Inflation

[greggles]

With US inflation proving to be very sticky and resistant to high interest rates I am wondering whether we (and by we I mean most countries) are in for a sustained period of high inflation that could last for many years, if not decades.

Since governments have realised that they can just fire up the printing machines when they need more money, the money supply of most notable fiat currencies has dramatically increased and no doubt will continue to increase. After all, there are wars to pay for, infrastructure to build, and huge societal problems to solve and it seems that cannot be done with the tax revenue currently being generated. Increasing debt for all, especially governments, is the new economic reality.

I think fiat currency debasement and devaluation is only going to continue and most likely get worse and as a result inflation will remain high for the foreseeable future. If wages don't keep up, and I don't think they will, we will see the slow erosion of the middle class and the creation of an underclass who will never be able to afford to buy a house and who will exist solely to perform menial jobs that are essential in a service economy like Australia.

 

[over9k]

A little inflation update in my business

Pre-manufactured horseshoes up 60%
Hand tool replacement up average 50%
Consumables up average 40%
Steel bar stock up 30% (and only because I get a good deal from a client)
Aluminium bar stock up 90%
Polyurethanes, lab putty and cyanoacrylates up minimum 40%

Plus all those things+++ mentioned above, fuel, insurances and whatnot.

My price increase 12%

Thank @#$& I haven't got a mortgage or other repayments.

 

[over9k]

I am wondering whether we (and by we I mean most countries) are in for a sustained period of high inflation that could last for many years, if not decades.

Yes. It's a supply driven problem and supply is not going to improve.

 

[joeno]

When one considers the purchasing power of the Australian dollar against CPI, house prices and USD - seems like we're getting poorer as the years go by. Perhaps the move for the average middle class worker is to invest in global stock index, a local property (to live in), and bitcoin in the ratio of 60/30/10?

 

[Smurf1976]

If wages don't keep up, and I don't think they will, we will see the slow erosion of the middle class and the creation of an underclass who will never be able to afford to buy a house and who will exist solely to perform menial jobs that are essential in a service economy like Australia.

I reckon there's a very real change this goes a step beyond that.

A point will come where few are willing to do those jobs for the wages on offer and fewer people will use those services. They'll simply disappear as a concept for the average person who'll go back to cleaning their own house, mowing their own lawns, washing their own dog and so on.

 

[mullokintyre]

I reckon there's a very real change this goes a step beyond that.

A point will come where few are willing to do those jobs for the wages on offer and fewer people will use those services. They'll simply disappear as a concept for the average person who'll go back to cleaning their own house, mowing their own lawns, washing their own dog and so on.

I suspect its already happening.
As my wife has now banned me from even carrying a ladder, much lessascending one, there are some services I am no longer allowed to perform.
I was seeking someone to come and clean my gutters the this week, found two businesses advertised as doing this service.
phoned and left messages on both mobile numbers, but neither have phoned me back yet.

Mick

 

[Dona Ferentes]

A point will come where few are willing to do those jobs for the wages on offer and fewer people will use those services. They'll simply disappear as a concept for the average person who'll go back to cleaning their own house, mowing their own lawns, washing their own dog and so on.

There's no shortage of riders/ drivers with low language skills delivering food and parcels, I'd suggest.

 

[wayneL]

View attachment 172700

Yeah but I think it's a bit more complex in reality. Those lines ain't as smooth as that in real life.

 

[mullokintyre]

New trends in business and society are always popping up.
Some are game changers, some of little consequence, some last some wither quickly.
A new one that caught my eye was a trend to dynamic pricing.
It already happens in the wholesale elcetricity market, the retail fuel market (don't buy fuel on the Thursady before a long weekend) hotels and "high season" sports like skiing.
After listening and reading to some of the contributions to the inquiry on the big grocery retailers price setting, it would not surprise me to see that being introduced into that business here in OZ.
The WSJ highlights how dynamic pricing has been creeping into the restaurant trade.


Restaurants like San Diego-based Cali BBQ are experimenting with a form of the dynamic pricing long used by airlines, hotels and ride-hailing services. Technology providers are pitching services that enable restaurants to change prices weekly or monthly, increasing or slashing the cost of a taco or sandwich between a few quarters to several dollars, depending on demand and sales patterns.

Dynamic pricing—charging higher rates at peak times and dropping them at slower ones—has become commonplace in industries such as e-commerce, and mobile apps have made it easier for companies to study consumers’ buying and browsing and quickly adapt. Rising costs in recent years have led more retailers to implement it.

Restaurants are experimenting with the technology as the industry looks for ways to boost sales and increase profits. Many restaurants increased menu prices as labor, food and other costs have soared since 2021.

Wendy’s drew public scrutiny after the burger chain said in a mid-February earnings call that it was looking to test dynamic pricing. The chain said it would invest around $20 million in its U.S. restaurants to install digital menu boards by 2025 that could suggest items to customers and present different offerings depending on the time of day.


Other restaurants, particularly sit-down ones, are charging more for prime seats during peak hours. Gene and Georgetti, a historic Chicago steakhouse where Frank Sinatra once regularly dined, in late 2022 implemented dynamic pricing on two booths frequented by celebrity customers. Diners typically pay a $20 fee when they book the booths at busy hours, helping counterbalance the restaurant’s rising expenses, managing partner Michelle Durpetti said.

While some consumers tend to resent surge pricing, as Wendy’s discovered last month, they like happy-hour discounts and other deals at slow times, industry consultants said.

