Inflation is here

[PWMDMD]

Can you explain?

Even though the current price of gas has little to do with current government policies people want to believe the increase was inevitable and predictable. They want to believe inflation is also a result of current policies when the truth is 80% of the inflation experienced today is a direct result of actions taken in 2020.

*Revised to remove as much political verbiage as possible.

 

[dlundblad]

Even though the current price of gas has little to do with current government policies people want to believe the increase is an inevitable and predictable result of their guy not being in charge. They want to believe inflation is also a result of current policies when the truth is 80% of the inflation experienced today is a direct result of past administration actions.

You just just took it to the next level by making it political with no actual explanation.

 

[PWMDMD]

So in 2008 when the housing market crashed and gas was $4.50 a gallon, global oil consumption was at an all time high whereas in 2019 when the US was the worlds largest crude exporter and gas was say $2.50, world usage was at an all time low?

I understand crude being global to a degree, but one can’t help but wonder if it’s pumped, refined, and distributed here that it would be cheaper at the pump than if it was done elsewhere.

It's been explained several times it does not matter where it's pumped, refined and distributed. Here's the thing, US-based oil companies don't give two ****s about giving you cheap gas and they will sell to the highest bidder on the world market regardless of where it's produced.

 

[dlundblad]

“It’s been explained before” is so credible.

I need to start reading the news, world economics etc. on this site. What have I been doing my whole life.

 

[PWMDMD]

You just just took it to the next level by making it political with no actual explanation.

That is as general a statement as I can make and still make the point.

 

[PWMDMD]

“It’s been explained before” is so credible.

I need to start reading the news, world economics etc. on this site. What have I been doing my whole life.

Apparently not paying attention to how the world works and I don't have time to explain it all to you in simple terms so here's the short version. There are a lot of factors that are resulting in increased gas prices - the spike in gas prices started in July of 2020 as things opened up and we are only $0.31 higher right now compared to May 2019. Even with OPEC nations not budging on production gas prices are not really up all that much - you can't compare now to April 2020 because that price was artificially low due to CV-19 shutdowns and a glut of oil.

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPM0_PTE_NUS_DPG&f=W

 

[javacontour]

Don’t hold your breath waiting for them to run out.

You don’t get the energy market. When it comes to energy the US is not in a great position at the bargaining table.

ETA: OPEC has more and it’s cheaper for them to produce.

Oh I get it. As I said if they can produce cheaper, we would be fools to spend our own money.

OPEC controls supply to the extent they can keep their members in line and not cheating on the production targets.

 

[alarmguy]

Nobody’s even mentioned houses. I don’t see how middle class survives with the current housing prices. Unless you owned a home 2yrs ago (and yours went up accordingly) you’ve been absolutely left in the dust.

Houses are priced on what the public can afford, if houses weren't they would not sell and prices would go down. Homes are selling like crazy because people can afford to buy them and once the economy gets back to pre-covid times more inventory will be available and we all know, more inventory of ANYTHING creates more stable and lower prices on ANY product.
Im sure everyone knows by now, inventory is low on EVERYTHING, homes are no different and why would anyone expect them to be?

No one has been left in the dust and it's such a tiring thing to hear. If someone can't afford to buy something, they need to look in the mirror and figure it out instead of waiting for others to fix it for them.

 

[PWMDMD]

Houses are priced on what the public can afford, if houses weren't they would not sell and prices would go down. Homes are selling like crazy and once the economy get back to pre-covid times more inventory will be available.
Im sure everyone knows by now, inventory is low on EVERYTHING, homes no different.
No one has been left in the dust.

Home prices here are being driven (above and beyond low-interest rates) by people who previously needed frequent access to a particular area (usually Boston) for work, they were paying a premium for housing there, but they are now 100% remote for the foreseeable future and they can get a lot more house 60-90mins outside Boston. Even buying at the top of the range for my town these people see these $500-750K houses as a steal because the same house would've been $2M-3M closer to Boston. They're coming in all cash, 20-30% over asking with no inspections because they're going to gut the house anyway.

When I bought in 2015 I paid $415K for a house that sat on the market for months because according to my real estate agent, "Few have that kind of money around here." The average home price in town was around $250K. My house was appraised a few months ago for a refi at $700K and the average sale price here is now $475K. All that in 6 years...

