Inflation

[JohnDe]

I posted this in another thread, but I think it is relevant to the inflation discussion.

We all blame governments and businesses for the increasing inflation, and yes there is some blame to go there, but we rarely look at ourselves.

Consumers need to understand that their purchasing choices affects many things, including what a business is going to stock, what manufacturing build, the cost to make, hold and sell. this is a part of the inflation formula.

We want bigger cars, we need bigger roads and more maintenance, bills go up, resources are reduced, prices increase to meet the new demands, wages increase to match the cost of living, we buy more with our increased wages. And round in circles we go again.

This popped up on my notifications, shows how much bigger the average car is getting. Maybe it’s a sign of our increased wealth, the average household owns two cars, one for each partner. Forty years ago, we would have one large family car and one small run-around.
Today we buy what we want, large dual cab Ute just in case we go off road or I buy a boat, and a large SUV to carry the family.

 

[sptrawler]

Here is a good article on why the cost of living seems to be getting worse, when everyone is at pains to tell us it is getting better.

The true cost of living has climbed far faster than we've been told. Here's what's actually going on

Now is a particularly good time to announce measures to address the cost of living crisis. We need them because things are a lot worse than the official index suggests, writes Peter Martin.

www.abc.net.au

From the article:
Way back in the late 1990s, more than a quarter of a century ago, the consumer price index used to actually reflect the cost of living. It included all of the big costs incurred by households including — importantly — mortgage interest payments, which at the time accounted for an average of $5 of every $100 each wage earner spent.

Then in September 1998, in response to representations from the Reserve Bank and the Treasury, the bureau changed the way it calculated the index, excluding mortgage and other interest payments in a decision it acknowledged would make the index worse at measuring living costs.

It still carries the warning on its website, saying the consumer price index is "not the conceptually ideal measure for assessing the changes in the purchasing power of the disposable incomes of households".

For years the bureau has also published a separate set of measures it pointedly calls "living cost indexes". These do include mortgage and other interest charges, and for households headed by employers (those for whom the buying power of wages matters) they are substantial.

Whereas the consumer price index (the one quoted by the treasurer) increased 5.4 per cent in the year to September, the living cost index for households headed by wage earners climbed 9 per cent.

For these working households, the price of food climbed 4.8 per cent in the year to September, the price of electricity 14.5 per cent and the price of mortgage interest charges 68 per cent.

It's the increases in mortgage rates that have made the increases in the other prices hurt so much.

Nine per cent — the overall increase in prices faced by wage-earners — is way above the typical wage increase of 4 per cent.

 

[Smurf1976]

when Putin shut off gas pipelines and caused energy prices to skyrocket, the only answer is to reduce demand until we can raise supply.

its the only way it can work, unless you install a system of rationing which doesn’t help with increasing supply.

In terms of responses to the situation agreed.

I'll argue however that the Russia - EU gas situation was not only entirely foreseeable long before it happened but was actually foreseen by many.

Sensible planning, across all industries, can avoid at least some of the trouble arising in the first place. Some problems are unforeseeable or, even if foreseen, remain unavoidable but there's others where the response to use alternatives etc rationally ought to have occurred before the problem not after the inevitable happened.

 

[Value Collector]

Nine per cent — the overall increase in prices faced by wage-earners — is way above the typical wage increase of 4 per cent.

This does come back to my main point I have been trying to explain.

eg. How much of that 9% cost of living increase we have seen in the past year is due to factors that come and go like supply chain issues, and how much is structural and is due to regular monetary inflation?

if roughly 4% is due to monetary inflation and the other 5% due to temporary supply and demand factors, then it makes sense to only increase wages by 4% To cover the monetary inflation, and expect everyone to tighten their belt a bit to overcome the temporary factors.

some seasons in human life as better than others, eg droughts cause crop failures, there are wars, there is disease etc etc some times we have less to consume, some times we have more. I don’t think there is a way that we could ever promise the population a steady supply of products at set prices.

 

[sptrawler]

This does come back to my main point I have been trying to explain.

eg. How much of that 9% cost of living increase we have seen in the past year is due to factors that come and go like supply chain issues, and how much is structural and is due to regular monetary inflation?

if roughly 4% is due to monetary inflation and the other 5% due to temporary supply and demand factors, then it makes sense to only increase wages by 4% To cover the monetary inflation, and expect everyone to tighten their belt a bit to overcome the temporary factors.

some seasons in human life as better than others, eg droughts cause crop failures, there are wars, there is disease etc etc some times we have less to consume, some times we have more. I don’t think there is a way that we could ever promise the population a steady supply of products at set prices.

