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Rampant inflation @ 2021/12/15 08:47:09


Post by: JWBS


Inflation currently 5% in UK and 10% in US. Some credible people are predicting up to 30% next year, seems wild but idk. How will it affect the hobby? I'm not sure, demand for this stuff is supposed to be elastic but often doesn't seem like that. Either way I'm quite concerned, mostly due to inflation across the board, not hobby stuff.


Rampant inflation @ 2021/12/15 08:50:14


Post by: Not Online!!!


Don't worry, GW allways prices upwards and over inflation.


Rampant inflation @ 2021/12/15 10:07:29


Post by: AllSeeingSkink


It's a bit worrying, without trying to start a political debate, a side effect of using the money printer to solve problems.

House price increases over the past decade have been my biggest concern over day to day items. It's gone crazy out here and I hear in many other parts of the world. House prices in the past few years have gone up more than I could save, and rent also going up makes it harder to save. The rent prices paused a bit with covid, but surprisingly not the house prices.

But if day to day items start jumping insanely then that'll just make life even harder again.


Rampant inflation @ 2021/12/15 10:20:03


Post by: Gitzbitah


If it really hits 30%, and wages don't keep pace, I can see that being the push to make 3d printing the norm. When things cost more, the time it takes to acquire the skill to print and modify STLs suddenly starts looking a lot more appealing, and 3d printer prices are dropping.


Rampant inflation @ 2021/12/15 10:26:40


Post by: VBS


For the hobby, as for everything, prices will go up. GW doesnt need any reason for a yearly price increase anyway. But other companies will do the same, Parabellum for example said the resin they use went up 50% and have to up the prices to at least have profit on specific items. Nice.

Earlier this year (April) I made a price list of groceries I regularly buy. I was curious to compare the price towards the end of the year since all the money printing + supply chain issues were for sure going to pump up the prices. Checked this week and almost everything on the list is up about 10%. Some fruit and vegetables are +30%. Great.


Rampant inflation @ 2021/12/15 15:02:21


Post by: Ghool


My grocery bill has almost doubled since 2019.
Inflation might ‘only’ be at 5% in most places but prices are up for daily living are up much more than that.
I’m super happy we managed to buy a house when we did. Friends I know that are trying now are finding it very difficult to impossible.
My main concern is interest rates skyrocketing when it’s time to renew my mortgage:


Rampant inflation @ 2021/12/15 15:46:12


Post by: Ouze


I had hoped Covid would cause a decrease in housing prices as, not to be insensitive, homeowning boomers got killed off. In fact the exact opposite happened - we had a historical pricing spike on housing here.

We are seeing lots of crazy high price hikes on stuff like steak/beef etc.

Crazy times.


So far as the hobby, it's not going to touch it I don't think. It's already a very expensive hobby for what it is, it will just get more so.




Rampant inflation @ 2021/12/15 19:11:41


Post by: JWBS


Federal reserve plans to hike interest rates 3 times next year https://www.bankerandtradesman.com/fed-to-accelerate-withdrawal-of-economic-aid-as-prices-surge/


Rampant inflation @ 2021/12/15 19:46:03


Post by: Nurglitch


Everyone was careful to get fixed rate loans and mortgages while money was cheap, right?


Rampant inflation @ 2021/12/15 20:21:13


Post by: Ouze


 Nurglitch wrote:
Everyone was careful to get fixed rate loans and mortgages while money was cheap, right?


I wish. We paid off our mortgage a few years ago and had been shopping around for houses, but at these prices... forget it. Sigh, what could have been.



Rampant inflation @ 2021/12/15 20:29:30


Post by: techsoldaten


 Ghool wrote:
My grocery bill has almost doubled since 2019.
Inflation might ‘only’ be at 5% in most places but prices are up for daily living are up much more than that.
I’m super happy we managed to buy a house when we did. Friends I know that are trying now are finding it very difficult to impossible.
My main concern is interest rates skyrocketing when it’s time to renew my mortgage:


If we were using the same CPI we used in 1982, inflation would be at around 15%.

Great if you own assets, terrible if you need to put food on the table.

As far as the price of miniatures goes - there are a few ways the price could stay constant. If that happens, it would be the first time GW miniatures cost less in real dollars.


Rampant inflation @ 2021/12/15 20:31:48


Post by: Ouze


If I recall correctly, when pounds sterling plummeted against USD a few years back, Forge World just jacked up their prices to the US even more to "adjust" it.

Meanwhile, on the other side of the alignment chart, Hasslefree ran a bunch of sales and urged US people to buy while the prices were so great.


Rampant inflation @ 2021/12/15 20:36:06


Post by: Azreal13


Didn't they even frame it as good news because you didn't need to worry your pretty little heads with such complicated things as basic division and multiplication to work out the exchange rates?


Rampant inflation @ 2021/12/15 20:58:53


Post by: techsoldaten


 Ouze wrote:
If I recall correctly, when pounds sterling plummeted against USD a few years back, Forge World just jacked up their prices to the US even more to "adjust" it.

Meanwhile, on the other side of the alignment chart, Hasslefree ran a bunch of sales and urged US people to buy while the prices were so great.


Well, there's dollars converted to pounds sterling, then there's the purchasing power of the dollar. The exchange rate can stay the same, but if the purchasing power goes down that means you can buy fewer goods and services.

So if there is inflation but the price of miniatures stays the same, those miniatures have become cheaper relative to all the other things you buy. The price of miniatures can go up, but if the change in price is below the rate of inflation, you are technically getting a discount.

The main way we gauge inflation is the Consumer Price Index. It's a measure of the average cost of commonly purchased goods.

https://www.investopedia.com/articles/07/consumerpriceindex.asp

Good idea to keep an eye on it. I'm very skeptical of the inflation numbers right now and see a lot of evidence to suggest it's at least double what's being claimed.

Here's the real question: GW releases a lot of 5-man kits these days. What are the odds they predicted inflation and prepared for it ahead of time?


Rampant inflation @ 2021/12/15 21:44:43


Post by: ingtaer


Friendly reminder to make sure the discussion remains on the hobby effect please, so far so good but we all know how these things spiral.


Rampant inflation @ 2021/12/16 02:13:16


Post by: sebster


 techsoldaten wrote:
If we were using the same CPI we used in 1982, inflation would be at around 15%.


We don't use the same CPI because product quality changes over time.

This;


is not the same as this;



Rampant inflation @ 2021/12/16 02:40:53


Post by: techsoldaten


 sebster wrote:
 techsoldaten wrote:
If we were using the same CPI we used in 1982, inflation would be at around 15%.


We don't use the same CPI because product quality changes over time.

This;


is not the same as this;



First Land Raider I bought was $35. The same model now sells for around $80, it's more than 10 years old. Same sprues, different packaging. Same is true for a large part of the line.

If you want to argue the Orks look better, fine. But COLI is meant to refer to innovations, not iterations.


Rampant inflation @ 2021/12/16 03:10:30


Post by: sebster


 techsoldaten wrote:
First Land Raider I bought was $35. The same model now sells for around $80, it's more than 10 years old. Same sprues, different packaging. Same is true for a large part of the line.


Umm, yeah. Not every price increase is a result of product improvement. There is also inflation. That's why there is inflation, adjusted for product improvement.

If you want to argue the Orks look better, fine. But COLI is meant to refer to innovations, not iterations.


No. At no point in any economics analysis is anyone going through and picking out what is an innovation and marking that to be included, and what is an iteration to be excluded. That would be impossible, and pointless and just weird.

What they are doing is measuring what a consumer could spend if they just wanted the old products, and using that to adjust inflation. It doesn't go in to deciding if the new model i-phone is innovatively different to the old model or just an iterative change, it just notes the new model has utility improvements over the old model and makes an adjustment based on the relative price of the old model compared to the new one.


Rampant inflation @ 2021/12/16 03:17:46


Post by: chaos0xomega


Important to keep in mind that inflation is often reported nationally in aggregate but varies considerably in regional terms and by individual goods.

In general terms, its only up about 5% on common household goods for me locally in NJ - but traveling to the Midwest ive seen prices up 2-3x higher from where they were in some cases.


Rampant inflation @ 2021/12/16 06:52:48


Post by: Ouze




Sebster! I haven't seen you in forever and I've missed you.

 techsoldaten wrote:
I'm very skeptical of the inflation numbers right now and see a lot of evidence to suggest it's at least double what's being claimed.


If it doesn't touch on you-know-what, what makes you say that?


Rampant inflation @ 2021/12/16 07:12:41


Post by: sebster


 Ouze wrote:


Sebster! I haven't seen you in forever and I've missed you.


Hey mate, I've missed you too and a bunch of other dakka people, most of whom still seem to be posting here, which is cool. I went and got a job that's actually pretty full on so I don't really have the time to be on dakka anymore, but you know, its Christmas time and things are pretty quiet so I thought I'd pop in here. Also I finally got to see Dune and wanted to put my thoughts somewhere.


Rampant inflation @ 2021/12/16 08:07:30


Post by: NinthMusketeer


I don't know if I can handle this much sanity in a thread. Where's the baseless claims? The passive-aggressive-definitely-not-impolite ad hominem? People are deciding to post their opinions in a sensical non-inflamatory way and I don't remember how to handle that.


Automatically Appended Next Post:
chaos0xomega wrote:
Important to keep in mind that inflation is often reported nationally in aggregate but varies considerably in regional terms and by individual goods.

In general terms, its only up about 5% on common household goods for me locally in NJ - but traveling to the Midwest ive seen prices up 2-3x higher from where they were in some cases.
This is indeed a very important factor. Exponentially more so with housing.


Rampant inflation @ 2021/12/16 08:56:04


Post by: VBS


 Ouze wrote:
 techsoldaten wrote:
I'm very skeptical of the inflation numbers right now and see a lot of evidence to suggest it's at least double what's being claimed.


If it doesn't touch on you-know-what, what makes you say that?


If I may... inflation, like any other stat, is subject to cherry picking. So the basket of goods to calculate cpi can change from year to year. It is not a secret that this is used to "soften" the outcome, sometimes including goods/services that have not skyrocketed while excluding other that did. There are sites like Shadowstats that use the old methodology of the 80's to calculate inflation (fixed basket), and it constantly throws higher numbers than those officially published.
Considering industrial good and services are some of the hardest hit (clearly not 10%), some miniature companies are likely to suffer in 2022 (or already are).


Rampant inflation @ 2021/12/16 13:14:11


Post by: Jerram


GWs gonna GW they're big enough to weather the storm, I worry about the mid size companies though. Add this on to everything else and it could get brutal.


Rampant inflation @ 2021/12/16 15:21:44


Post by: Easy E


Once Supply Chains get sorted then a lot of this goes away.


Rampant inflation @ 2021/12/16 15:46:53


Post by: techsoldaten


sebster wrote:
 techsoldaten wrote:
First Land Raider I bought was $35. The same model now sells for around $80, it's more than 10 years old. Same sprues, different packaging. Same is true for a large part of the line.


Umm, yeah. Not every price increase is a result of product improvement. There is also inflation. That's why there is inflation, adjusted for product improvement.


First off, good to see you! Been a while.

sebster wrote:
If you want to argue the Orks look better, fine. But COLI is meant to refer to innovations, not iterations.


No. At no point in any economics analysis is anyone going through and picking out what is an innovation and marking that to be included, and what is an iteration to be excluded. That would be impossible, and pointless and just weird.

What they are doing is measuring what a consumer could spend if they just wanted the old products, and using that to adjust inflation. It doesn't go in to deciding if the new model i-phone is innovatively different to the old model or just an iterative change, it just notes the new model has utility improvements over the old model and makes an adjustment based on the relative price of the old model compared to the new one.


Disagree with the idea distinctions don't matter, at least from the standpoint that it's not an accurate measure of the economy.

iPhones do a bad job representing the point. Shrinkflation is probably the best, the idea that you're paying the same for less of a box of cereal that provides 75% of what you got a couple years before.

CPI measures the cost, not the yield, and this matters in a highly centralized economy where consumers have fewer alternatives for common goods and services (food, hygiene products, etc.) That's not impossible to measure nor is it pointless or weird. The distinction reflects changes in living standards that have a material impact on people's lives.

Ouze wrote:
 techsoldaten wrote:
I'm very skeptical of the inflation numbers right now and see a lot of evidence to suggest it's at least double what's being claimed.


If it doesn't touch on you-know-what, what makes you say that?


While I could point to lots of things (price of housing / used cars / etc throughout the US, backlogs on orders of luxury goods,) it's mainly the Fed. Buying bonds and keeping prime lending rates at 0% is a witches brew. It keeps prices down and backstops companies while at the same time creating perverse incentives for businesses to maximize around short term goals.

In the near term, the Fed's actions depress prices. In the long term, they lead to devalued currency as markets correct.

Inflation that hasn't been realized yet is still inflation. Can't print money forever.


Rampant inflation @ 2021/12/17 01:47:29


Post by: Tannhauser42


 Easy E wrote:
Once Supply Chains get sorted then a lot of this goes away.


For a lot of normal stuff, sure.
But, as someone already said, "GW is gonna GW".


Rampant inflation @ 2021/12/17 02:39:23


Post by: sebster


VBS wrote:
If I may... inflation, like any other stat, is subject to cherry picking. So the basket of goods to calculate cpi can change from year to year. It is not a secret that this is used to "soften" the outcome, sometimes including goods/services that have not skyrocketed while excluding other that did.


This is all theoretically possible, but a complete non-factor in real life. The basket of goods isn't picked by some bureaucrat who picks goods based on whether he wants a higher or lower CPI. That would be insane. BLS gets around 20,000 people from all facets of life to provide in detail all their consumer spending.

No-one is doing anything to 'soften' the outcome.

There are sites like Shadowstats that use the old methodology of the 80's to calculate inflation (fixed basket), and it constantly throws higher numbers than those officially published.


Not quite. What Shadowstats did was complain that BLS used a different method in the 1980s, and if that method was used today inflation would be ~2.5% higher. But Shadowstats isn't doing an alternate calculation of inflation today. All Shadowstats is doing is taking the current rate of inflation and adding a fixed constant. Shadowstats was never anything but a scam.



There are, by the way, alternate methods of calculating inflation. With so much on-line data now, there have been new methods used to survey more people, and vastly more products. But here's the funny thing, they all line up really closely with the BLS method, to the point where if BLS were to change, it would probably only do because these other methods are likely to be cheapr and faster, not because they have any better sense of inflation.


Rampant inflation @ 2021/12/17 02:52:11


Post by: chaos0xomega


 Easy E wrote:
Once Supply Chains get sorted then a lot of this goes away.


I think at this point its pretty clear that we aren't seeing transitory inflation, seems most economists are now saying that was a bad call and didn't account for a number of factors that weren't entirely obvious a year back and only really came to light more recently. We will see prices stabilize and deflate once this thing runs its course - but its not going to deflate back down to where it was.


Rampant inflation @ 2021/12/17 15:24:08


Post by: Easy E


chaos0xomega wrote:
 Easy E wrote:
Once Supply Chains get sorted then a lot of this goes away.


I think at this point its pretty clear that we aren't seeing transitory inflation, seems most economists are now saying that was a bad call and didn't account for a number of factors that weren't entirely obvious a year back and only really came to light more recently. We will see prices stabilize and deflate once this thing runs its course - but its not going to deflate back down to where it was.


It never does..... ever.


Rampant inflation @ 2021/12/18 14:40:40


Post by: Orlanth


Heavy inflation is almost cettainly coming, hyperinflation is possible.

The former we should consider, if the latter happens the effect on our hobby spends will not be relevant to us.

Even heavy inflation will cross that line for many. However as the thread is solely about the hobby aspects the c-word gamers need not fear. Inflation will cause enough hardship that those with less expendable income will put their armies on ebay. You can get your plastic crack there at bargain prices.

Modest inflation will not effect the rest of us that much because GW product is unrealistically priced anyway, the company is in a good position to NOT raise prices in hard times and would be advised to do so.

If we get anywhere near 30% inflation, it will be a financial apocalypse for anyone not manufacturing discount goods. Unlabelled bread, that will make a killing, cheap beer likewise, space marines, not likely.

GW however has low manufacturing overheads compared to product price. plastic kits cost pennies to make but are priced at a whole lot of pounds. They can afford the extra pennies it will cost, they cannot afford the loss of revenue from limited purchasing power of the general public.

I would be completely on track for GW to be myopic regarding prices in an economic downturn, but even the most idiotic board member must at some point agree that selling 40K only to the very richest kids is not a viable market, it has to be available to the middle class, or the hobby will sink.

You cant eat Tau and the Necrons wont heat your home. However escapism is always valued in hard times, hence why cheap beer manufacturers and online software manufacturers will profit mightily.

I am going to go out on a limb here and predict that if prices rocket GW prices will rise slowly once management realises they either have to sell at a price the public can afford, or close down. The one major change however will be the termination of GW retail, while GW retail keeps the hobby in the public mind, GW IP is mainstream enough it is not warranted. In times of heavy inflation GW might not be able to afford stores, but can afford am all order only business. If things get very bad they might no longer support 3d party stockists but that would be extreme.
I could see that being problematic is GW do not budge on prices and third party retail is no longer an option. The company does have one card it can play in that scenario, increasing box set sizes. Like I said earlier sprues cost pennies, so keep the price as is, (with no 3rd party discounts) or even raise it slightly, but provide double the content, triple even if times are hard.
I can see GW surviving anything short of hyperinflation with enough forward thinking in senior management.


Rampant inflation @ 2021/12/18 14:44:54


Post by: Manchild 1984


If you expect Inflation, think about getting a loan and put it into stocks.

Not financial advise. lol?


Rampant inflation @ 2021/12/18 14:50:28


Post by: Orlanth


 Manchild 1984 wrote:
If you expect Inflation, think about getting a loan and put it into stocks.

Not financial advise. lol?


Yes heavy inflation is all but inevitable now because REASONS.

Prepping is good at this time, buy tins etc. Not sure about stocks though.
Ironically potential lockdowns or economic hit will give us gamers a heads start in one aspect.
We are all or most of us already preppers in terms of things to do under mass unemployment or other ills.
Why? Because we have piles of shame.
This converts into piles of things to do if we are stuck at home there are no jobs and prices have doubled.


Rampant inflation @ 2021/12/18 20:42:30


Post by: Ouze


 Orlanth wrote:
Why? Because we have piles of shame.


I do believe I could literally spend the rest of my life working on what I have bought without ever buying another mini and still never finish it.


Rampant inflation @ 2021/12/18 21:07:48


Post by: chaos0xomega


Yep, same here.


Rampant inflation @ 2021/12/20 01:05:56


Post by: sebster


 Orlanth wrote:
Heavy inflation is almost cettainly coming, hyperinflation is possible.


Like, is this the same massive inflation that was coming in 2009 and it just hasn't arrived quite yet, or is this a new heavy inflation and it's going to happen in addition to the 2009 heavy inflation people were certain was coming but we still haven't got, and so we're going to get heavy inflation on top of heavy inflation?

Anyhow, if anything like that actually happened then plastic miniatures will be the last thing on anyone's mind. That's kind of the issue with this thread - people are trying to focus on price increases within a specific, very niche company, but using the broadest level macro considerations to predict them. But GW prices aren't really linked to the broader economic issues that drive overall inflation. We may or may not see a continuation of the current inflationary pressures, but whether we do or not, GW is gonna GW, and raise prices wherever they think they can, and only ease off in places where they want to target new customers.


Rampant inflation @ 2021/12/20 01:10:24


Post by: the_scotsman


Nurglitch wrote:
Everyone was careful to get fixed rate loans and mortgages while money was cheap, right?


hellllllllllllllllllllll yeah. And a refi to get it even lower.


Rampant inflation @ 2021/12/20 02:35:00


Post by: Toofast


Nurglitch wrote:
Everyone was careful to get fixed rate loans and mortgages while money was cheap, right?


Yes. Bought a house for 185 at historically low rates. Had a couple realtors out last week who said it would go for 310-325 and sell within 10 days. I'm just gonna hold it for awhile because prices in this area aren't coming down any time soon. I've talked to a ton of NY/NJ people who used to spend winters here but decided to stay permanently because of our taxes and lack of covid restrictions. They're selling $1M+ houses up there and moving down here which has shot the market through the roof. You also have Canadians, Germans, and vacation rental companies competing for houses here. Contractors are in short supply, building materials even shorter. They aren't building as many new homes so existing home prices are rising because of that as well. I also got a Tacoma TRD Offroad for 36k, 6 months later it was worth 42k. The market on houses and cars is insane and I feel bad for anyone who wasn't able to get into a new house/car before this inflation kicked off. Companies are giving 2-3% raises when CPI is almost 7% and even that hilariously understates true inflation.


Rampant inflation @ 2021/12/20 15:27:49


Post by: Easy E


The measure of inflation in the hobby is not GW prices.

It is what other, smaller shops end up doing that is the measure.

