Yes, agree, divs. I was thinking more about the post of mine yesterday when I said that inflation will result because of Covid causing sick leave, hence leading to all kinds of problems, eg logistics, production, which in turn cause shortage of supply. This I think might/may cause a rise in the price of food and merchandise. My thinking is, if Covid is not arrested and continues to cause disruption, then over years, the economy will be affected. However, I think central banks are within their means to take slow steps to cause as little disruption as possible to world economies, some of which may not be within their control........the future is not mine to see, I can only speculate.might not be so temporary , businesses usually try to claw back cost increases over time , and if so, of those increased costs are wages raised to reduce staff shortages .. well it is hard to reduce staff wages at a later date ( and retain staff )
other likely cost increases include energy , sure oil,gas , petrol might come back you still have electricity costs
also there will probably be an increase in the cost of borrowing money , currently it is very low ( in some places ) you would expect at least a return to historic averages
there is also a chance of increased regulation, and compliance costs ( these sort of folks just can't help themselves )
I think the situation of "covid panic" is temporary. After that it's the masses sentiment.might not be so temporary , businesses usually try to claw back cost increases over time , and if so, of those increased costs are wages raised to reduce staff shortages .. well it is hard to reduce staff wages at a later date ( and retain staff )
other likely cost increases include energy , sure oil,gas , petrol might come back you still have electricity costs
also there will probably be an increase in the cost of borrowing money , currently it is very low ( in some places ) you would expect at least a return to historic averages
there is also a chance of increased regulation, and compliance costs ( these sort of folks just can't help themselves )
might not be so temporary , businesses usually try to claw back cost increases over time , and if so, of those increased costs are wages raised to reduce staff shortages .. well it is hard to reduce staff wages at a later date ( and retain staff )
other likely cost increases include energy , sure oil,gas , petrol might come back you still have electricity costs
also there will probably be an increase in the cost of borrowing money , currently it is very low ( in some places ) you would expect at least a return to historic averages
there is also a chance of increased regulation, and compliance costs ( these sort of folks just can't help themselves )
As a restaurant owner cost of business has gone through the roof.Most of those are not big enough issues to cause a major inflation risk.
Wages may increase but not until demand increases significantly, Covid is dampening demand. Besides, wages are starting from a low anyway, any increase will be just catch up.
Electricity costs will not rise significantly, there is new competition coming, wait and see. There could also be a drop in prices.
Oil and gas, yes I can see prices going up especially for lubricants.
Many businesses are flush with cash, waiting for opportunity and trades.
Not many governments will be game to increase regulation and compliance costs when they are trying to keep the economy going and trying to rev it up.
I purchased some quality wines at very reasonable prices during the Christmas holiday period, it seems that some companies have full warehouses and need to make some room.
Prices are all over the place at the moment, all dependent on the industry type and affects of Covid issues. However, there is fear in the consumer which is holding back everything. There is so much more that we haven't looked at - property prices (starting to level?), hospitality, electronics.
Just had a thought, my fuel bill has dropped by 60% since July 2021(we have a fuel card). The difference is that we now own an EV, and in comparison my electricity bill went up 10% in the same period.
How many more EVs will be sold during 2022 and what affects will this cause?
As a restaurant owner cost of business has gone through the roof.
December (and we should of done this sooner) we raised prices 10% to more than cover them all.
End result is we are doing more with less. The few staff we have get paid more but do more work. Cost of Goods absorbed by charging more.
This is just my corner atm.
Prices are all over the place at the moment, all dependent on the industry type and affects of Covid issues. However, there is fear in the consumer which is holding back everything. There is so much more that we haven't looked at - property prices (starting to level?), hospitality, electronics.
I like you, John, you can always see outside the box Something not many are able to do so, and you can explain things more clearly, may I say more eloquent? ( By the way, nice to see you again) Well, that's all said and done, John, Well done
Glad that investors are comforted that it was not worse than feared.Data showed the US consumer price index surging a whopping 7 per cent in the 12 months through December, the biggest annual increase since June 1982, but in line with economists' forecasts.
