Inflation be Damned

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canpakes
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Re: Inflation be Damned

Post by canpakes »

K Graham wrote:
Tue Mar 08, 2022 9:20 pm
crap just got real.

McDonald's is shutting down its Russian restaurants

Why are we doing the Russians favors? We’re supposed to be sanctioning them.
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Xenophon
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Re: Inflation be Damned

Post by Xenophon »

canpakes wrote:
Tue Mar 08, 2022 9:32 pm
K Graham wrote:
Tue Mar 08, 2022 9:20 pm
crap just got real.

McDonald's is shutting down its Russian restaurants

Why are we doing the Russians favors? We’re supposed to be sanctioning them.
That is the meme of the day: "Russia no longer has access to social media, fast food, or soda. Pretty soon they'll be the healthiest most well adjusted humans on the planet"
He/Him

“If you consider what are called the virtues in mankind, you will find their growth is assisted by education and cultivation.”
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Philo Sofee
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Re: Inflation be Damned

Post by Philo Sofee »

Xenophon wrote:
Tue Mar 08, 2022 9:51 pm
canpakes wrote:
Tue Mar 08, 2022 9:32 pm



Why are we doing the Russians favors? We’re supposed to be sanctioning them.
That is the meme of the day: "Russia no longer has access to social media, fast food, or soda. Pretty soon they'll be the healthiest most well adjusted humans on the planet"
:lol:
K Graham
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Re: Inflation be Damned

Post by K Graham »

In 2021 overall inflation rose 7% and wages increased 4.7%, both at their highest rates in forty years. This means that despite record wage growth, on average, Americans got a 2.3% pay cut in 2021. But when you break down the areas that affected inflation the most, it becomes clear that not everyone was impacted the same way, and many benefited greatly from inflation. For instance, used car prices skyrocketed a whopping 45% from Feb 2021 to Feb 2022 because the pandemic created a chip shortage. So if you weren't buying a used car in 2021, then the avg 7% rate of inflation was closer to 5% for you. However, if you are selling a used car, you can maybe sell it for as much or even more than you initially paid for it. So for instance, because of inflation, the market value for my 2019 Ford Ranger is more than what I paid for it three years ago. Which means whenever I choose to sell it, I would have been driving a new car for the past few years rent free. It also means that the avg 7% inflation is much less for me because I'm not buying another used car.

Another area that rose higher than 7% was in home values which rose 23% in the Atlanta area. In terms of inflation, this could either help or hurt you depending on your situation. So, if you're renting it really sucks for you because you don't have an existing home to sell to offset the inflated cost of that purchase. However, if you're an existing homeowner with a mortgage, then inflation is your new friend because your home value and your equity just increased significantly whereas your mortgage payment stays the same. For this reason inflation is good for people with debt (most Americans), but not so good for creditors. So if you owned a home in the Metro Atlanta worth $600,000 your personal wealth just increased by $138,000 in one year thanks to inflation. Roughly 80 million Americans are homeowners, and so they saw their personal wealth jump this along with their buying power this past year.

So people who purchased neither a home nor a used car in 2021 were likely to net a substantial pay increase. On the flip side of that coin, if you were a first time home buyer who also bought a used vehicle in 2021, then the inflation rate for you was likely greater than 10% and your pay cut was likely greater.

Another point that matters is type of employment. Some people got a bigger pay increase than others. Employees in the leisure and hospitality industry ( 15 million workers) saw the biggest increases, with average hourly wages for hotels and restaurant (18 million workers) 13.4% higher in November than the same month the previous year. Workers in transportation and warehousing (5.3 million workers) saw a 10.4% increase, the next biggest gain. So it should go without saying tens of millions of Americans saw dramatic pay increases that surpassed inflation, effectively creating a pay raise. Incidentally, 3 million real estate agents saw their income jump 17% on average because their income is tied to the value of the homes they sell. Commission based sales reps in all fields likely saw a substantial pay increase for the same reason (i.e. used car salesmen).

Location is also important as not every area in the country is experiencing the same rate of inflation. The cities that experienced the highest rates of inflation were the cities people were moving to the most. So if you are living in South Dakota, NYC or San Francisco, inflation for you was about half that of the national average, which is lower than average wage growth. But if you were moving to Sandy Springs, inflation for you was closer to 10%.

https://fortune.com/2022/02/10/used-car ... in-a-year/

https://www.marketwatch.com/story/heres ... 1642013614
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K Graham
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Re: Inflation be Damned

Post by K Graham »

Gadianton wrote:
Tue Mar 08, 2022 9:32 pm
A-Mike once again needs to answer: Under Trump's vision of the US as a net energy exporter, where is the incentive to lower the price of oil?
Asked, never answered.
"I am not an American ... In my view premarital sex should be illegal" - Ajax18
K Graham
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Re: Inflation be Damned

Post by K Graham »

Inflation ran 8.5% in the year ending last month, while nominal wages grew only 5.6%, a decline in inflation-adjusted wages of 2.7%. So we had both record increases in wages with the highest inflation in 40 years. The silver lining here isn't only that wage growth is permanent while inflation is temporary. Those on the lower end of the economic ladder have seen higher wage increases. For instance, hourly employees saw their income jump 6.6% from March 2021. Those who fall into the category of "Job Switcher" saw their wages rise 7.1%. The fact is a hot economy raises prices more than wages because the former adjust more frequently than the latter. Pay raises usually come at the end of the year while inflation fluctuates with the ebb and flow of supply/demand.

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At least at the start of 2022 — “the economy” looked pretty darned good to one large segment of Americans: those starting out at the bottom of the economic pyramid. The Biden presidency began on January 20, 2021, with hopes that aggressive relief around COVID-19 — especially for middle-class families with kids — and efforts to prop up the job market in areas like restaurants and retail would prevent a recession. Now, with virtually zero fanfare, two studies have shown that — even in a time of rising inflation — lower-income Americans arguably gained more last year than any time since LBJ’s “War on Poverty” in the 1960s.

Researchers have discovered the combination of the booming job market and the impact of occasionally bipartisan federal relief that started under Donald Trump in 2020 and grew with 2021′s Biden-backed $1.9-trillion relief package have meant sweeping and unexpected economic gains for the Americans who’d been so often left behind during four decades of rising income inequality.

“This has been a success story for middle-class families,” said Shaefer, whose UM center this month reported that lower-income Americans have on average 50% more money in the bank (even adjusted for inflation) than at the start of the pandemic and that 2021′s expanded Child Tax Credit brought a notable reduction in food insecurity. The number of Americans with bad credit scores is at the lowest in 16 years, possibly ever.

Now, nearly a third of the way into 2022, it’s hard to say what’s more remarkable about last year’s epic victory in this mini-”War on Poverty” — that most U.S. voters don’t even know that this happened, or that this brief flourishing of an America where fewer kids were going to bed hungry and where retail clerks suddenly had a rainy-day fund for an emergency is already disappearing thanks to our nation’s bitter, cynical politics.
"I am not an American ... In my view premarital sex should be illegal" - Ajax18
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