Soaring Lumber Prices Add $36,000 to Cost of a New Home - Page 2 - Politics Forum.org | PoFo

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#15170519
Puffer Fish wrote:This has nothing to do with the point in the opening post.

I think misunderstanding abounds.

I'll just point out the obvious.

I don't know what the fuck I'm talking about.

I'm not a builder, or a lumber speculator.

But, it is good conversation.

I'm sorry again to Rancid. I always seem to fuck with him, and shouldn't do that, he's a good chap.

I'm just jealous because he makes more money than me, and owns better stocks than me (I don't own any stock. I am just focused on making my car payment and my cell phone payment, and having a spot to lay my head).

Rancid is a good chap.

I just got a file in the mail for crosscut saws. It is a good file.
#15170852
Puffer Fish wrote:A shortage of lumber and land is greatly driving up US housing prices.

Part of the problem is long-term population growth putting strain on limited natural resources. But the more immediate problem is due to a mismatch in supply and demand.
The coronavirus pandemic and the economic shutdown that came along with it, combined with industry expectations that demand would not go back up anytime soon, have resulted in the current shortages.

Keep in mind there is also the very real possibility rising housing prices could be an indicator of inflation.

=====

Soaring lumber prices add $36,000 to the cost of a new home, and a fierce land grab is only making it worse
April 30, 2021

The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the NAHB.

"We have seen, over the last four or five months, what I have never seen in my career before, is lumber to move to the level it has," said Sheryl Palmer, CEO of Taylor Morrison Home.

New lot supply is down 20% from a year ago, according to Zonda.

As the housing market gets leaner, potential buyers are turning in record numbers to new construction, but several factors are making those homes pricier than ever before.

First is a major shift in the market’s composition due to the record shortage of existing homes available. About 1 in 4 homes for sale are now newly built, the highest share ever. Historically new homes make up about 1 in 10, but fierce buyer competition is behind that shift. Prices for new and existing homes are at record highs.

But it is not just competition fueling prices for new homes. The cost of what goes into the home is adding to it as material and land prices surge.

Lumber prices seem to set a new record almost daily, now up 67% this year and up 340% from a year ago, according to Random Lengths, a wood products industry tracking firm. And lumber doesn’t just go into framing a house. Those added costs hit cabinets, doors, windows and flooring.

Lumber prices are skyrocketing for various reasons beyond just high demand from homebuilders and remodelers. Lumber tariffs had prices already rising a year ago, but then when the pandemic hit, production shut down. The expectation was that housing demand would dry up for a long time. But instead, after a brief pause, it came roaring back. Homebuilders were caught off guard, as were lumber producers.

The price per single lot is up 11% this year compared last year, because demand is so high and supply is low. New lot supply is down 20% from a year ago, according to Zonda, a real estate data and advisory firm.

"There’s a literal land grab going on as builders are scooping up lots," said Ali Wolf, chief economist with Zonda. "The lot supply shortage is real, and it is causing prices to rise and builders to move further into the suburbs."​

Soaring lumber prices add $36,000 to the cost of a new home (cnbc.com)
https://www.cnbc.com/2021/04/30/soaring ... -home.html

=====

The article goes on to criticize tariffs against importing lumber from other countries as contributing a little bit to the shortages. I happen to agree. This doesn't mean tariffs are bad, but lumber basically represents a natural resource and the US has limited timber producing area relative to its large population. So I do not see this as being like the tariffs on many other things. If the US tried to produce all the timber it used, that would put a big strain on the country's forest resources. It makes total economic sense for the US to be importing timber from Canada, or Russia.

However, it's also true that timber product exports from the US to other countries are dramatically down, so I would think that would mostly compensate for the effects of tariffs on imports.

I think the media is being a little bit dishonest by blaming these problems on the trade wars.

