It’s not inflation. It’s price gouging.
Yeah it isn’t natural at all and needs regulation on basic items to live
I don’t know, they look natural to me
Price gouging coincidentally at the same time across the entire economy, soon after an enormous increase in the monetary supply.
A—Aurora Borealis? At this time of year! At this time of day! In this part of the country! Localized entirely within your kitchen?!?
Record high prices coinciding with record high profits and plunging cost of good sold, followed by even higher prices. They are testing to see what the pain thresholds are. All that’s gonna happen is that business will start to collapse as consumer spending plummets because people can barely afford to survive. Will the system autocorrect or collapse? Will the government ever enforce consumer protection laws ever again? ¯\_(ツ)_/¯
The loan on my van is paid off, The bank is paying me interest on my savings again, I have a years worth of costco rice stored, and the campsites by the river where i live in my van is empty because everyone too broke to go on holiday. Life is sweet. (No part of this comment is hyperbole)
Out of curiosity is your van largely stock or have you upgraded it?
Mechanically, not upgraded, no. But it was an empty van with an aluminium roof rack when I bought it, and I did the fitout myself. Awning, solar panels, batteries, inverter, fridge, shower, ventillation etc.
Occam’s razor says it’s a more simple/plausible explanation that a huge increase in the monetary supply causing higher prices through supply and demand is about a thousand times more plausible than tens of thousands of corporations simultaneously deciding to coordinate to fix prices despite that it’s in each of their best interests individually to break with that scheme.
“Not really looking for a debate about it tbh.”
No, just the last word. There’s a lot more to it that clearly explains why it’s a systematic failure that led to this, and it’s a lot more complex that just over supply of cash. You can’t stop looking at other facts once you’ve researched just enough to find an answer you’re comfortable with.
Your previous comment was basically a massive industry wide conspiracy theory though, so their response of a more sensible answer to give you something a bit more concrete to go on was pretty reasonable to me.
Not a conspiracy theory but the inevitable conclusion of a system left unchecked by regulation for too long. We have slowly rolled ourselves to the edge for decades yet have been able to maintain a very precarious balance, until a worldwide pandemic kicked the cart and set it rolling down the hill.
Did the entire planet have too much cash and an urge to spend it all at once? Yes. That only explains the flashpoint where prices exploded. Demand was at an unprecedented high from the world coming out of lock down at the same time that supply was at an all time low thanks to the pandemic. (There’s a lot more to all of this of course, but there are going to be countless PhD thesis written about this macroeconomic clusterfuck and this isn’t one of them.) So far, this all makes sense. Where things go sideways is when supply stabilizes, cost of goods sold start to go down, and yet prices continue to rise. Remember how the fed thought that information was going to be a short, temporary spike that didn’t require intervention? This is why. They expected the system to autocorrect, but it didn’t. Prices continue to rise. People have less money. Prices continue to rise. Interest rates skyrocket in an attempt to cool the economy. Prices continue to rise. Consumer spending slows but prices rise.
Corporations are literally geared towards maximizing profits. It’s not a conspiracy if they are working as intended. The failure, IMHO, is in how we have chosen to manage our economy. Complete deregulation and a slew of other choices have brought us here. Not a conspiracy but also not as simple as “too much money” or “too much cheap credit”. So, amending my original comment, yes it is in part inflation but it isn’t just inflation.
PS: Credit card debt in the US surpassed $1T. We’re running on literal borrowed time and every business around us is trying to find new and creative ways to squeeze every penny we don’t have out of us, by design, without a check or a balance in sight.
It is specifically a conspiracy theory that there’s a price-fixing cartel across the entire economy. You can give rhetoric about unchecked capitalism and all this, but the fact still remains that we’re talking about hundreds to thousands of companies that would have to opt into this scheme (drawing the line fairly arbitrarily at “the ones that comprise most market share”).
I raised this point already - individual corporations are incentivized to break with a price-fixing scheme because it increases market share. Consumers don’t want to pay exorbitant prices if there’s any alternative. Didn’t hear a response.
You believe whatever you want. Can lead a horse to water but can’t make him drink.
I’m sorry you’re under the impression that the economy is controlled equally by tens of thousands of corporations. Its much more like 2 dozen control nearly all money that presently exists. They wake up everyday and fix prices. They’ve been doing it a lot ever since 2008 and the utter downfall of consumer protections. I also have no fucking clue what you mean when you say that not fixing prices is in their best interests?? Like, you realize that by price fixing they make billions of dollars more than they should be? How tf is making even more money not in the interest of a corporation? They literally profit off of wars. Any possible thing that increases the amount of capital they generate is in their own best interests. Even employing children, or slaves. Capitalism is designed specifically to be exploitative of as many people as possible to generate as much capital as possible.
