USA Inflation Hits 8% Even Before Russia-Ukraine Conflict

[Economy 53,076]

https://www.bnnbloomberg.ca/u-s-inflation-hit-fresh-40-year-high-of-7-9-before-oil-spike-1.1735572

 

New data shows Inflation hit nearly 8% annually (7.9% to be precise) even before the recent Russia-Ukraine conflict

 

That inflation rate is very high and the highest in over 40 years.

[Bling 31,703]

Can someone explain inflation? I know it means prices go up but like, why the drama? Isn't that going to happen over time anyway?

[bpmMonkey 7,832]

I think the problem is the speed in which it happens. Usually the real life wages have time to grow with the inflation, so you dont really feel that things are getting more expensive and therefor otherwise your money would lose value (the same $ gets you on one day milk, bread and eggs, zhe next day only bread -> $ lost its value). Now we are moving into a time where the balance will be very off more and more. Factors for this inflation are a ton of different things and im very sure there are a lot of good youtube videos on this matter 😊

[holy scheisse 23,072]

I was looking up monster ball on wiki the the other day (bc obviously) and it was shocking to see how the revenue was listed as 

 

$227.4 million ($261.61 in 2020 dollars)[1] 
 

And that was just 10 years ago 

[Maryjanesdope 681]

just deflate it🙄

[BillieGOAT 5,272]

Turn it off!

[gothicdream 39,660]

Meanwhile, companies are taking advantage and posting record profits 

"The top 30 companies in the major industry categories of the consumer price index have raised prices while collectively boosting their profits by $151 billion, according to the liberal watchdog group Accountable.US, which compared the firms’ latest yearly and quarterly earnings reports with the previous year’s filings.

The companies also bought back an additional $28 billion of their own shares, a strategy to boost the stock price, which also happens to boost executive compensation.

'These companies would have consumers believe they marked up prices just to keep up with outside costs, but the tens of billions in extra profits and generous giveaways to investors last year show otherwise,' Accountable.US President Kyle Herrig said in a statement."

https://www.huffpost.com/entry/inflation-corporate-profits_n_6229f9cee4b0296158377826

[Naak Le Vaar 1,222]

Inflation going up, housing going up, and wages stagnating. The system is meant to screw over the middle class. 

[gothicdream 39,660]

1 hour ago, WheresMy911Alice said:

Can someone explain inflation? I know it means prices go up but like, why the drama? Isn't that going to happen over time anyway?

I am NOT an expert so please take what I say with a grain of salt.

But, some inflation is always to be expected. To my knowledge, I think it's usually been only a couple percentage points per year in the past. But right now it's quadruple that, largely because of the effects of the pandemic - labor shortages, supply chain issues, etc. 

It basically exacerbates the issue of wages not rising enough to keep up with inflation. People aren't making any more money but are paying way more for the same goods and services, even more so than in years past. So effectively it's like people's income drops.

And, companies are taking advantage of it and raising prices even more than is necessary to cover increased costs.

[Mother of Puppies 36,615]

1 hour ago, WheresMy911Alice said:

Can someone explain inflation? I know it means prices go up but like, why the drama? Isn't that going to happen over time anyway?

the problem is that wages do not go up simultaneously which has a loss of real income as a result and therefor the "purchasing power" decreases. It's a downward spiral if the government doesn't do anything about it.

[Economy 53,076]

39 minutes ago, Healed My Heart said:

Meanwhile, companies are taking advantage and posting record profits 

"The top 30 companies in the major industry categories of the consumer price index have raised prices while collectively boosting their profits by $151 billion, according to the liberal watchdog group Accountable.US, which compared the firms’ latest yearly and quarterly earnings reports with the previous year’s filings.

The companies also bought back an additional $28 billion of their own shares, a strategy to boost the stock price, which also happens to boost executive compensation.

