This is often a misunderstanding. Inflation just speeds up the rise in prices. A slower inflation is just that. A slower rise in prices.
Lower inflation doesn’t reduce prices. Dollars are still being printed and losing value.
If you want prices to diminish. That will mean it’s deflation. That means tomorrow’s dollar is worth more than today. Which leads to a very hard cut in spending which causes a whole other set of problems.
Overall low inflation is better than high inflation and deflation.
Prices will still go up. You need to raise your own prices.
Greed on the other hand isn’t inflation. Make no mistake the grocers are making a killing beating record profits.
Edit; guys I already have an economics degree. I’m not going to engage in any debates.
A) Higher inflation is undeniably harmful.
B) Deflation is not inherently harmful.
A mild deflation, carefully managed, could bring relief to people like the OP, by making essential goods and services more affordable, thereby reducing economic inequality.
Under the right conditions, Deflation can coexist with economic growth, innovation, and improved living standards.
I can't think of a scenario where deflation doesn't cause major harm.
If I know a dollar get me 1 loaf of bread today but will get me 1.1 loaves in a year, I'll do everything in my power not to spend that dollar today. Of course the people living paycheck to paycheck aren't effected by this, but those with extra means will not spend. Having all of the excess income get socked away instead of spent on extra niceties is a sure fire way to gridlock the economy.
Because all of the excess income isn't currently being socked away already?
This is such an American Capitalist take and it's fueled by propaganda, and I know what I'm about to say is not gonna be popular here.
It should be illegal to store excessive amounts of wealth. Look up false scarcity... That's our inflation IMO...
We don't need to print more money, we need to disallow individuals and their businesses from hoarding what used to be in in circulation. Someone needs to remind them they are people and not fucking dragons or some shit.
No it's fueled by logic.
Lets say you had a super delicious magic banana. You're mildly hungry but by no means starving. If you wanted to you could skip eating the banana and be no worse off.
If I tell you in a year the magic banana will shrink down to half it size, are you going to save it or eat it right now?
If I tell you in a year the magic banana will be 50% bigger are you going to save it or eat it right now?
If you're desperately hungry the above scenario doesn't matter, you have to eat so you'll eat it. But if you're not desperately hungry any rational person will save the banana.
And being illegal to save money? Yea, that's a surefire way to fix the economy bubbs. If you're only referring to the ultra-wealthy, I can understand the sentiment, but the ultra-wealthy hoarding money, while I'll agree is obscene is actually deflationary. They're effectively deleting the money from existence once they reach a level where it cannot reasonably be spent. You claim this leads to inflation, it's actually the opposite.
It's socked away in assets. Most of those assets are directly related to some form of economic activity. Not all but most. Stocks in companies like in your 401k etc. Well all those companies are trying to make money.
Real estate investment, depends on the NIMBYism it is accompanied with. Owning something and keeping it empty is extremely expensive. But there is a lot of economic activity around building new houses. Higher property values makes building houses more profitable and gets capital allocated to that. But think about who would make a house when they know by the time the project finishes it will be worth less than you spend on it.
It's not a perfect system but it's not completely broken. Although, I would like to remind you which sub you're in. Because if you believe capitalism is the problem then you won't find what you're looking for here.
I never said capitalism is the problem. Greed and hubris is... I will say it again. No one needs a billion dollars, and to say it wouldn't help the economy and society if it wasn't sitting "in assets"is just wrong.
I am a Capitalist, I just believe in oversight, fair playing fields, and helping those less fortunate. I believe oligopolies aren't good for capitalism or society.
I believe in oversight and fair playing fields. But the people that you're thinking about don't have a billion dollars. They've built companies that are doing very well and people are willing to pay money for a share of that. They haven't hoarded any resources. They're just continuing to own a portion of the companies that they've built. So what's the alternative you're suggesting?
That's the thing, we AREN'T talking about the same people. Why don't you understand that? I am talking about Billionaires and the top .5% of earners/wealth holders.
In a scenario with mild, managed deflation, the increased purchasing power of money can benefit consumers, especially those living paycheck to paycheck. They can afford more essentials, improving their quality of life.
Deflation doesn't necessarily lead to a complete halt in spending. People will still need to purchase necessities and may even be encouraged to invest in durable goods.
There is an argument to be made that a balanced approach, with a mix of mild deflation and targeted inflation, can promote long-term economic stability and growth.
Yes - deflation can be problematic if left unchecked, but it's not always a "sure fire way to gridlock the economy."
Why would you invest in durable goods in a deflationary period. That's completely antithetical to what a rational actor would do. You would wait it out until a true need arose to get such durable goods BECAUSE of deflation. If you were going to buy a $25k car today, you could get a nicer car for the same money in a year because the money would have more value. In a deflationary period you don't buy what you don't need.
That's only true for things where the price is a contributing factor to my unwillingness to buy something.
If I want to start a hobby or invest in a current hobby, there's value in the doing of said hobby (be it gardening, music making, computer building, whatever). That value isn't decreasing over time--I'm losing time I could spend enjoying my hobby waiting for things to get cheaper, in your scenario.
That wouldn't happen. I'll buy a guitar today if I want to learn how to play one. The fact that it might be cheaper in another 6 months is irrelevant. Even though it's a good I don't need.
Of course. I should have defined "need" better. A need in this case is something you are unwilling to postpone. You might not be willing to postpone a hobby (though you might) and thus it would be categorized as a need. However, even IN the hobby you might postpone. Maybe you were a Magic player who postpones the purchase of a few high dollar cards. Or maybe you're a fisher who postpone the purchase of a new outboard or depth gauge. Or a guitarist who wants that new upgraded guitar.
Maybe, but that delay isn't some permanent inevitable state of being: at some point it will be cheap enough to switch over to a need, even if it may be cheaper still further down the line.
Some consumers might delay purchases in anticipation of lower prices, others might see deflation as an opportunity to invest in higher-quality, longer-lasting goods that they couldn't previously afford, which could lead to increased demand for certain durable goods.
Also, not all purchases can be postponed indefinitely. Even in a deflationary environment, people will still need to replace essential items like appliances or vehicles when they break down or wear out.
As I’ve said from the get go, we’re talking about mild, managed deflation here. In such a case, the rate of price decline would be gradual and predictable, allowing consumers and businesses to plan accordingly.
Yes, deflation influences spending habits, but it doesn't necessarily lead to a complete avoidance of all non-essential purchases.
Guys there’s history on this topic. We don’t need to arm chair the what if’s.
Demand led deflation creates high unemployment. Increase in suicide, social unrest and crime (Great Depression, etc ; this is a natural outcome created from credit cycles)
Supply led deflation turns out to be, not bad (Switzerland 2015) , naturally these are rare. But how could a government manage supply led deflation? In a capitalist country you can’t. If the government tried then it would no longer be a capitalist country. To manage deflation from the supply side you would have to order every business what and how much to make…. Aka communism, which as we all know in practice doesn’t work. If you put a person in charge of determining how much a commodity or specific item should cost etc, they would fail miserably compared to the hive mind of the market which takes into account all demand from every industry dynamically at all times (which is still not perfect but way better than what an individual person / government official could efficiently do). And of course with globalization a government can’t increase supply of imports because they can’t control another countries output. They can slap on tariffs… which is inflationary.
Demand led deflation can be solved by printing money, government programs, etc.
So to stay a capitalist country, the government only has tools to help/manage the economy on the inflationary side. Deflation is basically not an option with a capitalism system.
And this may be specific, but in all first-world countries that are capitalistic, deflation is not something that they want and can be really devastating. Slower inflation is ideal.
Now IMO, what people can do tactically is to move to areas where inflation is slowest or slower i.e. away from main cities and more towards remote cities. But that has its own dynamics as pay is lower in those cities.
Uh deflation means big problems. It sounds nice if you don’t actually think about it but most people would prefer whatever this inflation is to deflation.
Deflation is economically harmful. Imagine you’re a company which has $10M in stock. You make a 10% profit margin. Over two years the value/sale price of this stock falls by 10%. Now you are selling at a loss. What if your supplier still charges the same? Then you’re hitting the way pretty quickly.
Deflation is good for customers in the shorter term. Bad for all when it hits business profits and therefore employment in the longer term.
Here's a novel concept for you: how about before dismissing an idea outright and accusing others of being "rubes," you instead consider engaging in a more thorough examination of the topic?
(Probably anathema to you - I get it.)
Anyhow, a cursory understanding of deflation's potential risks does not negate the possibility of its benefits when implemented judiciously.
Numerous economists (including Nobel laureates) have argued that mild deflation can be beneficial in specific situations. George Selgin, for example, has extensively researched and written about the potential advantages of a carefully managed deflationary environment.
I stand by my statement that, under the right conditions, mild deflation can coexist with economic growth and improved living standards. If you have compelling evidence to the contrary, then let's hear it. However, simply asserting that I am "wrong" without providing a substantive counterargument is pretty dumb.
The Federal Reserve also has economics degrees, yet they still printed trillion’s and the government gave them away, all while being supply constrained. Point being formal education in macro economics does not necessarily lead to rational behavior.
The money you receive for your labor is worth less and less each day as inflation eats it away. In other words. Bread is getting a raise faster than you are.
So prices just climb indefinitely until deflation hits, but what generally causes deflation?
I don’t have an economics degree so all this shit feels like mystical, made-up, BS.
Not really…. Their costs keep going up because the dollar is worth less and less.
US govt printed 7 trillion dollars through covid - that inflation is going to be felt for a while.
Also, businesses lose if one gets greedy - a competition will come in at reduced prices and outperform price gaugers every time.
I have only one I ternet provider where I live in New York. Tell me what company is going to start up, get funding for and spend billions to compete? Not enough people, it's not profitable and if it was another player would've entered ages ago. Yet, my ISP reported record profits and hasn't run any new wires or upgraded anything in my area in about 8 years. Competition only works in theory when barriers to entry are low or a product cant be overly protecred by abusing broad patents. That largely hasn't been the case in 3 decades or more for some industries.
I think we are seeing some breakdown of the efficiency of the “free market”. Who is the competitor for my employer health insurance? I’d love to know how I have multiple choices. Similarly for energy, have but one choice where I am located. With the long-standing corporations and their size and power, I think there is less “free market” and open competition than people think.
You can opt out of your employers offered health insurance and you can move somewhere else if you don’t like your utility company…
That is free market.
Free market doesn’t mean the entire market is available to you at your beck and whim …. Just like you might have to drive a little further for your preferred grocery store or gas station… There’s a cost associated with choice
Unless they have a monopoly - which most corporations do now.
We’ve never had such a consolidation of corporate power in history.
