Kubota still offering 0 percent financing

[Torvy]

I could ask several questions with respect to your comments about inflation.

Are you saying that if there is more money, such as the $ injected into the system by the govt between MAR of 2020 and DEC of 2021, that Inflation went up due to that?

Or are you saying that due to the very low supply side of materials and labor during that time that inflation went up for to lack of availability and the same amount of demand?

With respect to your thoughts about individual decisions not making a difference in inflation....

Are you saying that individuals purchasing items regardless as to price during inflationary times like this has no impact to the overall inflation rates?

Im looking at the real estate market..... I see hundreds of thousands of "individuals" buying homes at the highest rates in years during the 2020 to 2022 timeframe, regardless as to the asking prices.

Granted... they are individuals so assuming your thought process that these are "individuals", then we can assume that the increase in real estate values in that time frame (inflation) are not driven by demand because these are individuals?

I do agree that low interest rates (and available money supply) begat the initial phase of inflation...but I disagree that we as individuals can't impact the direction of inflation per the choices we make to pad our own desires over the good of our communities as a whole.

No, I teach economics and prices rising on real estate is not inflation (but it could be partially due to inflation). Inflation is an across the board increase in prices due to a rapid increase in the money supply. The biggest recent influence on inflation was the series of so-called COViD relief bills that dumped trillions into the market. Low interest rates have been there for a long time, they didn't create inflation, they were preventing a recession.

So, buying real estate may put upward pressure on home prices in that localized area, it does little to nothing as far as increasing prices a cross the country or outside of real estate.

This is a good interview that helps explain it.

News and Events - VCU Business - Virginia Commonwealth University

VCU Business News & Events page is your destination for stories that show the impact of VCU Business. Find events related to your interests.

business.vcu.edu

 

[stso9d]

No, I teach economics and prices rising on real estate is not inflation (but it could be partially due to inflation). Inflation is an across the board increase in prices due to a rapid increase in the money supply. The biggest recent influence on inflation was the series of so-called COViD relief bills that dumped trillions into the market. Low interest rates have been there for a long time, they didn't create inflation, they were preventing a recession.

So, buying real estate may put upward pressure on home prices in that localized area, it does little to nothing as far as increasing prices a cross the country or outside of real estate.

This is a good interview that helps explain it.

News and Events - VCU Business - Virginia Commonwealth University

VCU Business News & Events page is your destination for stories that show the impact of VCU Business. Find events related to your interests.

business.vcu.edu

You are claming that the great covid giveaway is a big cause of our situation? I have heard that it was abused by many companies for wrong purposes. I know it helped a lot of poor folks, temporarily, that are still poor. It was Christmas!

I am fortunate in that i didnt qualify. I dont blame common families that benefited. I do blame any corporations that took it and used it for whatever. But that is on them. But corporations have no conscience…

I believe it was the perfect storm for our current situation.

Wow - this is really a great tooic. Maybe not the right place but anyway…

Randy

 

[DonaldP]

You are claming that the great covid giveaway is a big cause of our situation? I have heard that it was abused by many companies for wrong purposes. I know it helped a lot of poor folks, temporarily, that are still poor. It was Christmas!

I am fortunate in that i didnt qualify. I dont blame common families that benefited. I do blame any corporations that took it and used it for whatever. But that is on them. But corporations have no conscience…

I believe it was the perfect storm for our current situation.

Wow - this is really a great tooic. Maybe not the right place but anyway…

Randy

Randy, kudos to you for saying that. There are so many folks early on that said "heck ... it's free money, why not take it and run". Now those same folks are wishing to be still unemployed because they made so much money in unemployment that it wasn't necessary for them to work well into the end of non vaccination for the general public in post pandemic times.

I believe that's what started the US in it's slow demise and fall into high demand and low supply price increases.
We reacted too late in bringing folks back to work... Trump said immediately after he got COVID and just before he lost the "so called election" that we needed to get every single person that could work back to work, and we need to do it now. I agreed. But we waited and the dollars kept flowing into the hands of work capable folks for another year. In my opinion, that failure to act is what cost us the place we are in now.

Now it's catch-up time with an increase in rates to slow that demand, but it's becoming more and more clear that we can't blow smoke up the skirts of anyone now... the waiting may have cost us two to three years in a recession.