Here's another article from 6 months ago where they are trying to blame the US timber industry being hurt by the trade war.
US timber industry has been crippled by trade war and Covid-19 - Quartz (qz.com)
https://qz.com/1934494/us-timber-indust ... -covid-19/

It obviously doesn't make consistent logical sense to be blaming the trade war for reducing exports of timber, hurting American timber jobs, while simultaneously blaming the trade war for reducing imports of timber, creating shortages of timber.

If the trade war is both reducing exports and reducing imports, then obviously those two "problems" should cancel each other out, and solve the problem by themselves.

But it seems there are many people looking for any excuse to blame tariffs that get in the way of free world trade.


Seems I missed a big thread during my PoFo holiday. Has anyone considered this is a sign of inflation during our year of low production? It isn't just in lumber but in quite a few commodities I might add. I was reading an article last week that inflation IS ALREADY HERE and we should see more signs of inflation once we start spending again. Even Buffet is predicting high inflation now and he is usually astute on these matters. And the Hedgefunders are bringing to hedge their bets now. All I am saying is the signs of what is to come are appearing but you have to pay attention. And where is Steve_America considering he keeps on publishing threads that he wants the Fed to print more money? I would say he has jumped the gun if he thinks MMT is on the money here and we can keep shaking the money tree. My prediction. A stock market crash and high inflation like the 70s this time next year.
#15170853
Rancid wrote:The market will continue to bare it. Rents and real estate are basically continually sucking away everyone's money. What will take a nosedive is the rest of the economy, like consumer goods and tourist, because people are pouring more and more of their money into either rent or a mortgage.

That said, yes, it will be dramatic and unpleasant.


THIS. Rancid is spot on again. People haven't been able to afford to buy homes (or even rent them) for the past few decades. We even had a crash due to the house bubble exploding. Unfortunately having a home is essential and people will just pay whatever is needed to have a roof over their head - even if they cannot afford it, and this trend will continue even during times of hardship. And what happens instead is that as the housing market stabilises after a crash everything else nosedives especially is the service and leisure sector.
#15170854
Rancid wrote:New homes increase supply which would actually put downward pressure on home prices. The issue in the US is that there isn't enough supply in the places that people want to live. Also, new homes are not more expensive than old homes. You are also completely ignoring location, which is a huge component to price. I live in a home that was built in the 1950s, it is worth more than the new homes being built in the suburbs. Why? Location.


Rancid is spot on AGAIN! The value of land is always worth more than the house that is upon it. There are Ghost Towns that once held huge property upon its borders that are worth hardly anything now because the land (or demand for that land) isn't worth anything. This is simple supply and demand economics. As for the price of lumber, that may well effect the property developers profit margins but I doubt it will have a huge impact on price for the consumer considering people buy on location more than whether the house is new or not. If lumber has gone up (and it has), I would say that is due to the production issues (so supply) rather than demand issues anyway. Just because the government has given you Covid cheques, doesn't mean America has been very productive last year. It just means we haven't seen the impact of inflation yet as people have yet to begin spending to pre Covid levels yet. Let's see what happens once we start spending again shall we. Lumber prices should be an indicator for what we can expect actually.
#15170977
B0ycey wrote:Rancid is spot on AGAIN! The value of land is always worth more than the house that is upon it. There are Ghost Towns that once held huge property upon its borders that are worth hardly anything now because the land (or demand for that land) isn't worth anything. This is simple supply and demand economics. As for the price of lumber, that may well effect the property developers profit margins but I doubt it will have a huge impact on price for the consumer considering people buy on location more than whether the house is new or not. If lumber has gone up (and it has), I would say that is due to the production issues (so supply) rather than demand issues anyway. Just because the government has given you Covid cheques, doesn't mean America has been very productive last year. It just means we haven't seen the impact of inflation yet as people have yet to begin spending to pre Covid levels yet. Let's see what happens once we start spending again shall we. Lumber prices should be an indicator for what we can expect actually.