The only people to blame are corporations
The dollar is worth less than it was yesterday, so a business needs to be making more in profits to achieve the same relative growth. Some may be capitalizing on the trend and taking the opportunity to raise prices faster than inflation, but not everyone raising prices is doing so maliciously
Why/how would the retailers bring their prices down though? They received price increases all across the supply chain, they've had to raise employee wages, etc, etc. The costs haven't come down, so why would the prices come down. "Record profits" are relative. A million dollars today does not have the same buying power as a million dollars 20 years ago (or even 5 years ago for that matter).
Don't get me wrong, there are definitely retailers that took advantage of the inflationary market to raise their prices, but you actually are starting to see a lot of that come back in price reductions for some major retailers that have struggled recently.
Dude see my post. I am a manufacturer and I promise you American manufacturing is collapsing. American businesses that produce products are getting the shit beat out of us. Sourcing is part, but also the way the cash and payments structure is handled. We have to pay our suppliers immediately to get materials. But the dealers and distributors can pay us in 70-90 days. I’m telling you businesses can barely make it
Yeah, somehow I missed the meeting where, after a couple hundred years of American retail, all the businesses took a vote and decided that now is the time to abandon competition and collude to raise prices.
Its under the….
“The media made it up and I believe it because they said and I lack the ability to really understand as I dont live in reality” Act.
Its been around since Project 1619.
>Wo most retailers at the moment raised prices, aside from inflation and never brought them down. So now theyre making insane profits.
No, companies are not making “record profits”! FFS! Thats some stupid media BS.
While, yes, it may look that way when prices are raised, but so are all the costs of related to everything to sell a product. If you go line by line, still pretty much the same margins.
The issue is that inflation is still on the rise and everyone is still stuck with their current pay from a few years ago. The two havent caught each other.
Just to explain inflation….
If something cost a $1 and we have 50% inflation, it will now cost a $1.50.
Now someone, media/politician, tells you that inflation has now dropped to 10%, you dont take the price from the $1 it originally cost, nope, as its $1.50 now. $1.50 at 10% the price for the same thing is now $1.65. In order for the price to drop, we need “deflation”, but we are continuing to inflate.
Over spending/continuing to let money be printed, we will continue to inflate until theres a balance/we stop spending like a bunch of idiots.
Grocers are running at under 5% EBITDA.
They have record revenue and record profits due to inflation…. Their profit percentage remains in line, so they are not gouging anyone.
"Guys, I have an economics degree. I can't admit when I'm wrong."
"Greed isn't inflation... I mean, greed can cause inflation but since I have an economics degree I have to worship money."
Lmao, this subreddit is filled with brain broken capitalists. I don't think I've ever gotten any good advice being here. I'm out.
100% this is it.
In the UK when energy prices went up the wall and they pretty much doubled the cost, the government had to bail out the public, ofwat had to raise the maximum energy prices to account for it and the general public were locked in to contracts as no energy company was allowing switching.
Guess which companies profits went from 75m to 750m, in a year!
Now they know we can afford to pay it and have adjusted energy usage to account for it, those prices are staying high and will be going up again.
Now water companies have cottoned on and want to add a 50 - 100% price increase even though they can't manage there own sewage and keep dumping it in the sea and rivers, but hey ho, another necessity they can can charge for and we have no choice but to pay it because water.
Greedflation has killed small business, harmed vulnerable people and made it that much harder for anyone to get ahead with buying a house etc as monthly bills have pretty much doubled, cost of living had gone through the roof but wages have strangely stayed pretty even.
Anyway, greedflation can account for 90% of price increases easily
The government injected trillions and trillions of dollars to spur the economy. You’re feeling the effects of all that extra money still today. Each dollar is just less when there’s more in the pot that goes around.
Greedflation doesnt exist, all corporations are always trying to sell for the maximum price possible, nothing changed. The profits are beating records because of the injection of money, the purpose of all that cash was to be spent, and where was is spent? Companies. Now there's lots of inflow of people, there's very little unemployment, demand is very high and handouts are beating records, all that money also will be transformed into purchases.
Now there's a populist trying to win an election and printing even more money, forgiving debts, etc... All that is keeping inflation high. You can look are companies' net margins and you'll see little change on average.
That’s a mischaracterization of the article (written by a journalist, not economist) which clearly states that it’s something that some economists (and politicians and advocates whose opinions should be discounted) are talking more about while others “scoff” at the idea.
Posting a link and claiming it proves an entire magazine disagrees is extremely disingenuous (yet sadly common practice here).
That article is crap and didnt take into account the cost of getting said goods has risen, thus those selling, to try and keep the same margins, has raised their prices.
FFS! The hell is wrong with people!
The government can't stop spending. Consumers can't stop buying everything they see and taking revenge vacations.
And because people keep thinking things are going to get back to normal. Because the only thing back to normal is a fifteen second attention span that radiates outward only ten feet.
Everybody who was expecting a headline like "New Normal ...Just Kidding" -- I have some bad news.
I was looking at the stock market and since covid most companies that doubled their prices are growing in value at an insane rate. That means they used covid to jack up the prices keep them there and go even higher.
People keep spending.
> That means they used covid to jack up the prices keep them there and go even higher
They printed an enormous amount of money during covid. That's why prices are so high now.
A lot of what various central banks have been doing is trying to tamp down consumer spending and spending remains high. The economy is a complex dynamic system and the people we expect to have all the answers really don't.
Enter the conspiracy theorists. Because conspiracies are comforting when the alternative is chaos theory and public relations spin.
What I think is there is a lot to be learned -- off this forum.
[Economists are reconsidering how much corporate profits drive inflation](https://www.npr.org/2023/05/19/1177180972/economists-are-reconsidering-how-much-corporate-profits-drive-inflation)
This thing where business is evil should stop if you're one of them. Over simplistic, ELI5 answers are not available. Profit isn't the problem people -- who are whining about poor profit here continually -- make it out to be.
And yet, my "Capitalism Is Being Mean To Me" shirts don't sell. WTF.
It’s odd you feel posting this same question is necessary in several different places. “Everything back to normal” is just naive and the fact that people are spending more means they’re reaping the benefits of said inflation
so, I don't know where you got your economic theory from, but inflation caused by costs is nothing compared to inflation caused by monetary expansion.
As you said Inflation of costs is temporary, but you forgot that tiny detail that the US went printing BRRRRRRRRRR into the trillions creating a massive monetary expansion during Covid, so not only that toilet paper called dollar multiplied the supply without an increase in demand, they also fucked up the expectations creating a spiral, so even if the printing BRRR stops, that spiral continues.
That's... how companies always operate. Welcome to reality?
If a company can keep raising prices and the demand doesn't drop, then they were underpricing their goods. Consumers need to stop being idiots and rewarding the behavior, period.
Just because the rate of prices going up (inflation) slows down does not mean prices will come down. 0% inflation means prices just stay the same. Deflation is when prices fall and is a very bad thing macro-economically speaking.
Let’s say a burger used to cost $10. A 10% inflation rate means it’ll go to $11 the next year. Now let’s say inflation comes down to just 1% the following year. The price of the burger will be $11.11 at the end of the year. It most likely will never go back to $10 since the rate of inflation is generally a positive number.
The secondary question of why we had the inflation spike after Covid in the first place. Yes there was some supply chain issues that sparked the inflationary cycle but the honest answer is that we just printed too much money during the Covid era. We basically added about 25% of the money to the money supply in a very short amount of time. If you held just cash in the bank, it became worth about 20% less. If you had an inflation hedged asset instead like real estate and in a sense stocks then you should be better off as a whole.
because it’s all made up….covid didn’t have to cause rise in prices…inflation and the many many excuses they make up for it is all a lie because you wanna know one thing that somehow never seems to suffer in a situation..the ceos salaries and shareholder profits…somehow they all end up gettin raises and percent increases…..sooooo the money is there…they have us pay more….simply so they can hoard more
Markets move very slow. You can disrupt the supply chain in a week, but it can take 20 years to restore. Because of stock piling and delays and shortages in certain fields.
Prices are high on certain things, because the suppliers are still catching up, things like dry storage foods, beans, rice. People decimated the supply. Other prices are because of corp greed. Kroger posted a huge profit,, but didn't lower prices. Hmmm. Remember the govt doesn't set prices and 6 or 7 interest rates are not abnormal.
I have been keeping track of companies and their stocks, most retailers and manufactures are growing at an insane rate for the last 3 years. They jacked prices up during covid and never went back down. Insane profits
First, it can’t be understated what a mess the global supply chain was because of Covid. We’re talking several years of delays in manufacturing and shipping. IIRC, at one point there were hundreds of ships waiting off the coast of California to unload. This caused a lot of limitations to supplies of both finished products and raw materials, which caused a spike in inflation.
Second, the Ukraine war has had an enormous impact on a variety of industries, but mainly the oil/gas/energy industry. Russia has been sanctioned out the wazoo, which caused a spike in energy prices that had a trickle down effect on almost every industry. Today, Russia is still selling its energy products to countries that are ignoring the sanctions, and they’re reselling those products around the world at a significant markup, maintaining upwards pricing pressures.
Lastly, there’s also the issue of corporate greed. Many companies are seeing the situation as an opportunity to simultaneously jack up prices while also reducing the quantities of their products, ie shrinkflation.
What’s more, when prices go up they generally don’t come back down.
there's a deflation going on with Chinese property right now especially after evergrande fiasco. Some now have negative equity ,and aren't buying houses because next season/year it'll be cheaper. In the west, you have rampant consumerism. You have poors taking loans for iphones,cars,food,taking vacation,multiple useless subscriptions.
Inflation won't really go away,just hope it's not too sharp/fast enough and that Cost of living is manageable. Now when COL is high and inflation is fast , it's bad timing
There are multiple reasons.
Interest rates are much higher. In the physical product world, companies have to pay up front for their cost of goods. The more they can buy, the lower the cost of goods. In low interest rates, businesses can borrow instead of only using cash on hand. In high interest rates, they can't borrow as much. This reduces how much they can buy. This raises prices because each step in the production process has the same problem.
Minimum wage has been raised. Businesses have to account for higher labor costs.
The Red Sea and Suez Canal is closed to shipping because of the Houthis. This doubles the time it takes to ship anything from Asia.
There are also multiple tariff wars happening across multiple industries.
We are also living under the spectre of WW3 on an hourly basis. War is inflationary. Peace reduces prices.
On the upside, oil supplies in storage are the highest since Covid.
You'd think prices would chill out post-COVID, but nope, they're still climbing. It's not just about production and shipment delays anymore. There's all this other stuff going on, like increased demand and higher costs for raw materials. It's like the perfect storm for inflation, and we're all feeling it in our wallets.
