Economy

[BigRedBuster]

2 minutes ago, Born N Bled Red said:

 

Your situation is a bit different as you are buying the raw materials from the businesses that hold the power. The meat and dairy industry does this on both ends. First by price setting the purchase price of the raw goods (live animals) the by price setting the selling price of the finished product. As a result they make bank on both ends as the middleman. 

Yes.

 

But, what I'm saying is that producers have no power in this.  They have absolutely no options to sell their products, which they have to sell when cattle are ready to sell.  They can't hold them for 6 months to make a point.  Sysco, on the other hand, has a little more pull.  I'm assuming they are one of the biggest single consumers of beef from the packers.  If they decide to move forward with a lawsuit, the packers really can't just stop selling to them.  The packers need to move the beef too, like the producers.  So, Sysco could do a lawsuit and not just be shut off by the packers.

[Born N Bled Red]

2 minutes ago, BigRedBuster said:

Yes.

 

But, what I'm saying is that producers have no power in this.  They have absolutely no options to sell their products, which they have to sell when cattle are ready to sell.  They can't hold them for 6 months to make a point.  Sysco, on the other hand, has a little more pull.  I'm assuming they are one of the biggest single consumers of beef from the packers.  If they decide to move forward with a lawsuit, the packers really can't just stop selling to them.  The packers need to move the beef too, like the producers.  So, Sysco could do a lawsuit and not just be shut off by the packers.

 

Sysco could, yes, but they still need to sell food to remain in business. Packers still have the power. Demand drops, they shutter plants or cancel the graveyard shift. Price of live animals crash for the producer as the packers aren't moving as much product, meanwhile the packers have created their own scarcity for the consumer, leading to higher prices. They maintain profits either way.

 

This is why companies like Costco have vertically integrated. They now own the animal from birth to slaughter and build their own processing plants. You'd think this would result in more competition for the raw goods  (live animals), but instead it reduces competition, because the Costco's of the world own the whole process and hire people to manage farms, rather than pay a farmer, cutting them out as well and further empowering packers to price set on the raw goods. 

[Moiraine]

1 hour ago, Born N Bled Red said:

Well, today it clicked. How interest rate hikes stop inflation. Some of you probably already understood this, but here goes. 

 

Poor people have too much money, this is increasing demand on materials and causing prices to increase as well. People are willing to pay the higher price because they have more liquidity. But too much inflation is bad, as it devalues the currency, which, of course impacts the wealthy most as they have the most currency to devalue. 

 

So by increasing the interest rate, it prevents poor people from doing things like buying a house, or taking out a loan for college, having kids, or even utilizing credit to pay for every day good. This in turn reduces demand and which then stems inflation by penalizing the poor for having liquidity and recommits them to a life of indentured servitude.

 

So instead of penalizing the poor people, why don't we cap how much of a price increase producers can charge relative to their input costs? Wouldn't this truly stem inflation and allow poor people to improve their financial standing and gain liquidity? 

 

Well- sure it would. But we can't put any limits or restrictions on the wealthy and their greed. Only poor people should have any limits on their life and we will control them through their finances. 

 

Then, we will also identify the necessities in life - fuel, food, medical care, and completely remove it from the equation of supply and demand and gouge the crap out of the poor people so that even if they stop utilizing credit so high interest rates don't impact them we keep them where we want them, living paycheck to paycheck selling the minutes of their short time on this earth for pennies on the dollar just to get by. 

 

In doing so we create an oligarchy, of the rich, by the rich, and for the rich. We'll call it capitalism and say "hey look, anyone can be like us," while the entire time the system is rigged to ensure only a select few ever truly experience economic mobility, a strong financial standing, and the liquidity necessary to achieve the American dream. 

 

 

 

 

 

I’m not super knowledgeable on maceoeconomics, but I know you need to read more about it because most of what you’re saying here is wrong. If inflation increases and hourly rages don’t increase, poor people will suffer a lot more than if inflation is reduced. Raising interest rates does make it harder to make a big purchase with a loan and it’s good for people with savings, but inflation unabated would hurt poor people way more than increasing interest rates.