IMHO


Rampant inflation @ 2021/12/20 16:12:38


Post by: techsoldaten


 Toofast wrote:
Yes. Bought a house for 185 at historically low rates. Had a couple realtors out last week who said it would go for 310-325 and sell within 10 days. I'm just gonna hold it for awhile because prices in this area aren't coming down any time soon. I've talked to a ton of NY/NJ people who used to spend winters here but decided to stay permanently because of our taxes and lack of covid restrictions. They're selling $1M+ houses up there and moving down here which has shot the market through the roof. You also have Canadians, Germans, and vacation rental companies competing for houses here. Contractors are in short supply, building materials even shorter. They aren't building as many new homes so existing home prices are rising because of that as well. I also got a Tacoma TRD Offroad for 36k, 6 months later it was worth 42k. The market on houses and cars is insane and I feel bad for anyone who wasn't able to get into a new house/car before this inflation kicked off. Companies are giving 2-3% raises when CPI is almost 7% and even that hilariously understates true inflation.


Stay long on those assets.

Lived in Nevada at a time when Californians were cashing out. Ride that for a few years and see what happens.

You might be interested in looking at some of the news about BLS data on jobs recovered since the start of Covid (not posting links b/c of politics.) Jobs in FL have recovered to about 91% of where they were pre-Covid, with a lot of people continuing to receive public assistance and tourism continuing to be at 50-year lows. The major drivers of new job creation are in construction, hi-tech and finance, meaning you're getting new sectors.

That state is about to get a lot hotter.




Rampant inflation @ 2021/12/20 16:21:35


Post by: Toofast


 techsoldaten wrote:

Stay long on those assets.

Lived in Nevada at a time when Californians were cashing out. Ride that for a few years and see what happens.

You might be interested in looking at some of the news about BLS data on jobs recovered since the start of Covid (not posting links b/c of politics.) Jobs in FL have recovered to about 91% of where they were pre-Covid, with a lot of people continuing to receive public assistance and tourism continuing to be at 50-year lows. The major drivers of new job creation are in construction, hi-tech and finance, meaning you're getting new sectors.

That state is about to get a lot hotter.




Oh I plan on keeping this house forever, same with my parents' house once I get it. Between passive income from my investments and renting those out, I'll be able to quit working and travel the world with my wife by the age of 40.


Rampant inflation @ 2021/12/20 16:36:21


Post by: techsoldaten


 Toofast wrote:
 techsoldaten wrote:

Stay long on those assets.

Lived in Nevada at a time when Californians were cashing out. Ride that for a few years and see what happens.

You might be interested in looking at some of the news about BLS data on jobs recovered since the start of Covid (not posting links b/c of politics.) Jobs in FL have recovered to about 91% of where they were pre-Covid, with a lot of people continuing to receive public assistance and tourism continuing to be at 50-year lows. The major drivers of new job creation are in construction, hi-tech and finance, meaning you're getting new sectors.

That state is about to get a lot hotter.




Oh I plan on keeping this house forever, same with my parents' house once I get it. Between passive income from my investments and renting those out, I'll be able to quit working and travel the world with my wife by the age of 40.


Good luck and hope that comes true for you.

Just remember you will be a different person at age 40, world travel only keeps you so fulfilled, and the future holds many opportunities.

Keep your options open and listen to the Pompcast.


Rampant inflation @ 2021/12/21 19:24:39


Post by: NinthMusketeer


Hope it's more than a few feet above sea level...


Rampant inflation @ 2021/12/22 18:01:21


Post by: Orlanth


 sebster wrote:
 Orlanth wrote:
Heavy inflation is almost cettainly coming, hyperinflation is possible.


Like, is this the same massive inflation that was coming in 2009 and it just hasn't arrived quite yet, or is this a new heavy inflation and it's going to happen in addition to the 2009 heavy inflation people were certain was coming but we still haven't got, and so we're going to get heavy inflation on top of heavy inflation?

.


This is not 2009. In 2009 some important bankers lost money on risky investments, and the rest of us had to compensate them, because important bankers are not allowed to lose money.
2021 is different, in 2009 some businesses closed down but the global economy was not turned off and people told to go home.
We are yet to pay for that, that debt has been deferred but not forgotten.


Rampant inflation @ 2021/12/22 19:18:59


Post by: Easy E


Well, even a broken clock is right twice a day. This could be it.

There is no doubt in my mind, that some people will be beating the "inflation is terrible" drum as hard as they can for the next several months.


Rampant inflation @ 2021/12/23 22:13:12


Post by: Waaagh_Gonads


Inflation in Australia was 3.0 in Q3 2021, a significant drop from the 3.8% for the year up to that point.

So GW will raise prices 30% in 2022.

I'm glad I am not in the US or Canada right now.
Your governments really, really need to stop printing money and start removing it from the economy (slowly to avoid financial panic).



Rampant inflation @ 2021/12/24 01:30:38


Post by: techsoldaten


 Waaagh_Gonads wrote:
Inflation in Australia was 3.0 in Q3 2021, a significant drop from the 3.8% for the year up to that point.

So GW will raise prices 30% in 2022.

I'm glad I am not in the US or Canada right now.
Your governments really, really need to stop printing money and start removing it from the economy (slowly to avoid financial panic).


It might not be possible for the US to raise interest rates enough to slow down inflation.

Raising interest rates means paying more in interest on debt. Not printing money means a certain number of businesses stop being in business, the availability of cheap credit is what's propping things up.

The combination of increased debt service, declining tax revenue plus mass unemployment might make a default unavoidable.

Which would create problems worse than any GW rate hike you can imagine.


Rampant inflation @ 2022/01/06 02:53:22


Post by: MrMoustaffa


Yeah if GW tries to raise their prices in line with inflation right now I cant imagine that would end well for them. We'd be seeing yearly price rises around $5-10 a kit Id think.

That said, my 2018 jeep renegade is worth more now at 40,000 miles than it was when I bought it brand new a few years ago. Houses in my area regularly sell within 24 hours, often going above asking price without the bidder ever even setting foot inside. Absolutely insane to watch. My gf had her car rear ended and totaled the other day. Weve been shopping for cars and car lots are selling used vehicles with 30000 miles on them for more than MSRP new would be. I realize thats more to do with scarcity than inflation but if you think about it 40k is in a similar situation. New kits can be hard to get and products regularly go out of stock. If youve got a really good unit new in box, it can be worth more than msrp if its got some hot rules and people need it to fill out a list.

We may see a situation in the future if the supply chain got bad enough where the second hand market goes up in price as it gets harder to find certain kits but deman remains the same.


Rampant inflation @ 2022/01/06 09:52:05


Post by: sebster


 Orlanth wrote:
This is not 2009. In 2009 some important bankers lost money on risky investments, and the rest of us had to compensate them, because important bankers are not allowed to lose money.
2021 is different, in 2009 some businesses closed down but the global economy was not turned off and people told to go home.
We are yet to pay for that, that debt has been deferred but not forgotten.


That's a terrible description of the great recession. The issue wasn't just that bankers lost money, and the compensation is both mischaracterized and not a factor. The issue in 2008 was major financial institutions lost financial stability, and that uncertainty reduced consumption spending and killed investment spending. The reaction, stimulus spending and QE, led to extreme calls they hyperinflation was coming. Those calls were hopelessly wrong because they were based on utter nonsense, some vague notion that inflation is a product of M1 money supply, with no consideration of accelerator effects or even just of demand.

The same people are now making the same calls for hyperinflation. They're still wrong, albeit for entirely different reasons. What we are seeing right now is supply constraint inflation, its something that used to be fairly routine. Except, as we've seen, popular memory doesn't even last a decade, and so because we've had around 3 decades of relative price stability, people have simply no idea that periods of inflation do happen, they are normal, and what is normal is that the market adjusts, the constraint clears and inflation returns to normal levels.

What we're seeing is people seeing their first ever thunderstorm, concluding that it isn't just a flood, but a return of Noah's 40 days of flood that will cover the earth. Except it isn't Noah's flood, it isn't even a normal flood. It's just people seeing their first thunderstorm.

Oh and also the level of debt is not a factor in the rate of inflation, and if you think it is then I really just please beg you to stop making up opinions about economics because you really don't understand how it works. Look at Japan's lost decade, loads of debt stacked up trying to stimulate a stagnant economy and they were routinely facing deflation, and never once approached even a modest level of inflation.


Rampant inflation @ 2022/01/06 12:40:35


Post by: Orlanth


 sebster wrote:
 Orlanth wrote:
This is not 2009. In 2009 some important bankers lost money on risky investments, and the rest of us had to compensate them, because important bankers are not allowed to lose money.
2021 is different, in 2009 some businesses closed down but the global economy was not turned off and people told to go home.
We are yet to pay for that, that debt has been deferred but not forgotten.


That's a terrible description of the great recession. The issue wasn't just that bankers lost money, and the compensation is both mischaracterized and not a factor. The issue in 2008 was major financial institutions lost financial stability, and that uncertainty reduced consumption spending and killed investment spending. The reaction, stimulus spending and QE, led to extreme calls they hyperinflation was coming. Those calls were hopelessly wrong because they were based on utter nonsense, some vague notion that inflation is a product of M1 money supply, with no consideration of accelerator effects or even just of demand.

The same people are now making the same calls for hyperinflation. They're still wrong, albeit for entirely different reasons. What we are seeing right now is supply constraint inflation, its something that used to be fairly routine. Except, as we've seen, popular memory doesn't even last a decade, and so because we've had around 3 decades of relative price stability, people have simply no idea that periods of inflation do happen, they are normal, and what is normal is that the market adjusts, the constraint clears and inflation returns to normal levels.

What we're seeing is people seeing their first ever thunderstorm, concluding that it isn't just a flood, but a return of Noah's 40 days of flood that will cover the earth. Except it isn't Noah's flood, it isn't even a normal flood. It's just people seeing their first thunderstorm.

Oh and also the level of debt is not a factor in the rate of inflation, and if you think it is then I really just please beg you to stop making up opinions about economics because you really don't understand how it works. Look at Japan's lost decade, loads of debt stacked up trying to stimulate a stagnant economy and they were routinely facing deflation, and never once approached even a modest level of inflation.


One needs a holistic view of the global economy to properly catalogue the causes or consequences of the 2008 collapse. You highlighted one factor amongst many, so did I.
The difference is that "the major financial institutions lost financial stability" because of rampant greed and corruption. They bet the bank on high risk BS backed up by fake ratings and massed collusion to rig the system, then expected everyone else to pay via tax when the party ran out of balloons.
Then the dominos started falling until unrelated industries has issues due to problems that were related only by a long chain of events.

As for hyperinflation that call is entirely different.
We are feeling inflation right now, far more significantly than pre-COVID. This may well get worse if there are further cycles of lockdowns, especially if the next COVID mutation is nastier than Omicron.
I don't know which bubble you are fortunate enough to inhabit, but you should have noticed the inflation by now. It is real, it is happening, it is not a prediction or a calculation but a living reality. This will get worse.
Real people are getting heavily fethed by lockdown, whole sectors are losing money, some like the hospitality sector got income starved and not all categories got compensation. What compensation occurred requires public borrowing on the scale of a major war and will take decades to repay, or may result in default.

The main question is how much worse?
We will see a worsening of inflation if more lockdowns occur, hyperinflation. Not guaranteed.

That being said the main warning calls for hyperinflation have different roots, and are conspiracy based. I prefer to keep an open mind about that. The 'Great Reset' is not a concealed movement and has very powerful people behind it. One doesn't need too much tinfoil to come to the conclusion that the best way to reset the economy is to crash the existing one. hyperinflation would do that, but is not the only tool.

The Great Reset does concern me, and should concern you. When someone wants to level the playing field it is seldom to actually make things fair, but to reposition those who control the field and expand power. Economic feudalism is a major draw, why give people mortgages when you can own them instead. I cannot write off the hyperinflation threat, but it is only one of several plays that could be occurring.


Rampant inflation @ 2022/01/06 16:34:50


Post by: lord_blackfang


 sebster wrote:
people have simply no idea that periods of inflation do happen, they are normal


In a failing system.


Rampant inflation @ 2022/01/06 20:31:28


Post by: NinthMusketeer


I seriously did not realize how much I missed Sebster


Rampant inflation @ 2022/01/07 04:25:08


Post by: sebster


 Orlanth wrote:
One needs a holistic view of the global economy to properly catalogue the causes or consequences of the 2008 collapse. You highlighted one factor amongst many, so did I.
The difference is that "the major financial institutions lost financial stability" because of rampant greed and corruption.


No, economics is not just a means for you to pass moral judgements. I mean the idea that people were being greedy in 2008 but they weren't being greedy in, I don't know, 1995 or 1968 or whatever other year is just silly. When economic systems break it is not because of greed, which is an ever present reality of human existence. The problem is because there were flaws in the economic system.

They bet the bank on high risk BS backed up by fake ratings and massed collusion to rig the system, then expected everyone else to pay via tax when the party ran out of balloons.
Then the dominos started falling until unrelated industries has issues due to problems that were related only by a long chain of events


No. Housing crashes happen. They're not good but they are never enough to destabilise a world economy by themselves. The issue was the explosion in derivative and shadow financial assets over the prior decade, and the complete failure to control or properly report the risks of trillions in exposure by institutions holding these assets. The sub-prime crisis wiped out a lot of assets, but no more so than a lot of other localized crashes. The problem came when those losses hit financial institutes who's complex off balance sheet derivatives left them unclear of their own leverage, while those derivatives tied them to other financial institutes in complex ways, who in turn also had no idea what their actual leverage was. That allowed instability to spread, even to companies with no major exposures because there were no mechanisms to know those companies weren't exposed.

To get that back to the actual issue being debated, to respond to the fall in consumer spending and collapse in investment caused by the financial collapse, one of the measures taken was to buy up large amounts of debt to put more cash in to the economy. A lot of pundits concluded that because this was printing new money, then inflation and even hyperinflation will surely follow. This was, quite simply, complete nonsense. Inflation isn't purely a product of the money supply, but also the accelerator, the level of aggregate demand and the level of supply. So not only did we fail to see hyperinflation, we didn't see any inflation at all, instead inflation sat near 0% for years. And you know, people get a lot of stuff badly wrong, economics is a field that invites certainty of complex interactions and soon enough everyone says something foolish... but none of the people who got inflation so hopelessly wrong then ever owned it, reflected on it, or spoke about how they might have changed their thinking afterwards. And now those exact same people are claiming these new, brief period of moderate inflation is absolutely, certainly the beginnings of hyperinflation, and people are still taking them seriously.

I don't know which bubble you are fortunate enough to inhabit, but you should have noticed the inflation by now. It is real, it is happening, it is not a prediction or a calculation but a living reality. This will get worse.


You are claiming I haven't noticed inflation. In my post, to which you were replying to I wrote "What we are seeing right now is supply constraint inflation"... and you replied by saying that I haven't noticed the inflation.

Dude, my reply was 313 words. That's about a third longer than the Very Hungry Caterpillar. That can't be too much for you to read and take in, so what happened?

The main question is how much worse?
We will see a worsening of inflation if more lockdowns occur, hyperinflation. Not guaranteed.


No, once again periods of inflation are entirely normal, and the last few decades of extremely flat inflation have been an unusual outlier. You are seeing the first thunderstorm of your life and speculating that it is definitely a flood and might just be the return of Noah's flood.

That being said the main warning calls for hyperinflation have different roots, and are conspiracy based. I prefer to keep an open mind about that. The 'Great Reset' is not a concealed movement and has very powerful people behind it. One doesn't need too much tinfoil to come to the conclusion that the best way to reset the economy is to crash the existing one. hyperinflation would do that, but is not the only tool.


Yes, I too am concerned about the deep plots of the crab people from Mars.


Automatically Appended Next Post:
 lord_blackfang wrote:
In a failing system.


No, currency inflation is a normal thing, and vastly preferable to the opposite.


Rampant inflation @ 2022/01/07 15:25:48


Post by: Easy E


Did this discussion just reference the Great Reset?

Let's just consider that for a moment before we proceed with this discussion.


Rampant inflation @ 2022/01/07 15:40:14


Post by: Orlanth


 sebster wrote:
 Orlanth wrote:
One needs a holistic view of the global economy to properly catalogue the causes or consequences of the 2008 collapse. You highlighted one factor amongst many, so did I.
The difference is that "the major financial institutions lost financial stability" because of rampant greed and corruption.


No, economics is not just a means for you to pass moral judgements. I mean the idea that people were being greedy in 2008 but they weren't being greedy in, I don't know, 1995 or 1968 or whatever other year is just silly. When economic systems break it is not because of greed, which is an ever present reality of human existence. The problem is because there were flaws in the economic system.


The "flaws in the economic system" were due to greed and corruption.
Economies continue 'as normal' until a threshold is reached, just like individuals. A person can act normally regardless of the state of their bank account until they go bankrupt. However when that thresholsd is crossed big changes occur.
Companies are the same but bigger, so are nations.
in the case of the 2008 crash loose credit, rampant greed in the banking sector and dishonest labelling through ratings agencies caused a bubble that expanded until elasticity was lost, then it continued more as an artificial dotted line when the true economic status was further concealed by vested interests.
eventually hard reality intervened and bang, the system failed.
These were your flaws:
- greed
- corruption.

They bet the bank on high risk BS backed up by fake ratings and massed collusion to rig the system, then expected everyone else to pay via tax when the party ran out of balloons.
Then the dominos started falling until unrelated industries has issues due to problems that were related only by a long chain of events


No. Housing crashes happen. They're not good but they are never enough to destabilise a world economy by themselves. The issue was the explosion in derivative and shadow financial assets over the prior decade, and the complete failure to control or properly report the risks of trillions in exposure by institutions holding these assets.

The issue was the explosion in derivative and shadow financial assets over the prior decade, = greed
the complete failure to control or properly report the risks of trillions in exposure by institutions holding these assets. = corruption

Where did this greed and corruption occur

explosion in derivative and shadow financial assets = dishonest bankers buying junk trades made of mostly illusory assets
complete failure to control or properly report the risks = ratings agencies, bank overseers and management in banks

So greed and corruption of bankers.
....Who got bailouts
....at the cost of the taxpayer
....and didnt lose their jobs
....while many lost their jobs and homes
....and unrelated industries which hadn't cheated the system were thrown to the wall

And they were back to their old tricks by 2010 at the latest after pretending to say sorry to congress.

 sebster wrote:

To get that back to the actual issue being debated, to respond to the fall in consumer spending and collapse in investment caused by the financial collapse, one of the measures taken was to buy up large amounts of debt to put more cash in to the economy. A lot of pundits concluded that because this was printing new money, then inflation and even hyperinflation will surely follow. This was, quite simply, complete nonsense. Inflation isn't purely a product of the money supply, but also the accelerator, the level of aggregate demand and the level of supply. So not only did we fail to see hyperinflation, we didn't see any inflation at all, instead inflation sat near 0% for years. And you know, people get a lot of stuff badly wrong, economics is a field that invites certainty of complex interactions and soon enough everyone says something foolish... but none of the people who got inflation so hopelessly wrong then ever owned it, reflected on it, or spoke about how they might have changed their thinking afterwards. And now those exact same people are claiming these new, brief period of moderate inflation is absolutely, certainly the beginnings of hyperinflation, and people are still taking them seriously.


That was then, this is now.
Covid happened. Economies were shut down, many sectors of the economy were left to collapse, some got a measure of compensation, others not. Mostly at the cost to public borrowing and a further burden on the economy.
Inflation is now here.

It can get worse, the question now is how much worse.

 sebster wrote:

I don't know which bubble you are fortunate enough to inhabit, but you should have noticed the inflation by now. It is real, it is happening, it is not a prediction or a calculation but a living reality. This will get worse.


You are claiming I haven't noticed inflation. In my post, to which you were replying to I wrote "What we are seeing right now is supply constraint inflation"... and you replied by saying that I haven't noticed the inflation.

Dude, my reply was 313 words. That's about a third longer than the Very Hungry Caterpillar. That can't be too much for you to read and take in, so what happened?


So you are now complaining that I am part quoting you and not reading the whole message and cherry picking.
You have been doing that for best part of two decades.

However to answer you we are seeing more than supply constraint inflation, we are seeing general opportunistic inflation (that ole' greed again). money printing causing dilution of currency value, the shadow of large scale public borrowing, rising costs (including infrastructure cost hikes caused by ill planned energy restructuring for green agenda politics), tax rises, wage rises.
All the usual suspects.
To which we can add three major whammies to which we cant quantify a risk level..
- Possibility of major global or regional conflicts on the horizon.
- Covid uncertainty because we are facing a virus with a reasonably high mutation rate to which extreme reactions are likely to occur, warranted or not.
- Great Reseters doing some great resetting, whatever that happens to be. Though we are assured at the end we will own nothing, and be happy.

 sebster wrote:

The main question is how much worse?
We will see a worsening of inflation if more lockdowns occur, hyperinflation. Not guaranteed.


No, once again periods of inflation are entirely normal, and the last few decades of extremely flat inflation have been an unusual outlier. You are seeing the first thunderstorm of your life and speculating that it is definitely a flood and might just be the return of Noah's flood.