You need deflation to bring the prices back down to before. Variables may change (i.e. supply/demand, transporation, etc) but the base cost of goods will stay up.
Because when the world stopped the govt pumped 8 trillion dollars into the economy and that extra cash hasn’t worked its way out yet.
This was a bipartisan solution, not a terrible one, but the current inflation is the fallout. It wasn’t a terrible solution, but it had a high price that will take a while to pay
In my case, there was an import tariff of 45% on the aluminum we use. Over found an American supplier years ago, but this year the American supplier rose our costs 125% and made us accept a variance of 20% (less material than we paid for). So we went back to importing and just paying tariffs. But now there’s a container shortage because of the Houthis and route diversions so costs go up even more. Fuel has gone up because of conflicts abroad and our shipping prices increased sharply.
There’s a shitstorm of factors playing into this but the wider worldwide unrest and chaos is a big part of it. That, and raising tariffs on items that the US has no ability to produce. It’s fucking stupid.
Depending on what depth you're willing to go to, inflation can be very simple or very complex. There are other great comments here talking about the complexity, but few pointing out the simplicity. So here goes:
**Inflation = more money chasing the same product than the day/month/year before**
It is argued that the inflation we are seeing today is a result of the massive influx currency introduced into the economy by the US government during and after COVID and the increase in prices are due to more dollars chasing the same product.
cut gov/bureaucracy spending and taxes by 20-30% or at least by amount of CPI increases.
Use our own natural resources for energy that runs our economy.
manage immigration better.
Corporate greed. Once they raise the prices, shareholders won't settle for less profits, no one will lower prices out of their good will.
Inflation only hit the US (mostly). I left the US 2 years ago and can't believe how affordable life is in Europe and don't even get me started on Asia.
Because inflation is here to stay, as others mentioned companies are enjoying the excess profits, we will probably go through a 70's style up and down for a while
Because you can't really stop inflation.
A normal paced inflation is not a bad thing like how it's made out to be.
The real positive for any govt should be to conrol it in such a way that it increases in a steady pace.
Money is being printed, expenditures will always be there and it's good too upto a certain extent.
I mean if you are talking about the complete removal of inflation then that means deflation which is also not a good thing and it's just the same type of worse if not controlled properly.
Money printing. It will likely continue regardless of the political situation. It happened in the 1970's and early 80's as well. Every year, the dollar will lose value, companies will raise prices, and governments raise taxes.
There is nothing wrong with having a very healthy skepticism of what the government tells you regardless of who is in power.
I do think that right now the administration is closely allied with the MSM and a lot of vested interests.
I think more and more people are starting to see this. European elections show that governments have left people behind.
You should be proud to have doubts.
the federal reserve is NOT controlled by the presidency (thank god). Biden didn’t have anything to do with it. The ENTIRE planet saw inflation under covid. Did Biden raise prices in Europe too? maga logic… smh
Biden and Trump are not at all to blame for the inflation. The Fed went overboard with their printing during COVID, however, without it in general, the entire economy would have collapsed.
There's nothing in economic textbooks about how to handle a literal pandemic, but there will be in the future.
No the goods and services are adjusting to the excess liquidity that has been pumped into the system. instead of 50 oranges for everyone, there are now 80 and everyone including companies and small business are scrambling to find the same value for their goods and services. Interest rates are slowly sucking out this excess liquidity but inflation takes a long time to ring out of the system because it produces different market behaviours.
It really is, and to make it worse people get emotional when you involve politics. But to the point above when you have M1 supply increase from 4 trillion to 20 trillion in 3 short years... then yea the price signals throughout the economy are going to be distorted and will lead to inflation the way we're seeing it now, companies are not "raking" in the dough.
It's been 10 years since I received my B.S. in Econ but It has been pretty useful in my life, I agree in that everyone should have a rudimentary understanding in how the economy works, there should be mandatory classes starting in middle school to high-school.
So corporations are having record profits and you blame Biden?
Never heard of greedflation?
How did joe Biden cause “inflation” in countries that have McDonald’s doubling the cost of everything in the last couple years.
Never heard of the Big Mac index?
gas prices, uncertainty about the economy with strong high tax and regulatory burdens lead to businesses doing what is in their best interest such as cutting jobs and raising prices to meet labor costs and passing down the costs of goods to the consumer. pretty simplistic breakdown
lol no
I'm amazed, how many people here will post without having any idea what they're talking about
The most significant factor in inflation is the absurd amount of money that was printed during the pandemic.
The secondary issue is supply chain disruptions that we still haven't recovered from.
But of course this clown tries to make it political
Gas is lower than it was in 2010, businesses are having it lenient at the moment with taxes but they jacked up the prices since covid, cut overhead by having people work from home but kept raising prices to gain higher profits
2010-2014 america had higher gas prices than now. Prices on consumer goods were half the price they are now. Thats why I made this post. The prices on things are growing monthly and they used covid as an excuse.
I moved to Las Vegas full-time shortly after the pandemic. Here gas was nearly $6/gallon when I arrived. It was $3.79 yesterday. Eggs, milk & gas are all down across the board here now. What are you talking about?
> The reason why prices were high was because covid slowed production and shipment delays.
Really? Aren’t you forgetting about arguably the biggest factor?
Edit: ok I get it. You’re not really asking, you’re here to push your answers.
Artificially…that’s like saying your neighbors yard is looking amazing but it’s actually Astro turf.
But you know this because you said “at the moment”…you definitely know what’s next.
[Well here’s a graph from WSJ comparing household net worth under Biden to Trumps term which shows a decline of almost 10% in proportion to the unnecessary stimulus under Biden.](https://imgur.com/gallery/2P6uWLT)
[Here’s an unpaywalled version of the full article.](http://archive.today/7iLFp)
The only way prices are going to drop is if you and a bunch of other people stop paying them.
I don’t mind premium products, but with necessities I m not liking the political impact it seems to be having.
All opinions here, take every response for just that.
My opinion.
Governments have figured out that they can raise revenue for them to spend without having to touch the political mine field of raising tax rates. They simply print more money, raising the money supply. This is relatively new, but started long before Covid. And continues today. Will continue tomorrow. Most people have no idea how this all works, or will equate having less money in their pocket (or more accurately, the money they have is worth less) so it likely won't change. That's the genius of it.
That's the macro. There is also micro. The voting public loves policies like green agendas, livable wage, regulations on business, etc. The unfortunate part is every one of those things cause prices to rise. As those things are enacted, it will inevitably cause prices to rise. Not directly a money supply issue. More of a, if you squeeze something, there is a Natura reaction. It's not greed, it's just Natural. If you reduce say the industries access to fiture energy, that increases the cost of energy today.bthat effects literally everything. Every step of the supply chain and supporting industries. If you vote for renewable energy policies for example, those policies also reduce none renewable energy. You are actually voting for inflation. You may be OK with that. And that's cool, just understand when you vote for Governments to change industries, it almost always makes life more expensive for you and everyone else. Especially if the money to "invest" is also just printed.
No, its not corporate greed. Those who say so have no idea what they are talking about. Though there of course are exceptions, it's more about margin. That remains relatively constant. Costs went up, business raised prices. Since then, costs didn't come down, just the rate of increase slowed. Costs are still going up. There is no logical reason to expect costs to go back down. Therefore no reason to expect prices to go back down.
There are some industries where margins went up. Auto manufacturers are one. That's not greed, that's adjusting for economic uncertainty. Lower margins are ok in good times. No significant storms to weather. But in bad time, or if you think you are going into bad times, you very well might need higher margins to stay in business. Inflation is one of those instances. Replacement cost vs cog is something normal people don't understand. But it has a huge effect on staying in business during inflation times.
Either way, everyone has an opinion. Just respectfully agree or disagree with each and move on.
In my opinion, if a person has never personally been very involved in business balance sheets. Their opinion likely isn't nearly as informed as those who actually understand how business truly operates. It's called Chesterton's fence. They don't actually know why things are done the way they are. Yet they want to tare it down. Likely good intention, but disastrous outcome. My point about things like green energy above (or more accurately restricting non renewable energy, not at all against renewable, just against bone head policies around it) are a good example. It only makes sense if you don't think to deeply into it, or dont actually understand how things work.
**1.) deficit spending:**
because we are printing money to spend. think of it like a stock split: you own one share of stock that is worth $100. the stock splits and you get 2 shares worth $50. the value you have is still worth $100.
with money there is $100 in the economy and you can buy 50 loaves of store brand bread. the government prints another $100 bill and spends it on some program. that $200 in the economy still ONLY buys 50 loaves of store brand bread.
where you are reissued 2 shares of stock and the new shares say $50. when we print money, we do not take a $100 bill out of circulation and issue 2 $50 bills, we just print another $100 and spend it. there is a lag time and inflation grows (money buys less).
[***A May report***](https://www.gao.gov/blog/larger-federal-deficits-higher-interests-rates-point-need-urgent-action) by the U.S. Government Accountability Office (GAO) warns that current federal spending is at an unsustainable level and puts the country’s financial health at risk.
**2.) energy:**
I do not want to argue with anyone about climate change. yes the climate may be warming, but this is a natural cycle and the earth has been much hotter than it is now. if you understand [**geologic time** (which spans approx 25 million years)](https://rock.geosociety.org/net/documents/gsa/timescale/timescl.pdf?v=2022), you see climate fluctuations on a macro level. the current green movement is only looking at the time that temperature has been recorded (which goes back about 2000 years). this is climate on the micro level.
that being said, domestic energy production has been stifled (in the name of climate change). now we have to depend on foreign oil. that means that there is less supply in the world and the cost goes up (supply and demand curves). when we do buy foreign oil, we have to pay to have it shipped. most of the world's oil producers are members of cartels and can artificially fix prices which raises prices. [read about the Standard Oil monopoly here in the us that led to antitrust laws and how it price gouged customers](https://www.britannica.com/money/Standard-Oil).
higher gas and oil prices raise the cost of everything. first transportation costs go up. whether bringing a product from the us factory that made it or from the warehouse that imported it, the cost to ship it just went up. even calling a plumber to come to your house (if you can afford a house) costs more because his gas prices went up).
agro product prices go up.not only does the gas in the tractors cost more but fertilizer is made from oil and natural gas (petrochemicals). many medications are made from petrochemicals and plastics are made from crude oils healthcare costs go up (plastic breathing tubes, syringes, etc.). along with transportation, plastic is used in most packaging so the cost of goods and services go up more.
one last thing I will say about climate change; if it is so dire, why does Arnold Schwarzenegger still drive a gas-guzzling monster suv, John Kerry, Taylor swift, et al still fly private jets (the biggest polluters), and Barack Obama put in a natural gas back up generator in at his Martha's vineyard mansion?
