

    -jk

  7. #27
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    Quote Originally Posted by -jk View Post
    I suspect the post-pandemic economy will look different (the food services and uber/lyft sectors are among the first to see it). Prices will have to renormalize after that and some specific shortages get worked out.

    -jk
    yep, some traditionally underpaid occupations are going to see some badly needed wage increases...I'll be happy to pay an extra buck for my pizza...it's pretty interesting that while the $15 minimum wage debate continues, many businesses have already realized that if they want to hire workers, they may have to pay that much or more. Supply and demand works both ways...

  8. #28
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    Jan 2019
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    I just remembered. My 66 Mustang was 2600 new. I have no idea where 6000 came from. I sold it in 68 and bought a VW for like 18 new.

  9. #29
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    Feb 2007
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    Chesapeake, VA.
    I don't think this is going to be a blip or a temporary post-pandemic problem. I think we are in for a time in which we see sustained inflation for quite some time. I hope it won't be as bad as it was during the 70s,but it wouldn't surprise me if it is.
    I join those of you hoping that this is a temporary issue, but I don't have much faith.

  10. #30
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    Nov 2007
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    I paid several thousand bucks for a 1976 Plymouth Valiant, and it was probably worth a thousand...this was the nadir of American car making...a horrendously flawed vehicle, as were many other brands back then.

  11. #31
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    Quote Originally Posted by rsvman View Post
    I don't think this is going to be a blip or a temporary post-pandemic problem. I think we are in for a time in which we see sustained inflation for quite some time. I hope it won't be as bad as it was during the 70s,but it wouldn't surprise me if it is.
    I join those of you hoping that this is a temporary issue, but I don't have much faith.
    hey, the 1970s had 18% inflation, I just don't see anything close to that happening...sustained perhaps, but only moderate in magnitude, but who knows? Right now everything is out of balance, let's see where we are in another 12 months...

  12. #32
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    Washington, D.C.

    Why

    Quote Originally Posted by rsvman View Post
    I don't think this is going to be a blip or a temporary post-pandemic problem. I think we are in for a time in which we see sustained inflation for quite some time. I hope it won't be as bad as it was during the 70s,but it wouldn't surprise me if it is.
    I join those of you hoping that this is a temporary issue, but I don't have much faith.
    I'm genuinely curious. Why do you think we will see sustained inflation for quite some time? What makes this time different?

  13. #33
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    Quote Originally Posted by rsvman View Post
    I don't think this is going to be a blip or a temporary post-pandemic problem. I think we are in for a time in which we see sustained inflation for quite some time. I hope it won't be as bad as it was during the 70s,but it wouldn't surprise me if it is.
    I join those of you hoping that this is a temporary issue, but I don't have much faith.
    You'll have to wait for my response. Demands a keyboard, not a phone. Supply is a couple of hours away.

    Test question: what is the long-term interest rate now? Can't one derive expected inflation from the differential between short and L-T rates?

  14. #34
    Quote Originally Posted by sagegrouse View Post
    You'll have to wait for my response. Demands a keyboard, not a phone. Supply is a couple of hours away.

    Test question: what is the long-term interest rate now? Can't one derive expected inflation from the differential between short and L-T rates?
    For arguments sake, the 30 year is at 2.25% and the 10 year at 1.65%

  15. #35
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    Quote Originally Posted by MChambers View Post
    I'm genuinely curious. Why do you think we will see sustained inflation for quite some time? What makes this time different?
    A person who knows more about economics than anybody I know is convinced that there is going to be sustained inflation. I don't know enough to understand exactly why or to contradict him. He is almost always right. There is nothing more to it than that.

