# Is High Inflation Back?



## JonDouglas (May 31, 2021)

According to the folks at the Mises Institute, it is.  From their article entitled  *The Worst-Kept Secret in America: High Inflation Is Back*:

_To most people, “inflation” signifies widespread rising prices. Economists have long argued, as a matter of technical accuracy, that “inflation” denotes an increasing money supply. Frankly, though, most people don’t care what happens to the supply of money, but they care a lot about the prices they pay, so I’ll focus primarily on the numerous rapidly rising prices Americans are paying today._​​_Following are several examples of the current inflation:  Corn, soybeans, and wheat have been trading at multi-year highs, with corn having risen from around $3.80 per bushel in January 2020 to approximately $6.75 now. Chicken wings are at all-time record highs. It is getting more expensive to eat._​​_Copper prices have risen to an all-time high. Steel, too, recently traded at prices 35% above the previous all-time set in 2008. Perhaps most famously, the price of lumber has nearly quadrupled since the beginning of 2020 and has nearly doubled just since January. Naturally, with raw materials prices soaring, prices of manufactured goods are jumping, too. That is especially noticeable in the housing market, where the median price of existing homes rose to $329,100 in March—a whopping 17.2% increase from a year earlier._​​_The cost of driving is soaring, too. According to J.D. Power, cited in The Wall Street Journal, the average used car price has risen 16.7% and new car prices have risen 9.6% since January._​​_- - - - - [snip] - - - -_​​_Hang on tight, folks. We could be in for a rough ride in the months ahead._​
More at Source.​
This is NOT something we need right after the covid-crap the country stepped in.


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## Murrmurr (May 31, 2021)

The covid crap ensures long-term inflation, imo.


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## Gaer (May 31, 2021)

Well put!  Jon, This is only one aspect of the adversity which will occur in the next few years.  
"Tighten your seat belt!  It's going to be a bumpy ride!"


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## OneEyedDiva (May 31, 2021)

_"This is NOT something we need right after the covid-crap the country stepped in." _You've got *that* right. Hopefully people can get back to work and find clever ways to lower their expenses. I know people who say they don't have enough money to last the month but they eat out a lot and pay high cable bills. Cutting back on those two things alone would result in significant savings. Cutting back on eating meat is another budget saver.  It's about lowering costs on the things people have control over because with some things they will not have control.


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## JonDouglas (May 31, 2021)

The lockdown was, IMO, a huge mistake that created unnecessary economic, social, financial and mental hardship.  Below are some thoughts from the *Cincinnati Inquirer* on the subject

_When the lockdowns began in March 2020, we were all acutely aware of the serious medical threat that the COVID-19 pandemic posed. Some warned of the equally painful economic and social impact of overly aggressive response measures. We now know the pandemic allowed some elected officials to grab, for themselves, unthinkable power. However, we also now know the devastating effects of that response._​​_Teen depression skyrocketed, drug overdoses climbed sharply, schools were closed (leading to more screen time for kids with very little learning), small businesses were devastated (especially Black and Hispanic-owned businesses), some of which may never recover or rebuild._​​_In 2020, we took a high-powered sports car – the American economy – and shut down the engine as we were heading into a 90-degree turn at full speed. Not surprisingly, it ran off the track and took American workers with it. Unfortunately, the lessons about the need for good public policy have not been learned._​


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## Keesha (May 31, 2021)

I disagree. Lockdowns proved to isolate the virus and greatly reduce deaths and keep people out of hospital. This province has been in lockdown for a month and has reduced the number of infections by about 80%


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## JonDouglas (May 31, 2021)

Keesha said:


> I disagree. Lockdowns proved to isolate the virus and greatly reduce deaths and keep people out of hospital. This province has been in lockdown for a month and has reduced the number of infections by about 80%


According to the stats I've seen, some 80% or more of the people were never going to have much of a problem and, thus, didn't need to be locked down.  The best approach, IMO, would have been to quarantine the sick and those at risk, not the healthy majority.  Oh, and by the way, how did the lockdown work out for states that did it versus those that didn't?  Also, what about the news that covid exposure increased immune antibodies?  Finally, many reports fail to take into account how the CDC kept changing the testing and counting rules.


