Inflation Thread

[Northside Hawk]

Boy, it's bad and going to get even worse. The other day, I worked in my home office in the morning and planned to go into my office at work in the afternoon. I decided that I would hit and drive thru the local Jimmy John's on the way in to save time. Holy Shit! I realize JJ's is always a little more than other places and expected that but holy crap! I was floored when the guy told me the total. I just got a regular sub and a small drink. The total came to $11.43. For me alone! Again, this was not with chips to make a combo meal.

I got thinking about it after that floored me and figured it would cost me upwards of $45-$50 to take my family of 4 to get a simple lunch, like if we needed to pick up a lunch if out of town or something.

Boy, my 2.8% raise is not doing shit offsetting the 12% inflation!

In your daily lives, what particular products have you noticed that completely shocked you?

@Fryowa always talks about how he packs his own food when he and his boy travel to Iowa sporting events. You bet it adds up fast. The days of pulling into a Dog n Suds and feeding a family of four for under $10, or even under $20, are long gone. Not when you have to pay teenage employees fifteen dollars an hour to entice them to stay.

 

[Northside Hawk]

There are a lot of reasons for this inflation. This isn't a Trumpster situation any more than Bush, Obama, Clinton, Reagan, and so on. Probably the President with the least culpability is Carter who inherited a situation bound to create inflation regardless.

We could go into discourse on economic theory on money supply.

Others? Not all are bad

Nixon and Brenton Woods

Off shoring and not protecting industry - Reagan

Women in the work place and their salaries counted on family mortgage applications

Roe v Wade - yes really

Obama Admin and the continuation of endless wars and the Arab Uprising

Bush beginning endless wars

Obama and allowing Biden to gain financially in a very sensitive area.

Industrial military complex

Trump being the biggest socialist ever with COVID policy and Trade War policy

Bush being the biggest socialist for the one percent

Ethanol

Education Financial Aid and the rise of Academic Oligarchy

Artificially low interest rates to keep stocks going up and paying more for houses/cars

Out of control Pension systems.

Medical Oligarchy and consolidations


Who would have thought we'd be in this situation so quickly? I did, but like O for Prez, I thought it would happen faster. People don't realize how quickly things unraveled in the early 80s with interest rates and an economy arguably the worst since the depression (not 2008).

Hummers were the sign of the times in the mid 2000s. Today it's gigantic pick up trucks.

You have to pay people, even teenagers, king's ransoms just to entice them to work, and to insure them on the job. The bottom line is inevitability going to show up at the other end.

 

[Northside Hawk]

My brother hit the jackpot with this one.

He bought his house cheap 18 years ago for $45k. In our town that was pretty common for a fix-er-upper. Needed a roof and some remodeling which he did himself. He also finished the inside of the detached garage and put a new garage door in. I'm guessing he spent 10 grand on all that total because he did it himself and this was the early 2000's. I think he paid it off in 2011 or thereabouts.

Anywhoo, his girlfriend had a way nicer house that she bought back in the early 2000's (neither of them have ever been married, no kids between them) for like $200K. My bro sold his place a couple months ago for $125K and they plan on getting hitched this fall and paying her place off with his house money. They'll both be 40 years old with no mortgage and own a house that would probably bring $450K in today's market, no car payments.

If a person is either retiring and downsizing or combining households, the world is your freakin oyster right now.

My wife and I have talked about backpacking Europe for an entire summer after retiring, selling our house, and traveling the country in an RV and a convertible.

We're probably about 10-12 years from retiring. We bought our house for $127k in 2001, have one more major remodel (the kitchen, and we hire professionals rather than DIY) and if all goes well it will push the value of our house up-to the 215-225k range.

Of course a lot can happen in 10--12 years LOL

 

[MelroseHawkins]

@Fryowa always talks about how he packs his own food when he and his boy travel to Iowa sporting events. You bet it adds up fast. The days of pulling into a Dog n Suds and feeding a family of four for under $10, or even under $20, are long gone. Not when you have to pay teenage employees fifteen dollars an hour to entice them to stay.

What sucks is that we are paying higher prices they they aren't even fully staffed half the time. Our local Micky D's down the block never has their first drive thru window open and always has one staff person take the money at the 2nd window and distribute the food. Hell, one day it was mid morning and the worker was there and said they weren't serving any food until a certain time because the cook didn't come in.

 

[MelroseHawkins]

You have to pay people, even teenagers, king's ransoms just to entice them to work, and to insure them on the job. The bottom line is inevitability going to show up at the other end.

Look how well the maxed out minimum wage is working in Seattle. That place is a complete shit show now due to many reasons.

 

[HawkGold]

You have to pay people, even teenagers, king's ransoms just to entice them to work, and to insure them on the job. The bottom line is inevitability going to show up at the other end.

