Inflation

[divs4ever]

what's going to pummel earnings? Is it going to be costs?

costs blamed on wage demands is the usual game played ( sometimes that is correct , sometimes not )

 

[divs4ever]

Which, globally speaking, begs the question of where the capital will flee to.

Where's the best port in the storm?

i am tilting toward physical commodities ( sometimes commodity stocks , sometimes the real commodity held at home )

 

[over9k]

better them than me

you could mount a good argument for floating-rate debt , but locking in guaranteed erosion of value ??

The question is what the alternative is

 

[divs4ever]

The question is what the alternative is

well a time-tested strategy during inflation cycles is to attempt to lose less buying power than others

one could argue gold/silver ( held at home ) , but also long-life consumables ( honey , salt , rice , sugar as examples ) something you can consume at leisure or barter )

another could be invest in 'disaster industries ' ( companies like CCP which buy distressed debt ) maybe demolition/recycling companies

i hold CCP 'free-carried ' but may yet regret selling SGM a few years back

buying niches ( like rare wines,art, watches , etc ) are better done by those well studied in in those areas

for those with long vision buying 'forced sale' properties may be a way ( especially if that property can yield an income even at a taxable loss )

 

[over9k]

or.... oil

 

[divs4ever]

or.... oil

i don't use much oil personally a gallon of light machine oil might last the rest of my life ( i could probably grab some more graphite powder for squeaky hinges and such )

 

[over9k]

i don't use much oil personally a gallon of light machine oil might last the rest of my life ( i could probably grab some more graphite powder for squeaky hinges and such )

...I meant oil as in "oil's used to make absolutely everything and there's a supply side problem".

Or were you taking the piss?

 

[over9k]

I have a feeling you're going to say crude

The Fed has enough evidence now to aim or a tighter credit environment. This may be hopium rally 2.0 ala June 2022. The 'Jackson Hole' moment could be the release of economic projections in roughly a month's time where the Fed revises the dot plot upwards.

The historical context for a recession is huge. The only time in recent history where the Fed raised rates during a hiking cycle and didn't cause one was in 2018/19 when the Fed caved in and started cutting.

Meanwhile, layoffs are accelerating when compared to what we saw in 2022, and companies are angling for more. Private credit is becoming more difficult to access. We're seeing that manifest with consumers rejecting higher prices for some goods (Domino's?), international trade being at covid levels (Baltic dry lows) and companies reporting poor guidance (Walmart thinks their consumers may be in trouble soon).

Also seasonality to contend with - economic activity in the northern hemisphere will continue to increase until midyear which will only add to the demand side for energy especially.

 

[divs4ever]

...I meant oil as in "oil's used to make absolutely everything and there's a supply side problem".

Or were you taking the piss?

kind of but not completely

having lived in the bush for a while ( years ago ) some creativity is useful

certain things ( like a modern economy ) rely on oil , now

but some obsolete tech can also still be useful ( even 4,000 years later )

since some parties are fixated on holding certain supplies hostage , learning about alternatives might be advantageous

one might ask if oil is actually a dependency problem rather than a supply crisis

sure life be more difficult , but the Climate Agenda wants are lives to be torturous

( nothing annoys a bully more than mocking their well-planned efforts )

 

[frugal.rock]

After reading aIbove discussion, I suddenly had the question, what's the breakdown for oil usage?
I had expected the other category being mainly plastics to be larger than the 10.1% shown, but there you have it.
As you were, carry on.

What’s Made from a Barrel of Oil?

Oil is a building block that makes modern life possible. Here are the proportion of finished products that are created from a barrel of oil.

www.visualcapitalist.com

 

[divs4ever]

After reading aIbove discussion, I suddenly had the question, what's the breakdown for oil usage?
I had expected the other category being mainly plastics to be larger than the 10.1% shown, but there you have it.
As you were, carry on.

View attachment 153561

What’s Made from a Barrel of Oil?

Oil is a building block that makes modern life possible. Here are the proportion of finished products that are created from a barrel of oil.

www.visualcapitalist.com

the list doesn't mention modern pharmaceuticals

 

[over9k]

Consumption rates over a year (showing how seasonality effects things) is very easy to look up.

Energy consumption IS going to, with reference to seasonality, increase until midyear.

 

[farmerge]

Consumption rates over a year (showing how seasonality effects things) is very easy to look up.

Energy consumption IS going to, with reference to seasonality, increase until midyear.

Energy consumption at this abode is limited these days. Solar panels and wood fires keep that particular bill to under half of what it used to be. I know the panels cost a bit, BUT we had Main Roads parked on our property for 18 months so the lease money garnered from that paid for the panels with a fair bit let over.

 

[qldfrog]

the list doesn't mention modern pharmaceuticals

Or fertilisers as gas..as in non liquid is used but same same..

 

[Telamelo]

The real cause of inflation in Australia is "greed-price spiral"

A brutal analysis from the Australian Institute released on Friday found that Australia’s inflation would have stayed within the Reserve Bank of Australia’s (RBA) target if companies had not squeezed consumers through the pandemic via excess price hikes.

The “dramatic expansion” of business profits has gone mostly ignored by the RBA, which has instead focused on a supposed wage-price spiral that does not exist, Dr Jim Stanford from the Australian Institute claimed.

The RBA’s obsession with wage restraint – essentially urging Australians to cop a pay decrease – is “misplaced and unfair” and interest rates would be far lower if companies had not “gouged customers” at the checkout, its analysis showed.

Australian businesses increased prices by a whopping $160 billion per year, which was far more than necessary to cover rising expenses for labour, taxes and supply chain issues, the Australian Institute found.