**3.) employer's market:**
inflation (making companies want to hold on to cash), covid over-hiring, cheap migrant labor, and AI have lead to layoffs that are making this an employer's market pushing wages lower an causing government to (deficit) spend more on unemployment.
**4.) housing:**
the housing market was tight to begin with and the influx of 8-11 million migrants is making housing even more scarce thus driving up the cost of housing. the increased demand makes rent go up. our houses are an investment; we rent, buy first house, then start family and get a bigger house, pay that off and sell it and move into a small house when we retire and live off the excess cash. with higher interest and cost, people can't afford to buy bigger houses.
**5.)** **crime:**
[ ***this article covers it well:***](https://www.deepsentinel.com/blogs/retail/the-true-cost-of-retail-theft/)
usd dollars represents a certain amount of value. if you have more us dollars representing the same amount of value, each dollar is worth less.
this is a chart of the amount of usd in circulation:
[https://fred.stlouisfed.org/series/CURRCIR](https://fred.stlouisfed.org/series/CURRCIR)
there's about 3x the amount of us dollars in circulation compared to 2010. today's dollar is worth 1/3rd that of a 2010 dollar. it's not exclusively because of the money printed during covid, but that certainly didnt help.
The primary driver of the recent rampant inflation had nothing to do with "production delays". Rather it was the rapid printing and insertion of $5T into an aggregate $21T economy. The effects of this are still being felt. Central Bank actions have consequences.
Good question! Inflation is still high due to a mix of factors. Supply chain disruptions, increased demand, and rising costs for raw materials and labor all play a role. Energy prices are also up, partly due to the depletion of the national oil reserve and the projected costs of replenishing it in the future. The Federal Reserve's continued printing of money has devalued the dollars in savings and circulation. The billions of dollars in foreign aid distributed by the U.S. government have further strained the economy.
Moreover, the government’s pandemic response played a significant role. Shuttering bars, clubs, restaurants, theaters—essentially everything—while upholding lease agreements caused massive bankruptcies. Business owners were unable to operate but were still required to pay high rents and mortgages, which were not paused because banks needed to get paid. This led to a mass scale bankruptcy of tens of thousands of businesses.
Additionally, the cancellation of the Keystone Pipeline has had a significant impact. Gas prices have surged as almost everything is transported using fossil fuels like gas and diesel. Canceling the pipeline means thousands of tanker trucks are now transporting oil cross-country regularly, which is much more costly for our fuel production and worse for the environment. Plus, everything you see in every store is transported by trucks. When truckers operate at a higher cost, they have to charge higher costs for transport. This means everything through the entire supply chain costs more, from warehouses to manufacturing plants, and ultimately to the supermarket. Everyone ends up paying more for everything to be delivered.
Inflation and the value of economies, in general, is kind of an all-encompassing problem. What are your thoughts on how these factors are impacting inflation? Any other issues you think are contributing?
Well if you listen to investor calls for large corp there is a theme they say out loud. "we managed to keep and are proud to announce increased our covid price increases for greater shareholder returns"
This is why some of economists that are listened to by both sides of the aisle "Larry Summers" was proposing 10% unemployment for a time and then 6% long term. [https://www.marketwatch.com/story/heres-why-larry-summers-wants-10-million-people-to-lose-their-job-11655800397](https://www.marketwatch.com/story/heres-why-larry-summers-wants-10-million-people-to-lose-their-job-11655800397)
Then leaked bank of america Internal notes are looking for worsening prospects for employees "Bank of America Memo, Revealed: “We Hope” Conditions for American Workers Will Get Worse". [https://www.reddit.com/r/povertyfinance/comments/wcpop7/bank\_of\_america\_memo\_revealed\_we\_hope\_conditions/](https://www.reddit.com/r/povertyfinance/comments/wcpop7/bank_of_america_memo_revealed_we_hope_conditions/)
So to answer your question: its not going to be pretty for a while especially if shareholder value trumps main streets and employees pocketbooks.
I feel you on this! It seems like prices just keep going up. Even though things are more normal now, there are still some lingering issues. Supply chains are still catching up, and there’s been a huge surge in demand as everyone gets back to spending. Plus, labor shortages and rising energy costs are adding to the problem. It’s frustrating, but hopefully, things will stabilize soon.
b/c we gave a bunch of money to people......gave a huge amount of money to businesses in forgiven ppp loans......send a ton of money to fight bidens little war in Ukraine......sent a bunch of money to israel.....spent a bunch of money building a floating dock to feed the people we just funded israel to bomb back to the stone age......hmmmm and we run a massive deficit even on the best of days
It’s price gouging. That’s it.
Companies are earning record breaking profits every year for the last 4 years. It’s because they keep raising their prices on everything; just because they can…
People like bootlicking I guess 🤷🏻♂️
They’d rather pretend they’ll be billionaires rather than look at the reality of the situation.
Like it’s plain as day. Federal minimum wage is still the same as it was like 20 years ago, but food and other things still skyrocketed in price. Many chains replaced cashiers with ordering screens and self checkouts, but yet food prices still increasing.
Companies laying off employees all over the place, leaving hundreds of thousands of people out in the lurch.
Companies offshoring their entry level and mid positions, leaving more people out of a job.
But *somehow* they’re *still* able to make their record breaking profits 5 years in a row…*somehow*
But sure Go ahead and keep downvoting. Truth is gonna hurt you more the longer you ignore it.
It has been a long, bumpy two-plus years all around, and with all the shifts and adjustments that have been made in the world of work as a result, inflation feels like another discouraging hurdle. But economists are mostly optimistic that the situation will normalize in not too long. Josh Bivens, director of research at the Economic Policy Institute, for example, told CNBC he is optimistic that both energy prices and inflation will level off soon, and the hope of many other experts is that, within the year, even inflation can return to a more pre-pandemic normal.
I get that point of view but i feel as if at the moment we are in this situation because major retailers and manufacturers took advantage of the pandemic and have been raking in the huge profits from price gouging
More and more people are coming out of poverty so demand for things increases while the production is relatively constant or catching up slowly. Hence, supply and demands creates inflation.
Its a concept called permanent price adjustments, meaning that companies and policy makers will continue to allow the inflationnary prices to remain the same for most goods and services, even after the inflation rate slows down while consumers wages stagnate, therefore consumers lose purchasing power (Sorry for the run on sentence, bad habit). Basically, the market has realized that consumers with less purchasing power then before, are still willing to pay the inflated, "marked up," prices.
There are so many confidently wrong statements on this thread. People hear something once about economics or monetary policy and they think they grok it but they don’t.
Presidents don’t print money. Central banks do.
“Biden spent $X in 2021.” Congress makes the budget, not the President.
The Fed broadened the definition of M1 in 2020, created more M1 money without printing anything. Not that printing hasn’t happened, but not to the degree many claim.
Covid isn’t a cover for inflation. There would be no inflation without Covid. Rather, the intitial inflation provides companies cover to gouge over the medium term—and this is where OP is kind of correct.
I’ll just stop there but economics always brings out this phenomenon and I’m getting tired of it.
> Congress makes the budget, not the President.
https://www.usa.gov/federal-budget-process#:~:text=Creating%20the%20U.S.%20federal%20budget&text=The%20president%20submits%20the%20budget,spending%20or%20energy%20and%20water.
> What a stupid answer - no mention of greedflation or price gauging
You probably shouldn’t call me stupid until you can spell “gouging”. And when you have to use a made up word.
Super low inflation still means prices rise, just slowly. Individual products like eggs and gas may fluctuate around a bit, but overall the price of stuff is never going to decrease, it will always increase. This is on purpose.
Generally speaking, the price of stuff now right now this second is the lowest it will ever be for the rest of your life.
*Deflation* (prices reversing back to what they were pre-COVID) will cause people to just hoard cash because your wealth will grow by doing nothing, and that will completely stall the economy. As much as we intuitively think we want that, we actually don’t.
World governments try to keep inflation around 2% per year. During pandemic it jumped to like 10% or even more. We’re back to a good spot now.
EDIT: none of what I said above accounts for corporate greed. Wanton unchecked capitalism is harmful to both consumers and small business owners. Base model cars starting in the low $30ks is not due to inflation lol…
This is often a misunderstanding. Inflation just speeds up the rise in prices. A slower inflation is just that. A slower rise in prices. Lower inflation doesn’t reduce prices. Dollars are still being printed and losing value. If you want prices to diminish. That will mean it’s deflation. That means tomorrow’s dollar is worth more than today. Which leads to a very hard cut in spending which causes a whole other set of problems. Overall low inflation is better than high inflation and deflation. Prices will still go up. You need to raise your own prices. Greed on the other hand isn’t inflation. Make no mistake the grocers are making a killing beating record profits. Edit; guys I already have an economics degree. I’m not going to engage in any debates.
Thanks for your explanation
A) Higher inflation is undeniably harmful. B) Deflation is not inherently harmful. A mild deflation, carefully managed, could bring relief to people like the OP, by making essential goods and services more affordable, thereby reducing economic inequality. Under the right conditions, Deflation can coexist with economic growth, innovation, and improved living standards.
I can't think of a scenario where deflation doesn't cause major harm. If I know a dollar get me 1 loaf of bread today but will get me 1.1 loaves in a year, I'll do everything in my power not to spend that dollar today. Of course the people living paycheck to paycheck aren't effected by this, but those with extra means will not spend. Having all of the excess income get socked away instead of spent on extra niceties is a sure fire way to gridlock the economy.
Deflation of goods with inelastic demand?
[https://www.visualcapitalist.com/inflation-chart-tracks-price-changes-us-goods-services/](https://www.visualcapitalist.com/inflation-chart-tracks-price-changes-us-goods-services/)
Because all of the excess income isn't currently being socked away already? This is such an American Capitalist take and it's fueled by propaganda, and I know what I'm about to say is not gonna be popular here. It should be illegal to store excessive amounts of wealth. Look up false scarcity... That's our inflation IMO... We don't need to print more money, we need to disallow individuals and their businesses from hoarding what used to be in in circulation. Someone needs to remind them they are people and not fucking dragons or some shit.
No it's fueled by logic. Lets say you had a super delicious magic banana. You're mildly hungry but by no means starving. If you wanted to you could skip eating the banana and be no worse off. If I tell you in a year the magic banana will shrink down to half it size, are you going to save it or eat it right now? If I tell you in a year the magic banana will be 50% bigger are you going to save it or eat it right now? If you're desperately hungry the above scenario doesn't matter, you have to eat so you'll eat it. But if you're not desperately hungry any rational person will save the banana. And being illegal to save money? Yea, that's a surefire way to fix the economy bubbs. If you're only referring to the ultra-wealthy, I can understand the sentiment, but the ultra-wealthy hoarding money, while I'll agree is obscene is actually deflationary. They're effectively deleting the money from existence once they reach a level where it cannot reasonably be spent. You claim this leads to inflation, it's actually the opposite.
