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Thread: The inflation thread
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11-15-2021, 09:27 AM #201yelgatgab
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11-15-2021, 10:01 AM #202
One of you dude with the 300 level courses on your resume wanna explain to me why a decrease in demand causes inflation?
What I'm seeing is cost push inflation causing everyone to test their pricing power and guess what? Everyone has more than they thought, from labor to housing to consumables. How much of it is sticky and and much of it isn't is the big guess.
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11-15-2021, 10:13 AM #203
You only need econ 101 to explain it. Supply and demand. The supply side is so jacked right now, that decreased demand is minimal. So supply < demand = higher prices. Doesn't help when you inject a few trillion via the CARES act, and then the Dems put another trillion in Fed UE benefits.
The worm will turn eventually. Could be a very big worm too."We don't beat the reaper by living longer, we beat the reaper by living well and living fully." - Randy Pausch
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11-15-2021, 10:18 AM #204
Where are you seeing a decrease in demand?
A few people feel the rain. Most people just get wet.
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11-15-2021, 10:20 AM #205
Crypto market is a couple trillion now, stock market is up trillions, real estate up trillions…
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11-15-2021, 10:21 AM #206
It was talked about up thread. You guys at the 101 level should refresh your memory of the difference between the demand curve and the quality demanded. Anywho...it doesn't matter. No matter what business you are in, charge more and ask your boss to pay more. Move out of cash and into assets and cross your fingers that you have enough left over for a new bike and a vacation.
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11-15-2021, 10:22 AM #207
Decrease in demand would be the logical response to higher prices--but the usual American response is to buy frantically--"better get mine while I can". No one ever got rich buying high and selling low but we keep trying.
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11-15-2021, 10:23 AM #208
"Wealth Effect"
"Too many dollars chasing too few goods"
That should keep you busy while I go overcharge for my services.
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11-15-2021, 10:23 AM #209
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11-15-2021, 10:24 AM #210
Clearly quality is the fault of the poors and extended ue.
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11-15-2021, 10:25 AM #211
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11-15-2021, 10:26 AM #212
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11-15-2021, 10:28 AM #213
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11-15-2021, 10:28 AM #214
We don't have low aggregate demand right now. Aggregate demand is much higher now than a year ago.
Don't try to think about macro by adding up little bits and pieces. You need to think about aggregates.
Google some basic IS-LM if you want a comprehensible yet organized way to think about this stuff.
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11-15-2021, 10:31 AM #215
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11-15-2021, 10:43 AM #216We don't have low aggregate demand right now. Aggregate demand is much higher now than a year ago.
Don't try to think about macro by adding up little bits and pieces. You need to think about aggregates.
Google some basic IS-LM if you want a comprehensible yet organized way to think about this stuff.
To me, the root problems are at the regulator and oversight level but I'm not a public policy guy and I'm no smarter nor do I have any great answers...just a regular guy hammering on the keyboard.
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11-15-2021, 10:53 AM #217
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11-15-2021, 11:23 AM #218
Yeah. Nice concepts. I probably used them in my one hour oral final in my MBA level macro class. Then I lived a life experiencing it for 40+ years in a consumer goods career. So I don't want to search "upthread". Where has demand gone down? C'mon, don't be a dick. Tell ole Wolley.
A few people feel the rain. Most people just get wet.
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11-15-2021, 12:31 PM #219
I thought this was a pretty good overview of current inflation issues-
Here's a direct link to the inflation topic (can't post a video to the exact segment)- https://www.youtube.com/watch?v=AODfsBMGzGQ&t=2526s
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11-18-2021, 07:50 AM #220
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11-18-2021, 07:58 AM #221
Chamath? How many tens of million did that piece of shit make off of spac frauds?
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11-18-2021, 08:01 AM #222
Not to mention - a lot of corporate guidance in quarterly and annual reporting indicate they're using this constrained environment to retool how they build and price to make fewer units and hold margin (GM is a good example). As there's not enough material supply in many cases for people to push volume/price wars, they're just harvesting profit as the whole market holds their margin. As someone who's done some vendor deals in technology lately, even there people are getting much tougher compared to in the past, as they usually have the funding to weather the storm and they'd rather hold as a high-margin product than flood a segment with cheap deals.
As it's not just material but labor that's often constrained as well, you're also incented to do fewer, more expensive deals to carry your fixed costs as you can't reliably source workers to scale affordably as you would want to.
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11-18-2021, 08:59 AM #223
The inflation thread
i see an odd lack of consumer rights discussions abound
nearly every old money company i’ve dealt with over my career attempts to or does price fix
opec isn’t a new cartel, and maybe 6% is too much commission on a house at this point
industry needs to change with the rest of the world if we want sustainable process, and they won’t choose to
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11-18-2021, 09:16 AM #224
Yep, it's why I rather favor a pollution calc tax - build dirty? pay lots of tax. A lot of people just see money and won't act unless it's for profit. A lot of price fixing is also informal. Like in insurance industry, rate filings are relatively public, so if you see your competitors holding firm or raising rates, you do it too to make more money unless you have big market share goals.
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11-18-2021, 10:49 AM #225
Yep. I am seeing this in several mfg. sectors for commercial vehicles. Can't get enough qualified or semi-qualified machinists, welders, or assembly line folks. Factories are running below 90% capacity all because they lack the trained work force. So, what do the mfg. do? They build more of the higher end models, with the higher margins. And less of the lower end, no frills models with the lower margins.
"We don't beat the reaper by living longer, we beat the reaper by living well and living fully." - Randy Pausch
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