That would be nice, if everything went down by the 5%, when supply issues are sorted, unfortunately history doesn't support that.

 

[divs4ever]

That would be nice, if everything went down by the 5%, when supply issues are sorted, unfortunately history doesn't support that.

it can but then it is called a depression ( when folks are desperate to reduce inventory )

and from what i was told ( both parents grew up in the great depression ) it wasn't so nice ( for nearly everybody )

 

[qldfrog]

In terms of responses to the situation agreed.

I'll argue however that the Russia - EU gas situation was not only entirely foreseeable long before it happened but was actually foreseen by many.

Sensible planning, across all industries, can avoid at least some of the trouble arising in the first place. Some problems are unforeseeable or, even if foreseen, remain unavoidable but there's others where the response to use alternatives etc rationally ought to have occurred before the problem not after the inevitable happened.

as for Putin planning to shut off gas..we can see who lives in DisneyWorld...
The Ukraine war as well as the pandemic were engineered crisis and shortages
For the Ukraine, a strategic US play to split and destroy , for Covid a taken opportunity..and you know my view.... so inflation was of course predictable maybe maybe even wanted.
How else will the western debt be paid or at very least be remotely affordable.
Now the prime target is us: medium and upper classes ( but not uber class) of the crashing empire

 

[houtman]

I posted this in another thread, but I think it is relevant to the inflation discussion.

We all blame governments and businesses for the increasing inflation, and yes there is some blame to go there, but we rarely look at ourselves.

Consumers need to understand that their purchasing choices affects many things, including what a business is going to stock, what manufacturing build, the cost to make, hold and sell. this is a part of the inflation formula.

We want bigger cars, we need bigger roads and more maintenance, bills go up, resources are reduced, prices increase to meet the new demands, wages increase to match the cost of living, we buy more with our increased wages. And round in circles we go again.

This popped up on my notifications, shows how much bigger the average car is getting. Maybe it’s a sign of our increased wealth, the average household owns two cars, one for each partner. Forty years ago, we would have one large family car and one small run-around.
Today we buy what we want, large dual cab Ute just in case we go off road or I buy a boat, and a large SUV to carry the family.

Gee, they have cherry picked data there, also the scaling is dodgy.
I wouldn't call a Range Rover an average car either, well not by price.


Looking back at my parents cars and my own now for comparison -

1965 - 1781 wide
1974 1689w
1980 - 1695 wide
1990 - 1794 w

2023 1 x 1940 and 1 x 1660w - average 1800w.

Very little average change over 60 years.

 

[qldfrog]

Gee, they have cherry picked data there, also the scaling is dodgy.
I wouldn't call a Range Rover an average car either, well not by price.


Looking back at my parents cars and my own now for comparison -

1965 - 1781 wide
1974 1689w
1980 - 1695 wide
1990 - 1794 w

2023 1 x 1940 and 1 x 1660w - average 1800w.

Very little average change over 60 years.

In Europe:
Parent's own car 40y ago was a Chrysler wide American sized monster, until both kids left home and that was in Europe, Peugeot 504 , Citroen DS3 etc were big and heavy...
If you exclude utes..which are not common in europe, I do not think there is much growth in size for the same level of car, but yes cheaper cars are smaller than luxury ones.

 

[TimeISmoney]

In Europe:
Parent's own car 40y ago was a Chrysler wide American sized monster, until both kids left home and that was in Europe, Peugeot 504 , Citroen DS3 etc were big and heavy...
If you exclude utes..which are not common in europe, I do not think there is much growth in size for the same level of car, but yes cheaper cars are smaller than luxury ones.

They wouldn't get through the streets after they've drunk half a keg of wine.

 

[Value Collector]

That would be nice, if everything went down by the 5%, when supply issues are sorted, unfortunately history doesn't support that.

Well like every thing it’s complicated, some things will go down eg once the oil price drops the petrol price will drop by what ever ratio a barrel of oil is to the price of a litre of fuel.

Some things where they have given their employees wage increases will have locked in the price rise as a structural increase, because unions don’t like wages going down.

others might not see reduced sticker prices, but might see more sales etc. and might have a hold on the next round of raises you would have expected from the monetary inflation. Eg if bread price was going to rise by 3% next year it might stay stable.

 

[Smurf1976]

as for Putin planning to shut off gas..we can see who lives in DisneyWorld...
The Ukraine war as well as the pandemic were engineered crisis and shortages

Thing is though, you don't need to know the detail to foresee the outcome.