I’m sorry you’re under the impression that the economy is controlled equally by tens of thousands of corporations. Its much more like 2 dozen control nearly all money that presently exists.
There are 8 million businesses in the U.S. We have problems with monopolization, but to the level where a cross-economy price fixing scheme could possibly be implemented, we are not at that point. That’s an extraordinary claim requiring extraordinary proof, not something to just believe dogmatically because you don’t like capitalism.
I also have no fucking clue what you mean when you say that not fixing prices is in their best interests??
You could start by just asking me. This is basic game theory. Market price of a good is 10 dollars, ACME and BLLC corp meet and fix prices at 15 dollars. ACME corp goes to market at 15 dollars, BLLC corp goes against the secret agreement and goes to market at 10 dollars. BLLC gets ACME corp’s customers as long as they retain their price at 15. Now take the same example and spread it across hundreds, thousands of companies, keeping in mind that this level of coordination would leave behind proof, witnesses, and take an extraordinary level of coordination. Non-participation in a price fixing cartel for a minority company could mean capturing the entire market, and anyone who was participating would immediately be incentivized to exit it.
This is what is being posited, versus the dirt simple explanation that more money has been printed and has thus decreased in value. And we know a ton of money was printed.
Price-fixing cartels aren’t impossible, however, they do become completely impossible to create or maintain at a scale like that. There is simply way too much competition.
This is basic game theory
Perhaps real life is more complicated than something you can read in an introductory textbook.
Just gonna leave these links here.
https://www.theguardian.com/environment/2021/jul/18/america-food-monopoly-crisis-grocery-stores
https://www.webfx.com/blog/internet/the-6-companies-that-own-almost-all-media-infographic/
https://finance.yahoo.com/news/handful-companies-control-almost-everything-152800823.html
Yup, well aware how much monopolization there is.
Here’s corporations in the US by market cap:
https://companiesmarketcap.com/usa/largest-companies-in-the-usa-by-market-cap/
Keep in mind we’re not talking about simply “6 companies dominate a single industry”. The burden of proof for “greedflation” is simultaneous price-fixing behavior across the entire economy. Across essentially all corporations.
It’s called price leadership and it is an extremely well established phenomena in economics.
It’s an established phenomena. But, just because it’s established as a concept, doesn’t mean it’s prevalent, or especially not that it could be used to explain simultaneous increases in prices across the entire economy.
Here’s an introductory article on price leadership:
https://www.investopedia.com/terms/p/price-leadership.asp
Breaks it down into “barometric”, “collusive” and “dominant” categories. Going through each one -
Barometric being the phenomena where all the firms in a space look to the dominant firm for indication on what to do with their prices. Assumes heavy market concentration in the dominant firm and a marked imbalance to analyze market trends or predict upcoming cost shifts on the part of other companies. Does not make any sense in a space with several near-equally sized entrants in the market exist with similar capabilities for determining prices and macro conditions.
Collusive being where they have actually agreed to fix prices together. This is of course illegal and requires ongoing coordination across basically every major company in the economy. This is mostly what we’ve been talking about in this thread and requires extraordinary proof, because the level of coordination required to make this happen is extreme, especially across not just one industry, but every industry. Or, to be fair, at least the basic industrial/manufacturing industries upon which all other industries depend.
Finally there’s the “dominant” category. That’s where a single dominant firm (or cartel of multiple firms) is setting prices - particularly, setting them downwards - and other smaller firms are forced to lower their prices to survive. This doesn’t make a whole lot of sense with upwards price-fixing, because less dominant firms become more competitive as a result, not less.
No… Not to my understanding. Inflation, while an average, is not equally rising across all things. It is possible for the few that control food to raise prices together. Same with clothing and other industries. I think it’s also exacerbated by the shipping fiasco during covid and the fact that corporations always want more profit. As a general rule, any time prices rise for any reason, and shipping can make everything rise together, if people still pay that price, it will not be lowered.