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## Don M. (May 31, 2021)

There is a potential Upside to the increasing inflation....Seniors may see an increase in their SS COLA, in 2022....perhaps as much as 3%.  By this time, next year, that may be enough to buy a loaf of bread.  

It's time to end these stimulus and unemployment payments, and encourage the jobless to take advantage of the Help Wanted signs that are everywhere.


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## Keesha (May 31, 2021)

JonDouglas said:


> According to the stats I've seen, some 80% or more of the people were never going to have much of a problem and, thus, didn't need to be locked down.  The best approach, IMO, would have been to quarantine the sick and those at risk, not the healthy majority.


There very well could be 90% of people here who don’t need to isolate but even healthy people who might not ever get this can be carriers . If they are carriers then they can unknowingly affect others. Those others might not know they are infected until they have severe symptoms so they may have infected 20 people.

This is why isolating  ‘everyone’ works.
This method only works if everyone has the same concern for others as they do for themselves.


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## Aunt Marg (May 31, 2021)

JonDouglas said:


> According to the folks at the Mises Institute, it is.  From their article entitled  *The Worst-Kept Secret in America: High Inflation Is Back*:
> 
> _To most people, “inflation” signifies widespread rising prices. Economists have long argued, as a matter of technical accuracy, that “inflation” denotes an increasing money supply. Frankly, though, most people don’t care what happens to the supply of money, but they care a lot about the prices they pay, so I’ll focus primarily on the numerous rapidly rising prices Americans are paying today._​​_Following are several examples of the current inflation:  Corn, soybeans, and wheat have been trading at multi-year highs, with corn having risen from around $3.80 per bushel in January 2020 to approximately $6.75 now. Chicken wings are at all-time record highs. It is getting more expensive to eat._​​_Copper prices have risen to an all-time high. Steel, too, recently traded at prices 35% above the previous all-time set in 2008. Perhaps most famously, the price of lumber has nearly quadrupled since the beginning of 2020 and has nearly doubled just since January. Naturally, with raw materials prices soaring, prices of manufactured goods are jumping, too. That is especially noticeable in the housing market, where the median price of existing homes rose to $329,100 in March—a whopping 17.2% increase from a year earlier._​​_The cost of driving is soaring, too. According to J.D. Power, cited in The Wall Street Journal, the average used car price has risen 16.7% and new car prices have risen 9.6% since January._​​_- - - - - [snip] - - - -_​​_Hang on tight, folks. We could be in for a rough ride in the months ahead._​
> More at Source.​
> This is NOT something we need right after the covid-crap the country stepped in.


I knew it was coming.


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## JonDouglas (May 31, 2021)

Keesha said:


> There very well could be 90% of people here who don’t need to isolate but even healthy people who might not ever get this can be carriers . If they are carriers then they can unknowingly affect others. Those others might not know they are infected until they have severe symptoms so they may have infected 20 people.
> 
> *This is why isolated ‘everyone’ works.*
> This method only works if everyone has the same concern for others as they do for themselves.


Except for the problem that it didn't work.


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## Keesha (May 31, 2021)

JonDouglas said:


> Except for the problem that it didn't work.


It did here! A month ago there were only a few cases here but it quickly went to 75 new cases in one day so they quickly shut the borders down. If you did travel here from other provinces you had to quarantine for 2 full weeks which we did since we just moved here. They had a shut down where people could only shop for essentials. Yesterday there were 20 new cases. The cases went down every single day by using the methods they have been using.


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## JonDouglas (May 31, 2021)

*How To Know When Inflation Is Here To Stay*:   That's the title of the following WSJ article, with snippet below.

