Supply chain is an issue for sure. I'm in IT. Things that used to be readily available are now 3 - 6 months out if you are lucky. And you can imagine how accurate a lead time that is 3-6 months out is...
Inflation
- Thread starter BoomBoom.sixpack
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This is a borderline fever dream. Why don't you want to produce oil? You think it will help the environment if we stop using it? You think China & Russia are drilling according to EPA guidelines or that they'll ever stop? How do you think the charging station for your electric car gets powered? Where do all those solar panels get made? How do you think we get the rare earth minerals needed to make all those batteries?
The truth is that we are dependent on fossil fuels. I'd rather control our supply ourselves than be at the mercy of some despot in Russia, China, Saudi Arabia or Venezuela.
Unless we seriously invest in nuclear, going completely renewable is just placing our economic fate in the hands of people like Xi, Maduro & Putin.
Costs and profits are the real answers.
The cost of importing oil from certain countries is cheaper which is why the US doesn't want to explore and produce its own oil because that means less profit.
People like myself who've lived in oil towns in the US know this far too well.
The cost of importing oil from certain countries is cheaper which is why the US doesn't want to explore and produce its own oil because that means less profit.
People like myself who've lived in oil towns in the US know this far too well.
Can you give examples of goods that are not supply chain constrained that also have not inflated?
A Snickers bar is more expensive now than 1 year ago. I wouldnt say those have been supply chain constrained as they are everywhere and have been everywhere thru covid.
I could sit and list countless things like this in clothing, sporting goods, food and beverage, etc. Bags of dirt are more expensive than they were last year- I just bought a few bags and noticed. That **** has always been on the shelves so no supply constraints.
It was an attempt to cite a couple of obviously extreme and crazy positions as examples.
But to actually respond, if you want to continue to believe what you typed, I suggest you not look back at the board during the months of 3/20 thru 2/21.
Ah 17 it. I'm going to do a little grave dancing. Here are a few threads where several of us were arguing with BoomBoom in the summer of 2020 about inflation.
https://forums.sixpackspeak.com/sho...d-Funds-rate-through-2022&highlight=Inflation
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&highlight=Inflation
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&highlight=Inflation
Here are some of the quotes from said threads:
JLS 7/30/2020: "Excess money in the system drives up prices. That's inflation. The only to keep it from happening is to increase supply. There are some industries with very elastic supply (technology for instance). But the stuff we spend most of our money on (food, housing, medical care, and transportation.) They all require a lot of work.
So in its simplest form, I think money = work. More money with less work bids up prices which is inflation. Less money with more work causes price cuts which is deflation
We pumped a shitload of money into the system and it will take a long time to get work back to where it was... 4-5 years probably. Inflation is coming."
BoomBoom 7/30/2020: "Inflation is not a worry."
JLS 7/30/2020: "Imports and commodities are going to cost more. We can get into the semantics of inflation vs price increases good by good, service by service. But the general concept is a dollar is going to be worth significantly less for the average American in 2022-2023 than it is today.
The only way to curb this is through raising interest rates in my opinion. That will encourage saving vs spending. Taxes are not getting raised on lower and middle earners.
I still think it's a ways away. 12-18 months."
BoomBoom 7/30/2020: "We've seen much more of a decrease in services than goods. And it ain't like restaurants are jacking prices.
Not saying we won't see inflation for a quarter of even a year. But that's it. Wages will stay stagnant like they have for decades. And without increasing income, you don't get inflation. MF understood that.
Lmao at the idea that wages will increase. If WS thought even for a second that that might happen, the DOW would be at 10k today.
The MEDIAN American will have the same income and will be buying the same goods at the same prices a year from now. Once you average in the Bezos' of the world, then you may see some inflation. But I ain't them, so that average stat is useless to me."
FYI, here are wages... Dow still up around 33k.
View attachment 24028
ronpolk 7/27/2020: "I agree with you 100%. Although we can certainly keep printing money and giving to people, eventually inflation is going to catch up. I’m not well versed enough in economics to tell you when that is though."
BoomBoom 7/27/2020: "Not really creating a problem by paying people more to not work. That would be creating a problem if unemployment were low, as jobs would go unfilled. But with unemployment sky high, jobs are filled regardless of if some workers on the margins are staying home. Meanwhile, what of the workers that want to work but can't find a job during sky high unemployment? They now can't afford rent etc. The drop in demand hurts business, costing jobs, etc."
ronpolk 7/27/2020: "What you can’t measure though is what percentage of people are not working because they are making more. And it’s a real number. I know of companies that have had a hard time bringing people back or hiring new people because they can’t pay what unemployment is paying, which in MS is equivalent to about $43k per year (including federal unemployment). There is no requirement for people to show progress of trying to find a job either.
I’m all for the safety net but it needs to be just that. There needs to be a monetary benefit to earning a wage and for a lot right now there is not."
BoomBoom 7/27/2020: "Yeah but you also can't measure what percent of those were underpaid to begin with, how much of the extra payments are offset by financial costs, etc. I'm sure the least desirable MW jobs may be having a little difficulty finding decent MW labor. But much of that is just an expression of a long running problem, and offset by other factors, so pretty marginal overall. And it pales to the problem of the laid off that can't find a job. It's just not what we should be focusing on."
JLS 7/27/2020: "Funny how the ones that pay for the party don't get to drink. We are witnessing the most inflationary event of our lifetimes. The Fed's job is to take away the punch bowl when the party gets going."
JLS 6/11/2020: "There are consequences to printing money/low interest rates. My take is this for now.
The Fed has a 2000 stock market bubble and a 2008 economic collapse that are dating. If they don't use protection, it's going going give birth to a 70's inflation baby."