Hardly the first thunderstorm, we can see Zimbabwe from here, with the same technology available to us, as anywhere else.
Covid is new through, and the global reaction to it is new, consequences are yet to be calculated as we have never unplugged the entire economy without a major war before, and we might also get the major war.


 sebster wrote:

Yes, I too am concerned about the deep plots of the crab people from Mars.


Laughing off a cabal of flat earthers is rational.
Laughing off a cabal of international financiers and power elite, not so rational


 sebster wrote:

 lord_blackfang wrote:
In a failing system.


No, currency inflation is a normal thing, and vastly preferable to the opposite.


We might get too much of a normal thing.


Rampant inflation @ 2022/01/07 16:56:38


Post by: Laughing Man


 Easy E wrote:
Did this discussion just reference the Great Reset?

Let's just consider that for a moment before we proceed with this discussion.

The mods haven't shown much of a problem with complaining about <<<globalists>>> and I doubt they'll start now.


Rampant inflation @ 2022/01/07 17:48:08


Post by: John Prins


The money from Quantitative Easing has mostly gone into stocks and housing, thus the high stock market and high housing prices lately.

The inflation of goods is probably more complex a problem than we've seen in a long time, and a lot of it is bad, self-inflicted government decisions:

China's tiff with Australia has caused power shortages to the point where their manufacturing is at a standstill in some provinces. Supply side issues raise cost of goods worldwide.
The USA's attempted green shift has throttled oil production leading to massive fuel price increases which affect the entire system. Baked in fuel cost inflation on everything in the USA.
Germany's decision to de-nuclearize their power grid has increased demand for natural gas spiking prices across Europe. Bake in fuel cost inflation on everything in Europe.

Add in how COVID is messing with supply chains, the global microchip shortage that's throttling the automotive industry, and you've got lots of reasons on top of QE for inflation.




Rampant inflation @ 2022/01/07 18:00:59


Post by: Laughing Man


 John Prins wrote:
The money from Quantitative Easing has mostly gone into stocks and housing, thus the high stock market and high housing prices lately.

The inflation of goods is probably more complex a problem than we've seen in a long time, and a lot of it is bad, self-inflicted government decisions:

China's tiff with Australia has caused power shortages to the point where their manufacturing is at a standstill in some provinces. Supply side issues raise cost of goods worldwide.
The USA's attempted green shift has throttled oil production leading to massive fuel price increases which affect the entire system. Baked in fuel cost inflation on everything in the USA.
Germany's decision to de-nuclearize their power grid has increased demand for natural gas spiking prices across Europe. Bake in fuel cost inflation on everything in Europe.

Add in how COVID is messing with supply chains, the global microchip shortage that's throttling the automotive industry, and you've got lots of reasons on top of QE for inflation.



The US' gas costs have little to do with domestic production or green energy, and almost everything to do with the pandemic massively decreasing demand for oil (as seen by 2020's record low gas prices) leading to OPEC slashing production, followed by everyone deciding the pandemic is over and OPEC not having fully throttled up production again. Domestic production is up dramatically over a five year period, and has mostly recovered from the 2020 COVID slump.


Rampant inflation @ 2022/01/10 03:47:55


Post by: sebster


 Orlanth wrote:
The "flaws in the economic system" were due to greed and corruption.


No. People are greedy. This is true in when an economy is going fine, and its true when part of an economy is struggling. But we only notice the greed when the economy has an issue because that's the only time that people on the internet with opinions start thinking that calling some other group immoral is a solution.

the complete failure to control or properly report the risks of trillions in exposure by institutions holding these assets. = corruption


This is moralistic twaddle. Seriously, please just stop thinking you can call some other person greedy and think you've reached any kind of conclusion. It is nonsense. Please go and learn what a derivative is and what it is for (because no, it isn't just a speculative bet). Because most derivatives are actually taken to reduce risk, control exposures to asset & commodity price fluctuations that companies don't want to be exposed to. But when the size of the derivative market grows rapidly then the complexity of interactions between derivatives grows even faster, and you need new layers of accounting & financial regs to bring transparency to exposures and local & market wide risks.

The problem came because regs didn't come close to keeping up with derivative growth. So while individual companies might have been able to build their own systems to track exposures, the lack of public reporting led to no understanding of whole sector exposures and how instability among companies tied to each other by derivative exposures could drag down the whole financial sector.

explosion in derivative and shadow financial assets = dishonest bankers buying junk trades made of mostly illusory assets


No. Pork bellies and orange juice pulp and stocks and mortgages are in fact real assets.

complete failure to control or properly report the risks = ratings agencies, bank overseers and management in banks


Except I sat in accounting classes in the late 1990s with lecturers talking about this issue, reading quotes from banking and financial CEOs talking about the need to build regulations around this. This was a major focus with all manner of senior financial staff wanting it fixed.

That was then, this is now.


Yes, but the economy remains a mechanical system and the only way to understand it is through understand its mechanical elements, not through moralistic nonsense. As such, the people to listen on future inflation are still the technical experts, who are expecting inflation within accepted bounds well in to next year, and not the moralistic people on the internet with opinions.

Inflation is now here.

It can get worse, the question now is how much worse.


No, the first question is if it will continue, or if it the product of supply shortages due to disruption in global supply chains, and if it will stabilise or drop as those disruptions end.

However to answer you we are seeing more than supply constraint inflation, we are seeing general opportunistic inflation (that ole' greed again).


"No, no, don't you see, some of it might be price rises due to supply shortages... but some of it is people being *greedy*."

Seriously dude, this is not a morality play.

Hardly the first thunderstorm, we can see Zimbabwe from here


Yes, Mugabe's Zimbabwe is entirely just like what is happening in liberal democracies. Definitely.

Laughing off a cabal of international financiers and power elite, not so rational


Ah yes, that annual event where the most influential and the wealthiest people in the world all meet and talk with each other, with the topics of conversation put on the public record... and it causes everyone to make up all sorts of wild conspiracies.

Meanwhile, over at the actual great reset forums, you just get Prince Charles talking to some apparatchik from the World Bank about how giving people a bigger stake in the world economy would produce more social resilience or something or other.

We might get too much of a normal thing.


Of course we might. And yesterday it got quite hot here and if that heat continued and just got hotter and hotter then they would have been awful, and if it got worse than that then people would have started dying, everything would have caught on fire, and if that heat continued spreading out to the rest of planet, never ending, just getting hotter then it would have eventually been a planet killing event. But instead evening came, it cooled down and in hindsight it was quite a nice day, except for that period for about an hour just after lunch.

I mean seriously, do you remember the early 90s as a period of impossible economic suffering? Do you often talk about the early 90s as the last time a secret cabal of billionaires attempted a great reset? No, because inflation then, at similar rates to today, was something that had to be managed but was not in fact some inevitable snowball of hyperinflation and total systemic collapse.


Automatically Appended Next Post:
 John Prins wrote:
The money from Quantitative Easing has mostly gone into stocks and housing, thus the high stock market and high housing prices lately.


1) Money doesn't and can't disappear in to housing and stocks. In an asset trade for every buyer there is a seller. On buying an asset, the buyer loses $100 and the seller... gains $100. The transaction will change which person ends up purchasing goods and services, but the level of overall economic activity is not affected.

2) The unemployment rate has gone from over 10 to sub 4. There are people buying more stuff than they were, and no reason at all to think money supplied by QE is somehow the only money that isn't part of that increase in demand.

China's tiff with Australia has caused power shortages to the point where their manufacturing is at a standstill in some provinces.


As much as I'd like to think my little country is driving worldwide issues, China's policy to our coal is far from the biggest issue with their energy sector. They've got deeper problems than not taking our coal, but you are right to raise China's energy problem as a major issue with the disruptions we're seeing right now.


Rampant inflation @ 2022/01/10 14:09:08


Post by: Orlanth


 sebster wrote:
 Orlanth wrote:
The "flaws in the economic system" were due to greed and corruption.


No. People are greedy. This is true in when an economy is going fine, and its true when part of an economy is struggling. But we only notice the greed when the economy has an issue because that's the only time that people on the internet with opinions start thinking that calling some other group immoral is a solution.


You are on the internet too.
However a lot of us notice the greed at other times. And there are levels of greed, fighting the boss for a pay rise matches clashes desires on both sides of a desk.
However there is an expectation that speculators in major banks can make high risk bets and expect to keep their winning if they win and pass on all losses to the taxpayer if they don't.
That greed gets peoples backs up, with good reason.


 sebster wrote:

This is moralistic twaddle. Seriously, please just stop thinking you can call some other person greedy and think you've reached any kind of conclusion. It is nonsense. Please go and learn what a derivative is and what it is for (because no, it isn't just a speculative bet). Because most derivatives are actually taken to reduce risk, control exposures to asset & commodity price fluctuations that companies don't want to be exposed to. But when the size of the derivative market grows rapidly then the complexity of interactions between derivatives grows even faster, and you need new layers of accounting & financial regs to bring transparency to exposures and local & market wide risks.


When you are triggered by facts Sebster, it is time to quit.
Derivatives might have labels about risk reduction, but that is not the reality. You are only making it worse when you admit that derivatives have a well sounding narrative, because the historical reality is the same derivative market being used to ruin millions of people, and place a tax burden on the citizen for bailouts to cover the handful of suits fething over for a goddamn percentage.

 sebster wrote:

The problem came because regs didn't come close to keeping up with derivative growth. So while individual companies might have been able to build their own systems to track exposures, the lack of public reporting led to no understanding of whole sector exposures and how instability among companies tied to each other by derivative exposures could drag down the whole financial sector.


The problem came because regs could not keep up because of massive scale corporate lobbying.
Exasperated by the bailouts which enabled and abetted further lobbying that meant that nothing could be done in hindsight.

 sebster wrote:

explosion in derivative and shadow financial assets = dishonest bankers buying junk trades made of mostly illusory assets

No. Pork bellies and orange juice pulp and stocks and mortgages are in fact real assets.


It is all part of the illusion.
Bankers add non-stocks into tranches for easy profit, went all in due to corruption and greed and bet the house on them.
It doesnt matter what cards you draw the hand after you are all in and lose. You need money to buy pork bellies.
So it doesn't matter if the F.C.O.J. projections are good and the cold weather has not damaged the orange harvest, because its overshadowed by the catshit wrapped in dogshit.
I can have fun playing with memes too.

 sebster wrote:

complete failure to control or properly report the risks = ratings agencies, bank overseers and management in banks


Except I sat in accounting classes in the late 1990s with lecturers talking about this issue, reading quotes from banking and financial CEOs talking about the need to build regulations around this. This was a major focus with all manner of senior financial staff wanting it fixed.


Plenty of people could read the signs, plenty of people counterlobbied for regulation, or ran shorts or recommended people keep a hand in apocalypse stocks. But none of these voices were heard over the lobbying that called for statis or even further de-regulation.

 sebster wrote:

That was then, this is now.


Yes, but the economy remains a mechanical system and the only way to understand it is through understand its mechanical elements, not through moralistic nonsense. As such, the people to listen on future inflation are still the technical experts, who are expecting inflation within accepted bounds well in to next year, and not the moralistic people on the internet with opinions.


It isn't moralistic nonsense if:
- It's true
- There is something that can/could be done about it.

Assuming you are able to read your own excuses you yourself are aware the 2008 crash existed and that there were causes that could have been prevented.

It is entirely good sense morality to question when a situation could have been prevented by regulation and was not due to vested interests

 sebster wrote:

Inflation is now here.

It can get worse, the question now is how much worse.


No, the first question is if it will continue, or if it the product of supply shortages due to disruption in global supply chains, and if it will stabilise or drop as those disruptions end.


Will they end though?
- Sabre rattling is increasing not decreasing.
- Covid has not gone away and some countries are doubling down on draconian measures.

Forum rules prevent me from quantifying those points further so don't get picky. Just turn on the TV and observe. You will see that the only certainty is uncertainty.

 sebster wrote:

However to answer you we are seeing more than supply constraint inflation, we are seeing general opportunistic inflation (that ole' greed again).

"No, no, don't you see, some of it might be price rises due to supply shortages... but some of it is people being *greedy*."
Seriously dude, this is not a morality play.


Are you so divorced from reality you don't understand that because some people put up prices because they have to others will because they can.
Welcome to planet Earth, enjoy your stay.

 sebster wrote:

Hardly the first thunderstorm, we can see Zimbabwe from here


Yes, Mugabe's Zimbabwe is entirely just like what is happening in liberal democracies. Definitely.


Stop trying to mince words, you implied this was the current generations only encounter with hyperinflation. I showed otherwise.

 sebster wrote:

Laughing off a cabal of international financiers and power elite, not so rational


Ah yes, that annual event where the most influential and the wealthiest people in the world all meet and talk with each other, with the topics of conversation put on the public record... and it causes everyone to make up all sorts of wild conspiracies.


If people with tinfoil hats put words into the mouths of these people you would have a point. That would be conspiracy.
But these words came from press conferences from official websites and from quotes directly from delegates mouths.

 sebster wrote:

Meanwhile, over at the actual great reset forums, you just get Prince Charles talking to some apparatchik from the World Bank about how giving people a bigger stake in the world economy would produce more social resilience or something or other.


If those delegates or members were denounced as cranks by the majority you would still have a point.
But these delates were not denounced by any other delegates and appear to speak for the majority.

No one said 'Prince Charles doesn't speak for us'.
Also it was not just Prince Charles saying these things, it is echoed by others with more power, and they were not denounced as fringe either.

 sebster wrote:

We might get too much of a normal thing.


Of course we might. And yesterday it got quite hot here and if that heat continued and just got hotter and hotter then they would have been awful, and if it got worse than that then people would have started dying, everything would have caught on fire, and if that heat continued spreading out to the rest of planet, never ending, just getting hotter then it would have eventually been a planet killing event. But instead evening came, it cooled down and in hindsight it was quite a nice day, except for that period for about an hour just after lunch.


You manage to get it wrong even when you try reductio ad absurdem. That takes 'skill'.

https://www.bbc.com/news/world-europe-49628275

Mass casualties in an advanced nation from a simple relatable and entirely normal cause. And it happened before in 2003.


 sebster wrote:

I mean seriously, do you remember the early 90s as a period of impossible economic suffering? Do you often talk about the early 90s as the last time a secret cabal of billionaires attempted a great reset? No, because inflation then, at similar rates to today, was something that had to be managed but was not in fact some inevitable snowball of hyperinflation and total systemic collapse.


The early 90's had other problems. Saddam for one.
But the information age was in its infancy.
Corporate feudalism was not possible then, it is entirely possible now. The infrastructure for a global digital only economy is in place, it was not there either end of the 90's.
It is now possible to control a population via social credit, that is happening already in China. And it is possible to drive a cashless society and force digitisation of all transactions, there are even some quotable benefits in doing so which can be used to drive through opposition.




Rampant inflation @ 2022/01/12 02:58:58


Post by: sebster


 Orlanth wrote:
However there is an expectation that speculators in major banks can make high risk bets and expect to keep their winning if they win and pass on all losses to the taxpayer if they don't.
That greed gets peoples backs up, with good reason.


Of course it gets people's backs up. Its an easy narrative with a readily identified villain. Which is exactly why people are so quick to latch on to it, even when it isn't accurate and won't stop the next crisis.


The problem came because regs could not keep up because of massive scale corporate lobbying.


Look at you just making stuff up out of the blue. Most of the stuff I'm talking about isn't even legislation but professional standards. You think Jack Abramoff was there, taking the IASB on private jet junkets?

This is so silly.

Bankers add non-stocks into tranches for easy profit, went all in due to corruption and greed and bet the house on them.


I spent actual time out of my life to explain to you the scope of the derivative market, and here you are still thinking derivatives just means CDOs. Please stop. You really just do not know the slightest damn thing about this and pretending you do is only going to stop you learning.

It doesnt matter what cards you draw the hand after you are all in and lose. You need money to buy pork bellies.


The derivative can fix the price for you, meaning you remove the risk of pork belly price fluctuation from the performance of your bacon supply business.

Plenty of people could read the signs, plenty of people counterlobbied for regulation, or ran shorts or recommended people keep a hand in apocalypse stocks. But none of these voices were heard over the lobbying that called for statis or even further de-regulation.


The debate was entirely focused on what that regulation should be. And it was a good faith, reasonable debate, the need to record exposures balanced against the very real consideration that badly designed requirements could place companies in to technical insolvency when they were still in reality going concerns.

Are you so divorced from reality you don't understand that because some people put up prices because they have to others will because they can.


You appear entirely unaware of the concept that the rate of inflation can, in addition to going up, also go down.

If those delegates or members were denounced as cranks by the majority you would still have a point.
But these delates were not denounced by any other delegates and appear to speak for the majority.

No one said 'Prince Charles doesn't speak for us'.
Also it was not just Prince Charles saying these things, it is echoed by others with more power, and they were not denounced as fringe either.


No, seriously, the Great Reset came from Prince Charles' conference, which was just a name given to his general brand of 'yes, capitalism but with everyone being nicer' nonsense. But crazy people on the internet decided to be crazy about it, because that's what they do, and now here we are.

You manage to get it wrong even when you try reductio ad absurdem. That takes 'skill'.

https://www.bbc.com/news/world-europe-49628275

Mass casualties in an advanced nation from a simple relatable and entirely normal cause. And it happened before in 2003.


You think the point at debate is whether it sometimes gets really hot? You think the fact that it does sometimes gets hot enough to kill people is some kind of killer revelation?

What are you doing?

The early 90's had other problems. Saddam for one.
But the information age was in its infancy.
Corporate feudalism was not possible then, it is entirely possible now.


Yeah, okay. I'm done. I mean this is too much, even for me.


Rampant inflation @ 2022/01/12 14:38:29


Post by: JWBS


U.S inflation hit 7% in December, the highest since 1982. I was born after that date so we've now reached an unprecedented level of inflation from my perspective, completely uncharted territory. I wonder what the next benchmark year is (I think the seventies were very bad in the UK, to the point where the government rationed electricity electricity and instituted a four day working week and mass unemployment afflicted us, which was all somehow tied to runaway inflation, and vice versa, iirc from my reading)


Rampant inflation @ 2022/01/12 15:57:09


Post by: Flinty


The early 1970s weren't great in the UK.

https://en.wikipedia.org/wiki/Three-Day_Week

https://en.wikipedia.org/wiki/1973%E2%80%931975_recession

Miners strike, oil embargoes due to middle east conflict and political fallout, major bombing campaigns from the IRA, and reciprocal armed intervention in NI (and vice versa), and a recession in 1974.

Hence, Punk became a thing.



Rampant inflation @ 2022/01/12 16:00:01


Post by: Ouze


This is way outside my area of expertise, but the US in the 70s had a double whammy of inflation coupled with high unemployment. I'm pretty sure unemployment is more or less under control as of right now, and if Omicron is as mild as it so far appears to be, it probably won't cause the huge spike we saw earlier in the pandemic.

 Flinty wrote:
Hence, Punk became a thing.


So, it wasn't all bad.



Rampant inflation @ 2022/01/13 00:44:53


Post by: Orlanth


 sebster wrote:
 Orlanth wrote:
However there is an expectation that speculators in major banks can make high risk bets and expect to keep their winning if they win and pass on all losses to the taxpayer if they don't.
That greed gets peoples backs up, with good reason.


Of course it gets people's backs up. Its an easy narrative with a readily identified villain. Which is exactly why people are so quick to latch on to it, even when it isn't accurate and won't stop the next crisis.


Except it was true, and you are in denial.
It wont stop the next crisis because the lessons have not been learned.

 sebster wrote:

The problem came because regs could not keep up because of massive scale corporate lobbying.

Look at you just making stuff up out of the blue. Most of the stuff I'm talking about isn't even legislation but professional standards. You think Jack Abramoff was there, taking the IASB on private jet junkets?


It's left to 'professional standards' i.e. a free-for-some, even if not a complete free for all. This is because legislation was kept out by lobbyists,



 sebster wrote:

I spent actual time out of my life to explain to you the scope of the derivative market, and here you are still thinking derivatives just means CDOs. Please stop. You really just do not know the slightest damn thing about this and pretending you do is only going to stop you learning.


I live it when you get triggered and try the please stop.
Why stop when I am making sense.
It matter less what other portions of the market exist beyond CDO's when that portion of the market is able to collapse the deck.
As mentioned earlier in this thread, greed and corruption in some portions of the market destabilised unrelated industries.

 sebster wrote:

It doesnt matter what cards you draw the hand after you are all in and lose. You need money to buy pork bellies.


The derivative can fix the price for you, meaning you remove the risk of pork belly price fluctuation from the performance of your bacon supply business.


Again you fail to grasp elementary logic. When you are all in and have lost your hand i.e when you have run out of money; you cannot take advantage of other business opportunities.
The 2008 crash caused so many people and businesses to lose their money it doesn't matter as much if derivatives secure prices of material assets.

 sebster wrote:

Plenty of people could read the signs, plenty of people counterlobbied for regulation, or ran shorts or recommended people keep a hand in apocalypse stocks. But none of these voices were heard over the lobbying that called for statis or even further de-regulation.