_Inflation is here already, and in the long run there is a lot of upward pressure on prices. But between now and then lies a big question for investors and the economy: Is the Federal Reserve right to think that the price rises we’re seeing now are temporary and will abate by next year?_​​_Some at the Fed are already having vague doubts, starting to talk about when to discuss removing some of their extraordinary stimulus even as they continue to push the idea that inflation is likely to fall back of its own accord._​​_The argument that inflation is temporary is simple. Consumer demand has been boosted massively by stimulus and the reopening release of pent-up demand. Supply is unable to keep up thanks to inventories and capabilities run down when demand collapsed during lockdown, workers unwilling to return to work and the overhang of Covid-19 restrictions on production. As a result, there are some extraordinary price ramps in narrow areas, such as used cars, that are pushing up headline numbers. The resulting price rises will abate once spare cash is spent and business is back to normal._​​More at Source: WSJ​
It may be helpful to remember that, to be practical, there are two economies - main street and wall street - and that the WSJ can have more of a wall street view.  Such would seem to be the case here when the article makes the statement, "Consumers came out of lockdown flush with cash", which may not be the case for senior retirees.


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## squatting dog (May 31, 2021)

Don M. said:


> There is a potential Upside to the increasing inflation....Seniors may see an increase in their SS COLA, in 2022....perhaps as much as 3%.  By this time, next year, that may be enough to buy a loaf of bread.
> 
> It's time to end these stimulus and unemployment payments, and encourage the jobless to take advantage of the Help Wanted signs that are everywhere.


Don't worry, if it follows past trends, the price of part B will increase too and you'll have a net gain of 3-4 dollars a month.


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## Packerjohn (May 31, 2021)

Keesha said:


> I disagree. Lockdowns proved to isolate the virus and greatly reduce deaths and keep people out of hospital. This province has been in lockdown for a month and has reduced the number of infections by about 80%


For a month you say, you lucky devil!  My province has been locked down since November, 2020; that makes it 7 months and the "great" leaders we have here just keep extending the dates.  Everyone else is talking about opening up plans but not us.  The "great" leaders are still telling us to stay home and do everything "virtually."  They must own stocks in those internet companies?  All festivals have been cancelled.  Walking trials in parks have been closed.  Feels like a concentration camp life here!


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## Keesha (May 31, 2021)

Packerjohn said:


> For a month you say, you lucky devil!  My province has been locked down since November, 2020; that makes it 7 months and the "great" leaders we have here just keep extending the dates.  Everyone else is talking about opening up plans but not us.  The "great" leaders are still telling us to stay home and do everything "virtually."  They must own stocks in those internet companies?  All festivals have been cancelled.  Walking trials in parks have been closed.  Feels like a concentration camp life here!


Well I ‘was’ in a province like that but we moved last month just before they closed the borders. My husband worked in a high risk area so we made a plan to retire early and don’t regret it any. Except maybe missing my bath. 

I’m really sorry you are feeling so restricted. It’s a serious illness no doubt and I respect the efforts taken to curb / control this .


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## mathjak107 (Jun 1, 2021)

Most of what we are seeing in price increases are temporary supply chain shortages ….

when you consider we had near zero inflation for a while this is really not much ….

longer term deflation may be the bigger problem


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## Liberty (Jun 1, 2021)

Wonder if a total bond fund will help take the edge off any downturn in this kind of market.


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## mathjak107 (Jun 1, 2021)

Liberty said:


> Wonder if a total bond fund will help take the edge off any downturn in this kind of market.


If we have inflation then bond funds will do bad …if we have deflation , long term treasuries or funds like Tlt or vglt are the place to be


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## squatting dog (Jun 1, 2021)

mathjak107 said:


> Most of what we are seeing in price increases are temporary supply chain shortages ….



So... when I can have all the 7/16th OSB I want as long as I pay $90 a sheet instead of the $8.75 I payed last year, that is a temporary supply chain issue?
I think not. What you are seeing is GREED, plain and simple. Anyone with even a working brain stem knows that if you create an artificial shortage, you can and will increase the price. 
Also, isn't it strange that during this whole pandemic thing, every sawmill around these parts has been going balls to the walls. Kind of makes you wonder where all this lumber they produced ended up.