MMTers define 'inflation' as an ongoing increase in prices generally accross the economy.
The US & world has suffered supply shocks and a drop in demand for many things because of covid. I will not be surprised if there is a period of price changes (mostly up) as a result.
The test of inflation is 'is it ongoing'? MMTers say that it is a question of how much resource & labor is being used compared to the demand.

I know that mainstream economists want to explain inflation without reguard to reality. It is so much easiier to claim they can ignore reality (is in, how much resources & labor that are there are not yet being used), than to have to actually look at the real economy. MMTers claim that economists must look at the resources & labor being used and not being used, before they can accurately predict inflation.

I keep going on about this because most of you have not groked the MMT theory. In particular, almost none of you have replied to me about why MS economists predictions have been so lacking in accuracy for many decades, maybe even, forever.
Some examples=>
1] They failed to accurately predict what would happen in Japan starting about 1992.
2] They failed to predict the effect that NAFTA would have on small towns across the US.
3] They applauded Clinton's surplus and didn't predict the resultiong recession (dot com bubble).
4] In Europe they totally failed to predict the effects of the EU's and EZ's economic rules would have as soon as the 1st downturn happened. They predicted that austerity would increase spending because buyers would know that their future taxes would not increase. All these predictions were wrong. [They have admitted as much by NOW saying that it is OK for EU & EZ nations to sell bonds (indirectly) to the ECB so they can deficit spend in this crisis.]
5] They failed to predict the GFC/2008. They were predicting the opposite.
6] They failed to predict the slow recovery (slow because the Gov. of US and EU nations didn't deficit spend enough).
7] They failed to explain why they needed to adjust the "full employment" percentage of unemployment to such high levels (in some EZ nations as high as 10% or even more, IIRC). Again, IIRC, Japan has been a counter example since 1992. It has had low unemployment, low inflation, & low bond yeilds, [b]along with *huge* yearly deficits and large amounts of bonds being bought by the BoJ[/b] since 1992. It didn't need to raise its unemployment rate to control inflation.

With all due respect, what did they correctly predict since 1992?
.
#15170982
Crantag wrote:I'm currently scoping out bridges, or tent spots. In case the county tries to come fuck with me and my current squater situation. Fuck the government. There is a tent city in my town, in the ashes of last year's fire. I am not really legit if you understand me, in my current posture of my trailer.

Let a man have a bed to lay his head, is what I always said.

I won't pay your taxes.

The man wants to fuck with me, I say let me be. Let me be me.

I'm not hurting anyone, go fuck with your son, because I'm done with your bullshit, fucking cops.

Next they are going to start telling me where to take a piss.
#15171000
Oh yeah, I paid 1500 income tax this year, cash out of pocket, and I'm poor as fuck. I worked on marijuana farms last year and they paid us 1099. I still work on marijuana farms.

I paid my taxes. But housing laws are fucked up. They are just seeking tax lots.

For the censors, I live in entirely legitimate living arrangements.

For the real folk, I do what I can, and fuck their zoning laws. And fuck their domicile laws.

I'm legit as fuck, though.

;) ;)
#15171005
Final post, and sorry for the multi posts, but fuck it, I'm a good way through a six pack.

Oregon is actually really awesome, but i might want to say it sucks, in order to discourage assholes from coming here.

But, the property laws which place me on the brink of homelessness from time to time, are something I'm dispassionate about.

But, come on to Oregon. Maybe don't. But if you are a cool Hombre, or a Nice Chap, or a Decent Fellow, maybe go ahead and try your luck, in South Oregon.

Just know in advance we are poor as hell, and don't have an economy.

But, we do have nice mountain streams, and trout fishing, and salmon, and we even have an ocean here, and pretty much every other outdoor thing.
#15171020
Steve_American wrote:MMTers define 'inflation' as an ongoing increase in prices generally accross the economy.
The US & world has suffered supply shocks and a drop in demand for many things because of covid. I will not be surprised if there is a period of price changes (mostly up) as a result.
The test of inflation is 'is it ongoing'? MMTers say that it is a question of how much resource & labor is being used compared to the demand.