The debate was entirely focused on what that regulation should be. And it was a good faith, reasonable debate, the need to record exposures balanced against the very real consideration that badly designed requirements could place companies in to technical insolvency when they were still in reality going concerns.


Good faith debate is all pointless if bad faith lobbying makes and progress impossible.

 sebster wrote:

Are you so divorced from reality you don't understand that because some people put up prices because they have to others will because they can.

You appear entirely unaware of the concept that the rate of inflation can, in addition to going up, also go down.


In global markets yes, in accessible retail rarely if at all.
My point remains though, which you kindly edited down to take my comment out of context. You claimed that ijnflation was driven by scarity rather than greed (paraphrased). I counter that while scarcity might cause some prices to rise, others will rise due to opportunism.

 sebster wrote:

If those delegates or members were denounced as cranks by the majority you would still have a point.
But these delates were not denounced by any other delegates and appear to speak for the majority.

No one said 'Prince Charles doesn't speak for us'.
Also it was not just Prince Charles saying these things, it is echoed by others with more power, and they were not denounced as fringe either.


No, seriously, the Great Reset came from Prince Charles' conference, which was just a name given to his general brand of 'yes, capitalism but with everyone being nicer' nonsense. But crazy people on the internet decided to be crazy about it, because that's what they do, and now here we are.


Klaus Schwab should be listed as the author if any individual. Though in reality it is a collective effort, hence why it was a theme for the Forum. Prince Charles was just the venue host for the years' conference..
Please grow up and replace 'crazy people' accusation with 'people who chose to read the official WEF material and took it at face value'.
Like I said, this was not hidden in any way, this was focal and this wasn't denounced as fringe by the WEF. So it's not a crank conspiracy, not with the Who's Who of financiers and political leaders that make up the WEF backing it.

 sebster wrote:

Yeah, okay. I'm done. I mean this is too much, even for me.


Have fun.


Rampant inflation @ 2022/01/13 09:46:29


Post by: StygianBeach


I think alot of what Sebster points out is that these crisis are the financial market 'functioning as intended', from the point of view of the financial institutions. Therefore these are a natural state and should not be interfered with.

I think I remember him defending that a corporation should be able to be legally treated as a person, however I could be wrong on that one.

It is difficult for me to argue with Seb though because his knowledge of the inner workings of finance and related talking points seem to be well practiced. I don't have the vocabulary to dispute what is claimed without committing alot of time to responding.

For example, the finance sector successfully lobbies against legislation and instead promote professional standards (self regulation).
Orlanth points out there is a legal problem, Seb claims there is a professional standards problem deflecting attention away from the fact that the professional standards problem is a legislative problem. Implication is that the legislative bodies should take no action.

I usually enjoy Sebs analysis and breakdown of financial situations: it is usually his conclusions (or implications) I disagree with.

I hope I made enough sense, that took longer than I wanted it to.


Rampant inflation @ 2022/01/13 11:18:40


Post by: Orlanth


What you say Stygian Beach is fair.

I still stick to my guns that there is a legal problem, and lobbying has passed this down to self regulation, which is de facto exploitation.

I see the global and regional market as like a tide, it ebbs and flows.
When the tide is coming in there is a buoyant economy, people make money. When the tide is coming out there is a shortage of monies and a recession.
To financial institutions this may be the system working as intended.

But I challenge the intent.

I am convinced that the tidal cycles of economics are intended to enrich the monetarists at the expense of everyone else. The so called 'good times' are there to encourage spending, rather than long term planning, the hard times are there for bankers to reap what others have sown.

The tide comes in the people produce, the tide goes out, the bankers take. Everything is expected to be on credit and when times go hard the true harvest occurs.


Rampant inflation @ 2022/01/13 20:14:53


Post by: NinthMusketeer


Economic and legal systems are always going to run into problems when they don't exist under the assumption that any time wealth can be centralized, it will be centralized. The wealthy have always attempted to hoard as big a piece of the pie as they can, even acting against their own long-term interests to do so.


Rampant inflation @ 2022/01/14 03:30:48


Post by: Ensis Ferrae


 John Prins wrote:

the global microchip shortage that's throttling industry,



FTFY. . . . I mean, yes, don't get me wrong, what you wrote about it throttling the auto industry is true. But, you also cannot get PS5s pretty much anywhere. A coworker and I were talking at work, apparently he'd read some tech article saying that Sony was firing up the PS4 lines again, and starting to produce them again, because there's surplus stock available, and the chips needed aren't necessarily the ones we're short of. The chip shortage has hit the cycling industry as well, which has affected not only the groupset makers who want to push the electronic shifters, but the bike manufacturers who cannot assemble bikes without A groupset, let alone an electronic shifting one.

Prices of graphics processor cards, I'm sure many of us have noticed, have been going up. Especially anything that is "good" for crypto mining (which happens to be desirable for pretty much any gaming rig). Heck, where I work, some of the aging testing machines we cannot replace as General Motors wants us to, because those companies cannot get the chips to make their testing equipment.


Couple the chip shortage with a container shortage (well, we're not exactly short containers. . . its just that they are all in the wrong places), and we get a major slowdown of goods being moved. My dad is a golf club fitter (the PGA has some fancy name for it, but alas I forget) and he was telling me how because oceanic shipping is so slow, many golfing kit manufacturers are using air freight services as they are cheaper to fly than to put on a ship at this point. And, not because its raw numbers cheaper than putting it on a boat, its the high level complicated maths used to determine a timeframe in which a made item, if unsold becomes a net loss on the profit/loss statements (ie, if it isn't turned into revenue soon enough). My dad's got one company's stock order double ordered at this point. Basically, he's had a set of stuff on order (and stuck in a container ship) for so long, that that company air freighted him another order of the same stuff, just to keep the lights on (iirc, it was a bunch of grips, which he tends to move a LOT of. . . like, generally top 5 income for that company levels of moving product).


In my local area, we're also seeing major disruptions due to the numerous "atmospheric rivers" that keep hitting us. Since christmas, the western/most populous side of the state has been hit with a ton of snow, followed by a ton of rain and flooding. Last weekend ALL of the mountain passes were closed. Alarmingly, the only other "main" route to move large volumes of goods via tractor-trailer was also closed due to the flooding we were seeing. This lack of moving goods has caused major draw downs in levels of service to nearly all grocery stores. Shelves have been sparse to bare of many erstwhile staple goods. Unfortunately, the pessimist in me only sees THAT getting worse over the coming years, but alas that is another highly charged subject, and not really in line with this thread.


I do think that with some things, such as at the root of the chip shortage, the big businesses will need to focus their efforts to ensure an economy keeps moving. . . That means chip makers will need to likely focus on the companies providing the tools that keep businesses open, rather than focusing on consumer goods. I mean, one of the big problems that I personally see in the auto industry, is that it really is peak US consumerist policy: It is get a new (or new to you) car every 2-4 years, whether you need it or not. Then, at the dealerships, we kept the "cream of the crop" and wholesaled off the rest. Now, most of those whole sale units end up next door at the used lot, they'll put a bit of money into em, flip it to a customer, who will then be back at my dealership paying out of pocket for us to fix the things we originally thought too expensive to fix. . . . But now, people are being forced to sort of realize that what they got is pretty OK, and so they are spending more to fix what they got, rather than trade in/ move on. Even in the parts game (where I work) prices have been steadily increasing, and availability of even "dumb" items (I am referring here to pure mechanical, no electronics of any sort) is getting worse, and then costs to get things quickly are going up up up.




Rampant inflation @ 2022/01/14 04:53:46


Post by: Voss


The chip shortage has hit the cycling industry as well, which has affected not only the groupset makers who want to push the electronic shifters, but the bike manufacturers who cannot assemble bikes without A groupset, let alone an electronic shifting one.

Manufacturing is fair enough, but I can't help but think that part of the chip shortage issue is stuffing microchips into every sodding thing, regardless of whether they're needed or not.

I look at crap like the 'electronic picture frame' my parents got over the holidays (which runs on Android, because of course it does), and the traditional picture frame they got at the same time and just sigh. Mostly because the second one is done and up on the wall, and the first is still sitting around on a table because it requires yet more devices and a tutoring session (and several refresher courses as they forget what I explained to them last time).


Rampant inflation @ 2022/01/14 10:50:44


Post by: Olthannon


I think this thread is a very good example of science versus humanities. It's great that you can explain that these horrible economic problems are fine because that means the system is working as intended. But to me that means the system is inherently bad and should be replaced. Just because a system works does not make it a good system. And where does this leave the average person? Struggling to get by and stuck with overburdening financial difficulties that are increasing year on year.
The people who don't see an problem are the ones that the system benefits.

To me the only benefit I see is that the more people are actually impacted by these issues, the more likelihood there is for a successful change. Although as is always the case, the lack of critical thinking means that when the blame for these issues is foisted off on to something else, then the fat, bloated system survives another day.


Rampant inflation @ 2022/01/16 18:12:19


Post by: Irbis


 Olthannon wrote:
I think this thread is a very good example of science versus humanities. It's great that you can explain that these horrible economic problems are fine because that means the system is working as intended. But to me that means the system is inherently bad and should be replaced. Just because a system works does not make it a good system.

This. System that is designed to suck money out of bottom 99% and transfer them to 1% maybe is well designed, well running, and working as intended, but unless you're in that top 1% (or work for them as paid propagandist, maybe) the defence of it is pretty insane take. It running well should be considered a bad thing, not a good one.

To give some perspective on said system, according to various estimations, 5 to 6 trillion dollars are hidden in various freeports, tax havens and other hidey holes thanks to tax system demolished by lobbyists - enough to end world hunger, give everyone on the planet free university education, and renew global infrastructure twice over. Benefiting everyone except people so insanely rich they can burn a truck full of money every single hour of life they have left and still not run out of money. Instead, the money languishes hidden to not give even a tiny portion of it to the less fortunate, doing nothing except acting like real life game high score the rich psychopaths can brag to their buddies about.

In the 70s, when the rich were properly taxed, up to 90% to discourage frivolous waste of money (with tax breaks for actually beneficial spending) the proceeds from it funded landing on the moon, development of personal computers, internet, and cell phones. Now? Compared to just 50 years ago, we live in hellish dystopia, making mockery of prediction of scientists back then that the rise in worker productivity will mean we will have good, prosperous lives working 5 hours 4 days a week, a 20 hours workweek. The money for that is there, it's just being stolen from us.


Rampant inflation @ 2022/01/16 23:04:45


Post by: John Prins


 Irbis wrote:

In the 70s, when the rich were properly taxed, up to 90% to discourage frivolous waste of money (with tax breaks for actually beneficial spending) the proceeds from it funded landing on the moon, development of personal computers, internet, and cell phones. Now? Compared to just 50 years ago, we live in hellish dystopia, making mockery of prediction of scientists back then that the rise in worker productivity will mean we will have good, prosperous lives working 5 hours 4 days a week, a 20 hours workweek. The money for that is there, it's just being stolen from us.


Nobody ever believed the 20 hours a week nonsense. People would just work 2 jobs and double their income if they could live on 20 hours. Lots of people do 50+ hours because they have financial goals to achieve.

The US government has been collecting about 17% of GDP in taxes since the 1950s regardless of the marginal tax rates.

Why is this? Basically you can only tax the rich so much before you incentivize them to find (or make, thanks lobbying) loopholes in the system. That 90% tax rate (which ended in 1962 and dropped to 70%, then 50% in 1982) didn't move the needle on government revenue at all. Also, the top 40% are the ones paying all the net taxes (taxes minus stuff you get back from the federal government). See below video:




Being rich means having options, like moving money overseas, legal structures and tax strategies to reduce your overall burden. Or just being educated about the tax system in general, as most people have no idea that they have options that they could be taking advantage of.

I live in Canada, and you'd be amazed how many people don't put money in RRSPs. It's an tax rebate (usually around 30%) on money you save for retirement, where it can grow tax free until you pull it out. I have lots of co-workers who could be doing this (as in, they can afford to!) but they simply DO NOT and it frustrates me to no end! Save money for retirement and GET MONEY BACK FROM THE GOVERNMENT.








Rampant inflation @ 2022/01/17 18:41:00


Post by: NinthMusketeer


It will come around in the end. The longer the wealthy push back their reckoning, the harsher that reckoning turns out to be. That's always been how it plays out.


Rampant inflation @ 2022/01/17 19:46:08


Post by: John Prins


 NinthMusketeer wrote:
It will come around in the end. The longer the wealthy push back their reckoning, the harsher that reckoning turns out to be. That's always been how it plays out.


Usually it takes people to be starving before it reaches that point. There's been a few logistical hiccups leading to some bare shelves in some states, but it'll take a widespread famine in the USA (dust bowl scenario) before you see a sharp correction. I'd rather not go that route.

Some of the tech monopolies need to be broken up for sure, and the banking/financial sector needs tighter regulations (lots of countries have tighter financial regulations and somehow do just fine), and holy smokes do we need some actually independent media in the west...but keep in mind we are at peak wealth/living standards/technology in all of human history. Capitalism isn't perfect, but we don't have a better system (yet). All we can do is keep tweaking the rules of the game.


Rampant inflation @ 2022/01/17 22:08:47


Post by: Easy E


The end of civilization is only three meals away....


Rampant inflation @ 2022/01/18 00:07:04


Post by: Orlanth


 Easy E wrote:
The end of civilization is only three meals away....


That works for dogs, but people are hardier than that.

They can take a lot more, however unless they see an external threat they may collapse for less.


Rampant inflation @ 2022/01/23 18:00:12


Post by: master of ordinance


Removed


Rampant inflation @ 2022/01/31 15:41:45


Post by: Easy E


Re-reading the thread title, I was hoping we were getting a new Daniel Mersey blue wargaming series book...... I do enjoy me some of the other Rampant series.


Rampant inflation @ 2022/01/31 21:21:43


Post by: BobtheInquisitor


 Easy E wrote:
Re-reading the thread title, I was hoping we were getting a new Daniel Mersey blue wargaming series book...... I do enjoy me some of the other Rampant series.


I always get a laugh from those books, considering another use for “rampant”. Makes “rampant inflation” a great euphemism.


Rampant inflation @ 2022/02/04 01:09:44


Post by: Miguelsan


I did back the Rampart KS, and due to rampart inflation I did get a lot less than the last time around for my money.

M.

(I'll see myself out)


Rampant inflation @ 2022/02/06 01:16:33


Post by: privateer4hire


My wife visited our local dollar tree yesterday and all prices are now $1.25. I texted my friend to see if he had his football pads and was ready to cut his hair into mohawk style ala Mad Max.


Rampant inflation @ 2022/02/07 21:31:01


Post by: NinthMusketeer


 privateer4hire wrote:
My wife visited our local dollar tree yesterday and all prices are now $1.25. I texted my friend to see if he had his football pads and was ready to cut his hair into mohawk style ala Mad Max.
An appropriate response, if not the only appropriate response


Rampant inflation @ 2022/04/30 00:01:17


Post by: GrosseSax


I've been house hunting for the last year and half and man, its absolutely brutal out there. With 50% down and a VA home loan, I thought I was in a good place, but I was sadly mistaken. Getting outbid by all cash buyers at every. single. turn. is getting very discouraging. I might have to wait this one out.

How's everybody holding up in this malaise?


Rampant inflation @ 2022/04/30 00:35:08


Post by: Ensis Ferrae


 GrosseSax wrote:
I've been house hunting for the last year and half and man, its absolutely brutal out there. With 50% down and a VA home loan, I thought I was in a good place, but I was sadly mistaken. Getting outbid by all cash buyers at every. single. turn. is getting very discouraging. I might have to wait this one out.

How's everybody holding up in this malaise?


One piece of advice I've seen crop up in today's insane market is to actually ditch the VA loan. . . Apparently, despite the guaranteed money involved in the deal, the sellers' realtors see "VA home loan" and are basically telling their clients "yeah, that's going to be a pain in the arse, and will take forever"


If possible, are you able to secure a cash loan, with the aim of a year or 2 down the line refi into a VA loan? (honestly, I only know how it works from a fresh purchase, so no idea if you can use a va home loan to refi)


Rampant inflation @ 2022/05/02 20:17:23


Post by: Tamereth


 privateer4hire wrote:
My wife visited our local dollar tree yesterday and all prices are now $1.25. I texted my friend to see if he had his football pads and was ready to cut his hair into mohawk style ala Mad Max.


In the UK we have a store called Poundland. Everything was a pound. Went in last week and they had stuff for £12. World economy has entered the apocalypse, time to fire up the V8.


Rampant inflation @ 2022/05/04 00:17:29


Post by: creeping-deth87


 GrosseSax wrote:
I've been house hunting for the last year and half and man, its absolutely brutal out there. With 50% down and a VA home loan, I thought I was in a good place, but I was sadly mistaken. Getting outbid by all cash buyers at every. single. turn. is getting very discouraging. I might have to wait this one out.

How's everybody holding up in this malaise?


I've basically given up on ever buying my own home. Toronto is far too expensive, but I can't leave the city because the wife needs to live here to work (she's a store manager at a big mall up here, and wouldn't get paid nearly as much if we left the city). Rent is too high to save anywhere near as much as we need, and paying back my student loans is a noose around my neck for the next 10 years. So... yeah, pretty boned lol.

Good luck with your house hunt.


Rampant inflation @ 2022/05/16 17:35:12


Post by: JWBS


It has finally hit home for me. My block of cheese was £1.70 last week, £2 today. Sickening percentage rise. I dread to look at the fancy cheese. Christmas looking bleak if luxury cheese is off the menu.


Rampant inflation @ 2022/05/16 20:26:37


Post by: Ensis Ferrae


I just went and purchased a new car because of the lunatic fuel prices around me.

For the past week+ they have been jumping 15-30 cents per gallon, each day. Was out this morning and saw some gas stations already at 5.50 per gallon.

Now, I know/realize that the europeans on this forum who pay by liter are already used to 6+ bucks per gallon (when you convert it over to freedom units), but I'd bet that y'all are also feeling the squeeze on your end, and perhaps even worse given the historical "normal" place yall get your crude from.


Rampant inflation @ 2022/05/18 16:08:53


Post by: Crispy78


 Ensis Ferrae wrote:
I just went and purchased a new car because of the lunatic fuel prices around me.

For the past week+ they have been jumping 15-30 cents per gallon, each day. Was out this morning and saw some gas stations already at 5.50 per gallon.

Now, I know/realize that the europeans on this forum who pay by liter are already used to 6+ bucks per gallon (when you convert it over to freedom units), but I'd bet that y'all are also feeling the squeeze on your end, and perhaps even worse given the historical "normal" place yall get your crude from.


Yeah. average petrol price in the UK at the moment is £1.67 a litre, or $7.87 per US gallon.


Rampant inflation @ 2022/05/18 17:06:26


Post by: Easy E


US Inflation was 8. something% and UK was 9% in the last quarter, mostly driven by fuel costs.


Rampant inflation @ 2022/05/18 18:02:34


Post by: Toofast


 Manchild 1984 wrote:
If you expect Inflation, think about getting a loan and put it into stocks.

Not financial advise. lol?


I really hope nobody followed this advice. You would be down about 30% today


Automatically Appended Next Post:
 NinthMusketeer wrote:
Hope it's more than a few feet above sea level...


My lot is at about 16'. We had a 20' storm surge during Irma and it flooded my street and the end of my driveway but still never came near the house. I've been listening to horror stories about how Miami will be underwater soon since the 1990s. I think it will be another 100 years before it becomes a serious issue and even then we can just build higher seawalls and do more dredging along the coast.


Rampant inflation @ 2022/05/21 01:54:59


Post by: boyd



Automatically Appended Next Post:
 NinthMusketeer wrote:
Hope it's more than a few feet above sea level...


My lot is at about 16'. We had a 20' storm surge during Irma and it flooded my street and the end of my driveway but still never came near the house. I've been listening to horror stories about how Miami will be underwater soon since the 1990s. I think it will be another 100 years before it becomes a serious issue and even then we can just build higher seawalls and do more dredging along the coast.


We got 27" of rain from Hurricane Matthew and back in 2008 we had 33" from that tropical storm that made land fall 3 times in Florida when it made a Z across the state. It stopped and changed directions just north of us and rained hard for 3 days straight. It only gets bad in my area when they close the locks. With the tropical storm, the locks opened the next day and we were dry. With Matthew, the county didn't open them and we had standing water until it prevented people from getting to attend a launch. The county opened the locks and we were dry within 2 days.


Automatically Appended Next Post:
 Easy E wrote:
US Inflation was 8. something% and UK was 9% in the last quarter, mostly driven by fuel costs.


It's expected to continue to grow too! Combine that with unreported COVID numbers because you can test at home and not report them to anyone and we are still seeing COVID rated increase to levels as high as the peak pandemic. Makes you wonder if we should just shut everything down again or if we can afford to take drastic action like that again!