And teen cars are kings ransoms compared to the 69 I bought for 250 on my 2 something per hour.

 

[Northside Hawk]

And teen cars are kings ransoms compared to the 69 I bought for 250 on my 2 something per hour.

I didn't even own a car until I was almost 25. Went through all of high school and college without one. By comparison my daughter is 22 and is already on her third or fourth.

Even my adult friends don't believe me so you can imagine what their kids and my kids think.

 

[HawkGold]

I didn't even own a car until I was almost 25. Went through all of high school and college without one. By comparison my daughter is 22 and is already on her third or fourth.

Even my adult friends don't believe me so you can imagine what their kids and my kids think.

Oh, you were one of those kids....

I lived in a farm community and not having a car was social suicide. I bought a 69 Satellite with 70k miles on it and different colored fenders. Got it painted, repaired rust, bought mag wheels and it was pretty cool. Those cars were basically road runners with chrome and a smaller engine (318) and smaller brakes. Gave up a girlfriend because she lived on an Iowa gravel road. No way I was taking it over dusty gravel... In college the timing chain broke and rapped the valves. An engineering student and redid the head in the dorm parking lot. Ran it to 175,000 miles which was a lot in those days. 8 track with triaxle speakers... Those 318's would take those cars to 145 mph.

Mine was a lot like this only more solid mags, lighter green main body and a dark green vinyl roof. Had the back raised some.

 

[HawkGold]

Oh, you were one of those kids....

I lived in a farm community and not having a car was social suicide. I bought a 69 Satellite with 70k miles on it and different colored fenders. Got it painted, repaired rust, bought mag wheels and it was pretty cool. Those cars were basically road runners with chrome and a smaller engine (318) and smaller brakes. Gave up a girlfriend because she lived on an Iowa gravel road. No way I was taking it over dusty gravel... In college the timing chain broke and rapped the valves. An engineering student and redid the head in the dorm parking lot. Ran it to 175,000 miles which was a lot in those days. 8 track with triaxle speakers... Those 318's would take those cars to 145 mph.

Mine was a lot like this only more solid mags, lighter green main body and a dark green vinyl roof. Had the back raised some.
View attachment 9028

Found it.

 

[MelroseHawkins]

I didn't even own a car until I was almost 25. Went through all of high school and college without one. By comparison my daughter is 22 and is already on her third or fourth.

Even my adult friends don't believe me so you can imagine what their kids and my kids think.

My first car was a 1980 Pontiac Lemans. It was 8 yrs old at the time and I got it for $550.00.

 

[MelroseHawkins]

Found it.
View attachment 9029

I often times wished I had my first car again. Anybody else. I almost started a thread about first cars some time ago but never did, obviously.

 

[Northside Hawk]

Oh, you were one of those kids....

I lived in a farm community and not having a car was social suicide. I bought a 69 Satellite with 70k miles on it and different colored fenders. Got it painted, repaired rust, bought mag wheels and it was pretty cool. Those cars were basically road runners with chrome and a smaller engine (318) and smaller brakes. Gave up a girlfriend because she lived on an Iowa gravel road. No way I was taking it over dusty gravel... In college the timing chain broke and rapped the valves. An engineering student and redid the head in the dorm parking lot. Ran it to 175,000 miles which was a lot in those days. 8 track with triaxle speakers... Those 318's would take those cars to 145 mph.

Mine was a lot like this only more solid mags, lighter green main body and a dark green vinyl roof. Had the back raised some.
View attachment 9028

I had access to a vehicle in those years, just never owned one. And while it caused the obvious social awkwardness, I didn't necessarily march to the beat of the typical social drum in high school. To an extent I still don't. It's part of how I survived growing up Irish on the heavily German north side of Dubuque back when that still meant something. It's how I continue to survive being a hard core Hawkeye fan living in Wisconsin.

 

[MelroseHawkins]

Gas up to something like $4.64 not. Good times! It'll be $5 or over by the end of the month.

 

[okeefe4prez]

Gas up to something like $4.64 not. Good times! It'll be $5 or over by the end of the month.

Man, I wrote calls on Valero (VLO) at $145 for June 17 thinking "no way hell will it go parabolic." It has gone parabolic. I'm up 240% on the position so I ain't complaining, but it seems the market has caught on that the US has a huge oil refining problem. At some point we're going to get demand destruction and it will tumble back down and probably drag the economy down with it.

 

[racerhawk]

I had access to a vehicle in those years, just never owned one. And while it caused the obvious social awkwardness, I didn't necessarily march to the beat of the typical social drum in high school. To an extent I still don't. It's part of how I survived growing up Irish on the heavily German north side of Dubuque back when that still meant something. It's how I continue to survive being a hard core Hawkeye fan living in Wisconsin.

