Front line real inflation story

godawgst · February 2021

Work in Electrical Distribution/housing. Have been told next 90 days will get much worse before it gets better with product availability. Not enough ships or containers avail. to bring product over, orders 60-150% higher than normal, supply chain can't catch up, ships having to sit out at sea up to 14 days b/c of covid testing and back-ups at the Ports, and finally Chinese Companies declining PO's b/c they don't know when they can fulfill them and won't take chance of not b/c of contracts and substantial penalties for not having product here on time (50-100K per day).

These products are all across the board and are the most basic of materials needed to keep a job going. It would be the equal of a restaurant only having 10-20 dozen a day to start with and when their gone their gone. Additionally these prices are projected to go up by 20-25% by summer (think of a piece of bread that used to cost .15 each not costing 20 or go price a piece of lumber of sheetrock that has went from $7-$28 in a year at Home Depot)

Can also see it again at Supermarket where prices are again going up and/or mfg. to keep prices same are starting to again shrink amount in packaging and hope people don't notice.

Oil industry used to have a saying that the cure for high oil prices is high oil prices. Think there is a 40% chance this might be pin that bursts the building boom, but with all the cheap free money floating around there who knows.

I am just glad the Gov't has said inflation is only "running 1.6%" or else we could have a problem.

doogie · February 2021

You would think longshoremen, FedEx and UPS drivers wouldn’t be so starved for hours

creepycoug · February 2021

godawgst said:
Work in Electrical Distribution/housing. Have been told next 90 days will get much worse before it gets better with product availability. Not enough ships or containers avail. to bring product over, orders 60-150% higher than normal, supply chain can't catch up, ships having to sit out at sea up to 14 days b/c of covid testing and back-ups at the Ports, and finally Chinese Companies declining PO's b/c they don't know when they can fulfill them and won't take chance of not b/c of contracts and substantial penalties for not having product here on time (50-100K per day).

These products are all across the board and are the most basic of materials needed to keep a job going. It would be the equal of a restaurant only having 10-20 dozen a day to start with and when their gone their gone. Additionally these prices are projected to go up by 20-25% by summer (think of a piece of bread that used to cost .15 each not costing 20 or go price a piece of lumber of sheetrock that has went from $7-$28 in a year at Home Depot)

Can also see it again at Supermarket where prices are again going up and/or mfg. to keep prices same are starting to again shrink amount in packaging and hope people don't notice.

Oil industry used to have a saying that the cure for high oil prices is high oil prices. Think there is a 40% chance this might be pin that bursts the building boom, but with all the cheap free money floating around there who knows.

I am just glad the Gov't has said inflation is only "running 1.6%" or else we could have a problem.

Tell me more about this. Are you talkng materials like copper, etc. for wiring? Or electronics for housing like smart house stuff?

Also, isn't there a difference between scarcity-induced price increases and inflation? I ask this question in the most academically honest way. You've probably noticed, I tend to jump on all the inflation threads because I fear it.

Lumber is up and I'm pretty clear about that ... that's all domestic demand driving that one.

creepycoug · February 2021

Bump. This is a real story.

doogie · February 2021

Yes it is. We have every single ship in use with most bobbing off the coasts filled with Backorders for nearly every industry playing a waiting game like we’ve never seen. Much of it has floating pricing!
Fascinating.

dflea · February 2021

Inflation has a meaning and it isn't that hard to calculate. In Q4 2020 it was 1.7%. Soon, you'll have the number for Q1 2021.

You guys holler when it gets where it needs to be to fit your narrative now, won't you?

godawgst · February 2021

creepycoug said:

godawgst said:
Work in Electrical Distribution/housing. Have been told next 90 days will get much worse before it gets better with product availability. Not enough ships or containers avail. to bring product over, orders 60-150% higher than normal, supply chain can't catch up, ships having to sit out at sea up to 14 days b/c of covid testing and back-ups at the Ports, and finally Chinese Companies declining PO's b/c they don't know when they can fulfill them and won't take chance of not b/c of contracts and substantial penalties for not having product here on time (50-100K per day).

These products are all across the board and are the most basic of materials needed to keep a job going. It would be the equal of a restaurant only having 10-20 dozen a day to start with and when their gone their gone. Additionally these prices are projected to go up by 20-25% by summer (think of a piece of bread that used to cost .15 each not costing 20 or go price a piece of lumber of sheetrock that has went from $7-$28 in a year at Home Depot)

Can also see it again at Supermarket where prices are again going up and/or mfg. to keep prices same are starting to again shrink amount in packaging and hope people don't notice.

