Why is a Strike Quite Possible?

Brownslave688

You want a toe? I can get you a toe.
I'm not being hoodwinked and I understand inflation.

There is actually 3 types. Demand-pull inflation, Cost-push inflation and Built-in inflation. Your talking about Built-In inflation. What we are experiencing now is mostly Demand-pull inflation. Demand-pull inflation refers to situations where there are not enough products or services being produced to keep up with demand, or supply chain bottlenecks, causing their prices to increase.

That being said, when supply catches up with demand, or when demand for supply goes down, prices will go down. When the war in Ukraine ends, when fuel prices go back down, when the Ukrainian grain market returns, when businesses go back to operating at full capacity, supply will return to normal and the current elevated prices, due to these issues, will fall and return to normal. Maybe not pre-pandemic, but should fall to where Built-in inflation would have them.

Remember when the baby formula prices shot up? Inflation at its rudimentary level. Demand was greater than supply because of a factory closure. The prices are back down now, or almost back down, because the factory is up and running. The prices will be back to normal once the factory catches up.

If you make a widget that everybody wants, and have a limited supply of them, you will charge more for them. When your supply catches up with demand, you will lower your price for that widget.

This is what we are experiencing now with inflation. Demand-pull inflation. When things go back to normal, prices will drop.


Taken from Investopedia.

Why Is Inflation So High Right Now?​

In 2022, inflation rates in the U.S. and around the world rose to their highest levels since the early 1980s. While there is no single reason for this rapid rise in global prices, a series of events worked together to boost inflation to such high levels.
The COVID-19 pandemic in early 2020 led to lockdowns and other restrictive measures that greatly disrupted global supply chains, from factory closures to bottlenecks at maritime ports. At the same time, governments issued stimulus checks and increased unemployment benefits to help blunt the financial impact of these measures on individuals and small businesses. When COVID vaccines became widespread and the economy rapidly bounced back, demand (fueled in part by stimulus money and low interest rates) quickly outpaced supply, which still struggled to get back to pre-COVID levels.
Russia's unprovoked invasion of Ukraine in early 2022 led to a series of economic sanctions and trade restrictions on Russia, limiting the world's supply of oil and gas since Russia is a large producer of fossil fuels. At the same time, food prices rose as Ukraine's large grain harvests could not be exported. As fuel and food prices rose, it led to similar increases down the value chains.
You are talking about certain prices for certain goods dropping. Of course they will prices fluctuate all of the time but absolutely no one is actually predicting deflation which is what would have to happen for your “guys don’t understand the raise is forever inflation is temporary’ statement to make any sense.


And you’re just repeating the old oh this is a temporary supply chain issue. Transitionary inflation line this administration tried to sell for a year before it become all too clear its much. More than that. I guess it makes sense since most of the articles you’re linking are from the spring when that was the line of thought.
 

Trucker Clock

Well-Known Member
You are talking about certain prices for certain goods dropping. Of course they will prices fluctuate all of the time but absolutely no one is actually predicting deflation which is what would have to happen for your “guys don’t understand the raise is forever inflation is temporary’ statement to make any sense.


And you’re just repeating the old oh this is a temporary supply chain issue. Transitionary inflation line this administration tried to sell for a year before it become all too clear its much. More than that. I guess it makes sense since most of the articles you’re linking are from the spring when that was the line of thought.

A little over a month ago.

Tom Hainlin, national investment strategist, U.S. Bank Wealth Management

“Higher inflation today reflects a restricted goods supply at the same time there’s strong demand for many of those same goods.”

Multiple factors contribute to supply shortages​

Hainlin says there are several factors fueling the continuation of supply challenges. “We can divide this issue in three primary ways – what’s going on in China, issues across the global supply chain and what’s affecting supply within the U.S. itself.”

Chinese firms play a major role supplying parts or finished products that are popular among consumers. The Chinese government is pursuing a “zero COVID” policy, which results in shutdowns of major cities where infections appear. “This restricts production in manufacturing facilities and the flow of goods through Chinese ports as they try to stem the tide of COVID in a very strict way,” says Hainlin.