Rampant inflation @ 2022/05/21 20:03:52


Post by: chaos0xomega


 Ensis Ferrae wrote:
I just went and purchased a new car because of the lunatic fuel prices around me.

For the past week+ they have been jumping 15-30 cents per gallon, each day. Was out this morning and saw some gas stations already at 5.50 per gallon.

Now, I know/realize that the europeans on this forum who pay by liter are already used to 6+ bucks per gallon (when you convert it over to freedom units), but I'd bet that y'all are also feeling the squeeze on your end, and perhaps even worse given the historical "normal" place yall get your crude from.


Wow, we're still under $5/gal here but its creeping up at a steady pace (not 15-30 cents mind you, more like 2-3 cents/day). But yeah, inflation is starting to really hit home in NJ too, we were relatively insulated from it early on because of the general economic strength of the state for the last couple years coupled with already sky-high cost of living that was pricing in a lot of buffer and margin over other regions of the country, but I've noticed the price for some things skyrocket over the past month or so. A plate of chicken parm and a dr. pepper from the on-site cafeteria at my job this week was going for $13. When I started with the company 7 years ago it was about $5 and change. Even before COVID it was going for $6 and change. Restaurant prices all seem to have crept up 20-40%, supermarket prices on some things seem to be up 50%, etc.


Rampant inflation @ 2022/05/22 16:44:22


Post by: Mad Doc Grotsnik


Part of the restaurant thing may be staff commanding higher wages post Covid?


Rampant inflation @ 2022/05/22 17:23:57


Post by: Ghool


 Mad Doc Grotsnik wrote:
Part of the restaurant thing may be staff commanding higher wages post Covid?


Working restaurants and being responsible for hiring, it’s not the wages increasing costs.
It’s the cost of growing things, their transport, and the cost of food in general.

What most people don’t realize about the restaurant industry, is that they don’t get a massive discount on the food they buy and use. They pay approximately the same price as most regular folks pay in the grocery store.
Often times, it’s more than likely that anyone can get food cheaper at a discount grocery retailer than restaurants do, even when they buy quantity.
For instance, it’s cheaper for me to buy certain items at Costco than my suppliers, even though the inconvenience of sending someone to go and shop is more hassle. This is what we’re having to do to prevent prices from bankrupting our customers.

Couple this with the skyrocketing price of gas, and that’s why restaurants are raising prices.
Make sure employees have benefits, treat them well, and make sure they feel valued is really all that’s required. A crazy high wage won’t make a difference if your boss is a tyrant and/or and asshat.

It’s all from skyrocketing transportation and food costs.
Over the past six months every single supplier I use has increased their costs to me by at least 15%, which translates into an almost 45% increase in the price when a customer buys something.
My sausages were sold for $5.50 each in January and I’ve had to raise them to $7.50 to even make the same margin as January. It absolutely has nothing to do with wages.


Rampant inflation @ 2022/05/23 01:35:09


Post by: Waaagh_Gonads


Ways that all government can decrease inflation.

Reduce unduly onerous regulation. Less regulation = less money and time complying for business.

Stop printing excess money and start to redraw the extra printed money released in the last 2 years. Reducing supply means the value goes up.

This is a start that will at the minimum slow inflatory growth down, but will be more effective where there is a large government influence in any country's economy.


They will have little effect on: Demand as we come out of covid, have proven next to useless in solving supply chain issues, essentially causing most of them with lockdowns, and finally wage growth as the economy winds up (at least in a free market)


Rampant inflation @ 2022/05/23 05:27:16


Post by: Jadenim


The vast majority of regulations are there for a damn good reason, mainly to stop people getting hurt or the environment getting screwed over.

Any money you “save” by removing regulations becomes a hidden cost somewhere else; lost productivity from people being off work sick or injured, polluted land, etc.


Rampant inflation @ 2022/05/23 15:00:05


Post by: Ensis Ferrae


 Jadenim wrote:
The vast majority of regulations are there for a damn good reason, mainly to stop people getting hurt or the environment getting screwed over.

Any money you “save” by removing regulations becomes a hidden cost somewhere else; lost productivity from people being off work sick or injured, polluted land, etc.



Exactly. . . and, couple this with some of the numerous studies I was exposed to/read during my grad school time, businesses who make "surpassing" regulatory requirements a foundational aspect of their business report better metrics across the board (better profits, more income, more content employees, customer satisfaction, etc).

On top of that, some of those same articles discussed in my coursework, we pointed out how businesses who focus on meeting/exceeding standards set by regulations tend to perform better year on year from their direct competitors who spend time/money/effort on repealing regulations.


Rampant inflation @ 2022/05/23 17:43:02


Post by: Easy E


To make things worse, Victrix has announced a 10% increase in prices starting June 1st!


Rampant inflation @ 2022/05/24 01:02:30


Post by: NinthMusketeer


Gotta figure; the default is no regulation on a thing, it's only added after something happens to show it's needed. Behind every regulation there is a story about how some pricks ruined it for all of us. One might note that doesn't have much to do with active inflation. 'Addressing regulation' just isn't anything resembling a solution for inflation, it would at the least need to be focused on specific regulatory laws that are relevant to the matter.


Automatically Appended Next Post:
 Mad Doc Grotsnik wrote:
Part of the restaurant thing may be staff commanding higher wages post Covid?
Consider though; only a fraction of a restaurant's expenses are going to be wages and only a fraction of wages will be the lower-end workers who have been demanding higher pay of late. And even then the % increase in price (to my knowledge) outstrips the % increase in wages, so it is impossible on multiple levels for that to be anything more than a contributing factor.


Rampant inflation @ 2022/05/24 01:16:04


Post by: Waaagh_Gonads


 Jadenim wrote:
The vast majority of regulations are there for a damn good reason, mainly to stop people getting hurt or the environment getting screwed over.

Any money you “save” by removing regulations becomes a hidden cost somewhere else; lost productivity from people being off work sick or injured, polluted land, etc.



Not I sated 'onerous' regulation.
Some regulation is essential but overregulation where only large companies can afford to comply strangles local/small competition.

For example baby formula was not able to be purchased by US cosumers or stores from Europe as it did not have FDA approval despite having a higher basic standard on nutrition. Therefore the big 4 producers face no competition and there is no flexibility in the market when supply chain issues arise.
Then when a shortage suddenly the US government is able to fly in plane loads from Canada and Europe, flouting their own regulations.


Where have prices skyrocketed - health, flights, gas/power. All of which are massively regulated.

Why have my 2 minute noodles not shot up in price? Because there is some but not a lot of regulation related to it.


Rampant inflation @ 2022/05/24 02:21:16


Post by: NinthMusketeer


That is certainly an interpretation of events.


Rampant inflation @ 2022/05/24 08:08:40


Post by: lord_blackfang


Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.


Rampant inflation @ 2022/05/24 12:06:24


Post by: chaos0xomega


 Waaagh_Gonads wrote:
 Jadenim wrote:
The vast majority of regulations are there for a damn good reason, mainly to stop people getting hurt or the environment getting screwed over.

Any money you “save” by removing regulations becomes a hidden cost somewhere else; lost productivity from people being off work sick or injured, polluted land, etc.



Not I sated 'onerous' regulation.
Some regulation is essential but overregulation where only large companies can afford to comply strangles local/small competition.

For example baby formula was not able to be purchased by US cosumers or stores from Europe as it did not have FDA approval despite having a higher basic standard on nutrition. Therefore the big 4 producers face no competition and there is no flexibility in the market when supply chain issues arise.
Then when a shortage suddenly the US government is able to fly in plane loads from Canada and Europe, flouting their own regulations.


Where have prices skyrocketed - health, flights, gas/power. All of which are massively regulated.

Why have my 2 minute noodles not shot up in price? Because there is some but not a lot of regulation related to it.


You are way off base on the problems with the US baby formula shortage. The long and the short of it is that baby formula in the US is heavily subsidized by state and federal contracts as part of well-intentioned (but perhaps misguided in their application/execution) social safety benefits. Each state issues a contract to one baby formula producer (following a competitive bidding process to identify the lowest cost option to the state) to be the "official" formula that individuals receiving government benefits in the state may purchase and utilize, etc. Supermarkets and grocers, etc. selling baby formula products are then required to stock the contracted formula brand on their shelves in order for benefit recipients to purchase the items locally, but in truth due to a number of factors the contracted brand in any given state tends to dominate market share and sales within the state regardless of this policy (the brand in question often puts an emphasis on marketing within said state, most of the contracts are long term and rarely end up moving to a competitor brand when they come up for bid again which creates a lot of long-term brand loyalty, especially when coupled with how widespread the public benefit is and how many parents out there end up using that brand as a result), which results in markets allocating most of their shelf space to the contracted brand and little (if any) shelf space to competitors, which kind of creates a feedback loop that makes the contracted brand the end-all-be-all within the states borders and crowds out competition. There are basically 4 companies which have split the formula contracts across all 50 states, one of those companies has about 2/3rds of the contracts alone, with the remaining 1/3rd being split amongst the other 3. There are a handful of smaller local companies that have no formula contracts and basically no relevant sales because they struggle to get shelf-space in markets, etc. Because capitalism, formula production for all 4 of these companies is concentrated and centralized into just a handful of factories in order to leverage economies of scale, meaning that if one of them ends up being contaminated (as was the case), you shut down a pretty significant share of the national production capacity of formula.

You could eliminate every regulation on the baby formula industry and it wouldn't change a thing so long as the welfare benefit structure doesn't change, even with the freedom to import European/foreign formula brands, it won't change much because at a state level consumers are largely married to one of the big 4 domestic brands and existing social welfare and safety net policies make that unlikely to change on its own. What can you do to fix it? It may seem counterintuitive, but, more regulation. Regulate the shelf space allocation of the contracted formula brand in any given market to no more than x% of the total allocated to baby formula, ensuring that competitor brands have a presence on the store shelves and consumers have an actual choice between competitors in spite of the advantages that one product receives in each state via the subsidy contracts. Regulate the manufacturing/production process indirectly so that the big 4 have to spread their production capacity across more facilities to build-in redundancy and ensure that if one factory goes down you're not shutting off 20-30% of domestic production capacity - this might bring a slightly higher cost to consumers as the big 4 will no longer be able to leverage economy of scale so effectively, but thats a tradeoff that needs to occur in order for production to remain robust and resilient. etc.

Note also that the shortage is not really an inflationary issue. The price of formula has skyrocketed due to the current constraints on supply vs what is basically inelastic demand (formula is more or less a life necessity and consumers will pay any price they can for the product, which has driven up the price as a result of the supply/demand process), but once production at the contaminated facilities is brought back online it will level back down to where it was. Importing european product is less about combating inflation and more about ensuring supply availability to those who need it.


Rampant inflation @ 2022/05/24 13:09:59


Post by: JWBS


 lord_blackfang wrote:
Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.

That's kind of a logical paradox though isn't it, since it's the regulation in the first place that creates this particular problem (and not as an unwanted side-effect, but as a specifically planned result), adding another regulation to countermand the previous regulation seems a bit farcical imo.


Rampant inflation @ 2022/05/24 14:49:42


Post by: Easy E


JWBS wrote:
 lord_blackfang wrote:
Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.

That's kind of a logical paradox though isn't it, since it's the regulation in the first place that creates this particular problem (and not as an unwanted side-effect, but as a specifically planned result), adding another regulation to countermand the previous regulation seems a bit farcical imo.


Well, except for the fact that the US has not had significant anti-monopoly policies since..... before most of us here were born; and I am old!

I am glad I managed to get back into this thread before it gets locked and purged.


Rampant inflation @ 2022/05/24 16:46:59


Post by: lord_blackfang


JWBS wrote:
 lord_blackfang wrote:
Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.

That's kind of a logical paradox though isn't it, since it's the regulation in the first place that creates this particular problem (and not as an unwanted side-effect, but as a specifically planned result), adding another regulation to countermand the previous regulation seems a bit farcical imo.


I'm absolutely amazed that you managed to spin food safety regulations as being the problem here.

Let's just do way with those and let the free market decide what the appropriate ratio of price vs toxic waste in baby food is.


Rampant inflation @ 2022/05/24 16:48:22


Post by: NinthMusketeer


JWBS wrote:
 lord_blackfang wrote:
Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.

That's kind of a logical paradox though isn't it, since it's the regulation in the first place that creates this particular problem (and not as an unwanted side-effect, but as a specifically planned result), adding another regulation to countermand the previous regulation seems a bit farcical imo.
The joke is that there isn't regulation in the first place, and it didn't cause the problem.


Rampant inflation @ 2022/05/24 16:51:51


Post by: NinthMusketeer


chaos0xomega wrote:
Spoiler:
 Waaagh_Gonads wrote:
 Jadenim wrote:
The vast majority of regulations are there for a damn good reason, mainly to stop people getting hurt or the environment getting screwed over.

Any money you “save” by removing regulations becomes a hidden cost somewhere else; lost productivity from people being off work sick or injured, polluted land, etc.



Not I sated 'onerous' regulation.
Some regulation is essential but overregulation where only large companies can afford to comply strangles local/small competition.

For example baby formula was not able to be purchased by US cosumers or stores from Europe as it did not have FDA approval despite having a higher basic standard on nutrition. Therefore the big 4 producers face no competition and there is no flexibility in the market when supply chain issues arise.
Then when a shortage suddenly the US government is able to fly in plane loads from Canada and Europe, flouting their own regulations.


Where have prices skyrocketed - health, flights, gas/power. All of which are massively regulated.

Why have my 2 minute noodles not shot up in price? Because there is some but not a lot of regulation related to it.


You are way off base on the problems with the US baby formula shortage. The long and the short of it is that baby formula in the US is heavily subsidized by state and federal contracts as part of well-intentioned (but perhaps misguided in their application/execution) social safety benefits. Each state issues a contract to one baby formula producer (following a competitive bidding process to identify the lowest cost option to the state) to be the "official" formula that individuals receiving government benefits in the state may purchase and utilize, etc. Supermarkets and grocers, etc. selling baby formula products are then required to stock the contracted formula brand on their shelves in order for benefit recipients to purchase the items locally, but in truth due to a number of factors the contracted brand in any given state tends to dominate market share and sales within the state regardless of this policy (the brand in question often puts an emphasis on marketing within said state, most of the contracts are long term and rarely end up moving to a competitor brand when they come up for bid again which creates a lot of long-term brand loyalty, especially when coupled with how widespread the public benefit is and how many parents out there end up using that brand as a result), which results in markets allocating most of their shelf space to the contracted brand and little (if any) shelf space to competitors, which kind of creates a feedback loop that makes the contracted brand the end-all-be-all within the states borders and crowds out competition. There are basically 4 companies which have split the formula contracts across all 50 states, one of those companies has about 2/3rds of the contracts alone, with the remaining 1/3rd being split amongst the other 3. There are a handful of smaller local companies that have no formula contracts and basically no relevant sales because they struggle to get shelf-space in markets, etc. Because capitalism, formula production for all 4 of these companies is concentrated and centralized into just a handful of factories in order to leverage economies of scale, meaning that if one of them ends up being contaminated (as was the case), you shut down a pretty significant share of the national production capacity of formula.

You could eliminate every regulation on the baby formula industry and it wouldn't change a thing so long as the welfare benefit structure doesn't change, even with the freedom to import European/foreign formula brands, it won't change much because at a state level consumers are largely married to one of the big 4 domestic brands and existing social welfare and safety net policies make that unlikely to change on its own. What can you do to fix it? It may seem counterintuitive, but, more regulation. Regulate the shelf space allocation of the contracted formula brand in any given market to no more than x% of the total allocated to baby formula, ensuring that competitor brands have a presence on the store shelves and consumers have an actual choice between competitors in spite of the advantages that one product receives in each state via the subsidy contracts. Regulate the manufacturing/production process indirectly so that the big 4 have to spread their production capacity across more facilities to build-in redundancy and ensure that if one factory goes down you're not shutting off 20-30% of domestic production capacity - this might bring a slightly higher cost to consumers as the big 4 will no longer be able to leverage economy of scale so effectively, but thats a tradeoff that needs to occur in order for production to remain robust and resilient. etc.

Note also that the shortage is not really an inflationary issue. The price of formula has skyrocketed due to the current constraints on supply vs what is basically inelastic demand (formula is more or less a life necessity and consumers will pay any price they can for the product, which has driven up the price as a result of the supply/demand process), but once production at the contaminated facilities is brought back online it will level back down to where it was. Importing european product is less about combating inflation and more about ensuring supply availability to those who need it.
Ya know, Dakka OT is certainly not where I would look to find interesting and educational content, but props to you for delivering it.


Rampant inflation @ 2022/05/24 16:52:49


Post by: Tyran


Kinda hard to fix inflation when one the major reasons is a foreign head of state went crazy and started a war.



Rampant inflation @ 2022/05/24 17:39:27


Post by: lord_blackfang


 Tyran wrote:
Kinda hard to fix inflation when one the major reasons is a foreign head of state went crazy and started a war.


Bro this thread on rampant inflation was started 2.5 months before the war but don't let that stop you from doing a brainwashed rUSsiA bAd


Rampant inflation @ 2022/05/24 17:43:37


Post by: Flinty


Are you implying that the war isn’t having a major impact on global inflation?


Rampant inflation @ 2022/05/24 17:48:30


Post by: lord_blackfang


 Flinty wrote:
Are you implying that the war isn’t having a major impact on global inflation?


Are you implying the war caused inflation months before it began?


Rampant inflation @ 2022/05/24 17:53:35


Post by: Flinty


No, but we aren’t talking about inflation or 2.5 months ago. We are talking about inflation now, which is an extremely complicated balance of all kinds of things, but to paraphrase Tyran, it’s not made any easier when a nutter incompetently invades their neighbour on the flimsiest of pretexts and knackers international trade.


Rampant inflation @ 2022/05/24 18:08:47


Post by: lord_blackfang


 Flinty wrote:
No, but we aren’t talking about inflation or 2.5 months ago. We are talking about inflation now, which is an extremely complicated balance of all kinds of things, but to paraphrase Tyran, it’s not made any easier when a nutter incompetently invades their neighbour on the flimsiest of pretexts and knackers international trade.


Yes yes all those massive trade routes passing through Eastern Europe for no reason.


Orrrr the cause could still be the same as it was before the war, then two thirds of this thread happened. Corporate gree-I MEAN COVID


Rampant inflation @ 2022/05/24 18:15:15


Post by: Flinty


I’m sure corporate greed also plays a large part of it, but not to the point that entirely eclipses the impact of the war. Also I think the gas and oil pipelines from Russia to Europe so count as major trade routes through Eastern Europe in their own right. The secondary effects on the global food supply due to Ukraine being unable to contribute due to war damage and blockade also represents a major Eastern European trade route.


Rampant inflation @ 2022/05/24 18:15:16


Post by: Toofast


 lord_blackfang wrote:
Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.


Regulations are what creates that monopoly, which is the entire point of the guy you're addressing...


Automatically Appended Next Post:
 Tyran wrote:
Kinda hard to fix inflation when one the major reasons is a foreign head of state went crazy and started a war.



It's cute that you believe that's what caused inflation. Printing 80% of the money in existence over the last year and handing it out like condoms at a rave is what caused inflation. Russia invading Ukraine did not cause the price of cotton and lumber to double and we were already seeing some of the highest inflation numbers in the last 40 years before the whole Russia/Ukraine thing kicked off. You're eating up propaganda designed to shift blame away from the fed where it belongs and onto those evil Russians. Our government and media will blame anyone and anything else other than our awful fiat system and their endless money printing for inflation. I guess you also believe all the 30 year olds having heart attacks and collapsing right now are due to global warming...


Rampant inflation @ 2022/05/24 18:21:31


Post by: lord_blackfang


Toofast wrote:
30 year olds having heart attacks and collapsing right now


Wait what what is this?


Rampant inflation @ 2022/05/24 18:24:40


Post by: Tyran


 Flinty wrote:
I’m sure corporate greed also plays a large part of it, but not to the point that entirely eclipses the impact of the war. Also I think the gas and oil pipelines from Russia to Europe so count as major trade routes through Eastern Europe in their own right. The secondary effects on the global food supply due to Ukraine being unable to contribute due to war damage and blockade also represents a major Eastern European trade route.


There is also the impact on fertilizers, as Russia was the source of a lot of the chemicals used for them.

Like sure the war isn't the root cause of all inflation. We still have Covid and general government incompetence. But Eastern Europe is a major trade route.


Rampant inflation @ 2022/05/24 18:36:04


Post by: chaos0xomega


Yeah, the war has hit a broad range of industries in different ways that are triggering inflationary effects. Energy (to include oil and natural gas) sanctions on Russia are driving up energy prices globally, even on nations that don't get those resources from Russia - this in and of itself isn't really inflationary and is transient based on the resulting artificial supply shortages (i.e. will subside whenever those sanctions get lifted and public perception allows for the purchase and import of those resources again), but what is inflationary is the knock-on effects these are having on other industries that are paying more for the energy and fuel needed to conduct business and are in turn passing this on to customers. Some percentage of the increase in cost in your carton of milk or eggs, etc. is directly attributable to the war in Ukraine as a result of the increased fuel costs involved in transporting those goods to market, as well as the increased cost for the manufacturers in transporting animals, feed, and other products to the farms, etc.