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## Lara (Jun 1, 2021)

Here's an interesting article from Forbes dated a year ago explaining both sides of the coin for whether we are going to have inflation or deflation. They said of the two sides the majority agreed with deflation happening. Well, so far they're wrong about that, but does deflation still have a chance? If so, when?
https://www.forbes.com/sites/invest...n-the-post-coronavirus-world/?sh=4b6bdf6b6f18


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## Don M. (Jun 1, 2021)

Same Price for Less.   As a means of "masking" inflation, manufacturers and stores are starting to produce/sell consumer items in smaller quantities and packages...for the "previous" prices.  Items that used to sell by a "pound" are now selling at the previous price....but now, for 12 ounces.  The end result is that consumers will see their final costs rising by 20%, or more.   

yahoo.com/news/one-way-companies-concealing-higher-104326057.html


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## mathjak107 (Jun 2, 2021)

Don M. said:


> Same Price for Less.   As a means of "masking" inflation, manufacturers and stores are starting to produce/sell consumer items in smaller quantities and packages...for the "previous" prices.  Items that used to sell by a "pound" are now selling at the previous price....but now, for 12 ounces.  The end result is that consumers will see their final costs rising by 20%, or more.
> 
> yahoo.com/news/one-way-companies-concealing-higher-104326057.html


That is accounted for in the CPI changes


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## Liberty (Jun 2, 2021)

We just had a new water pump put in a couple of weeks ago...great company who we've used for years.  They pulled out the paperwork and noted that this pump had lasted over 19 years...great mileage of course.  The well had cost us $1350. in 2001...this new pump cost us $2650.  Don't know about you, but I call that "inflation".  Look at the prices of homes and cars and anything you get done on your house or replace when needed if you want to see inflation.  Its all around us and is here to stay.


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## Liberty (Jun 2, 2021)

mathjak107 said:


> If we have inflation then bond funds will do bad …if we have deflation , long term treasuries or funds like Tlt or vglt are the place to be


Wonder if bond funds are even worth it period. Short term ones, maybe...and that's a big maybe.


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## JonDouglas (Jun 2, 2021)

One of the hedges for people with money is real estate, which may be the reason we're seeing such a building boom and increasing real estate prices.  This, in turn, pushes up the demand (and price) of related goods and services.  Don't know if I am right on this or not but it's my hypothesis at the moment.


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## Don M. (Jun 2, 2021)

mathjak107 said:


> That is accounted for in the CPI changes


It appears that the "official" CPI numbers do NOT reflect the costs that the average person faces.


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## Liberty (Jun 2, 2021)

Don M. said:


> It appears that the "official" CPI numbers do NOT reflect the costs that the average person faces.


You got that right Don...surely not for most folks.  Think we all know that pesky inflation is "always"  clawing at the door.


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## Liberty (Jun 2, 2021)

JonDouglas said:


> One of the hedges for people with money is real estate, which may be the reason we're seeing such a building boom and increasing real estate prices.  This, in turn, pushes up the demand (and price) of related goods and services.  Don't know if I am right on this or not but it's my hypothesis at the moment.


Hub is a Fire Commissioner...they are looking for land to build yet another fire station - they are in the process of building one right now, so this land will be for the future.  You won't believe what they are considering paying per sq. foot in this "country" area for land.  The biggest profits are from undeveloped to developed sold land.  We were fortunate to have benefited from this in the past, personally, also.


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## helenbacque (Jun 2, 2021)

"Except for the problem that it didn't work."

JonDouglas, and you know this how?  Can't prove a negative and no one truly knows what the death and disabled toll would be now had there not been.
Like Quote Reply


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## mathjak107 (Jun 2, 2021)

Don M. said:


> It appears that the "official" CPI numbers do NOT reflect the costs that the average person faces.


the CPI is not your personal cost of living index ….it only measures price changes in 80 ,000 goods and services , most of which you don’t use or buy ..

it compares the temperature of the 1500 mini economies that make up this country .

it has nothing to do with how many times you use or buy something , how you substitute or the quality of what you personally buy ..higher end goods see more of a price increase but may last longer


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## Don M. (Jun 2, 2021)

mathjak107 said:


> the CPI is not your personal cost of living index ….it only measures price changes in 80 ,000 goods and services , most of which you don’t use or buy ..it compares the temperature of the 1500 mini economies that make up this country .it has nothing to do with how many times you use or buy something , how you substitute or the quality of what you personally buy ..higher end goods see more of a price increase but may last longer



That's true....yet the SS COLA seem to be tied to this index....which is probably written by those who have little concern about things like grocery prices.  While we are lucky enough to not having to worry about minor increases in the cost of "staples", there are a lot of retirees who fall further behind every year due to rising costs.