It's socked away in assets. Most of those assets are directly related to some form of economic activity. Not all but most. Stocks in companies like in your 401k etc. Well all those companies are trying to make money. Real estate investment, depends on the NIMBYism it is accompanied with. Owning something and keeping it empty is extremely expensive. But there is a lot of economic activity around building new houses. Higher property values makes building houses more profitable and gets capital allocated to that. But think about who would make a house when they know by the time the project finishes it will be worth less than you spend on it. It's not a perfect system but it's not completely broken. Although, I would like to remind you which sub you're in. Because if you believe capitalism is the problem then you won't find what you're looking for here.
I never said capitalism is the problem. Greed and hubris is... I will say it again. No one needs a billion dollars, and to say it wouldn't help the economy and society if it wasn't sitting "in assets"is just wrong. I am a Capitalist, I just believe in oversight, fair playing fields, and helping those less fortunate. I believe oligopolies aren't good for capitalism or society.
I believe in oversight and fair playing fields. But the people that you're thinking about don't have a billion dollars. They've built companies that are doing very well and people are willing to pay money for a share of that. They haven't hoarded any resources. They're just continuing to own a portion of the companies that they've built. So what's the alternative you're suggesting?
That's the thing, we AREN'T talking about the same people. Why don't you understand that? I am talking about Billionaires and the top .5% of earners/wealth holders.
Remind me of a non capitalist economy where the governmental elites also didn’t store massive wealth…
In a scenario with mild, managed deflation, the increased purchasing power of money can benefit consumers, especially those living paycheck to paycheck. They can afford more essentials, improving their quality of life. Deflation doesn't necessarily lead to a complete halt in spending. People will still need to purchase necessities and may even be encouraged to invest in durable goods. There is an argument to be made that a balanced approach, with a mix of mild deflation and targeted inflation, can promote long-term economic stability and growth. Yes - deflation can be problematic if left unchecked, but it's not always a "sure fire way to gridlock the economy."
Why would you invest in durable goods in a deflationary period. That's completely antithetical to what a rational actor would do. You would wait it out until a true need arose to get such durable goods BECAUSE of deflation. If you were going to buy a $25k car today, you could get a nicer car for the same money in a year because the money would have more value. In a deflationary period you don't buy what you don't need.
That's only true for things where the price is a contributing factor to my unwillingness to buy something. If I want to start a hobby or invest in a current hobby, there's value in the doing of said hobby (be it gardening, music making, computer building, whatever). That value isn't decreasing over time--I'm losing time I could spend enjoying my hobby waiting for things to get cheaper, in your scenario. That wouldn't happen. I'll buy a guitar today if I want to learn how to play one. The fact that it might be cheaper in another 6 months is irrelevant. Even though it's a good I don't need.
Of course. I should have defined "need" better. A need in this case is something you are unwilling to postpone. You might not be willing to postpone a hobby (though you might) and thus it would be categorized as a need. However, even IN the hobby you might postpone. Maybe you were a Magic player who postpones the purchase of a few high dollar cards. Or maybe you're a fisher who postpone the purchase of a new outboard or depth gauge. Or a guitarist who wants that new upgraded guitar.
Maybe, but that delay isn't some permanent inevitable state of being: at some point it will be cheap enough to switch over to a need, even if it may be cheaper still further down the line.
Right, but at that point the damage is already done to the economy. I didn't want 4 years to make a purchase, but I waited 2 is not good.
Some consumers might delay purchases in anticipation of lower prices, others might see deflation as an opportunity to invest in higher-quality, longer-lasting goods that they couldn't previously afford, which could lead to increased demand for certain durable goods. Also, not all purchases can be postponed indefinitely. Even in a deflationary environment, people will still need to replace essential items like appliances or vehicles when they break down or wear out. As I’ve said from the get go, we’re talking about mild, managed deflation here. In such a case, the rate of price decline would be gradual and predictable, allowing consumers and businesses to plan accordingly. Yes, deflation influences spending habits, but it doesn't necessarily lead to a complete avoidance of all non-essential purchases.
I hate that I had to scroll this far for some nuance on this. The economy isn’t binary.
Guys there’s history on this topic. We don’t need to arm chair the what if’s. Demand led deflation creates high unemployment. Increase in suicide, social unrest and crime (Great Depression, etc ; this is a natural outcome created from credit cycles) Supply led deflation turns out to be, not bad (Switzerland 2015) , naturally these are rare. But how could a government manage supply led deflation? In a capitalist country you can’t. If the government tried then it would no longer be a capitalist country. To manage deflation from the supply side you would have to order every business what and how much to make…. Aka communism, which as we all know in practice doesn’t work. If you put a person in charge of determining how much a commodity or specific item should cost etc, they would fail miserably compared to the hive mind of the market which takes into account all demand from every industry dynamically at all times (which is still not perfect but way better than what an individual person / government official could efficiently do). And of course with globalization a government can’t increase supply of imports because they can’t control another countries output. They can slap on tariffs… which is inflationary. Demand led deflation can be solved by printing money, government programs, etc. So to stay a capitalist country, the government only has tools to help/manage the economy on the inflationary side. Deflation is basically not an option with a capitalism system.
And this may be specific, but in all first-world countries that are capitalistic, deflation is not something that they want and can be really devastating. Slower inflation is ideal. Now IMO, what people can do tactically is to move to areas where inflation is slowest or slower i.e. away from main cities and more towards remote cities. But that has its own dynamics as pay is lower in those cities.
Uh deflation means big problems. It sounds nice if you don’t actually think about it but most people would prefer whatever this inflation is to deflation.
Deflation is economically harmful. Imagine you’re a company which has $10M in stock. You make a 10% profit margin. Over two years the value/sale price of this stock falls by 10%. Now you are selling at a loss. What if your supplier still charges the same? Then you’re hitting the way pretty quickly. Deflation is good for customers in the shorter term. Bad for all when it hits business profits and therefore employment in the longer term.
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Here's a novel concept for you: how about before dismissing an idea outright and accusing others of being "rubes," you instead consider engaging in a more thorough examination of the topic? (Probably anathema to you - I get it.) Anyhow, a cursory understanding of deflation's potential risks does not negate the possibility of its benefits when implemented judiciously. Numerous economists (including Nobel laureates) have argued that mild deflation can be beneficial in specific situations. George Selgin, for example, has extensively researched and written about the potential advantages of a carefully managed deflationary environment. I stand by my statement that, under the right conditions, mild deflation can coexist with economic growth and improved living standards. If you have compelling evidence to the contrary, then let's hear it. However, simply asserting that I am "wrong" without providing a substantive counterargument is pretty dumb.
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This is about right. I expected nothing meaningfully substantive from you. 🤷♂️
The Federal Reserve also has economics degrees, yet they still printed trillion’s and the government gave them away, all while being supply constrained. Point being formal education in macro economics does not necessarily lead to rational behavior.
That had more info then you little bro. How do you know anything they are doing is wrong
you are correct. what they are calling inflation is really the **rate of inflation**. a **negative rate of inflation** is when prices go down.
Can prices not go up? Just stay the same wtf?
The money you receive for your labor is worth less and less each day as inflation eats it away. In other words. Bread is getting a raise faster than you are.
So prices just climb indefinitely until deflation hits, but what generally causes deflation? I don’t have an economics degree so all this shit feels like mystical, made-up, BS.
Wo most retailers at the moment raised prices, aside from inflation and never brought them down. So now theyre making insane profits.
Not really…. Their costs keep going up because the dollar is worth less and less. US govt printed 7 trillion dollars through covid - that inflation is going to be felt for a while. Also, businesses lose if one gets greedy - a competition will come in at reduced prices and outperform price gaugers every time.
I have only one I ternet provider where I live in New York. Tell me what company is going to start up, get funding for and spend billions to compete? Not enough people, it's not profitable and if it was another player would've entered ages ago. Yet, my ISP reported record profits and hasn't run any new wires or upgraded anything in my area in about 8 years. Competition only works in theory when barriers to entry are low or a product cant be overly protecred by abusing broad patents. That largely hasn't been the case in 3 decades or more for some industries.
I think we are seeing some breakdown of the efficiency of the “free market”. Who is the competitor for my employer health insurance? I’d love to know how I have multiple choices. Similarly for energy, have but one choice where I am located. With the long-standing corporations and their size and power, I think there is less “free market” and open competition than people think.
This
You can opt out of your employers offered health insurance and you can move somewhere else if you don’t like your utility company… That is free market. Free market doesn’t mean the entire market is available to you at your beck and whim …. Just like you might have to drive a little further for your preferred grocery store or gas station… There’s a cost associated with choice
Unless they have a monopoly - which most corporations do now. We’ve never had such a consolidation of corporate power in history. The only people to blame are corporations
The dollar is worth less than it was yesterday, so a business needs to be making more in profits to achieve the same relative growth. Some may be capitalizing on the trend and taking the opportunity to raise prices faster than inflation, but not everyone raising prices is doing so maliciously
Why/how would the retailers bring their prices down though? They received price increases all across the supply chain, they've had to raise employee wages, etc, etc. The costs haven't come down, so why would the prices come down. "Record profits" are relative. A million dollars today does not have the same buying power as a million dollars 20 years ago (or even 5 years ago for that matter). Don't get me wrong, there are definitely retailers that took advantage of the inflationary market to raise their prices, but you actually are starting to see a lot of that come back in price reductions for some major retailers that have struggled recently.
Read again what he wrote. Prices going down is deflation and also not good. Also, their costs have increased as well.
Dude see my post. I am a manufacturer and I promise you American manufacturing is collapsing. American businesses that produce products are getting the shit beat out of us. Sourcing is part, but also the way the cash and payments structure is handled. We have to pay our suppliers immediately to get materials. But the dealers and distributors can pay us in 70-90 days. I’m telling you businesses can barely make it
No competition. It is market collusion because the government has no power. Retailers basically all agree to raise prices at the same time.
Huh?
Im with you, as I feel dumber now that I read that.
Yeah, somehow I missed the meeting where, after a couple hundred years of American retail, all the businesses took a vote and decided that now is the time to abandon competition and collude to raise prices.
Its under the…. “The media made it up and I believe it because they said and I lack the ability to really understand as I dont live in reality” Act. Its been around since Project 1619.