Wheat and grain, as well as a number of other major agricultural products and crops are going to be more directly impacted as well given Russia and Ukraines status as major wheat and grain exporters. The fact that there are major agricultural disturbances (widespread droughts and widespread crop failures) occurring at the same time in other parts of the world aren't helping matters. The 22 year long US west-coast megadrought is looking at another record-breaking year (and according to a recent study is the worst drought in the history of the region going back ~1200 years based on soil and rock samples, tree rings, etc.) and has expanded to something like 60% of the country. Expected crop failures and low agricultural yields will put a heavy strain on domestic agricultural production and in turn demand for ag-imports from other areas, this will serve to drive up prices as well.

Then theres the ongoing chip shortage that started because of COVID impact to production capacity which has had ripple effects all over supply chains and drive up costs on a number of products and goods as a result, and is now being made worse by the fact that Ukraine was the producer of somewhere between 25% and 50% (depending on your source and what specific regions, industrial processes and gas purity grades they are including/excluding in the count, etc. for example Ukrainian neon makes up 90% of high-grade neon gas used in US-based gas-phase laser manufactured semiconductors, whereas Chinese chip manufacturers make more use of Chinese-produced neon though they are still heavily reliant on Ukrainian imports) of the global neon gas production used in the manufacture of chips and electronics. One of the two major neon-production plants in Ukraine was located in Mariupol and I'm guessing that isn't coming back anytime soon... Meanwhile Russia is something like 1/3rd of the global Palladium supply used in chip production for sensor devices and RAM/hard drives, etc. and obviously sanctions are going to curtail access to that supply for a lot of manufacturers, which will drive up the price of the supply from other producers, which will in turn result in the price of anything that relies on electronics, as well as anything that utilizes consumable electronic hardware as part of its production process, etc.

To say that the war in Ukraine isn't having a major impact on inflation and supply chain disruptions is laughably short-sighted (and methinks an indicator that certain posters here are eating up some "alternative propaganda" based on their comments).

EDIT - Also worth mentioning, the Fed doesn't print money. Anyone claiming it does has demonstrated that they aren't worth listening to and don't actually have a solid grasp or comprehension of the topic being discussed, and are merely regurgitating talking points they picked up on social media, youtube, etc. that they don't fully comprehend or understand.


Rampant inflation @ 2022/05/24 18:43:14


Post by: lord_blackfang


And yet the fact remains that Dakka would still have a thread titled "Rampant inflation" if Ukraine and Russia were all sunshine and rainbows (rainbows probably in jail)


Rampant inflation @ 2022/05/24 18:51:25


Post by: chaos0xomega


Sure, but the thread was basically dead from mid-January until the end of April. The thread started December 15th, ran through 3 pages of posts by January 18th or so, had 6 posts between the 19th and April 29th, and then since then had 2 more pages of posts.

Why do you think that is? Its because inflation has worsened in its severity and impact to a broader range of market sectors since the pre-war period and is hitting more consumers in more areas. The COVID-based inflation was not as severe and based on some data and analysis was starting to begin the process of correcting itself when the war began.


Rampant inflation @ 2022/05/24 18:57:11


Post by: lord_blackfang


I think because people got told the inflation, that's been happening for like a year, is now Russia's fault.

Russia has nothing to do, for example, with the fact the oil industry has decided to stop investing in new bores.


Rampant inflation @ 2022/05/24 19:04:37


Post by: Flinty


I kind of hope that public pressure and environmental regulations are impacting that, but I agree it’s unlikely due to any direct war impact.



Rampant inflation @ 2022/05/24 19:26:04


Post by: lord_blackfang


 Flinty wrote:
I kind of hope that public pressure and environmental regulations are impacting that, but I agree it’s unlikely due to any direct war impact.



Oil is Old Money and Old Money is insanely careful. Allegedly the negative oil price during covid gave them PTSD and they just bailed wholesale. I would expect them slowly dipping their toes in whatever the next big greenwashing fads are.


Rampant inflation @ 2022/05/24 20:05:42


Post by: NinthMusketeer


 lord_blackfang wrote:
I think because people got told the inflation, that's been happening for like a year, is now Russia's fault.

Russia has nothing to do, for example, with the fact the oil industry has decided to stop investing in new bores.
Inflation was bad, but what kicked off the discussion again was it getting dramatically worse. Trying to pretend like the war isn't a big factor is no different than trying to pretend Corporate Wild West isn't a big factor. The place to direct this criticism would be at, say, the person who expressed that regulation causes monopolies, which is just a gross misunderstanding of economics.


Rampant inflation @ 2022/05/24 20:08:10


Post by: chaos0xomega


 lord_blackfang wrote:
I think because people got told the inflation, that's been happening for like a year, is now Russia's fault.
Russia has nothing to do, for example, with the fact the oil industry has decided to stop investing in new bores.


No no. If it was because the inflation was always there but people were suddenly blaming Russia, you would have still seen a consistent level of interest in the topic throughout that time period as the impact would have been omnipresent because people would have been inconvenienced by it at a fairly consistent level from January through April. But thats not what happened, the early spike in impact that was witnessed at the timeframe the thread was started began to subside, before increasing in intensity some time later (as a result of other events - at least in the US it seems nobody really gives a feth about COVID anymore and theres not a lot to suggest that recent supply disruptions and cost increases have much of anything to do with it) enough to renew interest in discussion on the topic, and its only relatively recently that the "Russian connection" began to be established in posts (as opposed to the April/early May timeframe). The only reason I started posting in this thread again after all these months (for example) was because, I personally, had finally been inconvenienced by it enough to start caring again.

And yes, Russia does have something to do (albeit indirectly) with the fact that the oil industry hadn't been drilling new bores. Russian crude is cheap and plentiful, its also the same type of heavy sour crude that US oil refineries are geared to process. The domestically extractable oil is overwhelmingly light and sweet (these are technical terms, I assure you) and uneconomically expensive due to geographic constraints and the extraction processes needed to access them. US refineries are overwhelmingly not set up to refine light sweet crudes and the reconfiguration of the refineries required in order for them to process light sweets is horrendously expensive. On top of that, the refining process for light and sweet crudes is incredibly more cost intensive in and of itself than the process used to refine heavy sour crudes, regardless of what US refineries are configured to process (i.e. even if US refineries were set up to process light sweets, it would still cost more than it does to refine heavy sours). The net result is that domestically extractable crudes are significantly more expensive to extract and process than it would be to import and refine heavy sour crudes from elsewhere. The industry didn't open new bores because there wasn't any money to be made by doing so.

Incidentally, with the prices being what they are today, it makes a lot more sense to extract and refine domestic light sweets but many of the light sweet wells were permanently capped years ago when it became too expensive to continue production after the more easily accessible bores dried up. Likewise, due to the costs and leadtimes involved with opening new bores and wells, as well as the time to see a financial return on those costs, oil companies are not in a rush to increase production and are being conservative with their applications to drill new wells, as it could quickly turn into an expensive financial boondoggle (the sort of thing which could cause a massive collapse of the US energy sector) if they rushed to increase production and invested massively into new wells and bores only to see the price collapse before they could see a return. Even if they did - because the light sweet crude refining capacity in the US is so small, and the time and cost associated with opening new refineries or reconfiguring existing ones is so large, there would be a massive bottleneck on production that couldn't be easily lifted and would prevent domestic crude production from really easing the cost burden or having any financial impact on other markets. Realistically, it would be years before refining capacity would be able to catch up to theoretical production capacity in this scenario, during which time the oil companies would literally have to pay people to take their excess supply - so that being the case, regardless of what the price of crude is going for, any increase in domestic production capacity is going to be slow and gradual, and any massive government stimulus or investment into accelerating that risks creating a dramatically worse problem for global markets than anything we are seeing today (unless... you want the US to drag down the global economy into another recession?).

Anyway, back to Russia. While only something like 3% of US imports came from Russia, the huge supply surplus that Russia generated served to artificially lower prices of heavy sour crudes from other areas (chiefly Canada, LatAm, the North Sea, and OPEC states) and keep OPECs rates in check, and made heavy crude import and refining the economic choice for domestic production, which served to make the already uneconomical drilling for light sweet crudes in the US even more uneconomical. The few domestic wells and fields that do produce heavy sours are largely tapped to capacity and thus cannot supply much more than they already are. When sanctions hit Russian heavy sour crudes, and OPEC refused to increase production, the laws of supply and demand came into play and the cost of heavy sour crudes from non-Russian suppliers skyrocketed as a result of increased demand vs a more or less fixed supply (meanwhile Russia is struggling to even give away its crude and is running out of places to store it which is potentially forming another crisis point, but we'll see what develops). If the US was the only state sanctioning Russian crude, it would not have made any impact on energy prices at all, but because most of Russias former clientele are banning import of Russian heavy sours now, they are now hitting up the US's suppliers for the same supply and in turn driving the cost up for everyone. So yeah, it pretty much is a war impact, and thats evidenced by the fact that you can buy a barrel of Russian crude for ~$75 vs Brent crude (which is what the US imports) at ~$115. If there was no war, the price of oil most likely would not have changed significantly from where it was in January and as the US didn't really import Russian crude *anyway* there would have been no reason why the US opening new bores, or lack thereof, would have factored into this.


Rampant inflation @ 2022/05/24 20:28:10


Post by: lord_blackfang


Well, a war impact in the same sense that someone on a hunger strike is being starved by the entity they are protesting...

As for the first paragraph, the activity of this thread, as with all political discussion, is explained entirely by media coverage.


Rampant inflation @ 2022/05/24 21:50:52


Post by: Laughing Man


 lord_blackfang wrote:
Toofast wrote:
30 year olds having heart attacks and collapsing right now


Wait what what is this?

He thinks covid vaccines kill people.


Rampant inflation @ 2022/05/24 22:34:55


Post by: Ensis Ferrae


JWBS wrote:
 lord_blackfang wrote:
Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.

That's kind of a logical paradox though isn't it, since it's the regulation in the first place that creates this particular problem (and not as an unwanted side-effect, but as a specifically planned result), adding another regulation to countermand the previous regulation seems a bit farcical imo.


Just to address, with a different example, this point. . . Here in the US, we have certain regulations regarding emissions that apparently drive some of the fuel prices seen at the pump. I saw an article yesterday on either Reuters or AP News that the Biden admin was "considering" waiving/dropping some of those rules temporarily in order to help "save people" at the pump.

To which I say, "F That". . . Now, don't get me wrong, getting hit at the pump when you're a long-haul trucker sucks, and that particular industry will cause ripples of price increases at grocery stores on things that are necessary to survive. Personally, that should be addressed separately and in a way which doesn't screw over most consumers.

But, America as a whole is obsessed with overly large, useless vehicles. Like the guy about 4 miles from my house. . he lives in tiny-plot-of-land suburbia, like, the kind of plot where his Chevy Silverado 3500HD dually literally cannot park straight on his driveway and fit. It would be sticking out over into the street. Or my favorite customers: the DINK "karen" who drives a "denali" (Yukon) because of some silly notion that being in a vehicle that is larger, and heavier than even most police vehicles will keep her safe. . . That sort of thing needs to be addressed in a big way, and not just via inflation (but that's a whole different thread, so I won't derail things further)


Rampant inflation @ 2022/05/25 04:57:19


Post by: JWBS


 lord_blackfang wrote:
JWBS wrote:
 lord_blackfang wrote:
Maybe you should have put some regulations in place that would prevent supply of such a critical product being at the mercy of the whimsy of a handful of monopolists.

That's kind of a logical paradox though isn't it, since it's the regulation in the first place that creates this particular problem (and not as an unwanted side-effect, but as a specifically planned result), adding another regulation to countermand the previous regulation seems a bit farcical imo.


I'm absolutely amazed that you managed to spin food safety regulations as being the problem here.

Let's just do way with those and let the free market decide what the appropriate ratio of price vs toxic waste in baby food is.

I didn't make that claim though, that seems like a deliberate mischaracterisation of what I actually said. I wrote that the industry was monopolised (deliberately) via regulation, and to demonopolise with further regulation is a perverse idea. If you think the special interest groups and lobbyists involved in creating these monopolies are unaware of the consequences, and the benefits for themselves, I think you have a naive perspective.

/Edit - Also my toilet roll increased from £4 for a pack of 16 to £5, +25% since last time I bought it! Even more than cheese, which I thought was steep enough :s


Rampant inflation @ 2022/05/25 08:49:16


Post by: lord_blackfang


I apologize, I was at the time unaware of the deeper machinations later explained by chaos0xomega. The common explanation seen outside of the US is just that a major plant was shut down because of bacterial contamination, so I thought you were referring to food safety regulations.


Rampant inflation @ 2022/05/25 12:09:48


Post by: chaos0xomega


To refer to the government subsidies and welfare benefits as "regulations" is itself a gross and deliberate mischaracterization of the issue. That is not what the term regulation means nor is it how its understood by pretty much anyone.


Automatically Appended Next Post:
 lord_blackfang wrote:


As for the first paragraph, the activity of this thread, as with all political discussion, is explained entirely by media coverage.


Sounds like a heck of a lot of copium to me.


Rampant inflation @ 2022/05/25 12:13:14


Post by: JWBS


I didn't refer to either of those things as regulations, though government subsidies are, very obviously, a perfect example of regulation.


Rampant inflation @ 2022/05/25 14:36:10


Post by: chaos0xomega


No, they aren't. By definition regulations are government mandated rules and policies that must be followed under threat of enforced penalty. The baby formula manufacturers are not obligated to participate in the government subsidy program and there is no enforced penalty for them if they choose not to. Ultimately, the subsidy is a fixed-price sole-source purchasing contract issued by government on behalf of subsidy program participants, i.e. a voluntary agreement between the government and manufacturers to sell product to select individuals at a set price.

Program participants purchase the formula from their local retailers using a voucher system. The retailers then get reimbursed by the governemnt for the full retail price of the formula sold via voucher, in turn the government then gets a rebate from the manufacturer for the formula sold per the terms of the contract, so that at the end the government has paid a severely discounted price to purchase the formula on behalf of the recipient.

That is not a regulation by any reasonable or sensible interpretation of the definition of the term.



Rampant inflation @ 2022/05/25 14:46:06


Post by: Easy E


JWBS wrote:
I didn't refer to either of those things as regulations, though government subsidies are, very obviously, a perfect example of regulation.


Interesting. Can you provide me your definition of "regulation"?


Rampant inflation @ 2022/05/25 18:03:02


Post by: Flinty


There is at least one paper out there in the subject

https://scholarspace.library.gwu.edu/downloads/p2676v93m?locale=en

I don’t have the competence to know if it’s any good, or the status of the author or institution.


Rampant inflation @ 2022/05/25 19:32:49


Post by: JWBS


chaos0xomega wrote:No, they aren't. By definition regulations are government mandated rules and policies that must be followed under threat of enforced penalty. The baby formula manufacturers are not obligated to participate in the government subsidy program and there is no enforced penalty for them if they choose not to. Ultimately, the subsidy is a fixed-price sole-source purchasing contract issued by government on behalf of subsidy program participants, i.e. a voluntary agreement between the government and manufacturers to sell product to select individuals at a set price.

Program participants purchase the formula from their local retailers using a voucher system. The retailers then get reimbursed by the governemnt for the full retail price of the formula sold via voucher, in turn the government then gets a rebate from the manufacturer for the formula sold per the terms of the contract, so that at the end the government has paid a severely discounted price to purchase the formula on behalf of the recipient.

That is not a regulation by any reasonable or sensible interpretation of the definition of the term.



I said regulation, not a regulation. In macroeconomic terms, state mandated monopolies are very much regulation.
/Edit - including subsidised monopolies.
Easy E wrote:
JWBS wrote:
I didn't refer to either of those things as regulations, though government subsidies are, very obviously, a perfect example of regulation.


Interesting. Can you provide me your definition of "regulation"?


A rule or directive made and maintained by an authority, or, in this case, The action or process of regulating or being regulated.


Rampant inflation @ 2022/05/25 20:18:24


Post by: Easy E


So a subsidy is a regulation because it is a rule in order to provide tax incentive for doing a specific action or behavior?


Rampant inflation @ 2022/05/25 20:31:30


Post by: JWBS


I should have specified subsidised monopolies when I said perfect example. Anyway this seems to be getting kinda semantic (or at the very least, too finegrain, in an irrelevant way, imo).


Rampant inflation @ 2022/05/25 20:34:51


Post by: Flinty


Governments regulate things. Some times they using formal legislative based Regulations (I.e. the Building Regulations 2010 as amended), and sometimes they regulate things by other means. I think the point is that subsidies can be used to small are regulate.


Rampant inflation @ 2022/05/25 20:41:23


Post by: chaos0xomega


 Flinty wrote:
There is at least one paper out there in the subject
https://scholarspace.library.gwu.edu/downloads/p2676v93m?locale=en
I don’t have the competence to know if it’s any good, or the status of the author or institution.


Regulatory subsidies are a specific subset of subsidies with specific structure, process/function, and purpose. Whether the topic at hand meets that is overly technical and subject to interpretation. But also:

Spoiler:


I said regulation, not a regulation. In macroeconomic terms, state mandated monopolies are very much regulation.


Its not a state mandated monopoly, competitors are able to freely distribute and sell their product, and are not excluded from doing so by any rule or policy thereby falling far short of the coercive criteria needed in order to establish it as a monopoly. Contrast this to something like a power, water, or sewer utility service provider where in many (if not most, at least in the US) areas there are limited options (if you have any option at all and aren't in an area with exclusivity to a single provider) as a result of regulatory policy granting exclusive rights to specific entities to operate.

In particular, the terms of the subsidy do not regulate the "free market price" of the formula pricing and the manufacturers and retailers are free to set their prices as they please, the only price terms set by the subsidy are the rebate issued to the government. I.E. the manufacturer is free to set its wholesale price to retailers, and retailers are free to set their retail price to consumers (and in fact data studies have shown that in most cases the contract brand ends up having a slightly higher retail price than the non-contract brands in each jurisdiction as a result of the increased demand volume vs available supply). What is fixed is the rebate rate the government receives relative to the wholesale price of the formula. So you can't even claim that its a de facto monopoly or that the subsidy creates an anti-competitive price advantage that favors the contract brand over others, because not only is that not the case but the unintended "free market" impact on price results in the opposite occuring, resulting in the contract brand becoming *less* competitive on price. What drives sales of it in spite of the higher price is that somethng like half of all formula sales are through the subsidy program and the other half heavily favors the same brand in spite of price as a result of doctors and hospitals recommending the contract brand as a matter of convenience - medical professionals can provide the contract brand to patients and new mothers, etc. and bill the gov't through the subsidy program, as a result they tend to almost exclusively stock and provide contract formulas regardless of whether or not the patient is covered by the subsidy. This results in product familiarity and the perception of the formula being perceived as safe or medically recommended, which helps drive further sales despite other products being cheaper. Some studies suggest that the fact that its more expensive actually further encourages this as parents tend to be protective of newborns and the price disparity vs the cheaper non-contract formulas gives the perception that the other brands are cheaper, less comprehensive, and less safe, etc. Anyway, point is - not a monopoly, not de facto, not de jure.


Rampant inflation @ 2022/05/25 21:03:36


Post by: JWBS


chaos0xomega wrote:


Its not a state mandated monopoly, competitors are able to freely distribute and sell their product,

As I said, seems like just semantics now. Furthermore (I say w/o malice), your arguments on this specific point seem like cope tbh. Some of the players in the market are annointed with tax dollar subsidies. Might not be a monopoly in terms of semantics, but if that's the case, someone should alert these publications after they ctrl+F the articles for "Monop" (the most prominent sources on the first search page, I imagine there's many dozens more)

https://www.theguardian.com/us-news/2022/may/18/baby-formula-shortage-why-is-there-none-what-to-do-causes-explained
https://fortune.com/2022/05/14/baby-formula-shortage-milk-monopoly-fda/
https://www.bloomberg.com/news/articles/2022-05-20/baby-formula-shortage-shows-risk-of-us-industry-concentration
https://www.npr.org/2022/05/19/1099748064/baby-infant-formula-shortages
https://www.startribune.com/monopoly-and-protectionism-a-formula-for-hungry-babies/600175172/


Rampant inflation @ 2022/05/26 00:42:10


Post by: chaos0xomega


JWBS wrote:
chaos0xomega wrote:


Its not a state mandated monopoly, competitors are able to freely distribute and sell their product,

As I said, seems like just semantics now. Furthermore (I say w/o malice), your arguments on this specific point seem like cope tbh. Some of the players in the market are annointed with tax dollar subsidies. Might not be a monopoly in terms of semantics, but if that's the case, someone should alert these publications after they ctrl+F the articles for "Monop" (the most prominent sources on the first search page, I imagine there's many dozens more)


When you're having a discussion steeped in technical detail and are trying to identify a problem and/or propose solutions, "semantics" is not a valid dismissal of points being made, nor is reliance on colloquial (mis)use of technical terminology.

https://www.theguardian.com/us-news/2022/may/18/baby-formula-shortage-why-is-there-none-what-to-do-causes-explained


"Some are calling for federal action to tackle the monopoly a handful of companies have on the formula market."