Oil industry used to have a saying that the cure for high oil prices is high oil prices. Think there is a 40% chance this might be pin that bursts the building boom, but with all the cheap free money floating around there who knows.

I am just glad the Gov't has said inflation is only "running 1.6%" or else we could have a problem.

Tell me more about this. Are you talkng materials like copper, etc. for wiring? Or electronics for housing like smart house stuff?

Also, isn't there a difference between scarcity-induced price increases and inflation? I ask this question in the most academically honest way. You've probably noticed, I tend to jump on all the inflation threads because I fear it.

Lumber is up and I'm pretty clear about that ... that's all domestic demand driving that one.

This is electrical products to build houses with. We are getting 5-10 vendors announcing price increases weekly. In the past it would have been 1 or 2. These are more concerning as they used to hold the line on the most commonly sold products (bread/eggs/milk) and raise prices on the specialty items. The ones we are seeing today is all items across the board 5% +/- which means they don't have a choice in the matter as their raw materials costs have exploded imo.

Good question on scarcity price increases and inflation, although once the prices are increased rarely if ever do they go down from my experience.

Bob_C · February 2021

godawgst said:

creepycoug said:

godawgst said:
Work in Electrical Distribution/housing. Have been told next 90 days will get much worse before it gets better with product availability. Not enough ships or containers avail. to bring product over, orders 60-150% higher than normal, supply chain can't catch up, ships having to sit out at sea up to 14 days b/c of covid testing and back-ups at the Ports, and finally Chinese Companies declining PO's b/c they don't know when they can fulfill them and won't take chance of not b/c of contracts and substantial penalties for not having product here on time (50-100K per day).

These products are all across the board and are the most basic of materials needed to keep a job going. It would be the equal of a restaurant only having 10-20 dozen a day to start with and when their gone their gone. Additionally these prices are projected to go up by 20-25% by summer (think of a piece of bread that used to cost .15 each not costing 20 or go price a piece of lumber of sheetrock that has went from $7-$28 in a year at Home Depot)

Can also see it again at Supermarket where prices are again going up and/or mfg. to keep prices same are starting to again shrink amount in packaging and hope people don't notice.

Oil industry used to have a saying that the cure for high oil prices is high oil prices. Think there is a 40% chance this might be pin that bursts the building boom, but with all the cheap free money floating around there who knows.

I am just glad the Gov't has said inflation is only "running 1.6%" or else we could have a problem.

Tell me more about this. Are you talkng materials like copper, etc. for wiring? Or electronics for housing like smart house stuff?

Also, isn't there a difference between scarcity-induced price increases and inflation? I ask this question in the most academically honest way. You've probably noticed, I tend to jump on all the inflation threads because I fear it.

Lumber is up and I'm pretty clear about that ... that's all domestic demand driving that one.
This is electrical products to build houses with. We are getting 5-10 vendors announcing price increases weekly. In the past it would have been 1 or 2. These are more concerning as they used to hold the line on the most commonly sold products (bread/eggs/milk) and raise prices on the specialty items. The ones we are seeing today is all items across the board 5% +/- which means they don't have a choice in the matter as their raw materials costs have exploded imo.

Good question on scarcity price increases and inflation, although once the prices are increased rarely if ever do they go down from my experience.

The official calculation of inflation is so convoluted. Food and energy stripped out and crazy basket analysis, etc.

Practical inflation is real at the micro level in ways you don’t even think about it and not even caused by any sort of fiscal policy. Low priced easily replaceable goods taken off of shelves or made hard to find in favor of higher cost items that provide less growth in utility compared to the growth in price.

Inflation can be created just from the future threat of inflation, which I think is what we are kind of seeing now.

creepycoug · February 2021

Bob_C said:

godawgst said:

creepycoug said:

godawgst said:
Work in Electrical Distribution/housing. Have been told next 90 days will get much worse before it gets better with product availability. Not enough ships or containers avail. to bring product over, orders 60-150% higher than normal, supply chain can't catch up, ships having to sit out at sea up to 14 days b/c of covid testing and back-ups at the Ports, and finally Chinese Companies declining PO's b/c they don't know when they can fulfill them and won't take chance of not b/c of contracts and substantial penalties for not having product here on time (50-100K per day).

These products are all across the board and are the most basic of materials needed to keep a job going. It would be the equal of a restaurant only having 10-20 dozen a day to start with and when their gone their gone. Additionally these prices are projected to go up by 20-25% by summer (think of a piece of bread that used to cost .15 each not costing 20 or go price a piece of lumber of sheetrock that has went from $7-$28 in a year at Home Depot)

Can also see it again at Supermarket where prices are again going up and/or mfg. to keep prices same are starting to again shrink amount in packaging and hope people don't notice.

