Is the cost of anything not going up?

[Brian Runau]

I have always considered myself lucky with inflation. I remember stories of fellow workers who had been retired 20 years and their retirement was eaten up by inflation. When I retired in 1999, inflation remained very low overall, for 20 years. My retirement has a COLA maxed at 3%, same as the older guys and I have so far done pretty well. Now I will start feeling the inflation much more, as I am limited to that 3% COLA.

This round of inflation is starting to look like the late 70's when interest rates for mortgages were well over 10%, and property taxes were doubling in one shot. I had bought a new home in '73 and there were model homes nearby that the builder kept open for over seven years as he built more homes in the area. I went over and picked up the brochure for the homes about every six months. The brochure never changed, just the prices. I paid $40,950 for our house in 1973, and the same house in 1978-9 was over $80K. Fortunately for me, I bought it while I could afford it.

This sounds ridiculous but we had a desert shack we could move to if we could not make the payments, as it was a stretch when we bought it. They were $226, not including taxes. Within five years of buying it, they would have been tripled because of the price increase plus the higher interest rates. We lived there 32 years, and I sold it to my daughter at a deal ($600K) in 2006. It has almost doubled in price since that point. I agree, ridiculous.

So, who makes the money on inflation? Government. When we sold it, we got another home and paid higher taxes than before, while she moved in and also paid higher taxes than she had, of course her old home was sold and......etc.

The banks or lender make the money unless the increase is much higher than the overall average for inflation over time. My parents 30 year mortgage was $40/month. Small home early 1950's. When I sold it after they had passed I got about what the mortgage payments were over those 30 years. brian

[Pat Germain]

I have these conversations with my adult son and daughter all the time. They are very frustrated at how expensive everything is today; especially housing. They do have a point. Cars and houses are much more expensive today than when I was a young adult.

And boy do they get furious when people say, "Move some place cheaper!". To that I'll hear comments like, "Oh sure, your buddy moved to the Everglades and got a job abducting children for a swamp witch. And, let me guess, it doesn't pay a lot, but he gets by!". Yeah, much hyperbole here, but they do have a point. My daughter is video producer. She put herself through school and worked very hard to get her job in Seattle. There is just no way she can move to Toledo and expect to find any work beyond cashier at a convenience store. My son is a brand manager for a distillery. Wherever the cost of living is low, the local market won't support a brand manager.

[Warren Lake]

didnt read, really feel for kids for homes, much easier back when I got one.

im on my third panasonic camera and while they have gone up maybe 15 percent over 15 years you get way more.

[Jerry Bruette]

The advice I get here, and most of it is pretty darn good, is still pretty cheap.

And the advice I give is dirt cheap.

[Mel Fulks]

Bananas are still cheap. I eat one every day.

Yep, and I’ve got a holly tree that I bought at least 15 years ago that has never produced berries. Read that banana peels will help berry
production. While watching TV I cut them into small pieces . My wife doesn’t like it , but I find it “appealing”.

[Doug Garson]

Not trying to pile on but you did just mention three things that most people in society need these days. Food, Phone and Car.
These prices can be raised by the corporations, knowing full well that people will "find a way" and pay for them somehow. This is non discretionary spending, when it goes up for whatever reason, we feel it more.

Not sure " Frito-Lay party size snacks " would be considered non discretionary. I agree though that much of current inflation is corporate greed not increased costs of production and delivery.

[Brian Elfert]

Not sure " Frito-Lay party size snacks " would be considered non discretionary. I agree though that much of current inflation is corporate greed not increased costs of production and delivery.

The Frito-Lay party size snacks is just an example of something I have monitored the price of over time, and which has gone up at twice the rate of overall grocery inflation.

My employer is certainly facing higher prices for production and delivery. The input costs of most everything has gone up. Diesel fuel for deliveries is still high, although the price is down from recent highs. The price of new heavy duty straight trucks to replace worn out trucks has gone through the roof. Even parts to keep old trucks on the road longer have gone up significantly. Labor costs are higher as employees demand higher wages due to inflation. One piece of software critical to operation of the company more than doubled in annual cost. Software support and maintenance costs have been going up by 10% to 20% per year on much of the software we use. One raw material that is my employer's second highest cost behind labor has gone up significantly due to the plant closest to us closing and transportation costs being much higher now due to longer distance from the next closest plant.

[Malcolm McLeod]

…corporate greed…

From Intuit/CreditKarma, but lots of other sources:

In a Nutshell
Causes of inflation generally break down into two categories, demand-pull inflation and cost-push inflation. As for current inflation, the main contributing factors include the increase in the money supply, supply chain disruption and fossil fuel policies.

No mention of greed, but we can all find our own confirmation bias - if we look hard enough.

[Lee Schierer]

Yep, and I’ve got a holly tree that I bought at least 15 years ago that has never produced berries.

You may have a male holly tree. You need to buy it some friends,,,,,

[Patty Hann]

You may have a male holly tree. You need to buy it some friends,,,,,

If he does get his tree a "lady friend" I hope there are bees around to facilitate the courtship.

[Edward Weber]

Not sure " Frito-Lay party size snacks " would be considered non discretionary. I agree though that much of current inflation is corporate greed not increased costs of production and delivery.

It's a sort of "food" or at least food adjacent.

[Mel Fulks]

You may have a male holly tree. You need to buy it some friends,,,,,

Thanks,Lee. I was warned about it taking a long time . Giving it lots of banana peels ! Actually saw a berry recently ! Bought the tree
from a good dealer . It’s a Nellie Stevens, which is known to be the fastest growing kind . Has real glossy leaves ….so I don’t have to
wax them.

[Jim Koepke]

Thanks,Lee. I was warned about it taking a long time . Giving it lots of banana peels ! Actually saw a berry recently ! Bought the tree
from a good dealer . It’s a Nellie Stevens, which is known to be the fastest growing kind . Has real glossy leaves ….so I don’t have to
wax them.

As others have mentioned, holly is dioecious. That means you have to have a male and a female to get berries.

Be careful for what you wish. Birds will drop seeds from berries in some place where you, or your neighbors, may not want holly trees. A few years ago a neighbor had some holly trees removed. He was very happy for me to take the wood away as it saved him dump fees. Didn't have a way to quick dry it so it isn't as white as properly dried holly. It is still a pretty wood.

jtk

[Lee DeRaud]

No mention of greed, but we can all find our own confirmation bias - if we look hard enough.

Cost-push inflation tends to have a ratcheting effect baked in unless there is active pressure to reduce prices when/if costs go back down. Whether you call it "greed" or "maximization of shareholder value" is in the eye of the beholder.

There's also the effect of timing on volatile cost components. My favorite example is how gasoline prices go up almost immediately when the price of crude goes up (i.e. at the front end of a rather long supply chain) and only go down when the cost of refined/delivered gas goes down (i.e. at the back end of the same supply chain). There is a lot of profit under the curve in that time lag...again, you don't have to call it greed if you don't want to, but it certainly exists.

[Lee DeRaud]

The real issue is that when inflation is (near-)zero, it doesn't mean that prices aren't higher than they used to be, which is really what most people complain about.

(The people who expect prices to go "back to normal" are typically the same people who think "reducing the deficit" and "paying off the debt" are the same thing.)