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As Lumber Prices Fall, the Threat of Inflation Loses Its Bite

Tahuyaman

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When the Fed say they are not worried about inflation you can take that to the bank. Saying they might need to raise rates in 2023 is a clear signal that current "inflation" is not a problem to them.
I’m glad you have complete trust in Governmrnt. I don’t.
 

iguanaman

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I’m glad you have complete trust in Governmrnt. I don’t.
You are a "chicken little" so you have no faith in anything. The sky is falling and you are terrified. BTW The Fed is not the Govt.

marissasbooksandgifts-9781787005761-chicken-little-23347310919879.jpg
 

Kushinator

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I’m not sure why you’re trolling me like this.
Im calling you out for shit posting.
It’s a fact, not my opinion that inflation can exist in some sectors and not in others and that the rate of inflation can vary from sector to sector. I’m sure you consider that a partisan statement.
You've been corrected constantly in this thread and still there is a refusal to learn. Nobody respects your opinion on this topic.
 

Tahuyaman

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Im calling you out for shit posting.

You've been corrected constantly in this thread and still there is a refusal to learn. Nobody respects your opinion on this topic.
I have not posted anything incorrect or offensive in any way. Your continual trolling is weird.
 

Kushinator

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I have not posted anything incorrect
False. You can't even comprehend what inflation entails and as a result make shit posts. You will continue to be called out. Don't like it??? Do a better job understanding and communicating the subject matter.
Your continual trolling is weird.
Awwww.....
 

Tahuyaman

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You are a "chicken little" so you have no faith in anything. The sky is falling and you are terrified. BTW The Fed is not the Govt.

marissasbooksandgifts-9781787005761-chicken-little-23347310919879.jpg
I'm not sure how you came to that conclusion.

As far as the fed is concerned.........The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed private or public?

The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. The federal reserve was established by the US Congress to be the countty's bank.
 
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Tahuyaman

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False. You can't even comprehend what inflation entails and as a result make shit posts. You will continue to be called out. Don't like it??? Do a better job understanding and communicating the subject matter.

Awwww.....

Now you're getting quite amusing. I'm not sure why you think the rate of inflation can't vary from sector to sector or why it can exist in one sector, but not in another.
 

SouthernDemocrat

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Powell has not explained by what he means as temporary. Perhaps you can take a shot.

Production was constrained during the worst of the pandemic = Limited Supply.

After a year of working from home and stimulus, consumers are/were flush with cash = Increased Demand.

Here you get inflation.

To meet increased demand, suppliers have an incentive to bring more products to market = Increased Supply.

Consumers are not so flush with cash = Lower Demand.

Here inflation is curbed.
 

Kushinator

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Now you're getting quite amusing. I'm not sure why you think the rate of inflation can't vary from sector to sector or why it can exist in one sector, but not in another.
Inflation is a decline in purchasing power... this has already been explained to you and what was the response? A knuckle-dragging nu uh.
 

Waddy

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Sorry but the price of one commodity does not equal inflation or deflation. Also some inflation is needed for a healthy economy and deflation is a far bigger concern for the Fed. The good news is that interest rates are at historical lows which means there is plenty of room to cool off any REAL inflation by raising rates.

Inflation promotes speculation, both by businesses in risky projects and by individuals in stocks of companies, as they expect better returns than inflation. An optimum level of inflation is often promoted to encourage spending to a certain extent instead of saving. If the purchasing power of money falls over time, then there may be a greater incentive to spend now instead of saving and spending later. It may increase spending, which may boost economic activities in a country. A balanced approach is thought to keep the inflation value in an optimum and desirable range.

The U.S. Federal Reserve in June announced no change in its rate policy at its June 2021 meeting and did not signal concerns about rising inflation. A week earlier the U.S. Bureau of Labor Statistics (BLS) reported that the Consumer Price Index For All Urban Consumers (CPI-U) was up by 5.0% through May 2021, the index's biggest 12-month surge since the 5.4% increase during the period ending Aug. 2008.

https://www.investopedia.com/terms/i/inflation.asp
Those were EXAMPLES I gave of the general inflationary trend. And yes, the Fed can raise rates. That's usually effective because inflation is driven more by the availability of credit than the actual money supply. The credit market is at least five times larger than the money supply. My basic contention that the current inflation rate is a spike and prices will recede somewhat but not return to pre-Covid levels is going to prove accurate. Opinions will vary. Your opinion obviously will certainly vary.
 

Tahuyaman

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Inflation is a decline in purchasing power... this has already been explained to you and what was the response? A knuckle-dragging nu uh.
Duh. As inflation grows, people lose purchasing power. When did I ever claim otherwise? Inflation is a hidden tax which hurts those who can least afford it.
 

iguanaman

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Duh. As inflation grows, people lose purchasing power. When did I ever claim otherwise? Inflation is a hidden tax which hurts those who can least afford it.
Inflation also boosts growth in the economy and moderate inflation is always the goal of the Fed. It is DEflation that destroys the economy and is the worst economic indicator of them all.
 

