But, like, isn’t the price of everything going up a LOT more than usual and doing so without much, if any, fanfare? I mean, if I am right, isn’t that a harbinger of pain and discomfort in the near future?
I am not talking about gasoline which, of course, is a fixed, rigged and piggybacked product by government (making it the perfect ‘controlled-extortion’ profit item). I am not talking about food, either. Food is definitely going up but we kind of expected that (I do not know why we did but we did). I am talking about things that have no business being more expensive…..like used boats! What the hell?
I am currently looking for a 15′ Boston Whaler-style replacement boat for Sal’s little 11-footer and, of course, I go to Craigslist. Other boats will do but the BW15 is ideal for her. I look in the ‘under 18’ foot category and, typically, those runabout-type boats were usually under $10,000 unless made of welded aluminum (then they get stupid expensive). Last year there were lots of used fiberglass garden ornaments-on-trailers for very little money. $1,000, maybe $2,000 for a good hull, and the balance to as high as $10K, depending on the engine. Today, a boat like that is priced at double the cost of last year.
Used cars are up, too, tho not by so much. Still, I would estimate that sellers are asking a 25% premium at the very least (I do not need one but I like to stay hip to the cool SUV/truck market).
Even cheap-crap tools from Home Depot (always on sale) are, in fact, NOT on sale much it seems and are more often regular priced. And some better brands (Makita) seem to be higher, too. And let us not even dwell-for-a-minute on building supplies. Lumber, of course, is in the headlines but screws, nails, etc. are all up, too.
In my world OTG – where OTG meets the real world market now and then – everything is more expensive by a noticeable margin and over a relatively short period of time. Why? Why is that happening?
Now, I am not complaining…..not really……older people on fixed incomes are in a perpetual state of sticker-shock after the age of 65 or so. That is just the way of the capitalist world. One just has to suck it up, go without or ‘make-do’. Still, this recent price surge/gouging/extortion seems larger than I have ever noticed before and, if I am right, it will only get worse.
“Right about what?”
Well, the so-called marketplace is not generally as unpredictable as economists say publicly. They kinda lump everything under the heading of inflation and let it go at that – as if inflation was some kind of natural force that no one really understands. That is simply NOT true. This blog is not the place to get into it but, generally speaking much of the financial world is based on a 5% inflation or so-called growth rate. It has to be….huge pension schemes, savings accounts, interest rates on loans and other financial industries are reliant on a ‘growth’ or ‘inflation’ mechanism for them to work.
Even more ‘undetected’ is the natural inclination of the plumber wanting to keep pace with the electrician or the dentist wanting to stay ahead of the doctor. ‘Keeping up with the Jones’s’ is more than just status seeking, it is literally the device everyone uses to keep up with everyone else. And anyone with a little extra leverage uses that to ‘get ahead’ thus forcing the plumbers and the dentists to do the same when they can raise their prices.
Basically, we are all trying to get ahead or at least stay-the-same as our neighbours and those bastards keep raising their prices!
This past year, real estate has gone off the charts. The average home price in Canada is circa $750,000. That includes Saskatoon, Moncton and Winnipeg. Real estate has really jumped in value and I think that ‘inflated’ industry is acting like an accelerant to the larger economy.
If the goal of the economy is an exercise is trying to achieve equilibrium in a society that has the freedom to set it’s own prices, equilibrium will never be achieved, stability is replaced with volatility and inflation is, once again, inevitable. That statement is NOT news. But when something BIG gets completely out-of-whack compared to ‘other things’ then that anomaly acts as an accelerant and a disruptor. A couple of years ago cauliflower went off the charts and some people panicked. But cauliflower futures are not BIG. Things settled down on the cauliflower front. Big is gasoline, big is real estate, big is the total food basket. But biggest of all is real estate. In other words, real estate prices have set the economy on fire.
“Isn’t the economy-on-fire a good thing?”
It is for the young, educated, cutting-edge worker in demand who got into the housing market over a few years ago….not so much for the fixed income pensioner or the young person entering the BIG markets today. It is for the financial industry, banks, government and monopolies (gasoline and the like) but not so much for the workers in the service industries and hospitality industries (they have less leverage). Balloons do not help all boats float higher. Many sink.
But the real reason a fired up economy is NOT good is that it is not sustainable. And big-leap price-jumps in the ‘basics’ is especially bad because the basics are what we all need. If the prices of luxury goods goes up, we can choose NOT to buy them but bread, milk, burgers, gasoline, cars, houses and, for me, tools and building materials need to remain relatively stable. And they are not.
And now for the ‘other shoe’ to drop: The ‘west’ has stimulated the economy for some time to keep us all going. We started that ‘technique’ in 2008/09 when the sub-prime market tripped up the financial houses and they were deemed too big to fail. We pumped in the money for them. And we never clawed that stimulus back. All that money is mostly still out there. Then we double-downed with additional stimulus for weathering Covid and that money is out there and starting to show up now.
And get this – Biden is proposing to ‘juice’ up the economy even further with a big infrastructure expenditure (long overdue) and that money has yet to get pumped into the ‘balloon’ we call an economy.
Balloons stretch. Good balloons can stretch a long way. I am, however, inclined to believe all balloons eventually pop. Jus’ sayin……