Mick

 

[wayneL]

New trends in business and society are always popping up.
Some are game changers, some of little consequence, some last some wither quickly.
A new one that caught my eye was a trend to dynamic pricing.
It already happens in the wholesale elcetricity market, the retail fuel market (don't buy fuel on the Thursady before a long weekend) hotels and "high season" sports like skiing.
After listening and reading to some of the contributions to the inquiry on the big grocery retailers price setting, it would not surprise me to see that being introduced into that business here in OZ.
The WSJ highlights how dynamic pricing has been creeping into the restaurant trade.

View attachment 172704
Restaurants like San Diego-based Cali BBQ are experimenting with a form of the dynamic pricing long used by airlines, hotels and ride-hailing services. Technology providers are pitching services that enable restaurants to change prices weekly or monthly, increasing or slashing the cost of a taco or sandwich between a few quarters to several dollars, depending on demand and sales patterns.

Dynamic pricing—charging higher rates at peak times and dropping them at slower ones—has become commonplace in industries such as e-commerce, and mobile apps have made it easier for companies to study consumers’ buying and browsing and quickly adapt. Rising costs in recent years have led more retailers to implement it.

Restaurants are experimenting with the technology as the industry looks for ways to boost sales and increase profits. Many restaurants increased menu prices as labor, food and other costs have soared since 2021.

Wendy’s drew public scrutiny after the burger chain said in a mid-February earnings call that it was looking to test dynamic pricing. The chain said it would invest around $20 million in its U.S. restaurants to install digital menu boards by 2025 that could suggest items to customers and present different offerings depending on the time of day.


Other restaurants, particularly sit-down ones, are charging more for prime seats during peak hours. Gene and Georgetti, a historic Chicago steakhouse where Frank Sinatra once regularly dined, in late 2022 implemented dynamic pricing on two booths frequented by celebrity customers. Diners typically pay a $20 fee when they book the booths at busy hours, helping counterbalance the restaurant’s rising expenses, managing partner Michelle Durpetti said.

While some consumers tend to resent surge pricing, as Wendy’s discovered last month, they like happy-hour discounts and other deals at slow times, industry consultants said.

Mick

I have:

1/ hot lady pricing

2/ an idiot tax

Does that count

 

[mullokintyre]

I have:

1/ hot lady pricing

2/ an idiot tax

Does that count

I am going to guess that the "hot LadyPricing" is a cheaper price, while the idiot tax causes a higher price.
So what happens if you get a customer who classifies as a very hot lady, but is also an idiot?
Mick

 

[qldfrog]

I am going to guess that the "hot LadyPricing" is a cheaper price, whicle th eidiot tax causes a higher price.
So what happens if you get a customer who classifies as a very hot lady, but is also an idiot?
Mick

Is it called an opportunity?

 

[Dona Ferentes]

happy hour at the pub 4-6pm weekdays.

loss leader or pain point for them?

 

[mullokintyre]

While some consumers tend to resent surge pricing, as Wendy’s discovered last month, they like happy-hour discounts and other deals at slow times, industry consultants said.

Mick

I can see the day when people are perusing the Maccas online menu, see a sudden 10% drop for a big mac, and quickly snap up the offer.
Then pay three times the price of the "normal" menulog/ubereats/Deliveroo/DoorDash cost cos there is a sudden rush for deliveries.
Need to devlop an AI app that calculates the best price combination.
Mick

 

[qldfrog]

I can see the day when people are perusing the Maccas online menu, see a sudden 10% drop for a big mac, and quickly snap up the offer.
Then pay three times the price of the "normal" menulog/ubereats/Deliveroo/DoorDash cost cos there is a sudden rush for deliveries.
Need to devlop an AI app that calculates the best price combination.
Mick

Or a brain..oops 2024:
Need to build an holistic AI inclusive app indeed ,with rainbow colours, an Ukrainian flag..or Palestinian...I am confused and BLM logo

 

[Value Collector]

When one considers the purchasing power of the Australian dollar against CPI, house prices and USD - seems like we're getting poorer as the years go by. Perhaps the move for the average middle class worker is to invest in global stock index, a local property (to live in), and bitcoin in the ratio of 60/30/10?

I do think everyone should have some exposure to international markets, but should probably ignore Bitcoin.

Every Thursday my super allocation for that week gets put in at the following ratio.

 

[wayneL]

I am going to guess that the "hot LadyPricing" is a cheaper price, while the idiot tax causes a higher price.
So what happens if you get a customer who classifies as a very hot lady, but is also an idiot?
Mick

It depends on how hot and how much of an idiot... it's a bit of a sliding scale

 

[over9k]

Not a new trick.

 

[over9k]

They'll simply disappear as a concept for the average person who'll go back to cleaning their own house, mowing their own lawns, washing their own dog and so on

Not being funny here, how long has the average person actually been paying other people to do this kind of stuff for? I'm not aware of any kind of massive surge in housekeeping, lawn mowing etc demand, but I've hardly looked into it much either so I could just be completely oblivious.

 

[over9k]

Yeah but I think it's a bit more complex in reality. Those lines ain't as smooth as that in real life.

True, I'm just demonstrating the concept. It's the same thing as how costs like smurf's mentioned about cleaning your house etc can increase to the point of just pricing the service/good out of the market.

"There used to be a market for this, but nobody can afford/will pay it any more".