Well that is how everyone defines inflation. A breadbasket of goods and a comparable of prices. Also inflation is currently ABOVE the FEDs 2% target and WE HAVEN'T EVEN OPENED UP THE ECONOMY FULLY YET! The point Buffett was trying to make in regards to inflation is the price of commodities has increased hugely and that has a knock on effect with everything else in terms of price. That is what he means by inflation is already here. People have already increased their prices and the buyer is just accepting that now and we haven't even seen the full scale of demand yet given we are currently restricting the market. Until people are out and about, we should not... nor cannot make a prediction yet.

I know that mainstream economists want to explain inflation without reguard to reality. It is so much easiier to claim they can ignore reality (is in, how much resources & labor that are there are not yet being used), than to have to actually look at the real economy. MMTers claim that economists must look at the resources & labor being used and not being used, before they can accurately predict inflation.


Well given labor was forced to down tools last year and people were getting paid to sit on their ass, you don't need to be Einstein to work out that resources and labor haven't kept up with demand. Demand hasn't stopped since Covid. It has been restricted. Once those restrictions are lifted people will begin spending again with all their free money. And remember the government hasn't released a plan to pay back this borrowing via taxation yet and also plans on dumping another 2tn into their market. For someone who claims to know all about MMT, you seem to be forgetting that MMT controls inflation via taxation and yet you insist we spend spend spend and not look at taxation as that is the MMT way. No it isn't. You can spend what you like under MMT, but to install confidence you need a plan to recoup that borrowing. Even Keynesism economics relies on future growth to pay back borrowing. What is the plan this time? We just handed out free money to close the economy down not to increase production.

I keep going on about this because most of you have not groked the MMT theory. In particular, almost none of you have replied to me about why MS economists predictions have been so lacking in accuracy for many decades, maybe even, forever.
Some examples=>
1] They failed to accurately predict what would happen in Japan starting about 1992.
2] They failed to predict the effect that NAFTA would have on small towns across the US.
3] They applauded Clinton's surplus and didn't predict the resultiong recession (dot com bubble).
4] In Europe they totally failed to predict the effects of the EU's and EZ's economic rules would have as soon as the 1st downturn happened. They predicted that austerity would increase spending because buyers would know that their future taxes would not increase. All these predictions were wrong. [They have admitted as much by NOW saying that it is OK for EU & EZ nations to sell bonds (indirectly) to the ECB so they can deficit spend in this crisis.]
5] They failed to predict the GFC/2008. They were predicting the opposite.
6] They failed to predict the slow recovery (slow because the Gov. of US and EU nations didn't deficit spend enough).
7] They failed to explain why they needed to adjust the "full employment" percentage of unemployment to such high levels (in some EZ nations as high as 10% or even more, IIRC). Again, IIRC, Japan has been a counter example since 1992. It has had low unemployment, low inflation, & low bond yeilds, [b]along with *huge* yearly deficits and large amounts of bonds being bought by the BoJ[/b] since 1992. It didn't need to raise its unemployment rate to control inflation.

With all due respect, what did they correctly predict since 1992?
.


With all due respect, what has MMT predicted correctly since 1992? Economic speculators simply look at figures to try and work things out but to give times and dates on events that can happen is like a weather forecaster predicting the weather this time next year. Also there were plenty of MSc economists that predicted the housing bubble and the dotcom bubble as it happened. There are also some that are predicting future bubbles like the car finance bubble, SPEC bubble and the Cypto bubble as well as yet another mortgage bubble but because they can't give you a date or time you claim these are not predictions? Give over. You need to educate yourself. Economists works on confidence. All bubbles burst once the confidence does not keep up with the price increase. Nobody can know when that is given it works off human intuition. However that doesn't stop people from looking into the past to work out trends in the future. There are many red flags we are seeing today that we have seen before that resulted in high inflation. Should we just ignore that because Steve America read a blog on MMT weekly that the money tree has grown a few more branches or should the FED act now before inflation hits double digits I wonder. You cannot stop inflation once it takes off. It is like a domino effect given people act differently. You do realise that, don't you?
#15171022
Crantag wrote:Final post, and sorry for the multi posts, but fuck it, I'm a good way through a six pack.