Yeah, so we barely touched on the actual shortage issues from COVID in the thread here. That is for the most part a short term phenomena, and prices can actually resume prior levels after disasters and such like that, while actual monetary supply increases are typically permanent. And yeah, some industries (like energy) are pretty fundamental and can affect prices in a lot of other places, and there was additionally the energy shortage triggered by the Ukraine invasion. All these factors can cause price seeking and instability, but the key thing to point out is that that’s transitory, because after some time the costs of goods reequilibriate. But if you’ve increased the money supply 50%, then the price increases become permanent.
If you’re going to bring in Occam’s Razor, it’s probably less tenable to argue the ‘a conspiracy is more complex than the alternative’ argument when there’s obviously a set of shared motives driving labor costs down while at the same time pushing up profit margins. The fact that profit margins are up does a lot of damage to the ‘it can’t be greedflation’ theory
argument when there’s obviously a set of shared motives driving labor costs down while at the same time pushing up profit margins.
Well, just because they have shared motives doesn’t mean they’re going to act in concert with each other. They’re competitors. One’s market share loss is another’s market share gain.
The fact that profit margins are up does a lot of damage to the ‘it can’t be greedflation’ theory
It might help to clarify what “it” we’re talking about here, or for that matter, what exactly we’re referring to with “greedflation”. To be totally clear, companies will raise prices when the market will bear it, and when they have a monopoly or cartel, that can be nearly indefinitely. The thing I’m objecting to in the first place here is the notion that that’s just universally the case across the entire economy, which strikes me as ridiculous and a way for the government/central bank to deflect blame for monetary inflation. And to your point - for any highly competitive market, it’s a very elaborate explanation versus just that supply and demand has caused prices to increase because the supply of money has gone up, which is a very simple and fundamental phenomenon in econ. As a rule of thumb, the more diversified the market is, the less likely that is to be the case.
We did see a big supply shock when Russia partially cut out of the global energy market, causing the market to chase after oil from the remaining producers, causing an increase in price. That’s not some new phenomenon, that is also just basic supply and demand. It does cause price shocks, even if their costs didn’t go up, even if labor didn’t see the benefit. That’s not, however, some permanent state of “inflation” like monetary inflation which is just never reversed for the entire remaining lifetime of a currency - supply shocks are transient (at least until the fossil fuels actually run out).
The problem with consolidation is that companies that gain a majority market share are operating at the lowest of margins, so there is little room for new competitors to move into that market space.
Since these companies already own the market, it is too expensive for another company to enter that market space while competing successfully. The larger and more established companies already have economies of scale that are tilted in their favor. The only way for a new company to compete successfully against an entrenched business is by leveraging new technology or huge investments to bring their cost lower than their competitors.
And we’ve seen that happen in the past with agribusiness, they get large investments and just buy up all the other companies and put them under their own umbrella.
There is inflation I agree, but I think a significant percentage is from price gounging, around 30%. I saw a study detailing this that I could find and link if you want.
If you’re wondering how it can happen simultaneously accross whole countries and much of the world, you can look up the concept of “price leadership.”
See my reply to your other comment https://lemmy.world/comment/2308508
Can I see it?
No.
“soon” or maybe you need to review your oversimplification of complex issues
What are you trying to demonstrate with this chart? It doesn’t compare inflation vs. profit/profit margin increases.
Rose by any other name?
But yeah. It’s all made up.
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100%. I don’t know why anyone expected anything different - we’ve been printing and printing and printing money for the last 10 years. Chickens are home, roosting.
This particular theory is far too prevalent. Corporate executives are tugging themselves silly at the sight of people blaming the government instead of the people who paid them.
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That’s fucking moronic… The US government has had that money printer running since Nixon… It’s just garbage all around regardless… even though they are and have been some slightly less garbage parts
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Too much money chasing too few goods?
Wrong. Supply is fine.
Prices are going up because people are willing to pay higher prices than they were. We still have not found a new ceiling. It’s not “all the money printed by Trump” that caused a giant spike in inflation (that only played a small part). It’s record profits in a variety of industries convincing anyone and everyone to charge more.
tbh both inflation numbers are hot
Yeah, I wouldn’t mind being screwed by either of these inflations.
Small tits fan checking in.
The inflation report that came out today specifically omits fuel and grocery prices because those are “volatile” categories. My grocery bill is double what it was two years ago and has been for six months. I wouldn’t call that volatile.
They didn’t omit those prices. CPI and Core are two separate measurements. Core excludes food and energy.
In fact, excluding food and energy actually made the numbers worse. CPI is at 3.2% YoY. Core is at 4.7%.