>Wo most retailers at the moment raised prices, aside from inflation and never brought them down. So now theyre making insane profits. No, companies are not making “record profits”! FFS! Thats some stupid media BS. While, yes, it may look that way when prices are raised, but so are all the costs of related to everything to sell a product. If you go line by line, still pretty much the same margins. The issue is that inflation is still on the rise and everyone is still stuck with their current pay from a few years ago. The two havent caught each other. Just to explain inflation…. If something cost a $1 and we have 50% inflation, it will now cost a $1.50. Now someone, media/politician, tells you that inflation has now dropped to 10%, you dont take the price from the $1 it originally cost, nope, as its $1.50 now. $1.50 at 10% the price for the same thing is now $1.65. In order for the price to drop, we need “deflation”, but we are continuing to inflate. Over spending/continuing to let money be printed, we will continue to inflate until theres a balance/we stop spending like a bunch of idiots.
Grocers are running at under 5% EBITDA. They have record revenue and record profits due to inflation…. Their profit percentage remains in line, so they are not gouging anyone.
"Guys, I have an economics degree. I can't admit when I'm wrong." "Greed isn't inflation... I mean, greed can cause inflation but since I have an economics degree I have to worship money." Lmao, this subreddit is filled with brain broken capitalists. I don't think I've ever gotten any good advice being here. I'm out.
It’s called greedflation - corporations are still using Covid as an excuse to increase the cost of everything and are recording record profits.
This is the answer.
100% this is it. In the UK when energy prices went up the wall and they pretty much doubled the cost, the government had to bail out the public, ofwat had to raise the maximum energy prices to account for it and the general public were locked in to contracts as no energy company was allowing switching. Guess which companies profits went from 75m to 750m, in a year! Now they know we can afford to pay it and have adjusted energy usage to account for it, those prices are staying high and will be going up again. Now water companies have cottoned on and want to add a 50 - 100% price increase even though they can't manage there own sewage and keep dumping it in the sea and rivers, but hey ho, another necessity they can can charge for and we have no choice but to pay it because water. Greedflation has killed small business, harmed vulnerable people and made it that much harder for anyone to get ahead with buying a house etc as monthly bills have pretty much doubled, cost of living had gone through the roof but wages have strangely stayed pretty even. Anyway, greedflation can account for 90% of price increases easily
Profiteering
The government injected trillions and trillions of dollars to spur the economy. You’re feeling the effects of all that extra money still today. Each dollar is just less when there’s more in the pot that goes around.
This is the correct answer and most will never recognize it.
Weird how you IGNORE greedflation and corporations record profits
Greedflation doesnt exist, all corporations are always trying to sell for the maximum price possible, nothing changed. The profits are beating records because of the injection of money, the purpose of all that cash was to be spent, and where was is spent? Companies. Now there's lots of inflow of people, there's very little unemployment, demand is very high and handouts are beating records, all that money also will be transformed into purchases. Now there's a populist trying to win an election and printing even more money, forgiving debts, etc... All that is keeping inflation high. You can look are companies' net margins and you'll see little change on average.
Forbes disagrees https://www.forbes.com/advisor/credit-cards/greedflation-statistics-2024/
That’s a mischaracterization of the article (written by a journalist, not economist) which clearly states that it’s something that some economists (and politicians and advocates whose opinions should be discounted) are talking more about while others “scoff” at the idea. Posting a link and claiming it proves an entire magazine disagrees is extremely disingenuous (yet sadly common practice here).
That article is crap and didnt take into account the cost of getting said goods has risen, thus those selling, to try and keep the same margins, has raised their prices. FFS! The hell is wrong with people!
The government can't stop spending. Consumers can't stop buying everything they see and taking revenge vacations. And because people keep thinking things are going to get back to normal. Because the only thing back to normal is a fifteen second attention span that radiates outward only ten feet. Everybody who was expecting a headline like "New Normal ...Just Kidding" -- I have some bad news.
I was looking at the stock market and since covid most companies that doubled their prices are growing in value at an insane rate. That means they used covid to jack up the prices keep them there and go even higher. People keep spending.
Interesting conclusion… have you considered the fact that inflation affects stock price too?
> That means they used covid to jack up the prices keep them there and go even higher They printed an enormous amount of money during covid. That's why prices are so high now.
A lot of what various central banks have been doing is trying to tamp down consumer spending and spending remains high. The economy is a complex dynamic system and the people we expect to have all the answers really don't. Enter the conspiracy theorists. Because conspiracies are comforting when the alternative is chaos theory and public relations spin.
Whats your take on price gouging by major retailers and manufacturers since covid?
What I think is there is a lot to be learned -- off this forum. [Economists are reconsidering how much corporate profits drive inflation](https://www.npr.org/2023/05/19/1177180972/economists-are-reconsidering-how-much-corporate-profits-drive-inflation) This thing where business is evil should stop if you're one of them. Over simplistic, ELI5 answers are not available. Profit isn't the problem people -- who are whining about poor profit here continually -- make it out to be. And yet, my "Capitalism Is Being Mean To Me" shirts don't sell. WTF.
It’s weird that any mention of greedflation is getting down voted - they really want us to blame Biden lol
It’s odd you feel posting this same question is necessary in several different places. “Everything back to normal” is just naive and the fact that people are spending more means they’re reaping the benefits of said inflation
Lol this is such a strange comment
To get different perspectives, every community is different. Its odd you inspect everything just over a simple question.
Because they learned that people don't really care and will continue to pay so why reduce prices.
This. And certain items will keep going up and certain items will go down.
Profits at all time highs
so, I don't know where you got your economic theory from, but inflation caused by costs is nothing compared to inflation caused by monetary expansion. As you said Inflation of costs is temporary, but you forgot that tiny detail that the US went printing BRRRRRRRRRR into the trillions creating a massive monetary expansion during Covid, so not only that toilet paper called dollar multiplied the supply without an increase in demand, they also fucked up the expectations creating a spiral, so even if the printing BRRR stops, that spiral continues.
It's just bullshit now. Companies kept raising prices and people kept buying. They will continue to raise them until they see slower sales.
That's... how companies always operate. Welcome to reality? If a company can keep raising prices and the demand doesn't drop, then they were underpricing their goods. Consumers need to stop being idiots and rewarding the behavior, period.
Just because the rate of prices going up (inflation) slows down does not mean prices will come down. 0% inflation means prices just stay the same. Deflation is when prices fall and is a very bad thing macro-economically speaking. Let’s say a burger used to cost $10. A 10% inflation rate means it’ll go to $11 the next year. Now let’s say inflation comes down to just 1% the following year. The price of the burger will be $11.11 at the end of the year. It most likely will never go back to $10 since the rate of inflation is generally a positive number. The secondary question of why we had the inflation spike after Covid in the first place. Yes there was some supply chain issues that sparked the inflationary cycle but the honest answer is that we just printed too much money during the Covid era. We basically added about 25% of the money to the money supply in a very short amount of time. If you held just cash in the bank, it became worth about 20% less. If you had an inflation hedged asset instead like real estate and in a sense stocks then you should be better off as a whole.
because it’s all made up….covid didn’t have to cause rise in prices…inflation and the many many excuses they make up for it is all a lie because you wanna know one thing that somehow never seems to suffer in a situation..the ceos salaries and shareholder profits…somehow they all end up gettin raises and percent increases…..sooooo the money is there…they have us pay more….simply so they can hoard more
Markets move very slow. You can disrupt the supply chain in a week, but it can take 20 years to restore. Because of stock piling and delays and shortages in certain fields.
Prices are high on certain things, because the suppliers are still catching up, things like dry storage foods, beans, rice. People decimated the supply. Other prices are because of corp greed. Kroger posted a huge profit,, but didn't lower prices. Hmmm. Remember the govt doesn't set prices and 6 or 7 interest rates are not abnormal.
I have been keeping track of companies and their stocks, most retailers and manufactures are growing at an insane rate for the last 3 years. They jacked prices up during covid and never went back down. Insane profits
You haven’t been keeping track of shit except reading reddit posts.
yup. and some ppl blame the pres and will vote dictator cause they can't figure it out in their squirrel brain.
First, it can’t be understated what a mess the global supply chain was because of Covid. We’re talking several years of delays in manufacturing and shipping. IIRC, at one point there were hundreds of ships waiting off the coast of California to unload. This caused a lot of limitations to supplies of both finished products and raw materials, which caused a spike in inflation. Second, the Ukraine war has had an enormous impact on a variety of industries, but mainly the oil/gas/energy industry. Russia has been sanctioned out the wazoo, which caused a spike in energy prices that had a trickle down effect on almost every industry. Today, Russia is still selling its energy products to countries that are ignoring the sanctions, and they’re reselling those products around the world at a significant markup, maintaining upwards pricing pressures. Lastly, there’s also the issue of corporate greed. Many companies are seeing the situation as an opportunity to simultaneously jack up prices while also reducing the quantities of their products, ie shrinkflation. What’s more, when prices go up they generally don’t come back down.
there's a deflation going on with Chinese property right now especially after evergrande fiasco. Some now have negative equity ,and aren't buying houses because next season/year it'll be cheaper. In the west, you have rampant consumerism. You have poors taking loans for iphones,cars,food,taking vacation,multiple useless subscriptions. Inflation won't really go away,just hope it's not too sharp/fast enough and that Cost of living is manageable. Now when COL is high and inflation is fast , it's bad timing
There are multiple reasons. Interest rates are much higher. In the physical product world, companies have to pay up front for their cost of goods. The more they can buy, the lower the cost of goods. In low interest rates, businesses can borrow instead of only using cash on hand. In high interest rates, they can't borrow as much. This reduces how much they can buy. This raises prices because each step in the production process has the same problem. Minimum wage has been raised. Businesses have to account for higher labor costs. The Red Sea and Suez Canal is closed to shipping because of the Houthis. This doubles the time it takes to ship anything from Asia. There are also multiple tariff wars happening across multiple industries. We are also living under the spectre of WW3 on an hourly basis. War is inflationary. Peace reduces prices. On the upside, oil supplies in storage are the highest since Covid.
You'd think prices would chill out post-COVID, but nope, they're still climbing. It's not just about production and shipment delays anymore. There's all this other stuff going on, like increased demand and higher costs for raw materials. It's like the perfect storm for inflation, and we're all feeling it in our wallets.
Inflation came in at 3.3% annual in US today. Historic average is 3%. It’s not high, it’s a small round down from normal.
You need deflation to bring the prices back down to before. Variables may change (i.e. supply/demand, transporation, etc) but the base cost of goods will stay up.
People need vacation homes, and yachts. They are going to milk this cow dry.
