Ugly? How so?

Things are getting to where they should be in the first place for a country that prides itself on its human rights status. We punish other countries for what some people here demand that we do to our own citizens.

Hypocrites!

Pay me a fair wage; but don’t pay anyone else a fair wage because it might make me unable to afford luxuries.

It will get ugly if we have “stagflation” (high inflation and unemployment simultaneously). The Gen Xers and Millennials might find out what a real economic slowdown feels like. Inflation is death to Progressive ideas.
https://www.investopedia.com/terms/m/miseryindex.asp

 

It would reduce the actual payout of the contracted pensions, as long as they don't have a solid inflation clause.

 

Watch the weekly jobless claims over the summer. If disposable income is eaten by inflation and energy costs lots of those 'fair wage' jobs are likely to be reduced or eliminated after the pandemic to endemic normalization hiring phase ends.

https://fortune.com/2022/03/11/crypto-stocks-nasdaq-goldman-sachs-recession/

Inflation is at a 40-year-high. Energy prices are soaring. And now Wall Street is uttering the dreaded S-word—stagflation—or slowing economic growth amid a surge in prices. These macro headwinds are adding volatility to the global markets.

In successive client notes on Thursday, Goldman Sachs downgraded its growth outlook for the United States and for the European Union. Goldman analysts had particularly dire words for the latter.

“The Russia-Ukraine conflict has dented our previously optimistic views on Europe’s economic and asset market outlook. Largely due to the sharp increase in energy prices and the potential for additional supply disruptions, our Europe Economics team has revised down their baseline forecasts for 2022 Euro area GDP growth to 2.5% from 3.9%,” Zach Pandl, cohead of foreign exchange strategy, told investors.

 

Ugly? How so?

Ugly in that with gasoline and diesel fuel cost rising so goes everything else. Just about everything moves using fuel, when fuel cost increase so goes everything else. Wondering when and if things will turn around? Not to mention crime increase. Another problem.

Ron

 

Ugly in that with gasoline and diesel fuel cost rising so goes everything else. Just about everything moves using fuel, when fuel cost increase so goes everything else. Wondering when and if things will turn around? Not to mention crime increase. Another problem.

Ron

That’s not what you said in the post I quoted. I agree with this explanation.

 

That’s not what you said in the post I quoted. I agree with this explanation.

OK now I am missing something here. This is what I said:

Yep and so it goes. All I see around me is help wanted signs and businesses have reduced hours for want of workers. Very large amusement park not far from us on Lake Erie (Cedar Point) last summer was paying summer help, high school kids, twenty dollars an hour plus board. This resulted in all the surrounding small businesses who rely on the summer season on he lakeshore unable to get help since they could not afford it. Cedar Point just increased their ticket prices and food prices. No clue where it is all going but things are getting ugly.

Several local businesses have reduced hours open and days open for business for want of workers. I am seeing help wanted signs and not just for low paying jobs. Over Christmas I had lunch with my former department manager before I retired. They are looking for what we called a "control rod technician" all that is needed is a high school diploma. they will train and start pay with a benefit package is mid 50K with room for advancement. Cedar Point amusement park was closed for COVID two summers back but was open last season (it's seasonal) and paying their summer help which is high school kids $20 an hour. They simply raised ticket prices. The problem was all of the small businesses on the lake shore could not afford to pay kids $20 an hour for temporary summer help. Then I went on to say things were getting ugly and that was a reference to inflation in general and the number of open jobs around me. Whatever I said in there which upset you I am sorry. I just did not see anything. Again sorry and I redefined my thoughts as to getting ugly. We good now?

Ron

 

https://www.cnbc.com/2022/03/16/federal-reserve-meeting.html

Federal Reserve approves first interest rate hike in more than three years, sees six more ahead

• The Fed approved a 0.25 percentage point rate hike, the first increase since December 2018.
• Officials indicated an aggressive path ahead, with rate rises coming at each of the remaining six meetings in 2022.
• Members also pared expectations for economic growth this year and sharply raised their outlook for inflation.

 

Never saw that coming... Oh wait.

Ron

 

I have a comment to that but you guys would see it as political. Since it means mentioning he who must not be spoken of.

Check the history of the Fed over the last so many years, if they could have done it when they wanted infation wouldn't be quite as bad.

 

Woohoo, inflation is over, local gasoline price dropped $0.10 between Tuesday and Wednesday.

 

I have a comment to that but you guys would see it as political. Since it means mentioning he who must not be spoken of.

Check the history of the Fed over the last so many years, if they could have done it when they wanted infation wouldn't be quite as bad.

 

" This also doesn’t mean that rising wages in certain sectors couldn’t be part of the story of how the new Fed-created money is working its way through the economy. New money flows from the Fed through the banks and into the economy unevenly. Therefore, prices and wages are also bid up unevenly. So, as different sectors of the economy receive the new money, possibly through new investment stimulated by the artificially low-interest rates, wages will rise. This, in turn, may lead to those wage earners having more money to spend on goods and services, which will drive up prices generally. But the higher wages are not the cause of the inflation but a symptom of it.