Oregon is actually really awesome, but i might want to say it sucks, in order to discourage assholes from coming here.

But, the property laws which place me on the brink of homelessness from time to time, are something I'm dispassionate about.

But, come on to Oregon. Maybe don't. But if you are a cool Hombre, or a Nice Chap, or a Decent Fellow, maybe go ahead and try your luck, in South Oregon.

Just know in advance we are poor as hell, and don't have an economy.

But, we do have nice mountain streams, and trout fishing, and salmon, and we even have an ocean here, and pretty much every other outdoor thing.


It is always sad to read your post Crantag as I know you are a good guy who has been unlucky in life. I always find the best way to get out of financial trouble is to save what little money you have and build it up towards a goal. If you have money for beer you have money to save. Easier said than done I know but that is why I am where I am now. Not because I was born into money but because I saved and invested in tangible targets.

Also Oregon sounds to me like a place to live off the land. One of the things I hate most about modern life is we have lost the desire to survive outside our society. If you have a mountain stream you have clean water and if you can fish you can eat. Again easier said than done, but given society hasn't given you a break and you are 'piss poor,' living off the land is one way to break free.
#15171202
B0ycey wrote:Well that is how everyone defines inflation. A breadbasket of goods and a comparable of prices. Also inflation is currently ABOVE the FEDs 2% target and WE HAVEN'T EVEN OPENED UP THE ECONOMY FULLY YET! The point Buffett was trying to make in regards to inflation is the price of commodities has increased hugely and that has a knock on effect with everything else in terms of price. That is what he means by inflation is already here. People have already increased their prices and the buyer is just accepting that now and we haven't even seen the full scale of demand yet given we are currently restricting the market. Until people are out and about, we should not... nor cannot make a prediction yet.

Well given labor was forced to down tools last year and people were getting paid to sit on their ass, you don't need to be Einstein to work out that resources and labor haven't kept up with demand. Demand hasn't stopped since Covid. It has been restricted. Once those restrictions are lifted people will begin spending again with all their free money. And remember the government hasn't released a plan to pay back this borrowing via taxation yet and also plans on dumping another 2tn into their market. For someone who claims to know all about MMT, you seem to be forgetting that MMT controls inflation via taxation and yet you insist we spend spend spend and not look at taxation as that is the MMT way. No it isn't. You can spend what you like under MMT, but to install confidence you need a plan to recoup that borrowing. Even Keynesism economics relies on future growth to pay back borrowing. What is the plan this time? We just handed out free money to close the economy down not to increase production.

With all due respect, what has MMT predicted correctly since 1992? Economic speculators simply look at figures to try and work things out but to give times and dates on events that can happen is like a weather forecaster predicting the weather this time next year. Also there were plenty of MSc economists that predicted the housing bubble and the dotcom bubble as it happened. There are also some that are predicting future bubbles like the car finance bubble, SPEC bubble and the Cypto bubble as well as yet another mortgage bubble but because they can't give you a date or time you claim these are not predictions? Give over. You need to educate yourself. Economists works on confidence. All bubbles burst once the confidence does not keep up with the price increase. Nobody can know when that is given it works off human intuition. However that doesn't stop people from looking into the past to work out trends in the future. There are many red flags we are seeing today that we have seen before that resulted in high inflation. Should we just ignore that because Steve America read a blog on MMT weekly that the money tree has grown a few more branches or should the FED act now before inflation hits double digits I wonder. You cannot stop inflation once it takes off. It is like a domino effect given people act differently. You do realise that, don't you?


