[Steve_American]

The Lumber Bubble Has Burst! Here's What Happens Next...

Just like I, and many others, predicted, the price of raw lumber has returned to close to normal.
I understand that the peice of used cars has also fallen a lot.

Prof. Bill Mitchell says that for high inflation to continue there must be a "fair" fight between business owners and workers over wages. If the fight is unfair and workers can't keep demanding raises as inflation continues, inflation will not remain high. Today, this fight is very unfair, in the 70s and early 80s the fight was fair and so workers could demand and get raises, which then caused the owners to raise prices, which ... .

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[ckaihatsu]

(Everyone say 'lumber bubble' five times real fast out loud....) (grin)

[late]

Back when we had guys in a cold sweat over inflation, I posted quotes from guys like Krugman that most of this was just part of the rebound of an economy recovering, and therefore temporary.

There's some inflation cropping up beyond that, but Delta is likely to do a good job at curbing the new inflation.

I'm a lot more concerned about how Covid could further damage areas (and income levels) already under severe stress.

[JohnRawls]

The Lumber Bubble Has Burst! Here's What Happens Next...

Just like I, and many others, predicted, the price of raw lumber has returned to close to normal.
I understand that the peice of used cars has also fallen a lot.

Prof. Bill Mitchell says that for high inflation to continue there must be a "fair" fight between business owners and workers over wages. If the fight is unfair and workers can't keep demanding raises as inflation continues, inflation will not remain high. Today, this fight is very unfair, in the 70s and early 80s the fight was fair and so workers could demand and get raises, which then caused the owners to raise prices, which ... .

.

We are going to get hit by great recession 2.0 soon or at least the dot com bubble relatively soon by the looks of it.

The problem will stem from China collapsing to a large degree which it is in the process of. Currently the housing sector as a whole is nearing default or in default basically. Manufacturing is being hit hard by lockdowns, raising wages and higher than average raw material prices which makes a large chunk of Chinese construction and manufacturing unprofitable.

Once China goes under then the rest of the markets will panic and withdraw to the EU/US which should inflate shit again. I am not sure how much knock on effect Chinese collapse will have on Europe and US but I would assume big because it will further hamper supply.

[Steve_American]

We are going to get hit by great recession 2.0 soon or at least the dot com bubble relatively soon by the looks of it.

The problem will stem from China collapsing to a large degree which it is in the process of. Currently the housing sector as a whole is nearing default or in default basically. Manufacturing is being hit hard by lockdowns, raising wages and higher than average raw material prices which makes a large chunk of Chinese construction and manufacturing unprofitable.

Once China goes under then the rest of the markets will panic and withdraw to the EU/US which should inflate shit again. I am not sure how much knock on effect Chinese collapse will have on Europe and US but I would assume big because it will further hamper supply.

It is hard to have hyper or high inflation durig a recession.
We did in the 70s because OPEC raised oil prices for years, and the Fed. fought the resulting inflation instead of add money to te economy to ease the damage.
IMO, the Fed. failed to slow or stop it, so it should not have tried.

If China implodes, there likely will be shortages, and it is shortages that cause inflation. So ...
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