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## mathjak107 (Jun 2, 2021)

There is no way to reflect anyone’s actual cost of living so colas are linked to a industry stand so to speak based on 1500 mini economies,some of which may see nothing like you do .

rents fell here in nyc by almost 20% and  for millions there were no increases at all ..that is very different hen other areas


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## Liberty (Jun 3, 2021)

mathjak107 said:


> There is no way to reflect anyone’s actual cost of living so colas are linked to a industry stand so to speak based on 1500 mini economies,some of which may see nothing like you do .
> 
> rents fell here in nyc by almost 20% and  for millions there were no increases at all ..that is very different hen other areas


Guess the rents went down there from the ridiculous to the "I can't believe it" price levels then...lol.


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## Liberty (Jun 3, 2021)

Think a lot of folks want to move away from the crowded urban areas to get more "space" both inside their homes and outside ...green grass even and just more distance between them and others if possible after enduring crowded covid living conditions for over a year.  Being cooped up and saving their money gave them a leg up to do it...to say nothing of the incredibly low interest rates.


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## mathjak107 (Jun 4, 2021)

Liberty said:


> Guess the rents went down there from the ridiculous to the "I can't believe it" price levels then...lol.


Remember , half of all rentals in nyc are stabilized …while all are not necessarily below market they are capped  by what the stabilization board  votes on so that is a good thing ..the rest of the open market has to stay competitive rent wise


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## JonDouglas (Jun 15, 2021)

Interesting article in* The Hustle *entitled  *Why is lumber so expensive right now?**.  *I know nothing about the source but the article was informative and mildly entertaining.


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## mathjak107 (Jun 15, 2021)

lumber has plunged 40% since its high


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## JonDouglas (Jun 15, 2021)

mathjak107 said:


> lumber has plunged 40% since its high


Source?


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## mathjak107 (Jun 15, 2021)

JonDouglas said:


> Source?


You can check any commodity price list but here you go

https://markets.businessinsider.com...00-plunged-since-may-record-2021-6-1030520545


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## JonDouglas (Jun 15, 2021)

mathjak107 said:


> You can check any commodity price list but here you go
> 
> https://markets.businessinsider.com...00-plunged-since-may-record-2021-6-1030520545


Thanks.  The takeaway for me was "*Prices are still up 175% over the past year, and experts say they could remain elevated from historic norms.*"


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## mathjak107 (Jun 15, 2021)

we went through loads of lumber because of the rioting , the wild fires , booming construction , plus loss of workers , plant shut downs and illness..we can see pent up demand for a while …but as you see when supplies adjust prices plunge. A lot of the price increases are supply chain issues and will self alleviate


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## Don M. (Jun 15, 2021)

I was at the local hardware store, this morning, and while there, I looked at the price of an ordinary 8 ft. 2X4....they wanted $8.29.  When I got home, I looked at the prices, online, at the nearest Lowe's....they want $8.79.  It's no wonder that the price of lumber is adding 10's of thousands of dollars to the price of new homes.  The last time I bought a 2X4, I doubt that I paid much more than a dollar.....about 6 or 7 years ago. 

This pandemic has turned the world upside down.


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## squatting dog (Jun 15, 2021)

Funny, (not really), there ain't no shortage if you got the money.   Our close by Home Depot.
Now I see 3" Chlorine tablets have soared in price. Bought 50 lb. bucket last summer for $95.00. SURPRISE... 50 lb. is now $300.00 and up and that's if you can find it. 
Folks, this is called runaway mega inflation. 