Two culturally different places and one has control over energy or water to another = pretty much guaranteed to be a problem at some point. Who or what triggers it is just detail.

 

[JohnDe]

Gee, they have cherry picked data there, also the scaling is dodgy.
I wouldn't call a Range Rover an average car either, well not by price.


Looking back at my parents cars and my own now for comparison -

1965 - 1781 wide
1974 1689w
1980 - 1695 wide
1990 - 1794 w

2023 1 x 1940 and 1 x 1660w - average 1800w.

Very little average change over 60 years.

No.1 selling vehicle in 2022, and No.2 in 2023 -

By the early 1980s, the downsizing practice had expanded to nearly all size segments as product lines completed model cycles within each company. ​

Downsize (automobile) - Wikipedia

en.wikipedia.org

​

Check out some of the vehicles and their size during the late 70's and early 80's.

Thanks to the help of the State Library of Sydney I have been able to continue searching through old Wheels magazines to share with you the evolution of the Australian car market over the past 60 years. Today we’re exploring the 7 years between 1969 and 1976.

1970 Holden

1970 Ford Galaxie LTD

This period saw Holden and Ford get closer, while Chrysler maintained itself in third position at around 10% of the market. Japanese brands get stronger and stronger: Toyota led the pack in 1970 before being passed by Datsun in 1972.

The Datsun 180B is the best-selling Japanese car in Australia over the period.

1970 Toyota Corona Coupe

For the very first time in 1973 models data becomes available: the Holden is #1 with 94,419 sales, ahead of the Ford Falcon at 62,352 units. The Datsun 1200/1600/180B ranks at an excellent third place with 36,723 sales, just above the Holden Torana at 36,366 units.

1971 Honda 1300

1970 Mazda 1200 Coupe

1970 Subaru 1100

The Toyota Corona/Corolla/Celica takes the 5th spot with 34,650 sales, followed by the Ford Cortina/Escort/Capri at 31,828 and the Chrysler Valiant at 31,721. Mazda ranks #9. Other successful Japanese brands over the period include Honda at #11 in 1972. Subarus and Mitsubishis also feature quite regularly on Wheels Magazine at that time.

1971 Renault 12

Australia 1978: Holden Kingwood reclaims lead, Commodore #1 in December​

• January 30, 1978
• Matt Gasnier

Holden Kingswood Premier
* See the Top 10 best-selling models by clicking on the title – Thanks Paul *
Whereas last year it got dislodged by the Ford Falcon for the annual pole position, the Holden Kingswood reclaims its throne in 1978 despite sales down 3% to 52.559 units vs. 50.350 (-8%) for the Ford Falcon. The Holden Torana/Sunbird (+13%), Chrysler Sigma and Ford Cortina round up the Top 5, with the Datsun 200B the best-selling Japanese nameplate in Australia at #6 and the Toyota Corona/Celica, Toyota Corolla and Datsun 120Y also ranking inside the 1978 Top 10.
The very first Holden Commodore
November 1978: the Holden Commodore appears in the Australian sales charts.
But the big news in 1978 is the launch of the legendary nameplate Holden Commodore in November, when it ranks #4 with 3.090 sales. As early as December 1978, the Commodore takes the lead of the Australian sales charts thanks to 4.710 units sold, ahead of the Ford Falcon (4.641) and Holden Kingswood (3.478). The Commodore would end up being either the #1 or #2 annual best-seller in Australia for 33 years without interruption until 2011…

 

[qldfrog]

No.1 selling vehicle in 2022, and No.2 in 2023 -

View attachment 169472

By the early 1980s, the downsizing practice had expanded to nearly all size segments as product lines completed model cycles within each company. ​

Downsize (automobile) - Wikipedia

en.wikipedia.org

​

Check out some of the vehicles and their size during the late 70's and early 80's.

Thanks to the help of the State Library of Sydney I have been able to continue searching through old Wheels magazines to share with you the evolution of the Australian car market over the past 60 years. Today we’re exploring the 7 years between 1969 and 1976.

View attachment 1694741970 Holden

View attachment 1694751970 Ford Galaxie LTD

This period saw Holden and Ford get closer, while Chrysler maintained itself in third position at around 10% of the market. Japanese brands get stronger and stronger: Toyota led the pack in 1970 before being passed by Datsun in 1972.

View attachment 169476The Datsun 180B is the best-selling Japanese car in Australia over the period.

View attachment 1694771970 Toyota Corona Coupe

For the very first time in 1973 models data becomes available: the Holden is #1 with 94,419 sales, ahead of the Ford Falcon at 62,352 units. The Datsun 1200/1600/180B ranks at an excellent third place with 36,723 sales, just above the Holden Torana at 36,366 units.