The idea that higher wages can cause inflation is simply bad economics. It is part of the same discredited Keynesian analysis that tells us that government budget deficits create economic growth and that increased saving reduces it. As a wise graduate school professor of mine once told me, to ignore changes in money supply when trying to explain inflation is the equivalent of ignoring the eruption of Mount Vesuvius when trying to explain the destruction of Pompeii. "

From - https://www.johnlocke.org/the-myth-of-wage-push-inflation/

There are many, many more economics sites stating the same thing. Like most of the Keyesian economics models they are mostly false in real economics, like the "trickle down" theory. A google search showing how many economics sites agree -
https://www.google.com/search?client=firefox-b-1-d&q=do+wages+cause+inflation

 

Putting left vs right economic theory aside, how many websites contain the same information is not a good metric.

 

As far as raising wages can cause inflation...

Yes and no.

If a company raises its wages because of making higher profits or enhanced revenue, then no it won't directly cause inflation. (some supply and demand inflation may occur)

If a company is directed by law to raise its wages and the company must raise its prices for their goods or services then yes, it will cause inflation.

This has nothing to do with economic theory, it's pure fundamental economic reality.

For a business, wages are just another line item in their budget like any other line item such as supplies or taxes, and a business must balance that budget in accordance with basic economic principals such as revenue must match or exceed expenses.

Just for information...I was in business for over 28 years, so I understand how an economy really works, and have never placed any stock in theory.

 

Well inflation aside.

Just did my weekly supermarket trip. While just about everything here as to dry goods is Amazon the supermarket was actually well stocked, even as to sale items. Generally lately things have been good with no shortages I noticed. That was a nice change.

As to things like money. I still hear my father's words in my head. "Ronald, you can't spend money you don't have". That and "don't count your chickens before they hatch". As to the government in the US and their spending lately? They are spending money they do not have and gambling on money they may never see come in. I just do not see this ending well. I am also seeing lower returns on investments across the board. Overall inflation continues to rise and considering the number of people we saw out of work the new jobs are likely just people returning to work. Countless small business startup are now dead, including my favorite family run Chinese restaurant. Damn, I miss that place. Plenty of smaller businesses are gone and along with them chunks of the tax base.

Ron

 

Most of the "aisle of empty shelves" photos on the internet are actually standard seasonal rotations of what-is-placed-where in the supermarket. I have asked plenty of people and I have personally been in many supermarkets without seeing seeing an empty aisle. I usually eat grocery store deli/salads when I travel so I've been to 25 stores in the past 6-months and I'd like to see a news story that was more than showing a photo that was retweeted around the world without fact checking.

 

Most of the "aisle of empty shelves" photos on the internet are actually standard seasonal rotations of what-is-placed-where in the supermarket. I have asked plenty of people and I have personally been in many supermarkets without seeing seeing an empty aisle. I usually eat grocery store deli/salads when I travel so I've been to 25 stores in the past 6-months and I'd like to see a news story that was more than showing a photo that was retweeted around the world without fact checking.

Pretty much the same here. While at the onset I saw a few commodities gone and empty shelves it was only a few things like toilet paper and paper towels. Alcohol and alcohol swabs. Things like that but I figure many of the bare shelves I see are just file images. Pretty sure they weren't taken in the supermarket I was in this morning.

Ron

 

https://katu.com/news/nation-world/...ageous-for-lowering-employee-wages-03-25-2022

The email, with the subject line “Why gas increase is good for hiring,” starts off with the emailer, suspected to be Pankratz, acknowledging Applebee’s employees are struggling financially.

"Most of our employee base and potential employee base live paycheck to paycheck. Any increase in gas price cuts into their disposable income," the email reads.

 

Just recently a microcomputer board used in a product line is on back order and now we are told it will last over a year or more.

 

https://www.bloombergquint.com/business/a-world-that-s-more-expensive-is-starting-to-destroy-demand
A World That’s More Expensive Is Starting to Destroy Demand

Prices for some of the world’s most pivotal products – foods, fuels, plastics, metals – are spiking beyond what many buyers can afford. That’s forcing consumers to cut back and, if the trend grows, may tip economies already buffeted by pandemic and war back into recession.
...
In the developed world, the squeeze between higher energy and food costs could force households to cut discretionary spending – evenings out, vacations, the latest iPhone or PlayStation. China’s decision to put its top steelmaking hub under Covid-19 lockdown could limit supply and push up prices for big-ticket items like home appliances and cars. Electric vehicles from Tesla Inc., Volkswagen AG an
General Motors Co. may be the future of transportation, except the lithium in their batteries is almost 500% more expensive than a year ago.