NOTICE THERE IS PLENTY OF SUPPLY. PRICE DROP???NOT!
$64.24 A SHEET.  HOME DEPOT 6/13/21
Common: 19/32 in. x 4 ft. x 8 ft., Actual: 0.578 in. x 47.75 in. x 95.75 in. Oriented Strand Board.
194 in stock
Aisle 58


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## oldmontana (Jun 15, 2021)

mathjak107 said:


> lumber has plunged 40% since its high


Prices are still up 175% over the past year


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## squatting dog (Jun 15, 2021)




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## mathjak107 (Jun 15, 2021)

oldmontana said:


> Prices are still up 175% over the past year


And look at car prices ..but they too will return to normal as supply of chips increases


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## John cycling (Jun 15, 2021)

Keesha said:


> Lockdowns proved to isolate the virus and greatly reduce deaths and keep people out of hospital.



That's total nonsense.  No virus has ever been isolated apart from uncontaminated genetic material, which is a requirement
to prove there's a virus.  Yet that has never been done, not for any of the imaginary make believe viruses, which therefore, don't exist.
Thus, no one has had nor died from a covid19 virus.  Many people died who were murdered in hospitals, but that has nothing to do with a virus.
Koch's Postulates <-- and the fake virus testing;
Refutation of the theory of viruses <-- which has been known from the very beginning;
Exosomes or viruses <-- which one of these actually makes any sense;
Vaccinations <-- where the current cases are coming from (plus the fake testing).


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## fmdog44 (Jun 15, 2021)

Paid $7 for one pound of ground chuck today.


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## Keesha (Jun 15, 2021)

John cycling said:


> That's total nonsense.  No virus has ever been isolated apart from uncontaminated genetic material, which is a requirement
> to prove there's a virus.  Yet that has never been done, not for any of the imaginary make believe viruses, which therefore, don't exist.
> Thus, no one has had nor died from a covid19 virus.  Many people died who were murdered in hospitals, but that has nothing to do with a virus.
> Koch's Postulates <-- and the fake virus testing;
> ...


… okay! ‍
I truly don’t care that much
…… yawn


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## Ladybj (Jun 15, 2021)

When did High Inflation ever leave?  It comes at different times in many disguises.  It hit you when you least expect.. jmo.


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## Don M. (Jun 15, 2021)

John cycling said:


> That's total nonsense.  No virus has ever been isolated apart from uncontaminated genetic material, which is a requirement
> to prove there's a virus.  Yet that has never been done, not for any of the imaginary make believe viruses, which therefore, don't exist.
> Thus, no one has had nor died from a covid19 virus.  Many people died who were murdered in hospitals, but that has nothing to do with a virus.
> Koch's Postulates <-- and the fake virus testing;
> ...



That's right....This entire global pandemic is the result of a Secret Agreement of All of the Nations leaders as a means of lowering the worlds population.


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## hollydolly (Jun 16, 2021)

_Alarm bells were sounded over inflation today as the headline rate surged above the Bank of England's target.

The CPI index hit 2.1 per cent in May, up from 1.5 per cent the previous month and above the official 2 per cent goal.

The jump was significantly above the expectations of analysts, who had forecast a 1.8 per cent level.

It comes amid increasing concern that the UK economy - along with the US - is overheating as it bounces back strongly from the pandemic. 

Last week America recorded consumer inflation at 5 per cent, the highest level since 2008, after Joe Biden's administration pushed through a massive stimulus package.

And today the US producer price index, which measures inflation pressure before it reaches shoppers, showed an annual level of 6.6 percent after the biggest monthly increase in a decade. 

Rising prices will heighten the pain for struggling families as restrictions continue to devastate whole sectors of the economy. However, they also pose a huge threat to the government, which is borrowing hundreds of billions of pounds during the crisis and could now face higher interest payments.   

https://www.dailymail.co.uk/news/ar...n-surges-2-1-rising-Bank-Englands-target.html_


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## mathjak107 (Jun 16, 2021)

John cycling said:


> That's total nonsense.  No virus has ever been isolated apart from uncontaminated genetic material, which is a requirement
> to prove there's a virus.  Yet that has never been done, not for any of the imaginary make believe viruses, which therefore, don't exist.
> Thus, no one has had nor died from a covid19 virus.  Many people died who were murdered in hospitals, but that has nothing to do with a virus.
> Koch's Postulates <-- and the fake virus testing;
> ...


