Where exactly does all the inflation money go?
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Anonymous
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Hoping there's maybe an economist or something on this forum because I'm simply confused.
Groceries seem to be up 30% or so on average. Used cars are more expensive. Housing has appreciated (until recently) and the cost of housing has soared (40% increase in price plus rates ballooning from 3.5% pre-pandemic to 7-7.5% today. Despite everything costing more, I can't for the life of me figure out where all of this money is actually going? Most people working in government, education, etc. have seen raises that significantly underperform "real inflation" metrics. Even friends in the private sector seem to be getting promoted, but their raises and promotes are hardly worth anything when you account for inflation (10% raise is eaten into pretty quickly these days). Credit card debt is ballooning. The stock market is down 20% from ATH. No one seems to be getting richer. We're all becoming remarkably more poor, but someone has to be winning right? Is it old people collecting social security and a general loss of productivity due to aging demographics. Is Russia eating our lunch? Is the US diminishing in terms of power and I'm just paying more for food so someone disadvantaged doesn't have to? Is the market down because its forecasting in interest rate hikes and the unwinding of the fed balance sheet? Someone. Please. Help me understand?? I don't really buy this media narrative that feels spoon fed and maybe 3-6 months outdated by the time it arrives. I'm not sure I trust the cohort of journalism majors to really know what's happening as it happens... So my question to whoever might be able to answer this is simply, "Where is all the cash going?" |
Anonymous
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Collectors, Lenders and Investors.
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Anonymous
This investors, banks, lenders. |
Anonymous
| Corporate profits, duh. It’s price gouging. |
Anonymous
OP here. What investors exactly? If the market is down 20% as a whole? Is it private companies? |
Anonymous
If corporate profits were up so much, why is the market underperforming? |
Anonymous
If it's banks and lenders, which banking stocks are outperforming? Wells Fargo, Bank of America, etc. don't seem to be ripping higher... |
Anonymous
Commodities (the things that are more expensive) |
Anonymous
| Greedy corporation's price gouging. |
Anonymous
Commodities just seem to be cycling. Lumber... Then oil...then natural gas.. now eggs. Is it the same cabal of traders getting filthy rich off these fluctuations before the prices come back down to earth? If so, how can i get an invitation to the party? |
Anonymous
If you look at the earnings reports, very few corporations actually seem to be doing much better... One could easily argue that it's the greed of the consumer, those which continue to purchase products at these inflated prices, that is driving the increase in prices. |
Anonymous
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Corporations are doing stock buy backs and paying their CEOs multi millions. Meanwhile, the workers themselves aren't doing as well
The largest egg company in America? Gas companies? Banks? And many more, all reporting record profits. |
Anonymous
Check out earnings call transcripts and shareholder reports for different companies in sectors such as pharmaceuticals, oil, food, and you will find where the “inflation dollars” went |
Anonymous
But if all of this is true, why aren't the stock indices going up? S&P pharma is basically flat. S&P Oil and gas is comparable to 2015 levels. Food and beverage is doing well, but still only a 10% annualized 10-year return (I guess I see why bill gates bought so much land now!). It would just seem that index funds would be performing better if it was corporate greed. Is the money being siphoned off to preferred shared holders in some way? I just don't get where it's all going? |
Anonymous
| There’s lots out there if you want to read a little beyond DCUM opinions. Perhaps you could get something out of the George Mason’s Mercatus Center’s “Inflation Primer.” |