  16. #36
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    I'd tell ya, but then I'd have to kill ya
    Wall Street Journal: U.S. manufacturers say inflation due to tariffs.

    https://www.msn.com/en-us/money/mark...Zzr?li=BBnb7Kz

  17. #37
    Economics is a game played in the rearview mirror. Anyone who tells you they know exactly what's going to happen in the broader economy writ large is a person you should distance yourself from. We are substantially better at understanding what happened than what is going to happen. Or even what is actually happening in real time for that matter. I come at this from a historian's perspective, meaning I have a history degree, but I took a decent number of economics courses. I am NOT an economist, but I can understand what they tell me. There is a school of thought that holds that the prices of goods and services has been too low over the past couple of decades and that some of what is being ascribed to inflation is actually a market correction of increased prices and that these increased prices for certain items will persist over time. This school of thought mostly holds that Americans pay too little for food specifically and that this has kept wages arbitrarily low at the bottom of the wage scale and has stifled growth in the agricultural sector and that this has had ripple effects in the broader economy where low wage workers have little to no purchasing power. This school of thought holds that Americans need to pay more for many items, especially food, and that this will lead to increased wages for low wage workers across the board, increasing their purchasing power and that this will improve
    the broader economy. Gasoline and oil are other sectors where are we have probably paid too little over time. This isn't to say what you pay at the pump or in the grocery store doesn't increase over time, it is an argument that the rate of growth in those two sectors has been stifled because of deflation and not inflation over the past few decades. What is happening in the current market is probably a mix of market corrections in certain sectors based on historical deflation and that those sectors will experience a persistent increase in prices (think agriculture, steel, gas, lumber...maybe...remember we don't KNOW anything ever). But that housing prices, restaurant prices and other sectors are experiencing transient "inflation" based on supply and demand that will go back to normal levels over time. Here is an excellent overview.

    https://www.whitehouse.gov/cea/blog/...d-years-ahead/

  18. #38
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    I'd tell ya, but then I'd have to kill ya
    Quote Originally Posted by ClemmonsDevil View Post
    Economics is a game played in the rearview mirror. Anyone who tells you they know exactly what's going to happen in the broader economy writ large is a person you should distance yourself from. We are substantially better at understanding what happened than what is going to happen. Or even what is actually happening in real time for that matter. I come at this from a historian's perspective, meaning I have a history degree, but I took a decent number of economics courses. I am NOT an economist, but I can understand what they tell me. There is a school of thought that holds that the prices of goods and services has been too low over the past couple of decades and that some of what is being ascribed to inflation is actually a market correction of increased prices and that these increased prices for certain items will persist over time. This school of thought mostly holds that Americans pay too little for food specifically and that this has kept wages arbitrarily low at the bottom of the wage scale and has stifled growth in the agricultural sector and that this has had ripple effects in the broader economy where low wage workers have little to no purchasing power. This school of thought holds that Americans need to pay more for many items, especially food, and that this will lead to increased wages for low wage workers across the board, increasing their purchasing power and that this will improve
    the broader economy. Gasoline and oil are other sectors where are we have probably paid too little over time. This isn't to say what you pay at the pump or in the grocery store doesn't increase over time, it is an argument that the rate of growth in those two sectors has been stifled because of deflation and not inflation over the past few decades. What is happening in the current market is probably a mix of market corrections in certain sectors based on historical deflation and that those sectors will experience a persistent increase in prices (think agriculture, steel, gas, lumber...maybe...remember we don't KNOW anything ever). But that housing prices, restaurant prices and other sectors are experiencing transient "inflation" based on supply and demand that will go back to normal levels over time. Here is an excellent overview.

    https://www.whitehouse.gov/cea/blog/...d-years-ahead/
    But is that the "new" normal?

  19. #39
    Quote Originally Posted by dudog84 View Post
    But is that the "new" normal?
    The right answer is I will let you know in five years after someone tells me. My inclination is in certain sectors we will see prices stay higher simply because manufacturers and producers have learned that the market can support the price increase. In other sectors we will see prices drop or at least not continue to rise.

  20. #40
    Join Date
    Nov 2007
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    Vermont
    yeah, for years now we have heard from some quarters that the massive stimulus bills we've seen will lead to large increases in inflation, and economists have been contorting themselves to explain why this hasn't happened.

    Maybe when Jeff Bezos owns absolutely everything, prices will skyrocket...until then I just don't see a major problem...we'll see.

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