Now there is  nomination  for the most ridiculous post here yet


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## mathjak107 (Jul 23, 2021)

so far bond funds have appreciated nicely ..rates are going lower and lower


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## Meanderer (Jul 23, 2021)




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## JonDouglas (Jul 23, 2021)

7/20 WSJ OpEd:  *Too Much Money Portends High Inflation*

_June’s inflation index jumped 5.4% from a year ago, the highest reading since August 2008. The experts were surprised. Clearly, Federal Reserve watchers never bothered to consult Milton Friedman. Lost is a core Friedman dictum: “Inflation is always and everywhere a monetary phenomenon.”_​​_In his Feb. 23 testimony to Congress, Fed Chairman Jerome Powell said that the growth in the money supply, specifically M2, “doesn’t really have important implications.” The experts, the press and the bond vigilantes were as quick to unlearn monetarism, if they ever had learned it, as Mr. Powell. Reporting about U.S. inflation rarely contains the words “money supply.” We are repeatedly told that the most recent upticks in inflation are anomalous and “transitory.”_​​_Wrong. The inflation upticks aren’t temporary and were predictable, driven by an extraordinary explosion in the money supply. Since March 2020, the M2 has been growing at an average annualized rate of 23.9%—the fastest since World War II. There is so much money out there that banks don’t know what to do with it. Via reverse repurchase agreements, banks and money-market funds are lending money to the Fed to the tune of $860 billion. *That’s unprecedented.*_​​More at source.​​I am thinking that anyone who's trying to tell you there is no inflation problem is either not paying attention or deliberately trying to blow smoke up your butt.   They might want to read _The Economist:  Will surprisingly high global inflation last?_


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## mathjak107 (Jul 24, 2021)

No inflation ?  I don’t think anyone said that at all ..we have a 2% inflation goal by the fed so it is built right into the economic plan always .

but these numbers are skewed ..the chip issue for cars accounted for fully one third of the increase in those numbers as new and used car prices soared .

we have supply chain issues in pretty much every as  we went from shut down to fully open .
we saw no real inflation last year so at the least 4% would get us caught up and on track for normal


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## Don M. (Jul 24, 2021)

mathjak107 said:


> but these numbers are skewed ..the chip issue for cars accounted for fully one third of the increase in those numbers as new and used car prices soared .
> 
> That seems to be quite true.  Locally, most car dealer lots are nearly empty, and some are even posting TV ads asking people to bring in any extra or seldom used cars for a nice chunk of cash from the dealer.  Many used cars are selling for as much, or more, as they did new.  Since cars and trucks account for a good share of the GDP, It's easy to see how this shortage is driving the inflation numbers up.


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## mathjak107 (Jul 25, 2021)

My son owns a car leasing and car selling company ..they typically have 300 cars on their lot . They have 30 ….

he is telling all his clients to hold off buying and they are extending out leases


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## mathjak107 (Jul 25, 2021)

We have seen commodities soar , like lumber , only to have the supply chain improve and plunge


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## Liberty (Jul 25, 2021)

There are tons of cars on the dealership lots in our burg...wonder why this part of Texas seems to be doing ok that way?!  Maybe they had them left over from prime covid times.  Think we have more cars that people...lol.


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## mathjak107 (Jul 26, 2021)

Likely left over . but then again I will bet the prices are off the hook as dealers with cars are getting off the wall prices above sticker ..so they just might not be selling


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## Liberty (Jul 26, 2021)

mathjak107 said:


> Likely left over . but then again I will bet the prices are off the hook as dealers with cars are getting off the wall prices above sticker ..so they just might not be selling


Just heard some dealers are making money from "defaults"...taking the cars back and reselling them is netting them a nice tidy sum now.  Most folks  I know have 3 cars - we do and its only 2 of us unless son visits...lol.

Of course a lot of the third autos are "classics" or toys, like Corvettes or Jeep pop tops.