Idk man ground beef is still like $3 a pound for me, milk $2.70 a gallon, pasta $1 a pound. I’m not saying some things haven’t gotten more expensive because they have, but my grocery bill from 2 years ago is like 20-30% more expensive now.
I’m not sure what point you’re trying to make. A 20-30% jump in a grocery bill is unprecedented in my life time. I’m skeptical it’s even that low for most. Pre-pandemic, I was buying eggs for 1.39, they’re 2.49 now. Jarred spaghetti sauce used to be 1.99, it’s 3.49 now if I catch a sale. I used to be able to regularly buy chicken breast for like 1.49-1.99, now if it’s less than 3 I buy as much as I can afford and freeze it. This time of year in my area, corn would usually be on sale 4/$1. The cheapest it’s gotten is $0.79.
Just repeat ad nauseam for everything. The other day I was in the store thinking to myself, “I’m not sure I can afford convenience foods like canned beans.” Canned. Fucking. Beans. The luxury.
I’m spending $2.30 for 18 eggs, buy spaghetti sauce at $.99 or so, and generally pick up chicken at about $1 a pound. Never seen corn on the cob for more than $.50 a cob, usually less than that. Bush’s beans, we just picked some up at $2 a can.
Seems like you have a sweet deal somewhere. I can’t remember when I last saw spaghetti sauce that cheap and my chicken is 4.59 a pound.
S&S market in my town of Clovis always had some cut of chicken at that price. Shit, if I really want to cheap out, Walmart has chicken leg quarters for $7 for a 10 lb bag
New Mexico?
Yeah
They likely live in a different place than you do Sounds like you got it way better, congrats
Grocery prices can vary widely depending on location. The absolute cheapest Walmart ground beef I can get is $4.50 per pound and milk is $3.62 a gallon. Pasta is a $1 pound and eggs are relatively cheap here. Produce has gone through the roof.
lucky. in Australia milk +50%, bread and rice +100%, pasta only about 20%, meats are almost out of reach ($12aud for 12 shitty supermarket sausages about 1kg worth is about as cheap as it gets. fruit and veg has always been volatile and fluctuates but I would say on average 20% more now
People in the US scream about inflation but many of them have no idea how bad it is in other countries. Places where food products are sparse or imported are extremely expensive. There’s not that much stuff we don’t produce or grow in the US.
My buddy in Ghana has been especially hard hit. I’ve increased my remittances because he literally can’t afford to eat every day anymore on his wage.
Where I am at,ground beef is more in the $5-6/lb range, as a comparison. We have some dairy farms local so milk is a bit cheaper, but basically everything else is significantly more expensive, especially meat.
I can get $4 a lb ground beef in a convenience store
Yeah we can buy ground beef for around 7€ the kilo (2,2lb)
Depends where you’re at. Ohio? Same. Florida? 2-3x
Florida: not even once
California has leveled out quite a bit too.
Florida has regional problems due to their ahem “policy choices” as of late.
Groceries are stupid, it cost me $20 to make a lasagna that last year cost $10.
inflation can’t be that cute
Yuck
Sir, explain
I wish these had been dick pics instead
I wish it was sonic
RIP to your DMs
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Have you read the Discworld?
When you thought Lemmy would be less cringe than Reddit: 🤡
I mean it is in fact a shitty post.
But can the shit still be cringe when it’s shitty cringe and taken as merely cringy shit? The question of out times.
Is there a c/lost_lemmings? Because this guy would fit right in.
Feels like everything is too expensive these days. Rent now takes more than 1/3rd of my income and I’m trying out different foods so that I can save on groceries. Hell, I don’t drive anymore if I can avoid it. Shit is getting rough out here.
In some ways, the reported inflation is real. The main increase in cost is not actually real, or caused by anything except greed.
There’s also a lot of hidden costs that aren’t factored into inflation as strongly as they should be, or at all. Those hidden fees have also gone up.
So the entire business segment is just hand waving the whole issue because they know it will be reported wrong; they’re going to keep raising prices and point to the “official” inflation numbers and continue to feed us the bullshit that inflation isn’t a problem to justify never giving their employees a raise.
IDK how stupid they think we are, but I’m sure they think we’re little more than retarded (I mean that in the clinical sense). They’re (very publically) showing massive profit numbers, using inflation, or the lack thereof, to justify slave wages, while ripping off their users as much as they think that they can without creating riots.