It's also impossible to find a contractor for anything here as everyone is remodeling their homes.

 

[thastinger]

Where will we feel this the most?

My buddy farms 8K acres, he says soy beans are bringing 14 a bushel this year and they peaked at 8 last year.

 

[alarmguy]

Home prices here are being driven (above and beyond low-interest rates) by people who previously needed frequent access to a particular area (usually Boston) for work, they were paying a premium for housing there, but they are now 100% remote for the foreseeable future and they can get a lot more house 60-90mins outside Boston. Even buying at the top of the range for my town these people see these $500-750K houses as a steal because the same house would've been $2M-3M closer to Boston. They're coming in all cash, 20-30% over asking with no inspections because they're going to gut the house anyway.

When I bought in 2015 I paid $415K for a house that sat on the market for months because according to my real estate agent, "Few have that kind of money around here." The average home price in town was around $250K. My house was appraised a few months ago for a refi at $700K and the average sale price here is now $475K. All that in 6 years...

It's also impossible to find a contractor for anything here as everyone is remodeling their homes.

Agree, it all goes back to my post, whatever the public can afford. Before moving South I come from an area in the Northeast that is just like your area on Long Island. I also had a very successful real estate practice up there and that is an understatement.

For decades and DECADES its been the same old story but I still say my same old line, its what the public can afford and if you cant, then go elsewhere or figure out why you can't as well as what you spend your money on.

IN todays society though everyone is a victim, with the internet, mass media that is really just a sitcom now as well as twitter, FB and all of social media everyone is just a poor old victim of greed. *LOL* ... its laughable, its supply and demand and why I say those people need to look in the mirror.

Here is an example, I will not say how many decades ago *LOL* ... my first house, just married, no kids... looking for a home in a GREAT town, one of which I grew up in, same deal, tight market, no inventory, super great real estate agent taking us around looking at homes, feeling so sorry for us and told us, she feels so bad for young people, how on earth can they buy a home that is affordable and doesn't need work anymore...

*LOL* can you imagine if they had social media back then??????? !!!!!
That house was $156,000 instead we bought a home for 141,000 ... cheapest decent we could find.
You would be lucky to find that 156 home for under $700,000 now and the 141 home under $500,000

Its the same old story and why I say over and over, the same old line, its what the public can afford. There isnt some magical holy grail to change any of it, if you cant afford it, look in the mirror because there is always an excuse. Life has never, ever been more easy for young people but many are way to spoiled compared to the rest of the world and mass media just sucks them in for the advertising revenue..

 

[PWMDMD]

Agree, it all goes back to my post, whatever the public can afford. Before moving South I come from an area in the Northeast that is just like your area on Long Island. I also had a very successful real estate practice up there and that is an understatement.

For decades and DECADES its been the same old story but I still say my same old line, its what the public can afford and if you cant, then go elsewhere or figure out why you can't as well as what you spend your money on.

IN todays society though everyone is a victim, with the internet, mass media that is really just a sitcom now as well as twitter, FB and all of social media everyone is just a poor old victim of greed. *LOL* ... its laughable, its supply and demand and why I say those people need to look in the mirror.

Here is an example, I will not say how many decades ago *LOL* ... my first house, just married, no kids... looking for a home in a GREAT town, one of which I grew up in, same deal, tight market, no inventory, super great real estate agent taking us around looking at homes, feeling so sorry for us and told us, she feels so bad for young people, how on earth can they buy a home that is affordable and doesn't need work anymore...

*LOL* can you imagine if they had social media back then??????? !!!!!
That house was $156,000 instead we bought a home for 141,000 ... cheapest decent we could find.
You would be lucky to find that 156 home for under $700,000 now and the 141 home under $500,000

Its the same old story and why I say over and over, the same old line, its what the public can afford. There isnt some magical holy grail to change any of it, if you cant afford it, look in the mirror because there is always an excuse. Life has never, ever been more easy for young people but many are way to spoiled compared to the rest of the world and mass media just sucks them in for the advertising revenue..