By definition not a monopoly, this is colloquial misuse of the term. A more accurate term to use here would be oligopoly, but even that is inaccurate because beyond the big 4 theres at least another dozen or so US based formula brands out there, possibly many more. Either way, point is there is not a single entity in control of the entire market, nor do the elite "big 4" with WIC contracts control it.

https://fortune.com/2022/05/14/baby-formula-shortage-milk-monopoly-fda/


"The baby formula market exists as a shared monopoly, with only a few manufacturers controlling nearly all supply."

Ditto. You especially cannot have a monopoly where one company only has 43% market share. By definition, a monopoly requires one entity to control an entire market, in this case one entity seems to not even control half.

https://www.bloomberg.com/news/articles/2022-05-20/baby-formula-shortage-shows-risk-of-us-industry-concentration


A better article, it correctly assesses the level of market dominance the WIC contract grants in any given state, however its usage of the term monopoly is still inaccurate even at the state level. A better term would have been "virtual monopoly" in order to denote the advantage that the WIC contract holder has. If one formula brand had a 90% market share in California, then by definition they do not have a monopoly owing to the 10% market share controlled by their competitors. Even if we considered that a monopoly, the fact that the market dominance could flip almost overnight due to factors completely out of their control makes it a very weak monopoly.

https://www.npr.org/2022/05/19/1099748064/baby-infant-formula-shortages


The article is more technically oriented. "The USDA's own research found that whichever company gets the WIC contract in a state enjoys a powerful market advantage there, with a monopoly over WIC sales and "spillover" effects in the non-WIC market as well.

This is accurate. The holder of a WIC contract in a given jurisdiction does have a monopoly - on sales to a specific subset of consumers. They do not have a true monopoly over the entire baby formula market - not at the local/state level, certainly not federally.

https://www.startribune.com/monopoly-and-protectionism-a-formula-for-hungry-babies/600175172/


Disappointing article - inaccurate colloquial usage abounds not just in terms of monopoly but also of monopsony.

Even in colloquial usage these arguments largely fall flat. Key characteristics of monopoly are absence of viable alternatives or substitute goods (not present here, the viable products exist on every stores shelves, consumers choose not to buy them, even though those products may have been viable just a short period before when they had the WIC contract, even though consumers just a mile away in another state with a different WIC contract may be buying that very same viable alternative product in preference over the one that consumers in the first state turn their noses up at - you can't blame government or industry for the irrationality of consumers), lack of competition (also not true, not only are the alternative products usually cheaper despite being as good as or better than in terms of quality, but the competition for the WIC contracts is intense when it comes up for renewal on a 3-4 cycle), and artificially high prices resulting from the power of the producer to set their own rates in a vacuum (likewise not present here, not only are the competitor products typically cheaper, but the high price of the WIC product is the result of *retailers* setting the price in response to product demand rather than the price being dictated by the producer). Its hard to argue monopoly when none of the hallmarks of a monopoly are there.


Rampant inflation @ 2022/05/26 12:06:24


Post by: JWBS


Again, lot of text poitning to the (accepted, acknowledged) fact that the state of affairs is not, speaking in the strictest semantic terms a monopoly, but not addressing the fact that it's an effective monopoly (you've even said yourself that the unsibsidised competitors can sell at a lower price and the subsidised brands are just gouging based on their position in an uncompetetive market where the state mandates that their product be subsidised, then buys their product). inb4 "technically not gouging". But anyway I'm going to concede the point here. Yes, not a monopoly, in fact probably a pretty good system, no problems detected, no war in Ba Sing Se etc etc.


Rampant inflation @ 2022/05/26 20:46:04


Post by: NinthMusketeer


As an outside reader it seems like a classic case of internet discussion; Chaos knows what he is talking about and JWBS is putting up deflections to avoid admitting he was wrong.

The perpetual irony that we respect those who admit when they are wrong but stop at nothing to avoid doing so ourselves.


Rampant inflation @ 2022/05/26 21:44:20


Post by: JWBS


Wrong about what?


Rampant inflation @ 2022/05/26 22:53:13


Post by: Ghool


Let’s get back on topic;

So I saw the new Underworlds box at the LGS.
It’s almost double what I paid for Nightvault a few years ago. I paid $75 for the boxed set and $35 per warband.
$140 for the new boxed set, and new warbands are up to $55 each. The price of these sets is up nearly 100% in less than 5 years?!
Now *that’s* rampant inflation.

And Kickstarter games are getting to be unaffordable when it’s over $200 for a single base game with shipping.
Either I’m old or I’m really feeling like I’m getting priced right out of the market.

At least Marvel Crisis Protocol is still as expensive as ever.


Rampant inflation @ 2022/05/26 23:57:38


Post by: BobtheInquisitor


Has your take hone pay increased by 200% in the last 5 years?

Then yeah, you’re being priced out.


Rampant inflation @ 2022/05/27 00:28:08


Post by: NinthMusketeer


 BobtheInquisitor wrote:
Has your take hone pay increased by 200% in the last 5 years?
And that's the rub, really. Costs are increasing, wages are doing little to follow suit. It's like everyone getting a pay cut.


Rampant inflation @ 2022/05/27 01:11:54


Post by: chaos0xomega


JWBS wrote:
but not addressing the fact that it's an effective monopoly (you've even said yourself that the unsibsidised competitors can sell at a lower price and the subsidised brands are just gouging based on their position in an uncompetetive market where the state mandates that their product be subsidised, then buys their product).


Unsubsidized competitors can sell at whatever price they and their retailers choose to set for the products in question. The MSRP (RRP for you tea-drinking types) for both the subsidized and unsubsidized products doesn't change on the basis of contracts and the brands aren't setting the market price to consumers for those goods based on that criteria. Ultimately the retail price is being set by the retailers outside of the purview of the brands themselves. Framing it as "the unsubsidized competitors can sell at a lower price" is an interesting but extremely misleading twist of the facts - theres no evidence to suggest that competitors prices are being purposefully lowered by retailers relative to the contract brand (in fact, data from the studies conducted on this show that the price of these items remains nationally consistent with MSRP in markets where they aren't subsidized), instead the *subsidized brands* price is being *raised* by the *retailers* who carry it, which is an entirely different market effect altogether. Even if that weren't a case, "our competitors sell at a lower price" doesn't meet any criteria for a monopoly, especially not when the manufacturers profit margins are wholly unaffected by the retail price - manufacturers get their wholesale price either way.

In general, you don't seem to have understood the structure of the contracts or how the subsidy functions (despite what I thought was a simplified fairly straightforward explanation of it). Your attempt to frame it as though the subsidized brands are somehow making money off the government by gouging them with higher prices in a "non-competitive" market is hilariously wrong and the system simply does not work the way you think it does - the only people potentially making money off of this are the retailers. If a retailer doubles the price of the subsidized brand, the manufacturer does not see a penny more in profit than they would have if the retailer left the price at MSRP. The difference between the retail price and the MSRP is a profit 100% pocketed by the retailer and the retailer only. In reality, study has found that even though the contract brand tends to have a higher retail price than non-contract brands, in many cases the average retail price for both contract and non-contract brands is *lower* than the MSRP - and often lower than the wholesale price of the formula because retailers tend to use formula as a loss-leader to drive sales of other goods, you come for the baby formula but stay for the sugary junk foods and cosmetics. There is a real concern that retailers can take advantage of the system by exorbitantly marking up the formula price knowing that the government will pay the full retail price for the formula, which is why we have so much data on this as Congress directed the USDA to study this stuff to make sure taxpayers weren't being bilked.

Due to the way the system works and the way the contract is structured and priced, there is no real room for the manufacturers to take advantage of the system, as the contract award is based on the "net price" which is the rebate vs the lowest national wholesale price for the formula (i.e. it includes the wholesale rate from states where it is *not* the contract brand) based on fixed volume criteria (wholesale unit price of a full truckload of the product, etc). Naturally, the contract is awarded to the lowest bidder, and there is strong incentive for the bidders to offer the lowest net price in order to win the contract as competition is fierce. As a result, the contract manufacturers often end up losing money on every unit of formula sold through the voucher program (QUOTE - “The dirty secret about WIC is these formula companies actually lose money on formula that they sell through WIC,” because the lowest bidder ends up winning the state contracts, explained a former Democratic Senate aide. “But what happens is… if you give birth in a hospital and you request formula, you’re going to get the formula that is whoever has the WIC contract,” allowing the formula makers to reach a massive pool of new customers. Getting a state WIC contract can also mean more favorable shelf space at retailers across the state and more brand loyalty."), but this is made up for by the non-subsidized sales volume of the contract formula. A good example is Connecticuts WIC contract with Similac - Connecticut receives an almost 100% rebate on formula sold through its voucher program, meaning that the rebate covers almost the full price that the government pays to the retailer for the formula - i.e. the entirety of the wholesale cost plus the majority of the retailers price markup (in general, formula has a low average retail markup of about 10% over wholesale), assuming that the retailer didn't actually mark *down* the price as a loss-leader as mentioned previously. As the average retail price of formula approximately 5x the cost to manufacture it, Connecticut is essentially getting formula for free from the manufacturer/the manufacturer is taking an actual hard loss on every unit that it sells through the state voucher program.



JWBS wrote:
Wrong about what?


Almost everything.


Automatically Appended Next Post:
 NinthMusketeer wrote:
 BobtheInquisitor wrote:
Has your take hone pay increased by 200% in the last 5 years?
And that's the rub, really. Costs are increasing, wages are doing little to follow suit. It's like everyone getting a pay cut.


Aye. I could rely on getting a minimum of a 3.5% raise every year (last year I got 22% and the year prior 19% thanks to back-to-back promotions) until this year when I got a measly 2.75% raise despite good performance review ratings. While 3.5%+ was definitely enough to outpace inflation in years prior, 2.75% this year is a huge pay cut vs current inflation and has really eroded into the gains I made in prior years.


Rampant inflation @ 2022/05/27 06:19:32


Post by: Jadenim


The key thing is, what can be done about it? The usual government / central bank response of “raise interest rates” won’t work, because this inflation is not being caused by too much free cash in the system. In fact, it would just make things worse by also increasing the cost of mortgages, etc.


Rampant inflation @ 2022/05/27 09:30:58


Post by: JWBS


I decided some time ago to stop buying after Heresy box and a couple of other bits I'm waiting for. However since then I've added a couple more items to my shopping list (Avatar, latest killteam box, others), plus more new HH stuff like the Kratos etc so it looks like it may be endless for me, since they'll obviously make more stuff in the future that I will want to buy. I think I will have to just put a cap on my spending and leave it at that. £75 a month maybe.


Automatically Appended Next Post:
chaos0xomega wrote:

JWBS wrote:
Wrong about what?


Almost everything.


Well, your full throated defence of the American formula market monopoly has been an absolute pleasure to read, so it hasn't been a total loss.


Rampant inflation @ 2022/05/27 12:29:38


Post by: NinthMusketeer


That you think it was a defense demonstrates how fundamentally you misunderstood what he was saying.


Automatically Appended Next Post:
 Jadenim wrote:
The key thing is, what can be done about it? The usual government / central bank response of “raise interest rates” won’t work, because this inflation is not being caused by too much free cash in the system. In fact, it would just make things worse by also increasing the cost of mortgages, etc.
I could think of ideas, but that is a point where I feel I just don't have the expertise needed for my suggestions to mean anything. I'd hate to be a demonstration of Dunning Kruger effect.


Rampant inflation @ 2022/05/27 13:27:55


Post by: JWBS


 NinthMusketeer wrote:
That you think it was a defense demonstrates how fundamentally you misunderstood what he was saying.

Hope he sees this.


Rampant inflation @ 2022/05/27 14:19:17


Post by: chaos0xomega


NinthMusketeer is right tho.


Rampant inflation @ 2022/05/27 14:20:03


Post by: Easy E


The days of cheap and quick shipping are over, and it is time for all of us to adjust.


Rampant inflation @ 2022/05/27 14:29:16


Post by: JWBS


chaos0xomega wrote:
NinthMusketeer is right tho.

I hope he seees this bro.


Rampant inflation @ 2022/05/27 15:23:03


Post by: chaos0xomega


"I don't have a good counterargument and don't want to admit I'm wrong so I'm going to try to act unflappably cool and come across as an insufferable twatwaffle instead" is an interesting debate strategy, though I'm not sure its working out for you the way you want it to.


Rampant inflation @ 2022/05/27 15:35:18


Post by: JWBS


"I'm a bit of an explainer, an educator if you will, I like for others to know this about me so I'll elucidate, in a hilariously overwrought manner, the finer points of macroeconomics on the internets, including an explanation of the difference between a monoloply and an oligopoly to a native English speaker that has an IQ in excess of ninety" is an undertaking I can only admire.


Rampant inflation @ 2022/05/27 15:56:48


Post by: chaos0xomega


Wouldn't have had to "elucidate and educate" if your hot takes weren't so off-puttingly counterfactual ¯\_(ツ)_/¯


Rampant inflation @ 2022/05/27 16:07:36


Post by: JWBS


I conceded the point several posts back but you're still going on and on and on in a tedious, predictable rythym (thankfully w/o the excessive length today). Okay, how about this - I'll say no more about it, literally nothing at all, including no response to your reply to this offer, and no response to your further (doubtless fascinating) thoughts and explanations on the subject. How's that? Is that acceptable to you? (>‿◕)


Rampant inflation @ 2022/05/27 19:30:08


Post by: NinthMusketeer


chaos0xomega wrote:
"I don't have a good counterargument and don't want to admit I'm wrong so I'm going to try to act unflappably cool and come across as an insufferable twatwaffle instead" is an interesting debate strategy, though I'm not sure its working out for you the way you want it to.
It's bold move cotton, we'll see how that works out for him.


Rampant inflation @ 2022/05/27 20:00:23


Post by: JWBS


My unilateral arrangement with Cxo extends to any / all sidekicks and admirers too .


Rampant inflation @ 2022/05/27 23:18:35


Post by: Ensis Ferrae


 Jadenim wrote:
The key thing is, what can be done about it? The usual government / central bank response of “raise interest rates” won’t work, because this inflation is not being caused by too much free cash in the system. In fact, it would just make things worse by also increasing the cost of mortgages, etc.


I mean, at least in the US, we can point to 40 years of policy that lead exactly where we are today. . . We can also look at the laws/policies that brought us out of the Great Depression, and the business environments that created in the heights of the 1950s and 60s.

And then do that. . . but, ya know, with The Internet and all that. Obviously, even this comment is probably skirting dangerously close to the P word, but in many ways we really can "simply" look back at another time of great prosperity (for many), see what elements went into its creation, and adjust those ideas to more modern times.


Rampant inflation @ 2022/05/28 06:17:50


Post by: NinthMusketeer


In theory sure, but I feel like if that were a viable path forward we wouldn't be in this situation now. I legitimately believe that -to a certain extent- we have to wait for things to get SO bad that people currently sitting on the sidelines realize there is a need to take action. As in, actually do something that matters, not just talk about it (no disrespect to anyone in this thread, of course; I have no idea what any of you do in real life).


Rampant inflation @ 2022/05/28 10:27:28


Post by: JWBS


 Ensis Ferrae wrote:
 Jadenim wrote:
The key thing is, what can be done about it? The usual government / central bank response of “raise interest rates” won’t work, because this inflation is not being caused by too much free cash in the system. In fact, it would just make things worse by also increasing the cost of mortgages, etc.


I mean, at least in the US, we can point to 40 years of policy that lead exactly where we are today. . . We can also look at the laws/policies that brought us out of the Great Depression, and the business environments that created in the heights of the 1950s and 60s.

And then do that. . . but, ya know, with The Internet and all that. Obviously, even this comment is probably skirting dangerously close to the P word, but in many ways we really can "simply" look back at another time of great prosperity (for many), see what elements went into its creation, and adjust those ideas to more modern times.

Economics is a famously complex discipline where even the best in the field, somewhat tongue in cheek, refer to it as far more an art than science. We would probably be living in an economic utopia if it could be distilled into simple elements but the variables are too numerous.


Rampant inflation @ 2022/05/29 08:08:02


Post by: Miguelsan


My Econometrics teacher at college liked to say that Economics is a discipline very proficient at predicting the past.

Anyways shipping is one of the places were inflation is having a field day. Due to many reasons already touched upon everywhere the price of shipping a package has skyrocketed. Even in Japan, a country famous for stagflation, we are feeling it internally, and bringing anything from abroad is prohibitive. e.g. Mophidious is on a clearance sale. Siege of the Citadel game went from 200 to 120 pounds, but shipping to Japan went from 50 pounds last year to a staggering 119 pounds. It's not the only example. Almost anything coming from the US has been hit with big increases, KS is no longer an option for us JP players.

M.


Rampant inflation @ 2022/05/29 17:21:44


Post by: OrlandotheTechnicoloured


Another thing the war in Ukraine has done is given firms who have been absorbing price rises since covid hit a reason to raise prices

they had been keeping prices down as their competitors were all in an attempt to retain customers at least some of which had had a big financia hit (although some saved a bundle from not commuting)

but the war is a clear 'good' reason for putting prices up as not only does it actually put the firms costs up it's a clearly visible 'bad' event that provides a 'good reason' in consumers minds why prices are jumping (they may not be able to afford as much but they're much less likley to abandon a brand raising prices)

so you've had a fairly sudden hit of companies reclaiming the margins they had a couple of years ago


Rampant inflation @ 2022/05/29 20:01:50


Post by: Ensis Ferrae


 Miguelsan wrote:

Anyways shipping is one of the places were inflation is having a field day. Due to many reasons already touched upon everywhere the price of shipping a package has skyrocketed.


My father works in perhaps the most bougie industry ever (he fits and repairs golf clubs) and he was telling me some of the lengths his suppliers are going through to get him stock. Many of them manufacture in Japan, and elsewhere in Asia, and the global shipping problem has gotten to the point where some of these companies are finding it cheaper to use air freight for things that would normally go on a ship. Some of it considers the cost of space in a shipping container, but a lot more of it is down to an equation wherein a lack of income because things are not moving hurts more than paying fuel and exorbitant flight rates with having some income does.


Rampant inflation @ 2022/05/31 00:13:46


Post by: The happy heretic


Removed.


Rampant inflation @ 2022/06/08 23:47:03


Post by: Waaagh_Gonads


Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Rampant inflation @ 2022/06/09 01:41:24


Post by: Baragash


 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Interest rate rises aren't the solution to the current problem, and the current problem isn't printing money.

The only thing a massive rise in interest rates will do is ensure a deep, drawn out recession.


Rampant inflation @ 2022/06/09 03:17:20


Post by: Waaagh_Gonads


 Baragash wrote:
 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Interest rate rises aren't the solution to the current problem, and the current problem isn't printing money.


The only thing a massive rise in interest rates will do is ensure a deep, drawn out recession.


For this inflationary episode I think that printing money played a huge role (although other factors were at play). For example (many tables linked as most are slightly different and have different time points but all show how massive the money printing was).
It started under Trump and worsened under Biden, so both sides of politics are to blame.


https://www.google.com.au/search?q=us+dollars+printed+by+year&tbm=isch&ved=2ahUKEwiH7pL4sp_4AhVIrmMGHbnKDoMQ2-cCegQIABAA&oq=us+dollars+printed+by+year&gs_lcp=CgNpbWcQAzIFCAAQgAQ6BAgjECc6BggAEB4QBzoECAAQGFD2F1iPJWCiJmgAcAB4AIABmAGIAZ4LkgEEMC4xMJgBAKABAaoBC2d3cy13aXotaW1nwAEB&sclient=img&ei=-WShYseNMcjcjuMPuZW7mAg&bih=937&biw=1920#imgrc=YOwEOB2M1pquwM


Rampant inflation @ 2022/06/09 03:47:57


Post by: arkhanist


 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


There are two 'big' causes of inflation; demand-pull and cost-push. Demand-pull is when demand outpaces supply. Too many people chasing too few goods leads to rising prices for them. Take the EU for example; they're sanctioning Russian oil, and there is additional desire to find alternative sources even beyond legal requirements; so that demand has moved to other suppliers. Without a drastic increase in production, that means more people trying to buy the same non-Russian oil suitable for their refineries, so the price goes up for everyone - in effect, a bidding war. Another is chip supplies; there is a much higher demand for chip supplies than there is production capacity worldwide and has been for a while, so prices have shot up. Wheat and grains, particularly in areas where they were reliant on Ukrainian and Russian exports which are curtailed due to the black sea ports being full of mines right now, amongst other reasons.