Production and shipping from other major manufacturing countries may be tied to economic expectations. “In countries like Taiwan and South Korea,” says Hainlin, “output is driven by a consensus view anticipating a worldwide economic slowdown, so many firms are more cautious about ramping up production.”

Hainlin believes domestic supply constraints are largely a function of labor shortages, as unemployment lingers near historic lows and job openings remain high. “The major challenge for many employers is whether they can attract and retain sufficient labor to meet their production demands.” Hainlin says this problem spreads from manufacturing facilities to airlines to transportation services like trucking and port operations.

War-related supply disruptions​

Russia’s invasion of Ukraine, which began in late February 2022, immediately roiled energy and agricultural commodity markets. “The upward swing in oil prices is a direct result of the war and Europe seeking to impose restrictions on importing Russian oil,” says Hainlin. He points out that this impacts the global oil supply, as oil is priced on worldwide markets, and not just domestic production trends. “Bigger countries, for the most part, are net oil importers, so higher oil prices typically lead to a slowdown in aggregate economic growth,” says Hainlin.

Both Russia and Ukraine are major agricultural producers. After a long period of interruption, shipping of Ukrainian farm commodities to overseas destinations only recently resumed. African nations, among others, are highly dependent on Ukrainian crop production. The inability to ship products due to Russian intervention of sea lanes contributed to higher commodity prices. As a result, consumers across the world are paying more for food at the retail level. “The restrictions affecting the flow of oil and food are exacerbating the breadth of price increases,” says Hainlin.

The chip shortage​

Another prominent story related to supply chain issues was the shortage of semiconductor components for various purposes. These “chips” play an increasingly important role in a variety of products. For most of the last two years, orders for chips have been backlogged, causing a delay in the production of a number of items. The most notable sector that’s been affected is the automobile industry.

“Semiconductor components are critical to automobile production today,” says Hainlin. “With production delayed due to a lack of available chips, the supply of vehicles dropped and prices rose.” Higher costs for new and used cars are another major contributor to the rapid increase in the overall inflation rate.

Most semiconductors come from firms based in Taiwan and South Korea. In late July, the U.S. Senate and House passed legislation incentivizing construction of domestic semiconductor manufacturing plants. It includes a commitment of $52 billion to support the development of the semiconductor industry in the U.S. “Countries are interested in establishing domestic capacity that can’t be challenged by another nation,” says Hainlin. “We saw a number of countries pass similar legislation in previous years promoting robotics development.”

Hainlin notes this is not a quick fix to current semiconductor shortages. “The challenge is that this is a sophisticated technology, and it may take some time to catch up with the largest firm in the world in this sector, Taiwan Semiconductor.”

What isn’t clear is the near-term demand for semiconductor chips. “It’s difficult to determine if the current high demand is related to manufacturers trying to get ahead on inventory, or if demand will continue to rise as it has in recent times,” says Hainlin. “These are the kinds of questions we’re dealing with across many sectors of the economy as we emerge from COVID-19, as supply chains begin to return to normal and as we get a better sense of what future demand looks like.”

Where we go from here​

The sudden upturn in the inflation rate and its persistent nature demonstrates a continued imbalance between supply and demand, particularly in certain segments of the economy. The Fed’s aggressive policy reversal left behind its “easy money” approach that featured low interest rates and significant investments in the bond market. The Fed hiked interest rates rapidly over the spring and summer of 2022. “The Fed is sending a message to consumers that they will succeed in getting inflation back to normal,” says Hainlin. However, the Fed’s sudden turn played a role in the bear market for stocks that occurred in the first half of 2022. It also triggered lower bond prices as interest rates rose across the broader bond market.

The Fed’s actions are designed to dampen consumer demand, which will hopefully alleviate some of the supply side pressures. Hainlin believes the Fed will continue its rate hike policy until inflation numbers improve. Market participants are closely monitoring the Fed to see if it can achieve a tamer inflation environment without sending the economy into a recession. The confluence of interest rates, inflation and corporate profit growth are three key factors for investors to monitor in the closing months of 2022, as the rate of economic growth will likely be reflected in corporate earnings and stock prices.