More for them, less for us. As it’s always been.
The only happy inflation for me is the one in my pants. This image does it
Well, thing is, some product categories probably aren’t suffering the same price hikes as groceries, fuel and rent. Stuff like cable and internet, clothing and office supplies are probably bringing the average down (please tell me if they’re having inflation, I pulled these categories out of my butt).
I hope we see deflation eventually… I know it’s not good for the economy but no one wants to pay 100 dollars for a coke
That’s the fun part! It never deflates! I guarantee lots more prices for consumer goods could have already come down, but damn do they love the idea of keeping those price points where they are. We already need another round of inflation on wages to get to where we were.
There have been periods of deflation in the past.
This breaks the current economic system and will only occur safely once capitalistic GDP and population growth has ceased completely
Some would argue the current economic system needs a little rattling
I also thinks it needs some rattling. But I don’t particularly want to plunge an additional billion+ people into new food shortages and poverty to trigger reforms if we can’t help it.
Problem with deflation is: what do people do when theres deflation when it comes to optional expenses? Well, they may postepone them in hopes that prices go further down, this means that there’s less demand, prices go downer, businesses may start to fail, putting people in unemployment, reducing demand, and death spiral. Basically same thing as inflation death spiral but with deflation. Consumer confidence is a very delicate thing
this means that there’s less demand, prices go downer, businesses may start to fail, putting people in unemployment, reducing demand,
I’ve always been skeptical of this and I’m not really aware of historical examples that prove it. The part I just quoted - “less demand, prices go downer, businesses may start to fail” - that means supply decreases too. All that’s really happening if you have a couple % deflation is that people are slightly more incentivized to hold onto their money, and the fact is that currencies don’t just naturally appreciate in value that much, at most in the long term I think you have “the same amount of money in circulation” vs. population growth causing it to chase a slightly larger economy.
If you want a historic example look at the politics In Germany that got Hitler into power. Wikipedia is sadly only in German, but you can see from the graph that there was 10% deflation in 1932, with bad consequences.
I’m sure this does get lumped into “causes of Hitler’s rise to power/WWII” list somewhere. I seem to recall the inflation immediately prior being a lot more famous - that Germany was mandated by treaty to pay reparations after WWII, and that the Weimar Republic printed so much money people were using it as wallpaper or burning it as firewood (supposedly at least). In general, that there was a widespread sense Germany had been wounded somehow, which he was able to capitalize on, telling people to “fight back” against the minority groups he characterized as the forces of oppression. That’d be everywhere between 1918 and 1933 or so. Not so much “the purchasing value of money marginally increased for a one year period prior to Hitler’s rise”.
It’s a myth that the hyperinflation was the reason for hitlers rise. The hyperinflation occurred in 1923. Hitler tried a coup in November 1923, failed miserably, was thrown into prison and the party was banned for a while. In 1928 they had 2,6% in the election.
https://de.wikipedia.org/wiki/Reichstagswahl_1928?wprov=sfla1
Only during Brünings deflation politics the nsdap gained momentum. The vote 1930 gave them 18,3% and in 1932 37,3%. Now compare that to the deflation graph of the other Wikipedia link I gave last comment.
Well, simply attributing it to either side of inflation/deflation is overly simplistic. The simple way of putting it is that people were unhappy in Germany and Hitler was able to capitalize on it in a political campaign against a supposed cause. The German economy in general was on shaky ground following WWI but this was alleviated partially by the Dawes/Young plans, right up until the Great Depression actually started affecting that foreign aid and the economy took another major hit, at which point the Nazis were able to use this as evidence of a “failure in leadership” from the current government, getting Hitler appointed as chancellor, then Reichstag fire started & he seized power.
It probably only is problematic in the same amount that inflation is bad. If it’s a little, it’s fine. If it’s a lot, you’re screwed
TBH this strikes me as the kind of thought that doesn’t come from careful consideration of how it would actually play out.
no one wants to pay 100 dollars for a coke
Reminds me of a comic strip where a guy goes to Japan and orders a coffee. The cashier says the total is 300 yen and the guy says “damn, coffee is expensive here!”
I just checked, it’s actually 150 yen for a coffee.
If you get normal inflation of 2%, you will never see a 100$ coke. The cumulative inflation in 100 years in “only” 700%.
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It’s a meme, put your dick away.
You just gave me a whole new perspective
Inflation is transitory, and it is Trump’s fault for overheating the economy anyways.
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Negatory