Cost-push inflation is when the cost of making something goes up, so you have to raise the price to maintain the same profit margin. Obviously customers can be price sensitive, so often suppliers will try and buffer such price rises; riding out smaller bumps using their existing margin or taking temporary losses to maintain market share, but then big shifts when that is no longer an option. If we take the world oil price increase as an example, that then causes cost-push inflation in other areas, i.e. consumers of oil. Truckers pay more for fuel, they charge more for shipping. Higher costs for shipping raises costs for things that in themselves are fine.

Interest rate rises do act on demand-pull inflation; at its simplest, by increasing the costs of borrowing, you cut demand, both by business and consumers. e.g. higher mortgage payments? Less demand for houses (and less money for non-essential spending). However, and it's a biggie, it's not a quick impact; so you're not setting interest rates based on current demand, but on expected future demand. Plus you're managing demand for a whole economy with one big lever, so you can end up killing demand in areas that didn't need it, while not hitting overheating sectors enough that do. Whack it up too hard too fast, and you can hit people's confidence and crash demand way too hard. Kill demand, and you kill jobs. Plus its definitely an art, not a science, as it so much relies on prediction; and events have a nasty way of blowing that up. But generall you soften inflation with interest rate changes, you don't stop it in its tracks.

Post-covid we've seen an increase in demand-pull inflation, as people go back to doing things they used to and want to do again. As people feel more confident about the future, they spend more on non-essentials, also. Economic growth, and up to a point this is a good thing because it means jobs. This is one of the primary causes on inflation at the start of the year. Interest raises - and cutting stimulation (i.e. stopping printing money) - are normal tools to try and keep this managable, and is the main goal of raising rates right now. Covid meant all sorts of weird distortions to the world economy, and we're going to be working through those for a good while yet.

The bigger problem right now is cost-push inflation. The big driver here is energy costs (which were going up due to increased demand before the Russian war), but has gotten significantly worse due to sanctions. And there's more to come with natural gas, where the EU is a huge buyer of Russian supplies. Neon; ukraine was a huge supplier which just makes the chip situation worse. Fertiliser supply is massively affected. And you can't do anything about cost-push inflation with interest rate rises or ending stimulation, as it's not caused by demand which they manage.

We're developing into a type of stagflation; stubbornly rising prices, yet slowing growth or a retraction so demand-reduction isn't the solution. We had (well, still have!) issues managing the covid recovery, but that now is made far worse by the big spikes in cost-push inflation - and there's very little most anyone can do about it. Even if the war ended tomorrow, the west isn't going back to a pre-war relationship with Russia anytime soon, and that's going to have a major impact on energy supplies and prices for a while yet, along with the global shipping crisis, chip crisis (both covid related) and grain crisis (war related).

I calculated my personal inflation rate at 8.5% the other day - mostly energy and food. My pay is due to go up 0.5% this year. So yeah, that's meant significant cuts in pretty much all non-essentials. I've put money aside for the Heresy 2.0 box, which I have now spent; future hobby purchases are going to be on hold for a while!

The one good thing is that the current inflation spike is expected to be relatively temporary - once we finish absorbing the current round of price increases over the next 6-12 months due to rising energy costs etc, they shouldn't KEEP going up so much, absent a new crisis. Chip production is increasing to meet demand (which will take a year or two, but it will get there) and hopefully there's a solution to the grain crisis in Africa so there's not mass starvation, but there's some promising negotiations there being run by Turkey to allow Ukrainian supplies to resume. There will continue to be inflation from other causes, but it hopefully should be less eyewatering. Assuming no other global shocks happen for a year or two, which would be nice...


Rampant inflation @ 2022/06/09 05:25:44


Post by: Waaagh_Gonads


Arkhanist, I see you are from the UK.

What effect do you think lowering energy cost by removing green and social levies and VAT would have on inflation?

I am of the opinion that it is a lever that the government could use to remove a huge cost of living bill.

Australia removed half of their taxes at federal level for 6 months about 6 weeks ago and fuel immediately dropped about 10-15% and is still well below what it was at maximum.


Doing that at full amount on UK electricity amounts to about 25% of total price removed.

For fuel, Fuel duty is currently levied at a flat rate of 57.95p per litre for both petrol and diesel, while VAT at 20% is then charged on both the product price and the duty.




Rampant inflation @ 2022/06/09 06:39:32


Post by: arkhanist


When it comes to the UK specifically, yes, you could potentially reduce the impact on the cost of living in the short term by cutting levies and taxes on energy. However, they would be politically hard to reinstate.

They did cut UK fuel duty by 5p a couple of months ago (6p, after VAT) and the fuel companies mostly kept it and didn't lower prices.

Cutting the 'green crap' a decade ago was a previous response by the tories to an energy cost crisis - slashing investment on renewables and giving up on improving the dire state of UK housing insulation then (which was never reinstated), has led directly to a substantial higher exposure to natural gas prices in particular now to the tune of billions.

The previous pursuit of privatisation max also is bearing twisted fruit; we're fully exposed to global energy costs, despite being a substantial producer still of oil and gas from the north sea. France was able to cap their domestic energy rises to 4%, while the UK had a 54% rise a couple of months ago, and a similar one is coming in October.

We also need to press ahead with renewables and better efficiency for global warming, and we're absolutely out of time on that, even in the current crisis.

The UK gov has decided to go for a direct one-off payment to offset energy bills, biased mostly towards those on the lowest incomes after substantial pressure, which is at least fairly progressive. Personally I think they could do more, but my expectations that they actually give a toss about ordinary people are low, and it was only done to try and save Boris Johnson's skin from the partygate scandal.

Given they now seem determined to start a trade war with the EU over the Northern Ireland protocol they themselves negotiated (when the clear majority of NI people want to keep the protocol) to keep the brexit-ultra tory backbenchers happy, that will likely make things substantially worse.

Believe me, I am truly jealous NZ has Jacinda Ardern, and of Oz for getting rid of Morrison. Our Trump wannabe is still in power, for now.


Rampant inflation @ 2022/06/10 11:26:25


Post by: JWBS


 Baragash wrote:
 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Interest rate rises aren't the solution to the current problem, and the current problem isn't printing money.

The only thing a massive rise in interest rates will do is ensure a deep, drawn out recession.

Money is like any other good in the respect that when you increase the supply, the value goes down. This causes inflation, money is worth less so prices go up. High inflation as a result of turning on the money printer was predicted (it was a very safe prediction). The "Money printer wasn't a problem" is a party talking point that fools no one except those that are eager to spread the party line, for whatever reason (likely they just believe what they're told by the party).


Rampant inflation @ 2022/06/11 03:33:51


Post by: arkhanist


Well yes, increasing the money supply is inflationary due to the demand-pull effect - more money in the economy, increases demand for goods and services - more money chasing the same products drives up prices. That was the point!

Because covid was highly *deflationary*. We saw an absolutely huge drop in demand and economic activity. That could have led to an absolutely horrifying recession and job losses. Lowering interest rates wasn't much of an option left because that lever already got pulled hard due to the 2008 banking crisis. Another risk, which we did see happen in 2008 onwards was a liquidity crisis. Banks in particular stopped lending money; many businesses rely on short-term credit to operate, and loss of access to that caused significant damage to employment and wages. Pumping up cheap credit to banks offset that, and they wanted to avoid the same thing happening with covid.

Now, I'm not going to argue the world's central banks got it exactly right, or that some post-covid demand-pull inflation wasn't likely due the stimulation - growth and inflation are closely related - but you can't look at the money printing in isolation and ignore the risks they were trying to avoid. And inflation, while somewhat high at the start of the year, basically doubled after Russia invaded Ukraine and caused a 70's style energy shock. We're in a situation currently where employment is fairly good - we've avoided mass job losses - but real wages are taking a terrible beating. That is the big crisis to solve now, and is actually a bigger problem that's been going on for a long time now where capital has much more power and pays much lower taxes than labour (these are related!), so profits from growth go almost entirely to those with assets, and not those who work for a living. High inflation due to the energy and food crisis just makes it a lot more visible. Fixing *that* will take sustained government action, and the desire to actually do so against the interest of very wealthy, in contrast to the last 30 years. I can't say I'm actually expecting that they will, particularly in the UK.



Rampant inflation @ 2022/06/11 05:05:13


Post by: Baragash


JWBS wrote:
 Baragash wrote:
 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Interest rate rises aren't the solution to the current problem, and the current problem isn't printing money.

The only thing a massive rise in interest rates will do is ensure a deep, drawn out recession.

Money is like any other good in the respect that when you increase the supply, the value goes down. This causes inflation, money is worth less so prices go up. High inflation as a result of turning on the money printer was predicted (it was a very safe prediction). The "Money printer wasn't a problem" is a party talking point that fools no one except those that are eager to spread the party line, for whatever reason (likely they just believe what they're told by the party).


Sure, that's exactly what someone whose economic credentials are "listening to talking heads push agendas in the media" would say.

See how stupid that game is?

But your explanation is so simplistic it wavers somewhere between bad and wrong


Rampant inflation @ 2022/06/11 16:46:43


Post by: NinthMusketeer


Arkhanist, I greatly appreciate your application of nuance and educated assessment of the situation, but it has no place on the internet. Please distill your description of economic issues down to blaming a single party or factor for all of our woes


Rampant inflation @ 2022/06/11 19:09:00


Post by: Jadenim


 NinthMusketeer wrote:
Arkhanist, I greatly appreciate your application of nuance and educated assessment of the situation, but it has no place on the internet. Please distill your description of economic issues down to blaming a single party or factor for all of our woes


Damn you Lizard People!


Rampant inflation @ 2022/06/12 15:17:36


Post by: JWBS


 Baragash wrote:
JWBS wrote:
 Baragash wrote:
 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Interest rate rises aren't the solution to the current problem, and the current problem isn't printing money.

The only thing a massive rise in interest rates will do is ensure a deep, drawn out recession.

Money is like any other good in the respect that when you increase the supply, the value goes down. This causes inflation, money is worth less so prices go up. High inflation as a result of turning on the money printer was predicted (it was a very safe prediction). The "Money printer wasn't a problem" is a party talking point that fools no one except those that are eager to spread the party line, for whatever reason (likely they just believe what they're told by the party).


Sure, that's exactly what someone whose economic credentials are "listening to talking heads push agendas in the media" would say.

See how stupid that game is?

But your explanation is so simplistic it wavers somewhere between bad and wrong

Well I haven't appealed to my credentials in this discussion as of yet and neither have I questioned yours. Having said that, your complex, nuanced, fully expounded and cited claim that "..the current problem isn't printing money" is kind of irrefutable and now that I reflect upon it a bit more it does indicate that you are highly credentialed here, so I'll defer to you on this one. (/Edit - reading my prior response again it does read as more of an attack than I intended. That particular talking point is a peeve of mine though, I suppose that's why).


Automatically Appended Next Post:
 arkhanist wrote:
..but you can't look at the money printing in isolation and ignore the risks they were trying to avoid.


I didn't intend to, but I can see that it might look that way. The retort was about as simplistic as the claim I was arguing against, yes that's on me. Other equally important drivers exist.


Automatically Appended Next Post:
This guy on Twitter says US inflation is +17%. IDK how accurate this is, given that he says measurement of inflation has changed somewhat in recent decades, but the last few statements seem to show that food is up 30%, fuel is up a lot (10-110%), and housing is up 13%, all year on year.

https://twitter.com/tomselliott/status/1535269226709241861


Rampant inflation @ 2022/09/28 17:40:55


Post by: endlesswaltz123


Those in the know... How absolutely spaffed up the wall is the current UK economy, and thus us poor souls who are at the whim of it?

No discussion on why it has happened obviously as it covers certain unspeakable factors?

In addition to this, I am looking into buying a place/getting a mortgage in the next few months (or was at least)... Would it be prudent to put this on hold just incase I get a bad mortgage deal or even worse, the possibly dreaded housing market crash?

I would appreciate really objective answers to the above

EDIT: To add to this, how subject is the rest of the world to this also? Can the UK drag the global economy into a recession like 2008 when the US housing bubble popped or is it not quite as dire consequences as that?


Rampant inflation @ 2022/09/28 18:30:14


Post by: arkhanist


Those in the know... How absolutely spaffed up the wall is the current UK economy, and thus us poor souls who are at the whim of it?

Apparently the Bank of England intervened today (buying long-dated gilts enmasse) to stop "mass insolvencies" in multiple pension funds. And the IMF basically urged the Chancellor to reverse course. Even many Tory MPs think this is madness. Obviously the soaring rates for gilts and the collapse in sterling are the international money market's view, and they think Truss and Kwarteng are barking mad.

So um, we're very spaffed right now.

Mortgage wise - good deals have already been withdrawn, with new fixed rate deals looking like they anticipate the BoE will be setting rates of 6% next year (for reference; 2.25% currently, 0.1% this time last year). Mortgages are going to be MUCH more expensive from now on, and may well get worse next year.

The other factor is the expectation now that house prices will finally fall due to the massive hike in mortgage costs, maybe 10-15%; people just won't be able to afford current prices with inflation shooting even higher (the cost of importing food, clothing, fuel & medicines just went up due to collapse in sterling), plus of course energy prices, even though now subsidised and capped, are much higher than last year.

So buying a house in the near future is a big gamble; but then, everything is now so chaotic, its hard to predict whether it will get even worse, and on what timescale. For all we know, we could be looking at a tory rebellion and a general election by christmas. And the possibility of nukes actually, really coming into play in Ukraine could make all *this* look like a sideshow.

I don't think the UK economy is big enough to really screw the world economy, certainly less than Covid or the energy crisis has, but it won't be a nothing-burger either. I think the world economy is already heading to recession regardless thanks to Putin; the UK is already there, technically.


Rampant inflation @ 2022/09/28 20:31:56


Post by: Mad Doc Grotsnik


Oh it could get so much worse, as there’s a Dog Egg in the long grass which the Lawnmower of Recession might be about to pebbledash across the Garden of the Economy.

And it’s the number of people who, during the wider associated debacle, cancelled their Mortgage PPI (MPPI)

Potted version? Anyone who complained their MPPI was mis-sold, whether or not they got a refund, defacto cancelled that policy.

Which means, when the next recession really hits (and the BoE thinks we’re already in one), and mass redundancies hit? There are potentially millions of mortgage holders with no repayment insurance should they lose their job.

Benefits will only pay the interest due - not the capital. And even that is for a short period (I think around 12 months, but don’t quote me).

Of course, the weak pound and spiralling costs could see such a recession last a long time. And whilst we currently have very low unemployment? Many of those jobs are low paying.

I know if I lost my job, I’d be shafted for finding a comparable wage. Thankfully my specific career does best, in a genuinely non-parasitic way, during Hard Economic Times, so redundancy is incredibly unlikely. Spesh in my particular super specialism.

But trust me. When that Lawn Sausage explodes? Its gonna be bad


Rampant inflation @ 2022/09/28 21:37:12


Post by: lord_blackfang


This is the first time I've seen dog egg used in polite conversation since way back on Portent someone said a misbehaved kid laid a clutch of dog eggs right there in the store over losing a 40k game.


Rampant inflation @ 2022/09/28 22:41:54


Post by: Laughing Man


 endlesswaltz123 wrote:
EDIT: To add to this, how subject is the rest of the world to this also? Can the UK drag the global economy into a recession like 2008 when the US housing bubble popped or is it not quite as dire consequences as that?

On the somewhat bright side, Britain has done a great job of insulating itself from the larger European and world economies, so the impact should be lessened.


Rampant inflation @ 2022/09/29 00:27:35


Post by: GrosseSax


 arkhanist wrote:
Those in the know... How absolutely spaffed up the wall is the current UK economy, and thus us poor souls who are at the whim of it?

Mortgage wise - good deals have already been withdrawn, with new fixed rate deals looking like they anticipate the BoE will be setting rates of 6% next year (for reference; 2.25% currently, 0.1% this time last year). Mortgages are going to be MUCH more expensive from now on, and may well get worse next year.


I read today that 26% of UK mortgage holders have variable rates based on the BoE. I would think even a minor increase in rates could be catastrophic to housing no?


Rampant inflation @ 2022/09/29 11:33:26


Post by: queen_annes_revenge


I'm about a third of the way through my mortgage term. Is it worth doing overpayments before the rate increases?


Rampant inflation @ 2022/09/29 11:43:52


Post by: Mad Doc Grotsnik


 lord_blackfang wrote:
This is the first time I've seen dog egg used in polite conversation since way back on Portent someone said a misbehaved kid laid a clutch of dog eggs right there in the store over losing a 40k game.


That….may even have been one of my tales, as I have witnessed such!


Automatically Appended Next Post:
 queen_annes_revenge wrote:
I'm about a third of the way through my mortgage term. Is it worth doing overpayments before the rate increases?


Without giving Qualified Advice?

If you can afford to pay off capital, pay off capital. Probably worth checking your T&Cs though, as there may be limits for that before the bank can charge.

But I can confirm overpayments do not create a slush fund type thing against future repayment obligations.


Rampant inflation @ 2022/09/29 12:27:58


Post by: arkhanist



I read today that 26% of UK mortgage holders have variable rates based on the BoE. I would think even a minor increase in rates could be catastrophic to housing no?


Oh indeed. And we're not looking at minor increases but huge ones. And all the people that upsized due to the pandemic and finding they needed more space are coming to the end of their (most common) 2 year fixed deals right about... now.

Plus upcoming recession job losses, the amount of rental properties that are also mortgaged (so rents will go up), the existing cost-of-living crisis that means many people are already only hanging on by their fingernails, and this could so easily go very, very pear shaped.

Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone (with a huge majority inherited from their lying predecessor and two years left before there has to be a GE) that they are so far doubling down and demanding reality conforms to their unhinged fantasy economics, while blaming Russia for everything getting worse every time they open their mouths.

Watch this space - our version of the 1998 Argentinian collapse is entirely possible (mass poverty, starving children, complete collapse of pay and the wider economy, riots) with these morons in charge. Let's hope it doesn't come to that.


Rampant inflation @ 2022/09/29 13:43:58


Post by: A.T.


 arkhanist wrote:
Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone
Never ascribe to incompetence that which is adequately explained by Tory greed. Especially not after twelve straight years of the same.


Rampant inflation @ 2022/09/29 15:36:24


Post by: arkhanist


A.T. wrote:
 arkhanist wrote:
Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone
Never ascribe to incompetence that which is adequately explained by Tory greed. Especially not after twelve straight years of the same.


After hearing Truss on the morning regional radio interviews "defending" the new policies, there is no doubt at all that if she had any less brainpower she'd need to be put in a pot and watered twice a week. Her backers and policy gurus, sure, it's all about the grift and diverting money to Tory members and donors. I'd call her a true believer in Ayn Rand, but I'm not sure she's even capable of enough independent thought to qualify as belief. And Kwarteng is little better.


Rampant inflation @ 2022/09/30 00:29:14


Post by: Ensis Ferrae


 endlesswaltz123 wrote:


EDIT: To add to this, how subject is the rest of the world to this also? Can the UK drag the global economy into a recession like 2008 when the US housing bubble popped or is it not quite as dire consequences as that?


I've been reading on places like Reuters that the US is, in its own way heading toward heavy recession (again) as well. . . So I guess, "race ya to the bottom??"


For me, job security in my current job in a recession is great. . . history shows us when theres big recessions, people fix their cars far, far more than they do buying/selling them. So as a parts guy (currently) that is decent news. Problem is, I have certain views on subjects like climate change, build quality, and corporate decisions that means. . . Realistically, I need to get the hell out of dodge to save my sanity.


Rampant inflation @ 2022/09/30 03:35:49


Post by: Asenion


 arkhanist wrote:
A.T. wrote:
 arkhanist wrote:
Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone
Never ascribe to incompetence that which is adequately explained by Tory greed. Especially not after twelve straight years of the same.


After hearing Truss on the morning regional radio interviews "defending" the new policies, there is no doubt at all that if she had any less brainpower she'd need to be put in a pot and watered twice a week. Her backers and policy gurus, sure, it's all about the grift and diverting money to Tory members and donors. I'd call her a true believer in Ayn Rand, but I'm not sure she's even capable of enough independent thought to qualify as belief. And Kwarteng is little better.


The inflation really seems like a ticking time bomb.


Rampant inflation @ 2022/10/01 05:58:28


Post by: NinthMusketeer


To be fair the fething planet seems like a ticking time bomb right now, between climate change on the environmental end and wealth disparity on the social one.


Rampant inflation @ 2022/10/01 06:44:10


Post by: Vulcan


 queen_annes_revenge wrote:
I'm about a third of the way through my mortgage term. Is it worth doing overpayments before the rate increases?


DISCLAIMER: I am not a financial expert. Take this with the appropriate amount of salt and consider consulting a financial expert for proper guidance.

By and large it depends entirely on the terms of your mortgage. Some mortgages have penalties for early payments; some do not. If there are no penalties for early payment, strictly considering just the mortgage it is ALWAYS worth overpaying, as it reduced the amount of interest you wind up paying.

Now the real question is, will you save more in interest doing that than you would by paying off a different, higher-interest debt... or if you could EARN more return on that money by investing it elsewhere than you'd save in interest.

If there are penalties, you have to calculate if you'll save more money in reduced interest than you will spend in penalty payments.