Oil industry used to have a saying that the cure for high oil prices is high oil prices. Think there is a 40% chance this might be pin that bursts the building boom, but with all the cheap free money floating around there who knows.

I am just glad the Gov't has said inflation is only "running 1.6%" or else we could have a problem.

Tell me more about this. Are you talkng materials like copper, etc. for wiring? Or electronics for housing like smart house stuff?

Also, isn't there a difference between scarcity-induced price increases and inflation? I ask this question in the most academically honest way. You've probably noticed, I tend to jump on all the inflation threads because I fear it.

Lumber is up and I'm pretty clear about that ... that's all domestic demand driving that one.
This is electrical products to build houses with. We are getting 5-10 vendors announcing price increases weekly. In the past it would have been 1 or 2. These are more concerning as they used to hold the line on the most commonly sold products (bread/eggs/milk) and raise prices on the specialty items. The ones we are seeing today is all items across the board 5% +/- which means they don't have a choice in the matter as their raw materials costs have exploded imo.

Good question on scarcity price increases and inflation, although once the prices are increased rarely if ever do they go down from my experience.

The official calculation of inflation is so convoluted. Food and energy stripped out and crazy basket analysis, etc.

Practical inflation is real at the micro level in ways you don’t even think about it and not even caused by any sort of fiscal policy. Low priced easily replaceable goods taken off of shelves or made hard to find in favor of higher cost items that provide less growth in utility compared to the growth in price.

Inflation can be created just from the future threat of inflation, which I think is what we are kind of seeing now.

Interesting. It makes you think that all inflation conversations should start with, "what kind of inflation are we talking about?"

Bob_C · February 2021

creepycoug said:

Bob_C said:

godawgst said:

creepycoug said:

godawgst said:
Work in Electrical Distribution/housing. Have been told next 90 days will get much worse before it gets better with product availability. Not enough ships or containers avail. to bring product over, orders 60-150% higher than normal, supply chain can't catch up, ships having to sit out at sea up to 14 days b/c of covid testing and back-ups at the Ports, and finally Chinese Companies declining PO's b/c they don't know when they can fulfill them and won't take chance of not b/c of contracts and substantial penalties for not having product here on time (50-100K per day).

These products are all across the board and are the most basic of materials needed to keep a job going. It would be the equal of a restaurant only having 10-20 dozen a day to start with and when their gone their gone. Additionally these prices are projected to go up by 20-25% by summer (think of a piece of bread that used to cost .15 each not costing 20 or go price a piece of lumber of sheetrock that has went from $7-$28 in a year at Home Depot)

Can also see it again at Supermarket where prices are again going up and/or mfg. to keep prices same are starting to again shrink amount in packaging and hope people don't notice.

Oil industry used to have a saying that the cure for high oil prices is high oil prices. Think there is a 40% chance this might be pin that bursts the building boom, but with all the cheap free money floating around there who knows.

I am just glad the Gov't has said inflation is only "running 1.6%" or else we could have a problem.

Tell me more about this. Are you talkng materials like copper, etc. for wiring? Or electronics for housing like smart house stuff?

Also, isn't there a difference between scarcity-induced price increases and inflation? I ask this question in the most academically honest way. You've probably noticed, I tend to jump on all the inflation threads because I fear it.

Lumber is up and I'm pretty clear about that ... that's all domestic demand driving that one.
This is electrical products to build houses with. We are getting 5-10 vendors announcing price increases weekly. In the past it would have been 1 or 2. These are more concerning as they used to hold the line on the most commonly sold products (bread/eggs/milk) and raise prices on the specialty items. The ones we are seeing today is all items across the board 5% +/- which means they don't have a choice in the matter as their raw materials costs have exploded imo.

Good question on scarcity price increases and inflation, although once the prices are increased rarely if ever do they go down from my experience.

The official calculation of inflation is so convoluted. Food and energy stripped out and crazy basket analysis, etc.

Practical inflation is real at the micro level in ways you don’t even think about it and not even caused by any sort of fiscal policy. Low priced easily replaceable goods taken off of shelves or made hard to find in favor of higher cost items that provide less growth in utility compared to the growth in price.

Inflation can be created just from the future threat of inflation, which I think is what we are kind of seeing now.

Interesting. It makes you think that all inflation conversations should start with, "what kind of inflation are we talking about?"

Yes.

B2B sales are strong as a segment right now. Lots of companies (non Main Street ones) got a bunch of free PPP money. Some are probably hoarding some of the cash, but many (mine included) are pumping that cash into inventory and other hard assets or nice to have capital investments before commodities begin to rise, which we expect.

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