Tahuyaman

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Inflation also boosts growth in the economy and moderate inflation is always the goal of the Fed. It is DEflation that destroys the economy and is the worst economic indicator of them all.
It can as long as it remains low.
 

washunut

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Production was constrained during the worst of the pandemic = Limited Supply.

After a year of working from home and stimulus, consumers are/were flush with cash = Increased Demand.

Here you get inflation.

To meet increased demand, suppliers have an incentive to bring more products to market = Increased Supply.

Consumers are not so flush with cash = Lower Demand.

Here inflation is curbed.

I understand the simplictic response above and believe it. Yes SOME of the inflation we are seeing is due to re-opening the economy.

We always have inflation, the qustion is how much. How much gets inbetted. I have no idea, so we can all guess.
 

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What’s your point?

Right now lumber prices are not declining. They are still extremely high. Eventually they will come down. A lot people will be financially ruined before that happens.

but I know it’s ok because we have a Democrat administration. To liberals everything is unicorns and butterflies when we Democrat administration.

Actually, lumber prices are declining.
Lumber prices have been used for awhile to analyze inflation.

"Lumber prices in the futures market, for example, are down more than 45 percent from their peak, slipping below $1,000 for the first time in months. That’s still high — between 2009 and 2019, prices averaged less than $400 per thousand board feet — but the sell-off has been gaining momentum over the last few weeks. The price has fallen in 11 of the last 12 trading sessions, including a 0.5 percent drop to settle at $900.80 on Friday, according to FactSet data."

And here's one article from last year with some general perspectives.
 

Tahuyaman

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Actually, lumber prices are declining.
Lumber prices have been used for awhile to analyze inflation.

"Lumber prices in the futures market, for example, are down more than 45 percent from their peak, slipping below $1,000 for the first time in months. That’s still high — between 2009 and 2019, prices averaged less than $400 per thousand board feet — but the sell-off has been gaining momentum over the last few weeks. The price has fallen in 11 of the last 12 trading sessions, including a 0.5 percent drop to settle at $900.80 on Friday, according to FactSet data."

And here's one article from last year with some general perspectives.
you guys keep referring to lumber future prices. They don't reflect current retail prices.
 

TU Curmudgeon

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Umm....

Gasoline prices are not determined by an individual supplier. Sure, petrol energy products have inelastic demand properties, but suppliers still compete with each other to push inventories out at a profit maximizing price.

If the global market starts to build inventory, the price level will decline.

Yep, and that is a complete explanation for the fact that the gas price at all four gas stations at the same intersection are identical (and change within half an hour of each other).
 

Tahuyaman

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The price of gasoline is volitile, so it's generally not factored into the core inflation rate.
 

TU Curmudgeon

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Retailers, distributors and manufacturers don't have deep inventory of products these days. This is one reason why the pandemic was so disruptive for supply chains; companies are so hyper-focused on cutting costs and maximizing efficiency that they aren't very robust. I.e. Any lumber inventory that Home Depot bought at $120 per 1,000 board feet was sold a long time ago.

It's plausible that retailers started raising prices before lumber prices started going up -- but not by much. No one knew that lumber prices were going to keep rising until mid-May, and then start to fall. Any company that raised its prices too fast lost business to competitors who hung onto lower prices as long as possible. And as far as I know, there isn't a "Big Lumber" cartel which fixes prices.

Along the same lines, there is only so long that retailers or distributors can charge amounts that are disconnected to the commodity's price. As spot prices fall and supply rises, sooner or later someone is going to realize they can undercut the competition by selling at a lower price. That will exert a downward pressure on the price.

And of course, people pay a lot more attention to negative news than positive news. E.g. you notice how gas prices rise as soon as there's some mitigating event (like a hurricane knocking refineries offline), but don't notice how gas prices fall shortly thereafter.

I agree that a whole lot of companies have gone to the "Japanese Model" for their supplies and that that model is, inherently, risky UNLESS the supply chain is completely reliable. The Japanese seem to be able to make it work, but they do tend to be dealing with other Japanese firms (which have a vested "face" interest in ensuring that their company does not "default" on obligations).

On the other hand, there are SOME manufacturing companies which manage to maintain a fair "surplus inventory" (as well as having a sufficient cash/credit reserve to be able to take advantage of bargains that they chance across). Those companies tend to be quite able to outbid the competition because their internal economy allows for a substantial cushion.
 

TU Curmudgeon

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Actually "rise of" or "raise in" is correct and both "rise" and "raise" are incorrect.

Now, both of you, go stand in the corner and write "I will not correct other people's grammar when I don't know what I am talking about." 10,000 times.

Grammar Police.jpg
 

Plasmaball

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Actually "rise of" or "raise in" is correct and both "rise" and "raise" are incorrect.

Now, both of you, go stand in the corner and write "I will not correct other people's grammar when I don't know what I am talking about." 10,000 times.


I like giving roller shit.. we do it alot on slack. He knows.
 
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