 

I would also add that truly poor people, not lower middle class, already had a really tough time getting any kind of loan. Truly poor people would not be impacted much by an increase in interest rates (unless there is a recession in part due to the increase and they’re laid off) but they sure as hell would be impacted by inflation.

[Born N Bled Red]

6 minutes ago, Moiraine said:

 

 

 

I’m not super knowledgeable on maceoeconomics, but I know you need to read more about it because most of what you’re saying here is wrong. If inflation increases and hourly rages don’t increase, poor people will suffer a lot more than if inflation is reduced. Raising interest rates does make it harder to make a big purchase with a loan and it’s good for people with savings, but inflation unabated would hurt poor people way more than increasing interest rates.

 

I would also add that truly poor people, not lower middle class, already had a really tough time getting any kind of loan. Truly poor people would not be impacted much by an increase in interest rates (unless there is a recession in part due to the increase and they’re laid off) but they sure as hell would be impacted by inflation.

 

1) I never advocated for runaway inflation, I'm suggesting that penalizing the poor to reduce demand is but one way and IMO the wrong way to slow or reverse inflation. 2) Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about ten times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage. - Denying homeownership by making loans too expensive and by harvesting the dollars of the poor/ middleclass through higher interest rates prevents that wealth accumulation. 3) An inability to build credit through major purchases also leads to more expensive interest rates. Use credit (it costs more.) Don't use credit and have an undeveloped credit history (it'll cost much more when you do need it.) 

[Moiraine]

16 minutes ago, Born N Bled Red said:

 

1) I never advocated for runaway inflation, I'm suggesting that penalizing the poor to reduce demand is but one way and IMO the wrong way to slow or reverse inflation. 2) Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about ten times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage. - Denying homeownership by making loans too expensive and by harvesting the dollars of the poor/ middleclass through higher interest rates prevents that wealth accumulation. 3) An inability to build credit through major purchases also leads to more expensive interest rates. Use credit (it costs more.) Don't use credit and have an undeveloped credit history (it'll cost much more when you do need it.) 

 

 

Other than capping prophets what is your suggestion to slow or reverse inflation?

Homeownership already was unobtainable for most of the people you're concerned about. In fact lots of people were already priced out by the reduced material production during the pandemic leading to fewer houses being built. That (which is a form of inflation) had a much bigger impact on people buying houses than an interest rate hike. I believe interest rates have been at all-time lows for more than a decade prior to now.

I had over an 800 FICO before I bought a house and I have never bought a car (I keep getting my dead grandparents' cars). And there are still 0% interest credit cards out there.

[Born N Bled Red]

23 minutes ago, Moiraine said:

 

 

Other than capping prophets what is your suggestion to slow or reverse inflation?

Homeownership already was unobtainable for most of the people you're concerned about. In fact lots of people were already priced out by the reduced material production during the pandemic leading to fewer houses being built. That (which is a form of inflation) had a much bigger impact on people buying houses than an interest rate hike. I believe interest rates have been at all-time lows for more than a decade prior to now.

I had over an 800 FICO before I bought a house and I have never bought a car (I keep getting my dead grandparent's cars). And there are still 0% interest credit cards out there.

 

Under the current system, greed at the top is the main driver. It dictates that you must charge the maximum price for a product or service that a population will pay. This is why when people have more money and are willing to spend (aka demand) increases the price of a product or service increases. All input costs being equal a product or service produced or delivered during times of high demand will be more expensive than the same sold at a time of low demand. 

 

At present, inflation has impacted input costs. I won't argue that. However, we are seeing industries use that inflation as an opportunity to price gouge and rake in record profits which is, in turn driving additional inflation. This is true across all industries. We know companies track input costs. By simply tracking the inflation rate of inputs and then capping what companies can charge over that rate at say 5-10%, you would limit the run away inflation we have seen over the last two years, without harvesting the accumulated liquidity of the low to middle class. What's more this wouldn't hurt profitability, in theory either. Companies were already selling for a profit as was. If not, they wouldn't be in existence. Give companies the equivalent of a COLA plus 5-10% on what they sell their goods for just as the population is given on what they can sell their labor for. 