 

Brownslave688

You want a toe? I can get you a toe.
A little over a month ago.

Tom Hainlin, national investment strategist, U.S. Bank Wealth Management

“Higher inflation today reflects a restricted goods supply at the same time there’s strong demand for many of those same goods.”

Multiple factors contribute to supply shortages​

Hainlin says there are several factors fueling the continuation of supply challenges. “We can divide this issue in three primary ways – what’s going on in China, issues across the global supply chain and what’s affecting supply within the U.S. itself.”

Chinese firms play a major role supplying parts or finished products that are popular among consumers. The Chinese government is pursuing a “zero COVID” policy, which results in shutdowns of major cities where infections appear. “This restricts production in manufacturing facilities and the flow of goods through Chinese ports as they try to stem the tide of COVID in a very strict way,” says Hainlin.

Production and shipping from other major manufacturing countries may be tied to economic expectations. “In countries like Taiwan and South Korea,” says Hainlin, “output is driven by a consensus view anticipating a worldwide economic slowdown, so many firms are more cautious about ramping up production.”

Hainlin believes domestic supply constraints are largely a function of labor shortages, as unemployment lingers near historic lows and job openings remain high. “The major challenge for many employers is whether they can attract and retain sufficient labor to meet their production demands.” Hainlin says this problem spreads from manufacturing facilities to airlines to transportation services like trucking and port operations.

War-related supply disruptions​

Russia’s invasion of Ukraine, which began in late February 2022, immediately roiled energy and agricultural commodity markets. “The upward swing in oil prices is a direct result of the war and Europe seeking to impose restrictions on importing Russian oil,” says Hainlin. He points out that this impacts the global oil supply, as oil is priced on worldwide markets, and not just domestic production trends. “Bigger countries, for the most part, are net oil importers, so higher oil prices typically lead to a slowdown in aggregate economic growth,” says Hainlin.

Both Russia and Ukraine are major agricultural producers. After a long period of interruption, shipping of Ukrainian farm commodities to overseas destinations only recently resumed. African nations, among others, are highly dependent on Ukrainian crop production. The inability to ship products due to Russian intervention of sea lanes contributed to higher commodity prices. As a result, consumers across the world are paying more for food at the retail level. “The restrictions affecting the flow of oil and food are exacerbating the breadth of price increases,” says Hainlin.

The chip shortage​

Another prominent story related to supply chain issues was the shortage of semiconductor components for various purposes. These “chips” play an increasingly important role in a variety of products. For most of the last two years, orders for chips have been backlogged, causing a delay in the production of a number of items. The most notable sector that’s been affected is the automobile industry.

“Semiconductor components are critical to automobile production today,” says Hainlin. “With production delayed due to a lack of available chips, the supply of vehicles dropped and prices rose.” Higher costs for new and used cars are another major contributor to the rapid increase in the overall inflation rate.

Most semiconductors come from firms based in Taiwan and South Korea. In late July, the U.S. Senate and House passed legislation incentivizing construction of domestic semiconductor manufacturing plants. It includes a commitment of $52 billion to support the development of the semiconductor industry in the U.S. “Countries are interested in establishing domestic capacity that can’t be challenged by another nation,” says Hainlin. “We saw a number of countries pass similar legislation in previous years promoting robotics development.”

Hainlin notes this is not a quick fix to current semiconductor shortages. “The challenge is that this is a sophisticated technology, and it may take some time to catch up with the largest firm in the world in this sector, Taiwan Semiconductor.”

What isn’t clear is the near-term demand for semiconductor chips. “It’s difficult to determine if the current high demand is related to manufacturers trying to get ahead on inventory, or if demand will continue to rise as it has in recent times,” says Hainlin. “These are the kinds of questions we’re dealing with across many sectors of the economy as we emerge from COVID-19, as supply chains begin to return to normal and as we get a better sense of what future demand looks like.”

