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Price of wood (even a sheet of plywood)
Gas (in my area, prices haven't been this high in a long time, even when considering seasonal demand)
Beef
Dining Out (my favorite mom and pop Chinese restaurant raised prices anywhere from $0.50-$1.00 per entree, on the entrees I usually buy)
Behavior modifications because of it:
Not many modifications in my day-to-day life just yet (although I don't LIKE rising prices, I can afford the example I cited at the Chinese restaurant for instance), but I am putting off a home renovation project, for now, since I don't absolutely NEED to do it and want to see what happens over time with the cost of materials.
The thing with blame game is, we'll never know what's right. We will never know if the inflation would have happened had we just printed money and there had been no covid causing supply line issues. Had there been no covid, however, there would not have been political will to stimulate an economy that was already good and stimulated.
This is the situation: Covid happened, humanity shut down the entire world economy, we gave people money and printed money so the financial sysyem would not seize up and cause a massive depression within a pandemic, supply lines caused shortages, shortages cause inflation, more money in circulation also causes inflation. We don't know which is more to blame. It was all because of covid. Things would have been better without covid. We all know that, but here we are.
Here's the thing before you play the political blame game. The entire globe reacted to covid with some amount of similarity - shut downs followed by stimuli. For the governments that could afford it. We are not the only country facing inflation. It's pretty high in India and the Phillippines, for example.
Also remember that many of these markets are global - lumber, oil, etc..
Also if you look at history, this was bound to happen. There Plagues tend to followed by labor shortages amd labor shortages caise wage growth and then inflation. Humanity never never reacted to a plague in the way we did in 2020, usually they were just gritted and endured, whoever was going to get sick and die, just got sick and died. Maybe localities lile cities tried to do some restrictions. In 2020 we made very serious efforts to save people at a macro-economic cost, resulting in quasi-command economies the likes of which we have never done except in world wars. Transition away from war economies does result in inflation.
It's undortunate for research purposes that the Spanish Influenza coincided with WWI. We don't really know what economic problems in 1918-23 were war-caused and which were pandemic- caused.
E.g.: I was recently reading about how, in France, to prosecute WWI, they got off the gold standard and printed a ton of money, about 5x the amount of currency in circulation pre-war. They also did a lot of rent moratoria and gave direct payments to families who had members involved in the war effort which was something like half the country. They had high growth but also high inflation for about 8 years afterward.
Sound familiar?
Last edited by redguard57; 07-15-2021 at 01:02 PM..
It’s here I read it, hear it, and have seen some mostly in gas.
So tell us where have you seen it, for how long and exactly how much of a price increase have you seen?
Have seen it in the increase in prices for produce, meats ( especially beef), and milk. Also increases in the price of things such as laundry detergent, and snack items- though I don't need the snack items and don't buy them.
Gas. Video games ($50 used to be the price for most disc-based games - PS5 games are now going for $70). Meals out - a Hardee's chicken biscuit combo, small, was $7.74 this morning. It's very difficult to find lunch with a drink for under $10 now. Lots of places around me used to have bone-in chicken wing specials - all of the local places canceled them because the price of wings is up.
Groceries are up substantially, especially meat. Cars - new, used, rentals.
Gas. Video games ($50 used to be the price for most disc-based games - PS5 games are now going for $70). Meals out - a Hardee's chicken biscuit combo, small, was $7.74 this morning. It's very difficult to find lunch with a drink for under $10 now. Lots of places around me used to have bone-in chicken wing specials - all of the local places canceled them because the price of wings is up.
Groceries are up substantially, especially meat. Cars - new, used, rentals.
It just goes on and on.
The video game point is interesting. I would expect technology to go down.
There may be the problem, Mom. We have not paid for any of those items that you mentioned. We buy almost everything at Costco, including TP and Peanut Butter, and have not noticed increases there. We never go to Starbucks, when we want good coffee drinks we go to Dutch Bros., and I wash our cars myself. Lumber is something I do buy sometimes and have seen huge increases but again I call that a shortage, not inflation.
So housing and rents and car prices are going up but that's not inflation because the supply is insufficient? Isn't that like saying the flood waters aren't REALLY rising.. the land is not high enough?
That's called a distinction without a difference.
Consumer price inflation (not to be confused with 'monetary' inflation even though there is a VERY strong correlation), occurs when too many dollars chase too few goods.
Period.
It does not matter if the former goes UP or the latter goes DOWN, prices will rise or fall depending upon the relative elasticity of supply vs demand for the product.
Period.
So unless housing production costs plunge or the entire boomer population drops dead from covid or the money supply contracts like a pîss-clam in ice water I think it highly unlikely that RE prices will return to levels seen in 2010.
Of course everyone's personal inflatometer is different, but right now the most extreme effects of Central Bank money creation have been felt precisely IN housing and financial assets which a great many Americans still don't possess. But when consumer prices rise and rise rapidly you bet everyone will notice!
So housing and rents and car prices are going up but that's not inflation because the supply is insufficient? Isn't that like saying the flood waters aren't REALLY rising.. the land is not high enough?
That's called a distinction without a difference.
Consumer price inflation (not to be confused with 'monetary' inflation even though there is a VERY strong correlation), occurs when too many dollars chase too few goods.
Period.
It does not matter if the former goes UP or the latter goes DOWN, prices will rise or fall depending upon the elasticity of supply vs demand for the product.
Period.
So unless housing production costs plunge or the entire boomer population drops dead from covid or the money supply contracts like a ****-clam in ice water I think it highly unlikely that RE prices will return to levels seen in 2010.
Of course everyone's personal inflatometer is different, but right now the most extreme effects of Central Bank money creation have been felt IN housing and financial assets which a great many Americans still don't possess. But when consumer prices rise and rise rapidly you bet everyone will notice!
I completely agree with you.
The problem is wages aren’t really increasing to match the inflation. Hence, stagflation. IMO the government has just recklessly been trying to throw money at a problem and has now created a whole new monster that can’t be satiated with printing endless fiat. I honestly think we are moving into 1970s era inflation and the antidote, jacking up interest rates, is going to be very painful for many segments of the economy. Or, the fed very well could keep living in la la land and let the chips fall where they may. Either way, I don’t anticipate a soft landing.
What I think is unique about this situation is when SHTF, EVERYONE is going to blame the government.
The problem is wages aren’t really increasing to match the inflation. Hence, stagflation. IMO the government has just recklessly been trying to throw money at a problem and has now created a whole new monster that can’t be satiated with printing endless fiat. I honestly think we are moving into 1970s era inflation and the antidote, jacking up interest rates, is going to be very painful for many segments of the economy. Or, the fed very well could keep living in la la land and let the chips fall where they may. Either way, not a good result.
We cannot "jack up" interest rates, the debts are far too enormous, and the ecological capacity for further "growth" to pay those higher rates simply is not there.
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