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Posts Tagged ‘demand’

It’s Booming! Part 4: Those Pesky Prices!

Posted in Thoughts of the Day, tagged , , , , , , , , , , , , , on June 3, 2024| Leave a Comment »

It’s Booming! Part 4: Those Pesky Prices!

The article, “Inflation is slowing. Here’s why prices still aren’t going down” by Charlotte Morabito, is about inflation and seeks to answer why prices aren’t going down. The author makes the following points: “Historical data suggests a key factor in bringing down prices is a slowdown in consumer spending. Despite nearly half of Americans reporting they’re in a worse financial situation than five years ago, they’re still spending. Retail sales were up 2.1% year over year in the first quarter of 2024 and consumer spending jumped in February and March.” (Morabito, 2024)
The article explains the difference between disinflation and deflation. Disinflation is when the rate of inflation growth is slowing down. Deflation is when the prices go down. “There’s an important difference between inflation increasing more slowly — a phenomenon called disinflation — and inflation reversing itself, which would lead to prices coming down. Economists call the latter deflation, which is typically associated with a shrinking economy and potential recessions.” (Morabito, 2024) So, the prices going downward is actually a bad thing? Good to know.

Apparently, they have a new term for those who have a problem with the higher prices: “money illusion.” ‘“This cycle is a concept called money illusion,” said Sabrina Romanoff, a clinical psychologist. “People with money illusion … don’t take into account the level of inflation in an economy,” she said. “So they wrongly believe that a dollar today is worth the same amount that it was the year prior.” ’ (Morabito, 2024)

Yes, it seems those of us who actually expected an improvement in their personal circumstances are suffering from some sort of mental syndrome. It reminds me of the term money dysmorphia in the Dickler article, which describes how some people don’t see how great they have it since they are too busy comparing themselves to others.

Now we are mentally questionable because we expected the higher interest rates to drive prices down.

Also of note in the article is the following: “Wage-increase data may also seem inconsistent with consumer experience. Wages have been rising since January 2022, but the pace of the increase has been slowing down and, on average, it is just keeping up with rising prices. An analysis from Bankrate estimates the gap between inflation and wages won’t fully close until the fourth quarter of 2024.” Once again we’re supposed to believe that it’s the rate of increase that matters, not the cumulative inflation increase in comparison to the current wage.

The fact is the article reinforces the theory that domestic demand is responsible for the inflation. Both the article and the prevailing theory coming from the woke media seem to ignore global demand, such as from China, for our resources; cuts in supply for things like food, energy, and housing; as well as the printing of money coupled with excessive spending by the federal government. Unless these issues are addressed, how can the inflation be resolved? Instead, the article’s author is content blaming the consumer for continuing to spend. What are they supposed to do, not eat? Not pay their rent? 

Their utilities? Where does this attitude we’re buying luxury (unnecessary) items come from? And what are we supposed to do, hope that people tap out of their credit and can’t pay their bills, so they’ll stop spending money? The implication from the article seems to be that that’s the only way we’ll see a reduction in prices. And one might conclude it’s the only way they’ll lower the interest rates on credit cards as well.

(Dickler, 2024)

Dickler, J. (2024, March 13). “Nearly half of young adults have ‘money dysmorphia,’ survey finds. Here are the symptoms.” CNBC. https://www.cnbc.com/2024/03/13/nearly-half-of-young-adults-have-money-dysmorphia-survey-finds.html

(Morabito, 2024)

Morabito, C. (2024, May 12). “Inflation is slowing. Here’s why prices still aren’t going down.” CNBC. https://www.cnbc.com/2024/05/12/inflation-is-slowing-heres-why-prices-still-arent-going-down.html

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Inflation Caused by Government Spending, Supply Cuts, and Importation of Labor

Posted in Thoughts of the Day, tagged , , , , , , , , , , , , , , , , , , , on May 30, 2024| Leave a Comment »

In the past, the general understanding of inflation was that the demand for a good or service exceeded the supply. The implication was that any increase in the supply of money was in the hands of the consumer. In this case, the money is in the hands of the government and whatever special interests and agendas it decides to fund. There is no generalized proportional increase in wages for the workers, despite what the media says.

Instead, they are bringing in cheap foreign labor to undercut already proportionately low wages. This is to prevent a wage-price spiral — where the corporations would be forced to pay higher labor costs to compensate for the increased cost of living. They say preventing a wage-price spiral is good for everyone, but in reality it’s mostly good for the corporations. Bringing in foreign labor doesn’t just freeze wages, it can also reduce them. It also manages to drive up demand, putting pressure on price inflation. The corporations are also using taxpayer dollars to subsidize the foreign labor workforce — pay for their housing, food, healthcare, education. The taxpayer is paying the social costs of these workers while the corporations are just reaping the benefits of the cheap labor. This is a fascist system.

Meanwhile, in economics ideal price is determined by a bell curve. At the center of the curve is a price sweet spot. Free market systems are interested in that sweet spot since it allows companies to maximize profit. It shows the intersection where demand plus price can yield the maximum profit. Increasing the price has a tendency to decrease demand while decreasing the price has the tendency to increase demand in most things. Any price above or below that ideal price will decrease the profit. But in the fascist ideologically based system, supply is being artificially cut in areas such as housing, food, and energy, so that corporate profits can be somewhat maintained — though not at the level they were at under the free market system.

This keeps demand artificially high in comparison to the supply. That way they can keep prices and profit high while providing less. In other words, people can’t live without food, even if they can’t pay for it. And the few who can pay will pay whatever they have to in order to be able to eat. By targeting inelastic goods — essential items — for supply cuts they can force people to pay more for the item and thereby partially compensate for the reduction in quantity sold.

There is no intention to supply the world’s population with what they need to survive.

That way they can starve out the general population of necessary resources while still reaping some profit in the bargain — a compromise between greed and ideological fervor — and well in keeping with depopulation goals.

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