Indeed! I lived in Madison for 15 years, and wearing an Iowa hat in Madison will require a thicker skin, over time!

 

[racerhawk]

Man, I wrote calls on Valero (VLO) at $145 for June 17 thinking "no way hell will it go parabolic." It has gone parabolic. I'm up 240% on the position so I ain't complaining, but it seems the market has caught on that the US has a huge oil refining problem. At some point we're going to get demand destruction and it will tumble back down and probably drag the economy down with it.

Yuck. Yes, that does seem plausible. I've been reading some articles about our US oil refining capacity and it doesn't look good.

 

[HawkGold]

Indeed! I lived in Madison for 15 years, and wearing an Iowa hat in Madison will require a thicker skin, over time!

North is a closet Badger...

 

[okeefe4prez]

Yuck. Yes, that does seem plausible. I've been reading some articles about our US oil refining capacity and it doesn't look good.

The problem with it is that the business is a pure commodity business that is highly capital intensive with huge risk if you F something up. It has prolonged stretches where it loses money or just breaks even and then once a decade the sun shines on the dog's ass. No American company is willing to commit to material capital expenditure and Aramco owns the biggest refinery in the US.

The entire fucking modern economy is derived from the distillation tower in these giant refineries. None of these chucklefuck politicians understand that. The refinery heats crude up and it breaks into different fuels depending on the length of hydrocarbons. The process creates propane, butane, regular gas, jet fuel, diesel fuel, heavy oils that ships use and shit that becomes asphalt and roofing tar. Even if you could electrify the entire passenger fleet overnight, it's gonna be a helluva long time before any substitute for jet fuel or that heavy oil they use to carry your undies across the Pacific from China comes around.

 

[HawkGold]

Man, I wrote calls on Valero (VLO) at $145 for June 17 thinking "no way hell will it go parabolic." It has gone parabolic. I'm up 240% on the position so I ain't complaining, but it seems the market has caught on that the US has a huge oil refining problem. At some point we're going to get demand destruction and it will tumble back down and probably drag the economy down with it.

Nice move. You aren't Byron are you? https://www.youtube.com/watch?v=hoVWIM_Lbuo

 

[Fryowa]

The problem with it is that the business is a pure commodity business that is highly capital intensive with huge risk if you F something up. It has prolonged stretches where it loses money or just breaks even and then once a decade the sun shines on the dog's ass. No American company is willing to commit to material capital expenditure and Aramco owns the biggest refinery in the US.

The entire fucking modern economy is derived from the distillation tower in these giant refineries. None of these chucklefuck politicians understand that. The refinery heats crude up and it breaks into different fuels depending on the length of hydrocarbons. The process creates propane, butane, regular gas, jet fuel, diesel fuel, heavy oils that ships use and shit that becomes asphalt and roofing tar. Even if you could electrify the entire passenger fleet overnight, it's gonna be a helluva long time before any substitute for jet fuel or that heavy oil they use to carry your undies across the Pacific from China comes around.

A lot of the problem with interpreting the refining data is that there's no clear cut method for determining what's included in capacity. There's a lot of capacity out there right now not being considered because it got shut down during the germ and hasn't been restarted yet. That capacity can go online quickly relative to new construction, and it will once price and demand cross each other.

It's the same thing with steel. During covid tons of mills and service centers shut down due to demand and the price when ballistic. The AMM for HRCQ coils shot up to record levels over a dollar almost instantly, and now that covid shutdown plants have slowly started to come back online the AMM has gradually slid back to $.57 as of this morning. The gradual slide is because (like gasoline/diesel), most of the steel milling capacity is owned by 3 giants. They know the market isn't sustainable, but they're going to get as much margin out of it as they can for as long as they can. The result is that steel is way down from where it was during the germ hangover, but it's going to be more expensive than it was prior for a fairly long time. The same thing will happen with gas/diesel.

There's a "new normal" being established, which is common for every commodity at varying points across history for varying reasons. It's going to change the economy, but it's not going to tank it.

What people need to be watching more than fuel is agriculture. The stuff going on across the pond is going to do some seriously funky shit to our economy for a long time. Luckily the US is waaaaay agriculturally secure and will be for as long as anyone here will be alive (even with climate change), but the rest of the world is going to be in serious trouble with the Russo-Ukraine issues and that will affect our economy more than fuel. For whatever one thinks of it's downfalls, capitalism has driven HUGE advances in ag technology and efficiencies, and we are going to be very, very thankful for that in the next 5 years. People can cry all they want about the US being the new major oil power, but being the agricultural leviathan we are is much more important to our stability.