That you ask that question proves that you have not looked into MMT, and also that you forgot how I listed a short list of correct MMT predictions. So, again IIRC MMTers correctly predicted =>
1] That Japan could have large deficits without inflation, unemployment, high bond yields, etc., basically forever, even if the BoJ bought 40% of new bonds sold each year.
2] That Gov. surpluses always result in a recession. So, the dot com bubble.
3] That the EU & EZ rules on deficits were going to lead to exactly the current mess they have had since 2008.
4] That starting about 2006 or so the housing bubble would *soon* burst.
5] That the US & EU economies would not recover in the normal way from the GFC/2008 because of not enough deficit spending.
6] That the US could deficit spend without worring about it in a crisis as long as they kept it within reason.

Sir, I said that prices will likely go up soon, but not just because of all the deficit spending. There is also the point you made that supplies of things are down because we stopped importing as much and made less too. So, the question is, will it continue? Be ongoing?
. . . You seem to be saying, "certainly". I say, "maybe". I go on to say 2 things. a] The damage to people will be less with the deficit spending than it would have been, without it; and b] that it is more likely not going to be on going, than that it will be on going.
. . . OTOH, the US economy is now so concentrated in few hands that those few have the power to cause rising prices in all cases because they have monopoly power over prices. That is, the market does not come close to the Free Market assumed to exist by MS economic theories.

.
#15171208
Steve_American wrote:That you ask that question proves that you have not looked into MMT, and also that you forgot how I listed a short list of correct MMT predictions. So, again IIRC MMTers correctly predicted =>
1] That Japan could have large deficits without inflation, unemployment, high bond yields, etc., basically forever, even if the BoJ bought 40% of new bonds sold each year.
2] That Gov. surpluses always result in a recession. So, the dot com bubble.
3] That the EU & EZ rules on deficits were going to lead to exactly the current mess they have had since 2008.
4] That starting about 2006 or so the housing bubble would *soon* burst.
5] That the US & EU economies would not recover in the normal way from the GFC/2008 because of not enough deficit spending.
6] That the US could deficit spend without worring about it in a crisis as long as they kept it within reason.

Sir, I said that prices will likely go up soon, but not just because of all the deficit spending. There is also the point you made that supplies of things are down because we stopped importing as much and made less too. So, the question is, will it continue? Be ongoing?
. . . You seem to be saying, "certainly". I say, "maybe". I go on to say 2 things. a] The damage to people will be less with the deficit spending than it would have been, without it; and b] that it is more likely not going to be on going, than that it will be on going.
. . . OTOH, the US economy is now so concentrated in few hands that those few have the power to cause rising prices in all cases because they have monopoly power over prices. That is, the market does not come close to the Free Market assumed to exist by MS economic theories.

.

I read this entire post, looking for something to disagree with, and didn't really disagree with anything. Others are free to each their own and all that, and I respect you, Steve, believe it or not; I just think that reading economics blogs doesn't make one an expert.

But, where I agree here primarily, is the government spending in the downturn having been beneficial. It is even plausible that it saved the economy from collapse, by maintaining demand, and thus preventing a collapse in availability of things. I said it is plausible. I don't think it is likely (that it prevented a collapse. I don't think a collapse was forth coming. But maybe it was, and none of us even noticed, like how you don't notice that the dump truck in front of you didn't crash into the ditch.)

But, I agree that the government spending ought to have had a beneficial effect.

By the way, you should study Keynsian Economics. A lot of the shit you seem to spew seems to be shit MMT guys borrowed from Keynsian guys. And gals, of course. Gals like Rosa Luxemburg and Susan Strange, for example.
#15171225
Steve_American wrote:That you ask that question proves that you have not looked into MMT, and also that you forgot how I listed a short list of correct MMT predictions. So, again IIRC MMTers correctly predicted =>
1] That Japan could have large deficits without inflation, unemployment, high bond yields, etc., basically forever, even if the BoJ bought 40% of new bonds sold each year.
2] That Gov. surpluses always result in a recession. So, the dot com bubble.
3] That the EU & EZ rules on deficits were going to lead to exactly the current mess they have had since 2008.
4] That starting about 2006 or so the housing bubble would *soon* burst.
5] That the US & EU economies would not recover in the normal way from the GFC/2008 because of not enough deficit spending.
6] That the US could deficit spend without worring about it in a crisis as long as they kept it within reason.