Where we go from here​

The sudden upturn in the inflation rate and its persistent nature demonstrates a continued imbalance between supply and demand, particularly in certain segments of the economy. The Fed’s aggressive policy reversal left behind its “easy money” approach that featured low interest rates and significant investments in the bond market. The Fed hiked interest rates rapidly over the spring and summer of 2022. “The Fed is sending a message to consumers that they will succeed in getting inflation back to normal,” says Hainlin. However, the Fed’s sudden turn played a role in the bear market for stocks that occurred in the first half of 2022. It also triggered lower bond prices as interest rates rose across the broader bond market.

The Fed’s actions are designed to dampen consumer demand, which will hopefully alleviate some of the supply side pressures. Hainlin believes the Fed will continue its rate hike policy until inflation numbers improve. Market participants are closely monitoring the Fed to see if it can achieve a tamer inflation environment without sending the economy into a recession. The confluence of interest rates, inflation and corporate profit growth are three key factors for investors to monitor in the closing months of 2022, as the rate of economic growth will likely be reflected in corporate earnings and stock prices.

Guess I missed the part where they’re gonna drop prices by 25% to get back to “normal”
 

Brownslave688

You want a toe? I can get you a toe.
Prices are not up 25%, except for gasoline. And that has already come down by more than 25%
Apparently you haven’t bought anything in the last few years if you don’t think real prices are up 25% or more over the past 2 years. Even as the government measures it it’s around 15% and we know that’s low.

My electric rates just doubled. Natural gas expected to triple this winter. Fuel will be right back up after they stop releasing from the reserve. Food prices have doubled and tripled all over the place.

It’s a worldwide economy now too. It’s not nearly as simple as oh the USA seems to have gotten it together. In fact right now the dollar is really strong even with crazy inflation because other countries don’t seem to be even trying to control their inflation.

Electricity costs rising, wages rising (More pay raises are on the way for many workers this year), government coming after corporations to pay their share.

Yeah man none of that sounds like business will be looking to significantly drop prices
 
Apparently you haven’t bought anything in the last few years if you don’t think real prices are up 25% or more over the past 2 years. Even as the government measures it it’s around 15% and we know that’s low.

My electric rates just doubled. Natural gas expected to triple this winter. Fuel will be right back up after they stop releasing from the reserve. Food prices have doubled and tripled all over the place.

It’s a worldwide economy now too. It’s not nearly as simple as oh the USA seems to have gotten it together. In fact right now the dollar is really strong even with crazy inflation because other countries don’t seem to be even trying to control their inflation.

Electricity costs rising, wages rising (More pay raises are on the way for many workers this year), government coming after corporations to pay their share.

Yeah man none of that sounds like business will be looking to significantly drop prices
The price of groceries are getting out of hand
 

Trucker Clock

Well-Known Member
My electric rates just doubled.

Power generators rely on gas to produce electricity. When gas goes up, so does electricity.

Natural gas expected to triple this winter.

Gas is not really going up due to inflation. There are other factors that, when resolved, should lower the price. In turn, should lower electricity. In the near term, no.

The gas market is getting caught up in the frenzy that has hit the oil, fuel and coal markets as countries scramble to make sure they have enough reliable energy in the wake of Russia's invasion of Ukraine. Russia is the world's biggest exporter of crude and fuel and is also the biggest exporter of natural gas.

Fuel will be right back up after they stop releasing from the reserve.

The war in Ukraine has also contributed to the spike in energy prices, and continues to upend global oil and gas markets four months after Russia’s invasion. Oil supply took a massive hit when the U.S. and E.U. banned imports of Russian oil, hoping a series of punitive measures would force Russia to retreat. But much of the world relies on Russian oil, so the move intensified market volatility and led to rising oil prices.

Food prices have doubled and tripled all over the place.

A number of factors have contributed to the rise in food costs: A deadly avian flu has meant fewer eggs in the United States, a severe drought in Brazil slashed coffee crops and the war in Ukraine led to a spike in wheat prices in the spring.