 

The only other way to stem inflation by price gouging/ illegal price setting activity is to increase competition - real competition. Not 30 different brands owned by the same corporate conglomerate. This would mean going back to the days of Trust busting, and that's not going to happen. Companies are too huge the time for that was 20 years ago and unfortunately, the US elected officials have decided it doesn't have the cahones to take on their corporate donors (go figure). 

 

 

Also- kudos on the 800+ credit score you've clearly worked hard to keep that up. Not everyone has luxury of inheriting vehicles.  A small example of the birth lottery, I guess. 

[Moiraine]

2 hours ago, Born N Bled Red said:

 

Under the current system, greed at the top is the main driver. It dictates that you must charge the maximum price for a product or service that a population will pay. This is why when people have more money and are willing to spend (aka demand) increases the price of a product or service increases. All input costs being equal a product or service produced or delivered during times of high demand will be more expensive than the same sold at a time of low demand. 

 

At present, inflation has impacted input costs. I won't argue that. However, we are seeing industries use that inflation as an opportunity to price gouge and rake in record profits which is, in turn driving additional inflation. This is true across all industries. We know companies track input costs. By simply tracking the inflation rate of inputs and then capping what companies can charge over that rate at say 5-10%, you would limit the run away inflation we have seen over the last two years, without harvesting the accumulated liquidity of the low to middle class. What's more this wouldn't hurt profitability, in theory either. Companies were already selling for a profit as was. If not, they wouldn't be in existence. Give companies the equivalent of a COLA plus 5-10% on what they sell their goods for just as the population is given on what they can sell their labor for. 

 

The only other way to stem inflation by price gouging/ illegal price setting activity is to increase competition - real competition. Not 30 different brands owned by the same corporate conglomerate. This would mean going back to the days of Trust busting, and that's not going to happen. Companies are too huge the time for that was 20 years ago and unfortunately, the US elected officials have decided it doesn't have the cahones to take on their corporate donors (go figure). 

 

 

Also- kudos on the 800+ credit score you've clearly worked hard to keep that up. Not everyone has luxury of inheriting vehicles.  A small example of the birth lottery, I guess. 

 

 

 

Yes, I’m super lucky my dad and all of my aunts and uncles died 10-40 years before their parents so I could move up in the line of succession for used cars.

 

Anyway, you do make some good points. 

[Moiraine]

4 hours ago, Moiraine said:

capping prophets 

 

 

Ewps

[DevoHusker]

 

 

 

[teachercd]

That would be kind of a blast.

[BigRedBuster]

 

[Danny Bateman]

3 hours ago, BigRedBuster said:

 

 

Interesting. It'll bear watching if this will go any better than the Foxconn deal in Wisconsin.

 

That was a MAJOR feather in the cap of Scott Walker while he was governor... until it turned out Foxconn was basically just shaking the state down for incentives without seriously planning to follow through on their end of the deal.

[teachercd]

What will hurt the US economy more...

 

Russia dragging out this war and the US sending more and more money

 

Or

 

Russia winning the war?

[Moiraine]

2 hours ago, teachercd said:

What will hurt the US economy more...

 

Russia dragging out this war and the US sending more and more money

 

Or

 

Russia winning the war?

 

 

The US spending money in Ukraine isn't having a big impact on our economy. I imagine not doing business with Russia is costing more, e.g. there isn't as much oil to buy. Russia winning the war will hurt Europe a lot more than the U.S. I think. They get a lot more food imports from Ukraine than we do.

[JJ Husker]

Gas (regular unleaded) is down 36¢ from it’s high of $4.89, $4.53 today in Greeley. That’s at about the cheapest place in town. Still seeing lots of places over $4.70ish.

 

So if your’s is cheaper, FU, and if it’s more, suck it