'These companies would have consumers believe they marked up prices just to keep up with outside costs, but the tens of billions in extra profits and generous giveaways to investors last year show otherwise,' Accountable.US President Kyle Herrig said in a statement."

https://www.huffpost.com/entry/inflation-corporate-profits_n_6229f9cee4b0296158377826

The problem is the top 30 companies or the biggest Corps dont reflect the economy as a whole

 

Just because those businesses are doing well and have managed to keep profits high doesnt mean thats the case of the typical company

 

Theres a lot of businesses out there that have been hammered by pandemic hurt demand, supply chain issues and rising costs

 

Just because some top performers took advantage to maximize profits (as is always the case in business cuz thats just what companies do)... That doesnt mean that the business sector as a whole is totally BSing the issue of rising costs and having to pass it down

[gothicdream 39,660]

Agreed @Economy, definitely not every business. But I have to imagine the top 30 companies provide quite a large portion of the most common consumer goods.

[Economy 53,076]

9 minutes ago, Healed My Heart said:

Agreed @Economy, definitely not every business. But I have to imagine the top 30 companies provide quite a large portion of the most common consumer goods.

For sure but still. They still wont represent the economy as a whole

 

I also wanna point regarding that comment i responded to even tho its only partially related that all this hate ppl have on profits and stuff like share buy backs... It is worth noting that if such things stopped the net effect would be closer to neutral for many people than they realize

 

Overall lower profits for investors in exchange for either higher pay or lower prices would still be a net positive for the majority of people since the wealth do own a disproportionately higher percentage of such assets

 

Still, investment capital is what grows and pays for things like pension funds. Wed have to have a higher chunck of our income removed to save for retirement if profits had to be kept low for example

 

Theres always offsetting factors for everything. U can never take the quantities of wealth existing in 1 set of hands and imagine a complete perfect transfer. Ppl tend to imagine is that way but the reality is always a lot more complex than that

 

These offseting factors of course doesnt mean something isnt worth doing (like taxing capital gains more for example) cuz the benefits still outway the cons. But I also believe not facturing in offseting factors in calculations is a big issue when political sides argue their opinions om what the beat policies are thus making promises that are too lofty then im reality those results end up not occuring

[TasteLikeWhiskey 1,561]

2 hours ago, WheresMy911Alice said:

Can someone explain inflation? I know it means prices go up but like, why the drama? Isn't that going to happen over time anyway?

In simple terms... Inflation is the increase in the price of a 'general' basket of goods. Demand and supply interaction determines this. 

Inflation is a good thing.... Provided that it increases along with internal spending growth..... . Meaning that it increases along with a planned interest rate matched with the wealth of a nation. 

When supply and demand does not act like predicted (because we disallow demand / influence the rate of supply) .... It causes havoc. Inflation will automatically change according to private spending. States and reserve banks are forced to keep up with the supply changes. Interest rate changes is their only weapon against that. It becomes a tricky business.... With results in economic instabity. 

We are not even speaking about oil price instability! 

[gothicdream 39,660]

7 minutes ago, Economy said:

For sure but still. They still wont represent the economy as a whole

 

I also wanna point regarding that comment i responded to even tho its only partially related that all this hate ppl have on profits and stuff like share buy backs... It is worth noting that if such things stopped the net effect would be closer to neutral for many people than they realize

 

Overall lower profits for investors in exchange for either higher pay or lower prices would still be a net positive for the majority of people since the wealth do own a disproportionately higher percentage of such assets

 

Still, investment capital is what grows and pays for things like pension funds. Wed have to have a higher chunck of our income removed to save for retirement if profits had to be kept low for example

 

Theres always offsetting factors for everything. U can never take the quantities of wealth existing in 1 set of hands and imagine a complete perfect transfer. Ppl tend to imagine is that way but the reality is always a lot more complex than that

 

These offseting factors of course doesnt mean something isnt worth doing (like taxing capital gains more for example) cuz the benefits still outway the cons. But I also believe not facturing in offseting factors in calculations is a big issue when political sides argue their opinions om what the beat policies are thus making promises that are too lofty then im reality those results end up not occuring

Excellent points! I do think that's indicative though of how the system is designed to very disproportionately favor the more fortunate. Using the pension example, only 40-ish% of Americans have a 401k plan at all, so someone who can't afford to invest in a retirement fund to begin with doesn't see a benefit from record corporate profits and higher prices. They just see their paycheck covering less and less.