SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (49971)4/23/2006 12:25:33 PM
From: Steve Lokness  Read Replies (1) of 116555
 
Mish;

Let me turn it around. If it is money supply which is responsible for inflation, why haven't we as yet had an explosion of inflation?

Here is what I believe. Unscientific at that. There is an increased pressure on a lot of commodities and especially oil. The cost of raw basic materials start the spiral whereby every manufacturer must either absorb or pass along the increases in their production. So very slowly at first but then increasing prices start to rise. The spiral continues to escalate. Now we have higher prices in the production of all necessities - food, energy, etc. The worker becomes increasingly strapped for enough cash and soon has no alternative other than to demand more pay. I think that is where we are right now. The economy is absolutely humming and prices are rising. Money supply of course is part of the equation, but that was cooked in long ago thanks to recklessness of Greenspan. The tipping is the increase in oil.

Remember the 70's? It was the price of oil then for sure. Why would it be different this time? People were building houses with interest rates near 20% in some instances!!! That is why I suggested the need of a .5 increase right now to stop. (that's the comment I thought all would jump on). Will it be painful? Sure - so will the result if it gets out of control. ........House building in Washington State is out of control. They are building everywhere right now and the developments have unbelievable numbers of new houses just starting. I visited one site Friday and at 8:00 PM on Friday evening many of the contractors were still working. Don't think those workers have pricing ability? I do. And they will ask for it because they can and because they have a reason - their cost are going up. That's inflation.

Steve
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News