Where exactly does all the inflation money go?

[Anonymous]

Anonymous wrote:Corporate profits, duh. It’s price gouging.

https://www.theguardian.com/business/2023/feb/24/an-economic-fairytale-australias-inflation-being-driven-by-company-profits-and-not-wages-analysis-finds

Definitely proven in Australia

[Anonymous]

Anonymous wrote:

Anonymous wrote:Corporate profits, duh. It’s price gouging.

If corporate profits were up so much, why is the market underperforming?

Because the risk adjusted return is lower, because you now earn 5% on a 1 year T-Bill. Even if they make more money, the rise from 0.1% to 5% on risk free return is really hard to beat.

[Anonymous]

Anonymous wrote:The lack of understanding on this forum is… understandable.
Broadly speaking, nobody gets richer, inflation is caused by a too many dollars chasing too few goods and services.
We massively increased the money supply the past 2.5 years, and this is global, America actually exported inflation.
Inflation has knock on effects across the economy, so it’s not like a builder is getting much richer because the price of houses has skyrocketed, that demand for house increases demand for the materials to build houses, so the price of materials also rises.

But there can be winners and losers. You can win the inflation game by having locked in a very low mortgage rate, and you end up paying off that mortgage with dollars that are nominally worth less than they were when you started your mortgage, eg your mortgage is appreciably cheaper as inflation increases

Your arrogance and ignorance is... impressive.

Its not from the money supply, sorry. That's been huge for a decade and is now being snipped, but barely denting inflation.

It was all about supply chain issues, broken globalization, and then oligopolies essentially colluding to raise prices in a time of crisis.

[Anonymous]

Take a big pizza, call it the economy, and slice it into more slices. They may not be totally evenly sliced (in fact they most certainly won’t be) but the pizza slices are all smaller than they were and there is no additional pizza (REAL GDP / stuff /etc). That’s inflation.


Things in my portfolio doing well and earning much more: oil and gas royalties, AAA floating rate loans
Things doing poorly: corporations that have labor and capex to pay, everything else

[Anonymous]

Anonymous wrote:It is terrifying that people don’t understand this. It goes nowhere. Literally everyone got more money, approximately the same amount (in percentage) and at approximately the same time. But, not exactly the same percentage and not exactly at the same time. And this is why it feels like inflation is hurting you.

In the end of the day it all evens out (approximately). If you locked in asset acquisition in the beginning you will do well. If you acquired at the end, you don’t do poorly, you just miss the gain.

Virtually everyone who owned a house when the pandemic began will be better off when the inflation subsides.

If you look at the data exec comp generally went up low to mid double digits and line worker pay went up in low to mid single digits. It definitely was not an equal percentage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The lack of understanding on this forum is… understandable.
Broadly speaking, nobody gets richer, inflation is caused by a too many dollars chasing too few goods and services.
We massively increased the money supply the past 2.5 years, and this is global, America actually exported inflation.
Inflation has knock on effects across the economy, so it’s not like a builder is getting much richer because the price of houses has skyrocketed, that demand for house increases demand for the materials to build houses, so the price of materials also rises.

But there can be winners and losers. You can win the inflation game by having locked in a very low mortgage rate, and you end up paying off that mortgage with dollars that are nominally worth less than they were when you started your mortgage, eg your mortgage is appreciably cheaper as inflation increases

Your arrogance and ignorance is... impressive.

Its not from the money supply, sorry. That's been huge for a decade and is now being snipped, but barely denting inflation.

It was all about supply chain issues, broken globalization, and then oligopolies essentially colluding to raise prices in a time of crisis.

+1. Everyone says raising min wage will cause inflation. We didn’t raise it to par and we still have…inflation. It’s exactly what immediate pp says.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

YET there is an "egg shortage". At Whole Foods there was a sign saying you could only buy 2 packs because of a nation wide egg shortage.

The egg shortage is bc of an avian flu virus requiring culling of large numbers of chickens. The price of beef is up for a different reason which is that there are fewer and fewer beef farmers raising cattle.

No.

From Robert Reich, Labor Secretary under Clinton, on Instagram (@RBReich):

Egg prices are up 60%. That's absurd. People are paying upwards of $6 and $7 for a dozen eggs.

Why? Corporate Greed.

Cal-Maine, the largest egg producer in the US, is raking record profits -- $198 million in its latest quarter.

That's a 65% increase from a year ago.

Corporate greed is behind the skyrocketing egg prices -- and the media will hardly talk about.