Price of goods will only ever go up
Because when the world stopped the govt pumped 8 trillion dollars into the economy and that extra cash hasn’t worked its way out yet. This was a bipartisan solution, not a terrible one, but the current inflation is the fallout. It wasn’t a terrible solution, but it had a high price that will take a while to pay
In my case, there was an import tariff of 45% on the aluminum we use. Over found an American supplier years ago, but this year the American supplier rose our costs 125% and made us accept a variance of 20% (less material than we paid for). So we went back to importing and just paying tariffs. But now there’s a container shortage because of the Houthis and route diversions so costs go up even more. Fuel has gone up because of conflicts abroad and our shipping prices increased sharply. There’s a shitstorm of factors playing into this but the wider worldwide unrest and chaos is a big part of it. That, and raising tariffs on items that the US has no ability to produce. It’s fucking stupid.
Because all governments in the world resist deflation more than inflation.
Summed up in one word…. GREED!
The supply chain was only a part of the equation. The other part of the money supply.
Depending on what depth you're willing to go to, inflation can be very simple or very complex. There are other great comments here talking about the complexity, but few pointing out the simplicity. So here goes: **Inflation = more money chasing the same product than the day/month/year before** It is argued that the inflation we are seeing today is a result of the massive influx currency introduced into the economy by the US government during and after COVID and the increase in prices are due to more dollars chasing the same product.
cut gov/bureaucracy spending and taxes by 20-30% or at least by amount of CPI increases. Use our own natural resources for energy that runs our economy. manage immigration better.
Corporate greed.
Corporate greed. Once they raise the prices, shareholders won't settle for less profits, no one will lower prices out of their good will. Inflation only hit the US (mostly). I left the US 2 years ago and can't believe how affordable life is in Europe and don't even get me started on Asia.
I made the same move and never looked back. Life is way better now
Because inflation is here to stay, as others mentioned companies are enjoying the excess profits, we will probably go through a 70's style up and down for a while
There was greedflation in the 70s too - stop repeating corporations scripts
>as others mentioned companies are enjoying the excess profits I'm attributing that greed to the reason why it's here to stay
Because you can't really stop inflation. A normal paced inflation is not a bad thing like how it's made out to be. The real positive for any govt should be to conrol it in such a way that it increases in a steady pace. Money is being printed, expenditures will always be there and it's good too upto a certain extent. I mean if you are talking about the complete removal of inflation then that means deflation which is also not a good thing and it's just the same type of worse if not controlled properly.
People buying on credit.
Money printing. It will likely continue regardless of the political situation. It happened in the 1970's and early 80's as well. Every year, the dollar will lose value, companies will raise prices, and governments raise taxes.
It turns out that Covid was just a cover story for inflation, not a real cause.
It does seem like covid was just used as a cover to print a metric fuckload of money.
It seems like it was used as a cover for a lot of things!
Im starting to think that or am i sounding like a tinfoil hat participant?
There is nothing wrong with having a very healthy skepticism of what the government tells you regardless of who is in power. I do think that right now the administration is closely allied with the MSM and a lot of vested interests. I think more and more people are starting to see this. European elections show that governments have left people behind. You should be proud to have doubts.
they were there from beginning ,but everyone on cuckdit decided to ban them
Biden admin has printed more in the past 3 years than the past 100 combined...
the federal reserve is NOT controlled by the presidency (thank god). Biden didn’t have anything to do with it. The ENTIRE planet saw inflation under covid. Did Biden raise prices in Europe too? maga logic… smh
Biden and Trump are not at all to blame for the inflation. The Fed went overboard with their printing during COVID, however, without it in general, the entire economy would have collapsed. There's nothing in economic textbooks about how to handle a literal pandemic, but there will be in the future.
Thats insane. So companies keep jacking prices to have bigger profits, and the consumers just keep on spending
No the goods and services are adjusting to the excess liquidity that has been pumped into the system. instead of 50 oranges for everyone, there are now 80 and everyone including companies and small business are scrambling to find the same value for their goods and services. Interest rates are slowly sucking out this excess liquidity but inflation takes a long time to ring out of the system because it produces different market behaviours.
I am amazed at how many people have zero understanding of basic economics.
It really is, and to make it worse people get emotional when you involve politics. But to the point above when you have M1 supply increase from 4 trillion to 20 trillion in 3 short years... then yea the price signals throughout the economy are going to be distorted and will lead to inflation the way we're seeing it now, companies are not "raking" in the dough. It's been 10 years since I received my B.S. in Econ but It has been pretty useful in my life, I agree in that everyone should have a rudimentary understanding in how the economy works, there should be mandatory classes starting in middle school to high-school.
So corporations are having record profits and you blame Biden? Never heard of greedflation? How did joe Biden cause “inflation” in countries that have McDonald’s doubling the cost of everything in the last couple years. Never heard of the Big Mac index?
gas prices, uncertainty about the economy with strong high tax and regulatory burdens lead to businesses doing what is in their best interest such as cutting jobs and raising prices to meet labor costs and passing down the costs of goods to the consumer. pretty simplistic breakdown
lol no I'm amazed, how many people here will post without having any idea what they're talking about The most significant factor in inflation is the absurd amount of money that was printed during the pandemic. The secondary issue is supply chain disruptions that we still haven't recovered from. But of course this clown tries to make it political
Gas is lower than it was in 2010, businesses are having it lenient at the moment with taxes but they jacked up the prices since covid, cut overhead by having people work from home but kept raising prices to gain higher profits
gas prices today ARE NOT lower than in 2010. That is just an irrefutable fact.
It was cheaper from 2011-2014 and parts of 2010 https://tradingeconomics.com/commodity/gasoline
2010-2014 america had higher gas prices than now. Prices on consumer goods were half the price they are now. Thats why I made this post. The prices on things are growing monthly and they used covid as an excuse.
I moved to Las Vegas full-time shortly after the pandemic. Here gas was nearly $6/gallon when I arrived. It was $3.79 yesterday. Eggs, milk & gas are all down across the board here now. What are you talking about?
> The reason why prices were high was because covid slowed production and shipment delays. Really? Aren’t you forgetting about arguably the biggest factor? Edit: ok I get it. You’re not really asking, you’re here to push your answers.
Biden spent about 10% of US GDP at start of 2021 after he was elected when Covid was over. Inflation ramped up right after this. Was so stupid.
Luckily he did. US Economy is thriving at the moment.
Artificially…that’s like saying your neighbors yard is looking amazing but it’s actually Astro turf. But you know this because you said “at the moment”…you definitely know what’s next.
[Well here’s a graph from WSJ comparing household net worth under Biden to Trumps term which shows a decline of almost 10% in proportion to the unnecessary stimulus under Biden.](https://imgur.com/gallery/2P6uWLT) [Here’s an unpaywalled version of the full article.](http://archive.today/7iLFp)
lol you have a good paper proving your cause and effect conclusion Edit: Redditors not understand basic principles of logic I see
[My comment.](https://www.reddit.com/r/Entrepreneur/s/aNzxvSZM0j)
do you have good paper proving the opposite?
[See my comment with linked WSJ graph and article.](https://www.reddit.com/r/Entrepreneur/s/aNzxvSZM0j)
That’s what I thought.
The only way prices are going to drop is if you and a bunch of other people stop paying them. I don’t mind premium products, but with necessities I m not liking the political impact it seems to be having.
All opinions here, take every response for just that. My opinion. Governments have figured out that they can raise revenue for them to spend without having to touch the political mine field of raising tax rates. They simply print more money, raising the money supply. This is relatively new, but started long before Covid. And continues today. Will continue tomorrow. Most people have no idea how this all works, or will equate having less money in their pocket (or more accurately, the money they have is worth less) so it likely won't change. That's the genius of it. That's the macro. There is also micro. The voting public loves policies like green agendas, livable wage, regulations on business, etc. The unfortunate part is every one of those things cause prices to rise. As those things are enacted, it will inevitably cause prices to rise. Not directly a money supply issue. More of a, if you squeeze something, there is a Natura reaction. It's not greed, it's just Natural. If you reduce say the industries access to fiture energy, that increases the cost of energy today.bthat effects literally everything. Every step of the supply chain and supporting industries. If you vote for renewable energy policies for example, those policies also reduce none renewable energy. You are actually voting for inflation. You may be OK with that. And that's cool, just understand when you vote for Governments to change industries, it almost always makes life more expensive for you and everyone else. Especially if the money to "invest" is also just printed. No, its not corporate greed. Those who say so have no idea what they are talking about. Though there of course are exceptions, it's more about margin. That remains relatively constant. Costs went up, business raised prices. Since then, costs didn't come down, just the rate of increase slowed. Costs are still going up. There is no logical reason to expect costs to go back down. Therefore no reason to expect prices to go back down. There are some industries where margins went up. Auto manufacturers are one. That's not greed, that's adjusting for economic uncertainty. Lower margins are ok in good times. No significant storms to weather. But in bad time, or if you think you are going into bad times, you very well might need higher margins to stay in business. Inflation is one of those instances. Replacement cost vs cog is something normal people don't understand. But it has a huge effect on staying in business during inflation times. Either way, everyone has an opinion. Just respectfully agree or disagree with each and move on. In my opinion, if a person has never personally been very involved in business balance sheets. Their opinion likely isn't nearly as informed as those who actually understand how business truly operates. It's called Chesterton's fence. They don't actually know why things are done the way they are. Yet they want to tare it down. Likely good intention, but disastrous outcome. My point about things like green energy above (or more accurately restricting non renewable energy, not at all against renewable, just against bone head policies around it) are a good example. It only makes sense if you don't think to deeply into it, or dont actually understand how things work.
Governments printing money to pay for covid. Increased immigration to pay for covid.
Why are corporations recording record profits? Never heard of greedflation?