The economy is experiencing high inflation — well above the Fed's 2 per cent target — as the COVID-19 pandemic disrupts supply chains. The high cost of living is also weighing on US President Joe Biden's approval rating.
However, investors appeared to be comforted by the fact inflation was not worse than feared, and that the Fed was unlikely to be more aggressive than expected in hiking interest rates and tightening monetary policy.
"Today's inflation report continued to reinforce the theme that gaudy price gains are not standing in the way of demand," Rick Rieder, BlackRock's chief investment officer of Global Fixed Income, said.
US inflation hits 7% and is now the highest in 40 years.
ABC NEWS
Glad that investors are comforted that it was not worse than feared.
For something that the FED insists is transitory, and is not only persisting, but keeps getting higher.
For the price makers, its great.
For the price takers, not so great.
Arguments over the level "transitoriness" of inflation are immaterial to the majority of Americans.
It still has a profound effect on their lives.
As I wrote some time ago, the effects of inflation remain forever, they don't go away.
The fried chicken that went from a buck to a buck10 will not go back to a buck if the inflation is transitory or not.
And they will remember come election time that although some of the causes of inflation were because of the policies of previous incumbent in the White House, pretty much all of the effects are under the watch of the existing incumbent.
Whether deserved or not, this will not play out well for democrats in the up coming mid terms, and unless somethings change pretty quickly in the near future, it may even cross into the 2024 presidential election.
Mick
The picture you posted is a sapshot in time, it does not say whether the prices are going up down, or staying the same.Don't jump in before checking the depth.
Media is doing what they do best, sharing the bad news. You may be correct, inflation may take off like a rocket and crash the economy and the market, but before we prepare for the end maybe we should research all the information, rather than just the headlines. That was Cathy Wood's point (see video in my above post).
I have some relative in the US, so far I have not heard any complaint about food prices, though I do accept that different states would
Food Prices in USA grocery stores
A sample of food prices from several stores: how much is meat and milk, vegetables and fruits, alcohol, bread and other food products in Americawww.globalprice.info
Back in the 1970s there was a situation that came about due to the 350% to 400% increase of the oil price and in those days oil was far more critical than today though the basics are still in place.
Inflation rose far above interest rates the UK had 25% inflation with interest rates in the 7% to 8% range on an as-bad-as-it-gets scenario at its peak.
Australia's inflation peaked at 15.42% in 1974 and averaged over 10% for 9 years until 1983. Interest rate in 1974 was 8.38%. Interest rates averaged over 10% from 1974 to 1996.
Interest Rates Australia
Historical Interest Rates for Australia since 1959. See how bank lending rates have changed over time. Rates are on the increase currently.www.orangefinance.net.au Australia Inflation Rate 1960-2024
Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used.www.macrotrends.net
So we can see how disaster can befall and recovery takes very many years.
Today very many countries are hit with high gas prices increasing nearly as much as oil did in the 1970s.
Has the world learnt from all of this history. In a nutshell 'NO'! They never seem to realise that the basics are never different even if the basics are 50 years or more later. They are in fact Always the Same.
The Hawke Labor Government initially responded to the crisis by asking the Conciliation and Arbitration Commission to defer its national wage case. Commodity prices dropped and the Australian dollar sharply declined. The Reserve Bank conducted a $2 billion intervention to hold the dollar at 68c but it crashed to 51c. In December 1987, Keating said that the Australian economy would weather the storm because the Hawke Government had already balanced its Budget and brought down inflation
I'm currently in the US and have been for the past 8 months. I would say the stats say inflation is rising, but it isn't until you 'feel' the impact of price rises that you start caring. I haven't 'felt' any adjustments in food prices at either grocery stores or restaurants. However, construction materials I do see some changes, and significant shortages of some items. Depending on your link in the chain you may be feeling inflation in different ways. I'm just a consumer.
interesting i hadn't thought of 'theft in motion' like thatOne of the Myriad of reasons why goods are slow/hard to come by could be just plain theft.
Containers Busted Open
Mick
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