Used prices going up, up, up - Tractor Futures!

[Robo 52]

have to assume it's the same for all of you out there - I have been greatly amused to watch prices for used equipment skyrocket as parts and tractor inventory supplies have dwindled, and as usual-new-equipment buyers are scared away by sticker shock, long delivery times and being told 'you'll never be able to put a wrench to that $250,000 toy for which you just mortgaged the rest of your life'.

 

[ruffdog]

Just a supply and demand issue. When supply is more than the demand, prices go down and vice versa.

 

[Torvy]

Just a supply and demand issue. When supply is more than the demand, prices go down and vice versa.

Keep saying it does not make it true. Sure, supply and demand will affect prices on individual items, but this is compounded by an inflationary spiral that we have not seen in decades. Inflation is a money supply issue at its heart and is much bigger than you realize.

 

[ruffdog]

Prices for cars and trucks are much higher now. Supply and demand. A dealer that normally has 500 units on hand only has 20-35. That is a lack of SUPPLY so it drives DEMAND up.

 

[Doughknob]

Keep saying it does not make it true.

nor does trying to predict the future mean your predictions are true….

 

[3 Horse Ranch]

Prices for cars and trucks are much higher now. Supply and demand. A dealer that normally has 500 units on hand only has 20-35. That is a lack of SUPPLY so it drives DEMAND up.

Yes it is a supply and demand issue to some extent but it is also an inflation issue. The kicker is, while supply may increase and/or demand decrease, the value of the dollar lost to inflation will never be regained. As long as the government has the attitude "We have plenty of paper, ink and the presses still work so we have lots of money" this problem will only get worse.

 

[Torvy]

Prices for cars and trucks are much higher now. Supply and demand. A dealer that normally has 500 units on hand only has 20-35. That is a lack of SUPPLY so it drives DEMAND up.

False. Lack of supply is a lack of supply. It does not follow that it changes demand at all. "Normally" lack of supply would increase prices which would decrease demand until a new equilibrium price is reached. An alternative would be that producers would increase supply in response to the higher prices, again establishing a new equilibrium price.

While supply and demand affect prices on individual things, the supply chain issues are not what is causing the majority of the pricing issues.

 

[Steppenwolfe]

While supply and demand affect prices on individual things, the supply chain issues are not what is causing the majority of the pricing issues.

Oh thank God! One less thing to worry about...

 

[Torvy]

nor does trying to predict the future mean your predictions are true….

The difference is that I actually know what I'm talking about. It is not a crystal ball it is economic laws. This is not a guess, it is a 100% certainty. The only question is how many years before we recover. That part would take a crystal ball because recovery will not start until the root causes are addressed. Monetary policy is the root cause. Not a guess, not a prediction. Just a fact. Wishes will not change the facts.

 

[Username Taken]

The difference is that I actually know what I'm talking about. It is not a crystal ball it is economic laws. This is not a guess, it is a 100% certainty. The only question is how many years before we recover. That part would take a crystal ball because recovery will not start until the root causes are addressed. Monetary policy is the root cause. Not a guess, not a prediction. Just a fact. Wishes will not change the facts.

Do things cost more in Japan than they did two years ago? I don't think so. Inflation in Japan is at (-) 0.17%. That is a 'minus' you see there. For 2021

Our money supply is over-inflated, making the money worth less. So it isn't so much that things are going up in price, it's that our money won't buy nearly as much.

Japan, Korea, German......? They couldn't care less. Our goods don't cost any more there than they did 2 years ago. It's their currency that's strong. Ours is not.

Wait until the Yen becomes the Global Currency. I wanna hear the excuses then. That'll be fun

 

[ruffdog]

The difference is that I actually know what I'm talking about.

Oh, ok....................

 

[ruffdog]

The change in monetary policy has been in the works (listen to Jerome Powell- FED chair) for a few months now. The amount of QE is getting trimmed back and it looks like rate hikes are coming. None of that is going to solve supply chain issues. Supply for some goods will benefit if rates go high enough to deter purchases. Trucking, warehouse, and chip shortage issues have to be addressed separately.

 

[Hay Dude]

Do things cost more in Japan than they did two years ago? I don't think so. Inflation in Japan is at (-) 0.17%. That is a 'minus' you see there. For 2021

Our money supply is over-inflated, making the money worth less. So it isn't so much that things are going up in price, it's that our money won't buy nearly as much.

Japan, Korea, German......? They couldn't care less. Our goods don't cost any more there than they did 2 years ago. It's their currency that's strong. Ours is not.