[Anonymous]

Cal Maine's operating margin has averaged 5.5% over the last 48 quarters and has ranged from -26% to 36% (last reported is 30%+). When i see populist commentary regarding "corporate greed", it often centers around a crappy low return low margin industry experiencing a near term cyclical boom that inevitably will not last. kind of funny that you rarely see companies that actually have high margins and lots of pricing power (Microsoft, Apple, Visa, etc) being the poster child of corporate greed. You see the same thing with Bernie/Elizabeth blabbering about Kroger's wild price increases. Kroger makes a 3% margin on a good day.

if Cal Maine is the money printing embodiment of greed you think it is, then just buy the stock. you can easily hedge your egg expenditure if it's so certain they'll be able to raise prices. like 1-2 dozen eggs a week at $8 is $400-$800/year. Shouldn't take too much stock to offset that if it's such a sure thing.

[Anonymous]

if you think its an army of executives at cal maine raking it in, I'd direct you to page 26 of their most recent proxy. The 6 or so people in C suite at Cal Maine is making $400 - $1.2mm / yr. If the top 50 employees got paid $0, your eggs will not be any cheaper.

Or perhaps the most recent annual report where you will see that general and administrative expenses comprise 11% of egg sales, whereas the "cost of sales" (ie all the chickens/feed/etc) is equal to 81% of sales. If no one had to work at Cal Maine including all the laborers making little, maybe your eggs would be 10% cheaper.

one of the beautiful parts of American capitalism is that there's lots of publicly available information so we can test people's claims, including substance-less populists like Robert Reich who regularly spouts anti corporate one sided bullshit.

And we can even participate in "corporate greed" by buying little slices of companies.

https://www.bamsec.com/filing/114036122030205?cik=16160
https://www.bamsec.com/filing/156276222000297?cik=16160

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

YET there is an "egg shortage". At Whole Foods there was a sign saying you could only buy 2 packs because of a nation wide egg shortage.

The egg shortage is bc of an avian flu virus requiring culling of large numbers of chickens. The price of beef is up for a different reason which is that there are fewer and fewer beef farmers raising cattle.

No.

From Robert Reich, Labor Secretary under Clinton, on Instagram (@RBReich):

Egg prices are up 60%. That's absurd. People are paying upwards of $6 and $7 for a dozen eggs.

Why? Corporate Greed.

Cal-Maine, the largest egg producer in the US, is raking record profits -- $198 million in its latest quarter.

That's a 65% increase from a year ago.

Corporate greed is behind the skyrocketing egg prices -- and the media will hardly talk about.

Reich makes me sad. He’s gone full bozo, in my opinion. We know why egg prices have vastly outpaced general inflation and hint, it’s not the egg cartel.

[Anonymous]

Yes, I was probably a bit aggressive in the prior two posts. Reich makes me sad for a number of reasons. Have had friends/family cite his BS and think he’s credible when in fact he is a context less sound bite type. It saddens me that it works for both sides. It saddens me that the democratic pary is increasingly anti corporate because I’m a capitalist at heart, but don’t like the republican nut jobs either…

[Anonymous]

Boomers

[Anonymous]

Anonymous wrote: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.

This!

I work at a large corporation with record profits. The C-level got record bonuses; their compensation is mainly paid through performance bonuses. They gave us on the "shop floor" 0-4%, while externally publishing that the average raise for inflation was 5%. I suppose they averaged in the C-level pay into that because I got a whopping 1.8%. Last year, another for record profits, we got 0% raise and an email stating that the company didn't want to contribute to inflation!

[Anonymous]

Anonymous wrote:Yes, I was probably a bit aggressive in the prior two posts. Reich makes me sad for a number of reasons. Have had friends/family cite his BS and think he’s credible when in fact he is a context less sound bite type. It saddens me that it works for both sides. It saddens me that the democratic pary is increasingly anti corporate because I’m a capitalist at heart, but don’t like the republican nut jobs either…

Have to disagree. The numbers don't lie, and it used to be that corporations paid their fair share of taxes, but that percentage has decreased (tremendously) over the past 40 years or so, as the money has been going to the top 1% instead. The squeezing of the middle class has continued, and to much wealth is at the top. It's not good for the country

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

This!

I work at a large corporation with record profits. The C-level got record bonuses; their compensation is mainly paid through performance bonuses. They gave us on the "shop floor" 0-4%, while externally publishing that the average raise for inflation was 5%. I suppose they averaged in the C-level pay into that because I got a whopping 1.8%. Last year, another for record profits, we got 0% raise and an email stating that the company didn't want to contribute to inflation!

Call me a socialist but this infuriates me! There is literally no reason why there should be such income disparity between the top and the employees who do the actual work.