MMT is an explanation for these things. I never heard anyone actually predict these things beforehand. In fact those voices that did predict the dotcom and housing crash before they occurred were just the usual economists anyway. Besides, I support MMT. I have spoken fondly of it before now. I however don't reference it as why we can just hand out free money into the economy now and expect no consequences given MMT doesn't suggest that in any shape or form. And given inflations prime instigator is confidence, we wouldn't see an instant impact in it anyway. Also, and I cannot stress this enough, those who are predicting that inflation will be manageable right now are MSc economists and the guys running the ECB, FED and BofE. Those who are impartial to the market with a background to economics are more skeptical right now. And why shouldn't they be given there are red flags in the market right now which they are seeing firsthand.

Sir, I said that prices will likely go up soon, but not just because of all the deficit spending. There is also the point you made that supplies of things are down because we stopped importing as much and made less too. So, the question is, will it continue? Be ongoing?
. . . You seem to be saying, "certainly". I say, "maybe". I go on to say 2 things. a] The damage to people will be less with the deficit spending than it would have been, without it; and b] that it is more likely not going to be on going, than that it will be on going.
. . . OTOH, the US economy is now so concentrated in few hands that those few have the power to cause rising prices in all cases because they have monopoly power over prices. That is, the market does not come close to the Free Market assumed to exist by MS economic theories.


Right, two things. Firstly I am not predicting anything. We will learn more ONCE the economy opens up completely. I am just being pragmatic that we shouldn't believe that creating more money is the answer right now. Or perhaps it is but we need to have a plan to recoup that borrowing via taxation at the very least or growth. Lockdowns have consequences. The money was handed out into the economy not for growth but to shut down production. That is not MMT economics. That is something entirely different. That is panic economics for a better word.

Secondly, inflation right now is indeed down to supply issues. But giving away free money does INDEED still make the situation worse given there is more money in the market to in essence bid up prices. Demand has not ceased since lockdown, it has been restricted. That has always been my point. Just because inflation hasn't reached double digits yet since your Covid cheques doesn't mean it won't. It just means that all the factors that playout for high inflation are not in play right now.
#15171280
Rancid wrote:But when?


I can only give you an opinion Rancid. I would say when people begin spending again. The real question is will the supply chain keep up with the demand or more importantly will prices rise to boost profits that business lost during the Lockdown. Commodity price increases should be a red flag given demand has been artificially halted and I suspect shareholders are hoping for a quick rebound in profits. That is not good indicator for inflation especially in an environment that national debt has increased 300% and people have been given free money. But I am only speculating. As I said in the previous thread I want people to explain why things are different this time round compared in the 70s. All that is happening is people are repeating their hopes rather than actual facts and figures.
#15171283
B0ycey wrote:
I can only give you an opinion Rancid. I would say when people begin spending again. The real question is will the supply chain keep up with the demand or more importantly will prices rise to boost profits that business lost during the Lockdown. Commodity price increases should be a red flag given demand has been artificially halted and I suspect shareholders are hoping for a quick rebound in profits. That is not good indicator for inflation especially in an environment that national debt has increased 300% and people have been given free money. But I am only speculating. As I said in the previous thread I want people to explain why things are different this time round compared in the 70s. All that is happening is people are repeating their hopes rather than actual facts and figures.


Perhaps.

My opinion is this.

Inflation is happening already. It's all happening in the housing market, which doesn't get counted in the CPI. It's basically "hidden" from the traditional inflation metric which only looks at consumer goods (TVs, Shampoo, food).
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