While commodity prices are falling, it will take time before those lower costs pass through to consumers. Plus, plenty of other costs for producers — such as fuel, labor and packaging — have also been high.

And as supply has been disrupted, demand has grown.
 

Brownslave688

You want a toe? I can get you a toe.
Power generators rely on gas to produce electricity. When gas goes up, so does electricity.



Gas is not really going up due to inflation. There are other factors that, when resolved, should lower the price. In turn, should lower electricity. In the near term, no.

The gas market is getting caught up in the frenzy that has hit the oil, fuel and coal markets as countries scramble to make sure they have enough reliable energy in the wake of Russia's invasion of Ukraine. Russia is the world's biggest exporter of crude and fuel and is also the biggest exporter of natural gas.



The war in Ukraine has also contributed to the spike in energy prices, and continues to upend global oil and gas markets four months after Russia’s invasion. Oil supply took a massive hit when the U.S. and E.U. banned imports of Russian oil, hoping a series of punitive measures would force Russia to retreat. But much of the world relies on Russian oil, so the move intensified market volatility and led to rising oil prices.



A number of factors have contributed to the rise in food costs: A deadly avian flu has meant fewer eggs in the United States, a severe drought in Brazil slashed coffee crops and the war in Ukraine led to a spike in wheat prices in the spring.

While commodity prices are falling, it will take time before those lower costs pass through to consumers. Plus, plenty of other costs for producers — such as fuel, labor and packaging — have also been high.

And as supply has been disrupted, demand has grown.
You’ve listed about 25 different reasons for inflation just in this thread and they’re all gonna magically end in the next few months right?


🤣🤣🤣
 

Trucker Clock

Well-Known Member
You’ve listed about 25 different reasons for inflation just in this thread and they’re all gonna magically end in the next few months right?


🤣🤣🤣

Um. I only listed 7. Yes, the perfect storm. If only a few happened, the economy could have absorbed them. But, they all happened almost at the same time.

1. disrupted global supply chains (including domestic supply constraints and the shortage of semiconductor components)

2. demand (fueled in part by stimulus money and low interest rates) quickly outpaced supply

3. Russia's unprovoked invasion of Ukraine

4. what’s going on in China

5. many firms are more cautious about ramping up production

6. A deadly avian flu

7. a severe drought in Brazil




And I never said in the next few months. As a matter of fact, if you actually read the posts, I said in the near term, no.

You're point was that these high prices will never come down. They will only go up from here due to Built-in inflation. I said these high prices will eventually go down when the factors that have caused this high inflation are rectified. In the near term, no. Within the next year or two, probably.

And these prices will probably still be high during contract negotiations. So, if the Company is not willing to negotiate our pay scale fairly, a strike is not out of the question. See, this whole discussion is on topic. Inflation, wages, price of goods, contract and strike. All correlate together.
 

Brownslave688

You want a toe? I can get you a toe.
Um. I only listed 7. Yes, the perfect storm. If only a few happened, the economy could have absorbed them. But, they all happened almost at the same time.

1. disrupted global supply chains (including domestic supply constraints and the shortage of semiconductor components)

2. demand (fueled in part by stimulus money and low interest rates) quickly outpaced supply

3. Russia's unprovoked invasion of Ukraine

4. what’s going on in China

5. many firms are more cautious about ramping up production

6. A deadly avian flu

7. a severe drought in Brazil




And I never said in the next few months. As a matter of fact, if you actually read the posts, I said in the near term, no.

You're point was that these high prices will never come down. They will only go up from here due to Built-in inflation. I said these high prices will eventually go down when the factors that have caused this high inflation are rectified. In the near term, no. Within the next year or two, probably.

And these prices will probably still be high during contract negotiations. So, if the Company is not willing to negotiate our pay scale fairly, a strike is not out of the question. See, this whole discussion is on topic. Inflation, wages, price of goods, contract and strike. All correlate together.
Without something on the scale of the Great Depression we aren’t getting deflation on the scale big enough to bring prices back to what they were. We have 100+ years of data on inflation. It’s just not happening.
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