Wait until the Yen becomes the Global Currency. I wanna hear the excuses then. That'll be fun

“Quantitative Easing” I believe they call it?????

 

[ruffdog]

“Quantitative Easing” I believe they call it?????

Yes, QE is quantitative easing. Since late Spring of 2020 the FED has been taking on about $120B worth of assets per month. That puts cash into the economy. It is not printing new money...it is more like trading money for assets.

Quantitative Easing Explained.

 

[rScotty]

Keep saying it does not make it true. Sure, supply and demand will affect prices on individual items, but this is compounded by an inflationary spiral that we have not seen in decades. Inflation is a money supply issue at its heart and is much bigger than you realize.

Last year the stock market went up. If you are right, then that rise was not based on US industry suddenly becoming more efficient, but simply because it required more US dollars to buy the same stock.

And if so, then fixed rate investments - like bonds - will have to see their value go down because their payback in in pre-determined dollars....but these are dollars that are less.

Seems like both are easy enough to test by seeing if the price rise of stocks in dollars is reflected by a similar price rise in some a different currency - preferably a foreign currency that has already made the changes in financial policy that the US gov't is now considering.

If the economy worked like a runaway diesel we would either shut off the fuel or put on the brakes. Maybe both.

 

[Torvy]

Oh, ok....................

Dude, I literally teach economics. Your statements clearly show you don't understand economics. Attempting to regurgitate something you read on the internet will not magically help you understand the words you type. Just stop. Fed policy is only part of the problem. Massive influx of federal dollars into an already smoldering economy has quickened the inflation. The Fed is trying to take a measured approach, but it is like trying to stop the Mississippi with balsa wood. The supply chain issues are just a boil on the backside of an elephant. Those, too are caused, in part, by poor policies. If the supply chain issues were magically fixed tomorrow, the prices of new equipment would not drop.

 

[Torvy]

Last year the stock market went up. If you are right, then that rise was not based on US industry suddenly becoming more efficient, but simply because it required more US dollars to buy the same stock.

And if so, then fixed rate investments - like bonds - will have to see their value go down because their payback in in pre-determined dollars....but these are dollars that are less.

Seems like both are easy enough to test by seeing if the price rise of stocks in dollars is reflected by a similar price rise in some a different currency - preferably a foreign currency that has already made the changes in financial policy that the US gov't is now considering.

If the economy worked like a runaway diesel we would either shut off the fuel or put on the brakes. Maybe both

The stock market is not as good a barometer of economic health as many believe. I also did not say that everything is 100% due to inflation. Some of the rise in stock prices is monetary inflation. Rising stock prices themselves are not inflationary. Stock prices have little to do with producer or consumer prices. Bond values are reactionary, they respond to actions by the fed and to reactions by people who see bonds as a safe harbor against inflation. The inflation problem is in its infancy. The only solution is to shrink the money supply. The economy works best when people stop messing with it. Slamming on the brakes is almost as bad as hitting the gas on a patch of ice. Better that no one hit the gas in the first place. Now we have to go along for the ride and the drivers have never driven on ice before. Hang on.

 

[kenmac]

If the supply chain issues were magically fixed tomorrow, the prices of new equipment would not drop.

Had the supply issues not occurred, would those prices have risen ? I think not.
But, since everyone is willing, and continue to purchase at these higher prices, why would they lower prices ?

Now, I wonder what my CX105 cab tractor would bring ?

 

[ruffdog]

Fed policy is only part of the problem. Massive influx of federal dollars into an already smoldering economy has quickened the inflation. The Fed is trying to take a measured approach, but it is like trying to stop the Mississippi with balsa wood.

If you listen to what Jerome Powell has been saying since 2019, he has been warning congress of high inflation under current policies. This did not just happen out of the blue.

“In order to move rates up, I would want to see inflation that’s persistent and that’s significant,” Powell said at a (2019) news conference in Washington. “A significant move up in inflation that’s also persistent before raising rates to address inflation concerns: That’s my view.”

Fed Chair Powell says he would want to see persistent rise in inflation before hiking rates again

 

[jyoutz]

Yes it is a supply and demand issue to some extent but it is also an inflation issue. The kicker is, while supply may increase and/or demand decrease, the value of the dollar lost to inflation will never be regained. As long as the government has the attitude "We have plenty of paper, ink and the presses still work so we have lots of money" this problem will only get worse.

Low interest rates for many years is one factor that also has increased prices. This has kept demand for products high, most likely so businesses boom and political leaders get credit.