View attachment 1694781971 Honda 1300

View attachment 1694791970 Mazda 1200 Coupe

View attachment 1694801970 Subaru 1100

The Toyota Corona/Corolla/Celica takes the 5th spot with 34,650 sales, followed by the Ford Cortina/Escort/Capri at 31,828 and the Chrysler Valiant at 31,721. Mazda ranks #9. Other successful Japanese brands over the period include Honda at #11 in 1972. Subarus and Mitsubishis also feature quite regularly on Wheels Magazine at that time.

View attachment 1694811971 Renault 12

Australia 1978: Holden Kingwood reclaims lead, Commodore #1 in December​

• January 30, 1978
• Matt Gasnier

View attachment 169482Holden Kingswood Premier
* See the Top 10 best-selling models by clicking on the title – Thanks Paul *
Whereas last year it got dislodged by the Ford Falcon for the annual pole position, the Holden Kingswood reclaims its throne in 1978 despite sales down 3% to 52.559 units vs. 50.350 (-8%) for the Ford Falcon. The Holden Torana/Sunbird (+13%), Chrysler Sigma and Ford Cortina round up the Top 5, with the Datsun 200B the best-selling Japanese nameplate in Australia at #6 and the Toyota Corona/Celica, Toyota Corolla and Datsun 120Y also ranking inside the 1978 Top 10.
View attachment 169483The very first Holden Commodore
View attachment 169484November 1978: the Holden Commodore appears in the Australian sales charts.
But the big news in 1978 is the launch of the legendary nameplate Holden Commodore in November, when it ranks #4 with 3.090 sales. As early as December 1978, the Commodore takes the lead of the Australian sales charts thanks to 4.710 units sold, ahead of the Ford Falcon (4.641) and Holden Kingswood (3.478). The Commodore would end up being either the #1 or #2 annual best-seller in Australia for 33 years without interruption until 2011…

Interesting..
Do we agree the commodore is a huge car?
It was a monster size by euro standard.. and was when I came here in the nineties

 

[JohnDe]

Interesting..
Do we agree the commodore is a huge car?
It was a monster size by euro standard.. and was when I came here in the nineties

It grew. The first few models from 1978 to about 1984 (VB, VC, VH) were the smallest Commodore, the 1984 to 1987 (VK & VL) grew a little longer and wider, and it kept growing till the end.

 

[sptrawler]

It grew. The first few models from 1978 to about 1984 (VB, VC, VH) were the smallest Commodore, the 1984 to 1987 (VK & VL) grew a little longer and wider, and it kept growing till the end.

Absolutely, check out the size of any car when they were first released and now. The cars have grown, but go down to the local shopping center and the passengers aren't the size they were either.
Toyota Rav 4 original Vs Toyota Rav 4 2024.

Kia Sorrento original Vs Kia Sorrento 2024.

Mum, Dad and three teenage kids in a 1964 Mini, try that now, you would need 20Kg's of butter.

 

[over9k]

Absolutely, check out the size of any car when they were first released and now. The cars have grown, but go down to the local shopping center and the passengers aren't the size they were either.
Toyota Rav 4 original Vs Toyota Rav 4 2024.

Kia Sorrento original Vs Kia Sorrento 2024.

Mum, Dad and three teenage kids in a 1964 Mini, try that now, you would need 20Kg's of butter.

Simple crash protection arms race.

Everyone take the piss out of cars getting bigger and bigger but bigger = safer in a crash, this is a fact.

Only way to solve it would be a legal limit on size.

 

[sptrawler]

This IMO is nothing to be happy about, if you actually care where we are heading.

 

[Value Collector]

Absolutely, check out the size of any car when they were first released and now. The cars have grown, but go down to the local shopping center and the passengers aren't the size they were either.
Toyota Rav 4 original Vs Toyota Rav 4 2024.

Kia Sorrento original Vs Kia Sorrento 2024.

Mum, Dad and three teenage kids in a 1964 Mini, try that now, you would need 20Kg's of butter.

So you agree that we Australians need to tighten their belts

maybe the answer to a 9% increase in the cost of food is to eat 9% less food, and maybe not waste the other 50% of food Australians throw in the bin

 

[JohnDe]

This IMO is nothing to be happy about, if you actually care where we are heading.

View attachment 169494

Australian House Prices: Last 50-Year Retrospective

If you talk to anyone under the age of, say, 50, I don’t think you’d get much of an argument that Australian house prices are completely out of control.

www.savings.com.au