BoomBoom 6/11/2020: "To me, the main thing different from the past is raises. In the 70s something like 30% of workers got automatic cost of living raises based on inflation. Other employers didn't do it automatically, but had to match to keep workers. Today, that's virtually non-existent. And you can't have sustained inflation without raises.
I hope I'm wrong though. 4% inflation would do wonders for our nation."
https://forums.sixpackspeak.com/sho...d-Funds-rate-through-2022&highlight=Inflation
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&highlight=Inflation
https://forums.sixpackspeak.com/showthread.php?214603-National-Debt&highlight=Inflation
Here are some of the quotes from said threads:
JLS 7/30/2020: "Excess money in the system drives up prices. That's inflation. The only to keep it from happening is to increase supply. There are some industries with very elastic supply (technology for instance). But the stuff we spend most of our money on (food, housing, medical care, and transportation.) They all require a lot of work.
So in its simplest form, I think money = work. More money with less work bids up prices which is inflation. Less money with more work causes price cuts which is deflation
We pumped a shitload of money into the system and it will take a long time to get work back to where it was... 4-5 years probably. Inflation is coming."
BoomBoom 7/30/2020: "Inflation is not a worry."
JLS 7/30/2020: "Imports and commodities are going to cost more. We can get into the semantics of inflation vs price increases good by good, service by service. But the general concept is a dollar is going to be worth significantly less for the average American in 2022-2023 than it is today.
The only way to curb this is through raising interest rates in my opinion. That will encourage saving vs spending. Taxes are not getting raised on lower and middle earners.
I still think it's a ways away. 12-18 months."
BoomBoom 7/30/2020: "We've seen much more of a decrease in services than goods. And it ain't like restaurants are jacking prices.
Not saying we won't see inflation for a quarter of even a year. But that's it. Wages will stay stagnant like they have for decades. And without increasing income, you don't get inflation. MF understood that.
Lmao at the idea that wages will increase. If WS thought even for a second that that might happen, the DOW would be at 10k today.
The MEDIAN American will have the same income and will be buying the same goods at the same prices a year from now. Once you average in the Bezos' of the world, then you may see some inflation. But I ain't them, so that average stat is useless to me."
FYI, here are wages... Dow still up around 33k.
View attachment 24028
ronpolk 7/27/2020: "I agree with you 100%. Although we can certainly keep printing money and giving to people, eventually inflation is going to catch up. I’m not well versed enough in economics to tell you when that is though."
BoomBoom 7/27/2020: "Not really creating a problem by paying people more to not work. That would be creating a problem if unemployment were low, as jobs would go unfilled. But with unemployment sky high, jobs are filled regardless of if some workers on the margins are staying home. Meanwhile, what of the workers that want to work but can't find a job during sky high unemployment? They now can't afford rent etc. The drop in demand hurts business, costing jobs, etc."
ronpolk 7/27/2020: "What you can’t measure though is what percentage of people are not working because they are making more. And it’s a real number. I know of companies that have had a hard time bringing people back or hiring new people because they can’t pay what unemployment is paying, which in MS is equivalent to about $43k per year (including federal unemployment). There is no requirement for people to show progress of trying to find a job either.
I’m all for the safety net but it needs to be just that. There needs to be a monetary benefit to earning a wage and for a lot right now there is not."
BoomBoom 7/27/2020: "Yeah but you also can't measure what percent of those were underpaid to begin with, how much of the extra payments are offset by financial costs, etc. I'm sure the least desirable MW jobs may be having a little difficulty finding decent MW labor. But much of that is just an expression of a long running problem, and offset by other factors, so pretty marginal overall. And it pales to the problem of the laid off that can't find a job. It's just not what we should be focusing on."
JLS 7/27/2020: "Funny how the ones that pay for the party don't get to drink. We are witnessing the most inflationary event of our lifetimes. The Fed's job is to take away the punch bowl when the party gets going."
JLS 6/11/2020: "There are consequences to printing money/low interest rates. My take is this for now.
The Fed has a 2000 stock market bubble and a 2008 economic collapse that are dating. If they don't use protection, it's going going give birth to a 70's inflation baby."
BoomBoom 6/11/2020: "To me, the main thing different from the past is raises. In the 70s something like 30% of workers got automatic cost of living raises based on inflation. Other employers didn't do it automatically, but had to match to keep workers. Today, that's virtually non-existent. And you can't have sustained inflation without raises.
I hope I'm wrong though. 4% inflation would do wonders for our nation."
No matter how many times you've read it or state it out loud or beat off to it, renewables are not reliable enough to power the world. If you want a greener planet, you should push for nuclear. Renewables are cute. They are not sustainable nor a long term solution to a very large problem.
More from Michael:
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Why are you telling me something I am aware of? This is an extended back and forth for what seems like really no purpose.
Thank you JoeLee! I was waiting on someone to bring up wage increases. The declining supply of workers is playing heavily into the formula. Baby Boomers are retiring leaving many jobs unfilled. I have high school students that are managers at local retail stores because they can't fill those positions either.
Something else to think about: Even if wages increase with increasing prices*, inflation can push you into a higher tax bracket without increasing your purchasing power. Tax brackets based on nominal income only make sense if you assume the currency is stable. One day, we will all make more than $200k/year. Don't expect the government to update their tax brackets right on time.
Example:
Let's say you make $95,500/year and have an effective tax rate of 15.6%. 10 years later, you make $239,100/year and have an effective tax rate of 24%. At an 8% inflation rate, you've broken even on after-tax purchasing power.
*-wage increases usually lag price increases
Example:
Let's say you make $95,500/year and have an effective tax rate of 15.6%. 10 years later, you make $239,100/year and have an effective tax rate of 24%. At an 8% inflation rate, you've broken even on after-tax purchasing power.
*-wage increases usually lag price increases
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