Yup...everyone's a victim these days and nothing is actually their own doing. For the past 25 years of my adult life all I've heard, regardless of the political situation in the US, is incessant bitching and moaning by those who feel "left out" or more is owed to them or less is owned to someone else. The truth is my life has been fantastic under Clinton, Bush, Obama, Trump, and it's still going really well under Biden. It's not that I'm not sympathetic to other people's situations but the past 25 years have been the same for just about everyone I know - family and friends - and so there is a way to navigate through this world, get out ahead, and not be a victim. My life is the way it is by design...I made it this way. If most of the people I know can do it, so can other people, but it's easier to play the victim.

Taxes go up and taxes go down. The price of gas goes up and the price of gas goes down. Presidents come and go. In the end, it really doesn't matter all that much to me as my happy little life goes on. All the crap people are focused on that they believe will forever change and improve their lives - who's in the White House, particualr policy decisions that get endlessly implemented and rolled back, etc, etc, etc are mostly nonsense meanwhile those of us with a clue do well no matter what.

 

[Rmay635703]

Houses are priced on what the public can afford, if houses weren't they would not sell and prices would go down. Homes are selling like crazy because people can afford to buy them

No one has been left in the dust and it's such a tiring thing to hear. If someone can't afford to buy something, they need to look in the mirror and figure it out instead of waiting for others to fix it for them.

False as alluded to by PWM housing prices are being globalized now more than ever

Some f head foreigner or company can buy tracts of homes they don’t occupy and leave them rot. Which is illegal everywhere but the us.
.
Further until literally last month almost no houses were selling the couple that did were just very expensive because of no supply. Housing is finally starting to soften with asking prices dropping due to more supply.

My area has a mode income of $23,000, this area simply does not support more than that but everything was affordable so it didn’t matter.
now there are delusional ideots coming from areas with mode incomes In the quarter million plus region fing up home prices and driving llocal labor shortages making common repairs cost more.

Gentrification on steroids helps only a few people the rest suffer

Our tourist regions like Door County have severe labor shortages because the people that would work in the entire county can’t afford to live close enough to work there.
Eventually those visiting won’t be able to get meals or fuel or service because no one is there to run anything and they are almost there, most of the restaurants don’t really accept reservations and have 2-4 hour waits, math says that won’t work
Ditto on something as stupid as groceries or fuel, if you can find a place selling it’s got a lineup like the 70’s fuel crisis
Those who go can expect poor or non-existant service and will have to pack in extra supplies to sit at their resort in case the shelves are bare and yes the handful of gas stations have ran out of fuel several times this year and operate reduced hours. Delivery? Forget about it, all blacked out or not available.
Door January room reservations at a $65 hotel are now $250 ,

Millions of Remote working millionaires living in small town USA make everything better right?

 

[krismoriah72]

The $1000 that my dad saved and stashed in 1970 would have bought him 23 ounces of Gold. Now worth $42,000

The $1000 that my dad saved and stashed and gave to me will buy me .55 oz of gold now. Now worth $1000.


If i would have bought $1000 in gold at my first job in 1995 I could have bought 3 oz. Now worth $5000.


Inflation sucks for those that save cash.

Inflation is great for those that buy gold.

 

[PWMDMD]

False as alluded to by PWM housing prices are being globalized now more than ever

Some f head foreigner or company can buy tracts of homes they don’t occupy and leave them rot. Which is illegal everywhere but the us.
.
Further until literally last month almost no houses were selling the couple that did were just very expensive because of no supply. Housing is finally starting to soften with asking prices dropping due to more supply.

My area has a mode income of $23,000, this area simply does not support more than that but everything was affordable so it didn’t matter.
now there are delusional ideots coming from areas with mode incomes In the quarter million plus region fing up home prices and driving llocal labor shortages making common repairs cost more.

Gentrification on steroids helps only a few people the rest suffer

Our tourist regions like Door County have severe labor shortages because the people that would work in the entire county can’t afford to live close enough to work there.
Eventually those visiting won’t be able to get meals or fuel or service because no one is there to run anything and they are almost there, most of the restaurants don’t really accept reservations and have 2-4 hour waits, math says that won’t work
Ditto on something as stupid as groceries or fuel, if you can find a place selling it’s got a lineup like the 70’s fuel crisis
Those who go can expect poor or non-existant service and will have to pack in extra supplies to sit at their resort in case the shelves are bare and yes the handful of gas stations have ran out of fuel several times this year and operate reduced hours.
Door January room reservations at a $65 hotel are now $250 ,

Millions of Remote working millionaires living in small town USA make everything better right?

