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The problem isn't inflation. It's prices. What goes up may not come down

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Re: The problem isn't inflation. It's prices. What goes up may not come down

#61

Post by Aunche »

rzimmerman wrote: post #9
blitzar wrote: post #6

That people do not understand very basic concepts is scary. > The root of what’s going on here can feel obvious: blame inflation, which picked up in mid-2021 and throughout 2022. But that isn’t really the issue anymore, at least not at the current rate, because inflation is coming down. The actual problem here is prices. Inflation going from 10% to 5% is "inflation is coming down" - but it means that prices are risin…

It’s really disheartening to see the percentage of people that don’t understand this (and feel perfectly comfortable having an argument about it). People posting comparisons of receipts from 8 years ago and saying that prices are “really still up 30%” and “they’re lying to us”.

It's very easy to have selection bias. For example, your favorite restaurant might have been cheap when it was under the radar, but then they rose their prices by 30% after they went viral.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#62

Post by mattgreenrocks »

throw0101a wrote: post #58
mattgreenrocks wrote: post #45

Earlier quoted context omitted.

From my POV it feels like every near-essential good has slow but steady inflationary effect and everyone just sort of accepts it: * health care * housing * cars * food It's hard not to feel like these markets each manifest a collective behavior of, "we know we're essential, so we are free to set prices as we wish because you have no real alternatives." It benefits all the players to play along, you don't even need to…

> housing Were you not around in the US (and many other places) in 2008-10? Prices can definitely fall.

For sure! Definitely the exception rather than the norm. Wished I'd bought then, but was in no position to do so.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#63

Post by sokoloff »

piva00 wrote: post #57
sokoloff wrote: post #32

Earlier quoted context omitted.

In any inflationary environment, corporate profits should be expected to regularly break records (in nominal terms) just like GDP should be expected to regularly break records.

Break nominal records, yes, not to break record margins .

Corporate profit margins are in the range which has been typical since the recovery from the 2007 GFC.

https://www.gurufocus.com/economic_indicators/62/corporate-p...

They're not currently breaking records and they jumped into this range during a period of notoriously low inflation (by historical and absolute measures).

Re: The problem isn't inflation. It's prices. What goes up may not come down

#64

Post by sonicanatidae »

blitzar wrote: post #6

That people do not understand very basic concepts is scary. > The root of what’s going on here can feel obvious: blame inflation, which picked up in mid-2021 and throughout 2022. But that isn’t really the issue anymore, at least not at the current rate, because inflation is coming down. The actual problem here is prices. Inflation going from 10% to 5% is "inflation is coming down" - but it means that prices are risin…

There's also the problem of everyone still waiting for shipping carriers like UPS, FEDEX, etc. to lower the price increase from a fuel spike, a decade ago.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#65

Post by colejohnson66 »

wredue wrote: post #25
amanaplanacanal wrote: post #19

Earlier quoted context omitted.

Is this just young people? Those of us that lived through the 70s and 80s remember very well how this stuff worked.

Let me assure you that people not understanding extremely basic economics come from all walks of life. In fact, I was just listening to a random, she must’ve been 60 year old woman and her mother in a waiting room rant about “how is prices going up with inflation going down”. I’ve been working for 20 odd years now and still have coworkers who started the day I did rant “these fucking forced union wage increases! Don’…

The misconception of tax brackets is also frustrating. Tax brackets are marginal. If a tax bracket cutoff is, say, 10% at 100k, and you cross it to 110k, only 10k is taxed at 10%. The other 100k is taxed as before.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#66

Post by AnimalMuppet »

Izkata wrote: post #44
amanaplanacanal wrote: post #19

Earlier quoted context omitted.

Is this just young people? Those of us that lived through the 70s and 80s remember very well how this stuff worked.

The last 3.5 years have also screwed with peoples' sense of time, it's really common to see measures that normally get compared year-to-year instead get compared to 2019.

Yes. But in fairness, inflation was basically zero for a decade before that. So it's kind of "since inflation (re)started", which makes a kind of sense, even though it's hard to compare to all the reported figures, which are annual.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#68

Post by cy_hauser »

charcircuit wrote: post #41
erellsworth wrote: post #22

Earlier quoted context omitted.

In a perfectly competitive market, yes, profits go to zero. https://www.investopedia.com/ask/answers/031815/why-are-ther... But there's no such thing as a perfectly competitive market.

Why would someone bother selling something if there was no profit to be made?

To spin the wheels. People still get paid and the economy keeps humming along. No profit doesn't mean people aren't making money, just that the company isn't making excess money.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#69

Post by cpr »

The problem is utterly simple.

If you print dollars (created out of nothing), the value of each dollar goes down, since nothing of value has been created or destroyed. You have more dollars chasing the same value.

But of course the official narrative has to shield the Fed from criticism, so they can run the dollar machine with impunity.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#70

Post by [deleted] »

cy_hauser wrote: post #68
charcircuit wrote: post #41

Earlier quoted context omitted.

Why would someone bother selling something if there was no profit to be made?

To spin the wheels. People still get paid and the economy keeps humming along. No profit doesn't mean people aren't making money, just that the company isn't making excess money.

[deleted]
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