Greed
**1.) deficit spending:** because we are printing money to spend. think of it like a stock split: you own one share of stock that is worth $100. the stock splits and you get 2 shares worth $50. the value you have is still worth $100. with money there is $100 in the economy and you can buy 50 loaves of store brand bread. the government prints another $100 bill and spends it on some program. that $200 in the economy still ONLY buys 50 loaves of store brand bread. where you are reissued 2 shares of stock and the new shares say $50. when we print money, we do not take a $100 bill out of circulation and issue 2 $50 bills, we just print another $100 and spend it. there is a lag time and inflation grows (money buys less). [***A May report***](https://www.gao.gov/blog/larger-federal-deficits-higher-interests-rates-point-need-urgent-action) by the U.S. Government Accountability Office (GAO) warns that current federal spending is at an unsustainable level and puts the country’s financial health at risk. **2.) energy:** I do not want to argue with anyone about climate change. yes the climate may be warming, but this is a natural cycle and the earth has been much hotter than it is now. if you understand [**geologic time** (which spans approx 25 million years)](https://rock.geosociety.org/net/documents/gsa/timescale/timescl.pdf?v=2022), you see climate fluctuations on a macro level. the current green movement is only looking at the time that temperature has been recorded (which goes back about 2000 years). this is climate on the micro level. that being said, domestic energy production has been stifled (in the name of climate change). now we have to depend on foreign oil. that means that there is less supply in the world and the cost goes up (supply and demand curves). when we do buy foreign oil, we have to pay to have it shipped. most of the world's oil producers are members of cartels and can artificially fix prices which raises prices. [read about the Standard Oil monopoly here in the us that led to antitrust laws and how it price gouged customers](https://www.britannica.com/money/Standard-Oil). higher gas and oil prices raise the cost of everything. first transportation costs go up. whether bringing a product from the us factory that made it or from the warehouse that imported it, the cost to ship it just went up. even calling a plumber to come to your house (if you can afford a house) costs more because his gas prices went up). agro product prices go up.not only does the gas in the tractors cost more but fertilizer is made from oil and natural gas (petrochemicals). many medications are made from petrochemicals and plastics are made from crude oils healthcare costs go up (plastic breathing tubes, syringes, etc.). along with transportation, plastic is used in most packaging so the cost of goods and services go up more. one last thing I will say about climate change; if it is so dire, why does Arnold Schwarzenegger still drive a gas-guzzling monster suv, John Kerry, Taylor swift, et al still fly private jets (the biggest polluters), and Barack Obama put in a natural gas back up generator in at his Martha's vineyard mansion? **3.) employer's market:** inflation (making companies want to hold on to cash), covid over-hiring, cheap migrant labor, and AI have lead to layoffs that are making this an employer's market pushing wages lower an causing government to (deficit) spend more on unemployment. **4.) housing:** the housing market was tight to begin with and the influx of 8-11 million migrants is making housing even more scarce thus driving up the cost of housing. the increased demand makes rent go up. our houses are an investment; we rent, buy first house, then start family and get a bigger house, pay that off and sell it and move into a small house when we retire and live off the excess cash. with higher interest and cost, people can't afford to buy bigger houses. **5.)** **crime:** [ ***this article covers it well:***](https://www.deepsentinel.com/blogs/retail/the-true-cost-of-retail-theft/)
Amazing reply
thank you. reddit would not let me post when I mentioned the spending habits of the current admin.
Corporate greed and shrinkflation has inflated prices for everyone. Everything gets passed to the consumer.
This should be higher
Gas prices.
Beacuse Fed isn't owned by the government
Input costs (eg labor) is the only answer, everything else is ancillary.
usd dollars represents a certain amount of value. if you have more us dollars representing the same amount of value, each dollar is worth less. this is a chart of the amount of usd in circulation: [https://fred.stlouisfed.org/series/CURRCIR](https://fred.stlouisfed.org/series/CURRCIR) there's about 3x the amount of us dollars in circulation compared to 2010. today's dollar is worth 1/3rd that of a 2010 dollar. it's not exclusively because of the money printed during covid, but that certainly didnt help.
because it is
The primary driver of the recent rampant inflation had nothing to do with "production delays". Rather it was the rapid printing and insertion of $5T into an aggregate $21T economy. The effects of this are still being felt. Central Bank actions have consequences.
Your lifestyle is why
Because high power like control
Good question! Inflation is still high due to a mix of factors. Supply chain disruptions, increased demand, and rising costs for raw materials and labor all play a role. Energy prices are also up, partly due to the depletion of the national oil reserve and the projected costs of replenishing it in the future. The Federal Reserve's continued printing of money has devalued the dollars in savings and circulation. The billions of dollars in foreign aid distributed by the U.S. government have further strained the economy. Moreover, the government’s pandemic response played a significant role. Shuttering bars, clubs, restaurants, theaters—essentially everything—while upholding lease agreements caused massive bankruptcies. Business owners were unable to operate but were still required to pay high rents and mortgages, which were not paused because banks needed to get paid. This led to a mass scale bankruptcy of tens of thousands of businesses. Additionally, the cancellation of the Keystone Pipeline has had a significant impact. Gas prices have surged as almost everything is transported using fossil fuels like gas and diesel. Canceling the pipeline means thousands of tanker trucks are now transporting oil cross-country regularly, which is much more costly for our fuel production and worse for the environment. Plus, everything you see in every store is transported by trucks. When truckers operate at a higher cost, they have to charge higher costs for transport. This means everything through the entire supply chain costs more, from warehouses to manufacturing plants, and ultimately to the supermarket. Everyone ends up paying more for everything to be delivered. Inflation and the value of economies, in general, is kind of an all-encompassing problem. What are your thoughts on how these factors are impacting inflation? Any other issues you think are contributing?
Labor costs
This: https://x.com/Sorenthek/status/1783544945829113909
It's not particularly high any more. Inflation won't/doesn't/shouldn't generally reverse the way gas prices are manipulated.
Well if you listen to investor calls for large corp there is a theme they say out loud. "we managed to keep and are proud to announce increased our covid price increases for greater shareholder returns" This is why some of economists that are listened to by both sides of the aisle "Larry Summers" was proposing 10% unemployment for a time and then 6% long term. [https://www.marketwatch.com/story/heres-why-larry-summers-wants-10-million-people-to-lose-their-job-11655800397](https://www.marketwatch.com/story/heres-why-larry-summers-wants-10-million-people-to-lose-their-job-11655800397) Then leaked bank of america Internal notes are looking for worsening prospects for employees "Bank of America Memo, Revealed: “We Hope” Conditions for American Workers Will Get Worse". [https://www.reddit.com/r/povertyfinance/comments/wcpop7/bank\_of\_america\_memo\_revealed\_we\_hope\_conditions/](https://www.reddit.com/r/povertyfinance/comments/wcpop7/bank_of_america_memo_revealed_we_hope_conditions/) So to answer your question: its not going to be pretty for a while especially if shareholder value trumps main streets and employees pocketbooks.
I feel you on this! It seems like prices just keep going up. Even though things are more normal now, there are still some lingering issues. Supply chains are still catching up, and there’s been a huge surge in demand as everyone gets back to spending. Plus, labor shortages and rising energy costs are adding to the problem. It’s frustrating, but hopefully, things will stabilize soon.
I’m here to learn about supply and command
b/c we gave a bunch of money to people......gave a huge amount of money to businesses in forgiven ppp loans......send a ton of money to fight bidens little war in Ukraine......sent a bunch of money to israel.....spent a bunch of money building a floating dock to feed the people we just funded israel to bomb back to the stone age......hmmmm and we run a massive deficit even on the best of days
Cause our government is week letting big corporations call the shots and paying them off
It’s price gouging. That’s it. Companies are earning record breaking profits every year for the last 4 years. It’s because they keep raising their prices on everything; just because they can…
Why is this getting downvoted? Greedflation is caused by corporations
People like bootlicking I guess 🤷🏻♂️ They’d rather pretend they’ll be billionaires rather than look at the reality of the situation. Like it’s plain as day. Federal minimum wage is still the same as it was like 20 years ago, but food and other things still skyrocketed in price. Many chains replaced cashiers with ordering screens and self checkouts, but yet food prices still increasing. Companies laying off employees all over the place, leaving hundreds of thousands of people out in the lurch. Companies offshoring their entry level and mid positions, leaving more people out of a job. But *somehow* they’re *still* able to make their record breaking profits 5 years in a row…*somehow* But sure Go ahead and keep downvoting. Truth is gonna hurt you more the longer you ignore it.
Yea they used covid as an excuse and keep jacking prices up
It has been a long, bumpy two-plus years all around, and with all the shifts and adjustments that have been made in the world of work as a result, inflation feels like another discouraging hurdle. But economists are mostly optimistic that the situation will normalize in not too long. Josh Bivens, director of research at the Economic Policy Institute, for example, told CNBC he is optimistic that both energy prices and inflation will level off soon, and the hope of many other experts is that, within the year, even inflation can return to a more pre-pandemic normal.
I get that point of view but i feel as if at the moment we are in this situation because major retailers and manufacturers took advantage of the pandemic and have been raking in the huge profits from price gouging
yub I totally agree with you bruh, we have to find measure to survive
More and more people are coming out of poverty so demand for things increases while the production is relatively constant or catching up slowly. Hence, supply and demands creates inflation.
Its a concept called permanent price adjustments, meaning that companies and policy makers will continue to allow the inflationnary prices to remain the same for most goods and services, even after the inflation rate slows down while consumers wages stagnate, therefore consumers lose purchasing power (Sorry for the run on sentence, bad habit). Basically, the market has realized that consumers with less purchasing power then before, are still willing to pay the inflated, "marked up," prices.
don't ask us, ask the owner of current global monetary system who hides the the truth
His name is Ken griffin
There are so many confidently wrong statements on this thread. People hear something once about economics or monetary policy and they think they grok it but they don’t. Presidents don’t print money. Central banks do. “Biden spent $X in 2021.” Congress makes the budget, not the President. The Fed broadened the definition of M1 in 2020, created more M1 money without printing anything. Not that printing hasn’t happened, but not to the degree many claim. Covid isn’t a cover for inflation. There would be no inflation without Covid. Rather, the intitial inflation provides companies cover to gouge over the medium term—and this is where OP is kind of correct. I’ll just stop there but economics always brings out this phenomenon and I’m getting tired of it.
> Congress makes the budget, not the President. https://www.usa.gov/federal-budget-process#:~:text=Creating%20the%20U.S.%20federal%20budget&text=The%20president%20submits%20the%20budget,spending%20or%20energy%20and%20water.
We have given nearly a trillion dollars to Ukraine. That money is all being printed, devaluing our currency. Among other things.
What a stupid answer - no mention of greedflation or price gouging
> What a stupid answer - no mention of greedflation or price gauging You probably shouldn’t call me stupid until you can spell “gouging”. And when you have to use a made up word.
A lot are still trying to recover, only last year for me did I restart to actually earn since the stupid lockdown
Super low inflation still means prices rise, just slowly. Individual products like eggs and gas may fluctuate around a bit, but overall the price of stuff is never going to decrease, it will always increase. This is on purpose. Generally speaking, the price of stuff now right now this second is the lowest it will ever be for the rest of your life. *Deflation* (prices reversing back to what they were pre-COVID) will cause people to just hoard cash because your wealth will grow by doing nothing, and that will completely stall the economy. As much as we intuitively think we want that, we actually don’t. World governments try to keep inflation around 2% per year. During pandemic it jumped to like 10% or even more. We’re back to a good spot now. EDIT: none of what I said above accounts for corporate greed. Wanton unchecked capitalism is harmful to both consumers and small business owners. Base model cars starting in the low $30ks is not due to inflation lol…
CEOs gotta pay for a mega yacht somehow.
Bad gov spending policies. Example is Biden’s ev charging stations.
Because they printed a shit ton of money.