I see no evidence of foreign investors in town as 95% of the houses here are owner-occupied and only 5% for rent. As for gentrification, I've been part of that multiple times in my life. I find it interesting that it's usually presented as if it's a coherent sinister plot when in reality I was just someone who bought one of the nicer houses in a town because it was close to where I worked.

 

[mark pruett]

There's a lot of economic ignorance going on in this thread, and it's kind of painful.

First, inflation isn't necessarily bad. A certain low and stable level (about .7-2%) is actually a GOOD thing, in that people spend money and don't hoard it like they would in periods of high inflation or significant uncertainty, and it's absolutely better than deflation (the opposite of inflation), as that signifies economic contraction and reductions in spending, which are both very bad for the economy in a longer-term sense.

What IS bad about inflation is when it's not stable, and/or when it's very high. That means people and companies are hesitant (or unable) to spend, people are hesitant to invest, etc... all of which are terrible for the economy. It's also bad when wages don't keep pace, as inflation essentially erodes your disposable income, which is what drives most spending.

Remember, spending is essentially the fuel of the economy, and the more stable and predictable that is, the better the economy does.

Second, consumer price increases do not necessarily mean inflation. The pandemic and the responses to it have caused persistent and pervasive supply chain and manufacturing issues. This doesn't necessarily have anything to do with inflation directly. For example, computer GPUs have gone crazy in price, due to higher than usual demand as well as production and supply chain issues. If you can find one, it's liable to cost you 3x or more what the list price was. That has ZERO to do with inflation, and everything to do with supply and demand.

Right now, these supply chain issues are causing weird price spikes and fluctuations in all sorts of industries and shortages of certain consumer products, etc... Supply and demand.

I'm not saying inflation isn't happening, but the evidence isn't in the price raises we've been seeing; that is absolutely supply chain issues at the moment. Inflationary price raises would be across the board, not specific to certain industries/products. And a lot of what inflation we're seeing is more than likely due to Fed actions to keep interest rates low and keep the economy going. In a sense, you can't have it both ways; we could have low inflation, but we'd probably have a lot of other economic woes going on.

 

[40w8]

I'm old enough to remember the US causing inflation approx 1968 to fight that Military Industrial complex war. On TV there was a repetitive free Ad council ad that told us inflation was caused by Piggy People! What nerve! I was teenager and knew they were blowing smoke. By approx 73 or so Nixon FROZE wages like that did any good. By Carter, people with savings were getting 10% on CD's, and us regular people were paying 16% interest on a business. Once the $ is ruined, inflation is very hard to stop.

 

[FordMan59]

That's what happens when you're printing money as fast as the printing presses will run. I never understood all the extra hundreds of dollars being added to unemployment. As long as there have been jobs there has been unemployment. I've been there a few times in my life but I was never getting more money in unemployment than I could make working my full time job and that's the case with lots of people now thus the reason there are jobs everywhere. This is the kind of thing that happens when 1/2 the nation is relying on the government to print money to take care of them.

 

[PandaBear]

I'm old enough to remember the US causing inflation approx 1968 to fight that Military Industrial complex war. On TV there was a repetitive free Ad council ad that told us inflation was caused by Piggy People! What nerve! I was teenager and knew they were blowing smoke. By approx 73 or so Nixon FROZE wages like that did any good. By Carter, people with savings were getting 10% on CD's, and us regular people were paying 16% interest on a business. Once the $ is ruined, inflation is very hard to stop.

War related debt and spending is the common major cause of how most ancient empires collapsed.

 

[PimTac]

People want and expect life to be a certain way for them. Unfortunately that never pans out whether it’s a National economic policy or a personal change like a health issue. People have to learn to adapt to their situations.

You can spend money eating out or eat at home. You can eat ribeye steak or in my case for supper a nice split pea soup. Split peas are $1.49 a pound at the store we shop at. Throw some bacon ends and pieces and onion into that and you have meals for a few days.

Adapt.