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## Don M. (Jul 26, 2021)

Here's another minor "spike" to inflation...in coming months.  It appears that the weather in Brazil is damaging the Coffee crops, and coffee "futures" are climbing to record levels.  As much as my wife loves coffee, I guess we will be spending a bit more in the future...no big deal.  

https://www.bloomberg.com/news/arti...ain-on-renewed-risk-of-cold-weather-in-brazil


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## Don M. (Jul 26, 2021)

Liberty said:


> There are tons of cars on the dealership lots in our burg...wonder why this part of Texas seems to be doing ok that way?!  Maybe they had them left over from prime covid times.  Think we have more cars that people...lol.



Anyone buying a used car during these shortages....especially from a dealer who has lots of cars....would be wise to have the car inspected by a reputable mechanic, and research the vehicles VIN number.

This is the time of year when hundreds/thousands of flood damaged cars are cleaned up, and trucked across State lines to be sold to unsuspecting buyers....leaving them with a potential total loss within a year or two.


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## Liberty (Jul 26, 2021)

Don M. said:


> Anyone buying a used car during these shortages....especially from a dealer who has lots of cars....would be wise to have the car inspected by a reputable mechanic, and research the vehicles VIN number.
> 
> This is the time of year when hundreds/thousands of flood damaged cars are cleaned up, and trucked across State lines to be sold to unsuspecting buyers....leaving them with a potential total loss within a year or two.


Yep, Don...we used to call them "Harvey Cars"...lol.


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## Liberty (Jul 26, 2021)

Don M. said:


> Here's another minor "spike" to inflation...in coming months.  It appears that the weather in Brazil is damaging the Coffee crops, and coffee "futures" are climbing to record levels.  As much as my wife loves coffee, I guess we will be spending a bit more in the future...no big deal.
> 
> https://www.bloomberg.com/news/arti...ain-on-renewed-risk-of-cold-weather-in-brazil


Starbucks has supposedly bought up way in advance...spokesman said.  We'll see, huh!


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## mathjak107 (Jul 27, 2021)

Most companies that use large volumes of commodities  protect their pricing as well as dollar movements up or down via futures contracts..but that does not mean they don’t raise their prices as that commodities go up .

we were in the copper wire business and because of the wire inventory  it was protected via futures contracts ..but we certainly changed with the market


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## Liberty (Jul 27, 2021)

When we were in the food manufacturing, we charged according to the cost of ingredients plus our normal mark up.  Didn't gouge.  Sad that so many take advantage of overcharging.


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## mathjak107 (Jul 27, 2021)

When you lock in prices with future contracts you have to take the good with the bad …if prices fall and you are over paying as a manufacturer the fact is you lose money …so that is why manufacturers move with the markets as far as their pricing …when other manufacturers come down when prices fall you have to too ..if prices rise you still increase your prices regardless of cost .

this is business 101.

the best example of this is years ago I was in a small little general store upstate .

the women at the counter said to me you should buy some honey …she was selling it for 2.50 a jar ….she said it is a good deal since her next load will cost her 3 bucks .

I said tell you what ,give me every jar you have ..I will sell it back to you for 2.75 …I will make a quarter and you will save a quarter , we both win .

she couldn’t figure out why when she paid 2 bucks a jar she was actually a quarter poorer if we did this deal .

she couldn’t figure it out ..finally I explained to her , she needs to change with the market regardless of her cost ..if she doesn’t this is the end result because it is a three step process not two step.

you buy an item , you sell an item and you rebuy your stock ..it is that difference that is your profit .


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## oldmontana (Jul 27, 2021)

mathjak107 said:


> When you lock in prices with future contracts you have to take the good with the bad …if prices fall and you are over paying as a manufacturer the fact is you lose money …so that is why manufacturers move with the markets as far as their pricing …when other manufacturers come down when prices fall you have to too ..if prices rise you still increase your prices regardless of cost .
> 
> this is business 101.
> 
> ...


When a item you paid for costs $10 and you sell it for $15 you think you made $5.  But if it cost you $15 to replace it you have not.
Its called repacement costs.


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## mathjak107 (Jul 27, 2021)

exactly .

which is why resale prices on goods fluctuate even though costs may be locked in or paid for . no one is ripping consumers off as someone stated


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