ACTU Secretary Sally McManus said what was occurring was a “greed-price spiral”.

“Qantas has joined Coles and Woolworths, as well as the Commonwealth Bank, in posting eye-watering profits. Inflation is being fed by these companies putting up prices far more than they need to,” she said.

“Wage growth is clearly not contributing to inflation.

 

[waterbottle]

The real cause of inflation in Australia is "greed-price spiral"

A brutal analysis from the Australian Institute released on Friday found that Australia’s inflation would have stayed within the Reserve Bank of Australia’s (RBA) target if companies had not squeezed consumers through the pandemic via excess price hikes.

The “dramatic expansion” of business profits has gone mostly ignored by the RBA, which has instead focused on a supposed wage-price spiral that does not exist, Dr Jim Stanford from the Australian Institute claimed.

The RBA’s obsession with wage restraint – essentially urging Australians to cop a pay decrease – is “misplaced and unfair” and interest rates would be far lower if companies had not “gouged customers” at the checkout, its analysis showed.

Australian businesses increased prices by a whopping $160 billion per year, which was far more than necessary to cover rising expenses for labour, taxes and supply chain issues, the Australian Institute found.

ACTU Secretary Sally McManus said what was occurring was a “greed-price spiral”.

“Qantas has joined Coles and Woolworths, as well as the Commonwealth Bank, in posting eye-watering profits. Inflation is being fed by these companies putting up prices far more than they need to,” she said.

“Wage growth is clearly not contributing to inflation.

Isn't this a chicken v egg situation? People wouldn't be demanding higher pay if business didn't charge more for goods and services that could be paid for by consumers who've had a pay rise because businesses are charging more......... Etc

 

[frugal.rock]

A random snippet of data, a coupla days ago, i overhead some gab from a small time business person on the phone who was walking past me whilst I was stuffing my gob with a beef kebab (no onion, garlic and bbq sauce thanks) at Greystanes, Sydney (Maltese area).

All I heard was "they've put the prices up 18%, but I'm going to...",

I got the impression he then started to sprout about his devious plan to defy the raise...

How do you make a Maltese cross?

poke him in the eye

 

[farmerge]

The real cause of inflation in Australia is "greed-price spiral"

A brutal analysis from the Australian Institute released on Friday found that Australia’s inflation would have stayed within the Reserve Bank of Australia’s (RBA) target if companies had not squeezed consumers through the pandemic via excess price hikes.

The “dramatic expansion” of business profits has gone mostly ignored by the RBA, which has instead focused on a supposed wage-price spiral that does not exist, Dr Jim Stanford from the Australian Institute claimed.

The RBA’s obsession with wage restraint – essentially urging Australians to cop a pay decrease – is “misplaced and unfair” and interest rates would be far lower if companies had not “gouged customers” at the checkout, its analysis showed.

Australian businesses increased prices by a whopping $160 billion per year, which was far more than necessary to cover rising expenses for labour, taxes and supply chain issues, the Australian Institute found.

ACTU Secretary Sally McManus said what was occurring was a “greed-price spiral”.

“Qantas has joined Coles and Woolworths, as well as the Commonwealth Bank, in posting eye-watering profits. Inflation is being fed by these companies putting up prices far more than they need to,” she said.

“Wage growth is clearly not contributing to inflation.

I think that the average consumer always knows that. Pity the board of the RBA aren't alined to reality instead of looking after their mates at the big end of town. Thse profits whilst great for shareholders are just obscene after the pandmic. Blind Freddy can see that the balance is not right.

 

[moXJO]

The real cause of inflation in Australia is "greed-price spiral"

A brutal analysis from the Australian Institute released on Friday found that Australia’s inflation would have stayed within the Reserve Bank of Australia’s (RBA) target if companies had not squeezed consumers through the pandemic via excess price hikes.

The “dramatic expansion” of business profits has gone mostly ignored by the RBA, which has instead focused on a supposed wage-price spiral that does not exist, Dr Jim Stanford from the Australian Institute claimed.

The RBA’s obsession with wage restraint – essentially urging Australians to cop a pay decrease – is “misplaced and unfair” and interest rates would be far lower if companies had not “gouged customers” at the checkout, its analysis showed.

Australian businesses increased prices by a whopping $160 billion per year, which was far more than necessary to cover rising expenses for labour, taxes and supply chain issues, the Australian Institute found.

ACTU Secretary Sally McManus said what was occurring was a “greed-price spiral”.

“Qantas has joined Coles and Woolworths, as well as the Commonwealth Bank, in posting eye-watering profits. Inflation is being fed by these companies putting up prices far more than they need to,” she said.

“Wage growth is clearly not contributing to inflation.

I'm sure we talked about this back during covid. Supply shortages increased prices and those prices would be the new floor.
Everyone had to adjust prices to match the new reality.

Huge amount of blame should be shifted onto the majors.

 

[Telamelo]

I think that the average consumer always knows that. Pity the board of the RBA aren't alined to reality instead of looking after their mates at the big end of town. Thse profits whilst great for shareholders are just obscene after the pandmic. Blind Freddy can see that the balance is not right.

Exactly mate.. corporate greed & exploitation of us vulnerable consumer's occuring on a daily basis across just about everything out there - Government has no control on prices whatsoever & then worse still think RBA can handle inflation (which it clearly can't as again only targets & inflicts more pain on us vulnerable consumer's).

Becomes a double whammy hit on consumer's whilst big greedy corporations get away with hiking up prices as they wish. True inflation running closer to 15%-20% in my opinion.