 

[DonaldP]

No, I teach economics and prices rising on real estate is not inflation (but it could be partially due to inflation). Inflation is an across the board increase in prices due to a rapid increase in the money supply. The biggest recent influence on inflation was the series of so-called COViD relief bills that dumped trillions into the market. Low interest rates have been there for a long time, they didn't create inflation, they were preventing a recession.

So, buying real estate may put upward pressure on home prices in that localized area, it does little to nothing as far as increasing prices a cross the country or outside of real estate.

This is a good interview that helps explain it.

News and Events - VCU Business - Virginia Commonwealth University

VCU Business News & Events page is your destination for stories that show the impact of VCU Business. Find events related to your interests.

business.vcu.edu

Great points!!!

So you are saying that these localized real estate areas of the country are not indicative of inflation?

My house went from $90,000 to $135,000 in 2 years in Central NY... am I in one of those localized markets? Same thing happened in Pittsburgh, San Antonio, Spokane, Providence, Tampa, Louisville, Denver, Sioux Falls, Wilmington, Boise, Cheyenne, and
Minneapolis.

 

[hiddentacocatneddih]

Financing had caused inflation of vehicles. If financing went away over night, prices would come to reality.

 

[Torvy]

Great points!!!

So you are saying that these localized real estate areas of the country are not indicative of inflation?

My house went from $90,000 to $135,000 in 2 years in Central NY... am I in one of those localized markets? Same thing happened in Pittsburgh, San Antonio, Spokane, Providence, Tampa, Louisville, Denver, Sioux Falls, Wilmington, Boise, Cheyenne, and
Minneapolis.

All inflation involves price increases, but not all price increases are inflation.

If I had the time and the data, I could probably give you an idea of how much of the price increases are due to inflation and how much is due to regional price increases.

The CPI (consumer price index), which is the advertised inflation rate, takes a "market basket" of various goods and compares them over time to arrive at an inflation rate.

The PPI (Producer price index) takes a similar approach, but from a cost of inputs standpoint.

The CPI often understated inflation and the PPI is a leading indicator. PPI has been showing over 10% inflation. Inflation causes the price of raw materials to rise which is reflected in home prices. It can get complicated.

Producer Price Index News Release summary - 2022 M05 Results

www.bls.gov

https://www.investopedia.com/ask/answers/011915/what-difference-between-consumer-price-index-cpi-and-producer-price-index-ppi.asp

 

[rScotty]

Great points!!!

So you are saying that these localized real estate areas of the country are not indicative of inflation?

My house went from $90,000 to $135,000 in 2 years in Central NY... am I in one of those localized markets? Same thing happened in Pittsburgh, San Antonio, Spokane, Providence, Tampa, Louisville, Denver, Sioux Falls, Wilmington, Boise, Cheyenne, and
Minneapolis.

I don't teach economics at any level. I do advise & invest for a town, several businesses, and some individuals.

Donald, I don't know if you are in one of those localized markets or even know what localiaed means anymore. It sounds like your real estate went up 50% in two years. I'm familiar with the real estate in the rural area surrounding several of those cities that you mention. In every case I know, real estate prices have gone up much more steeply than has yours. Even had your house doubled - or higher - it probably would not be enough to enable you to move directly into a similar place in those areas you mention. So although your area house price increase may look startling, it is very modest by comparison with those others.

The resulting changes in your tax base may be something that you should pay attention to.
Keeping the local taxes from from increasing is the one area of monetary policy where local action may actually do some good. It is also an area of money policy where small changes can have a large influence. Please become active in deciding local tax issues.

When using economic theories as anything more than coffee conversation, I would caution that economics is a "soft" science. Economics has not yet progressed to the point of having many theories that can reliably predict results.

On inflation, there is always confusion about the popular use of "inflation". Experts & talking heads use the word "inflation" when they are actually talking about consumer prices & related indexes - not inflation at all. Sticking to consistent definitions helps to understand trends. And in economics, trends are eveything.

But regardless of definitions, our economy is what it is. It may not be true science - or much influenced by what we wish it to be - but that doesn't make it difficult to understand.

Economics is simple, understanding it is necessary, and it would be nice if it were more influenced by discussion.

One good thing is that helps keep things optimistic is knowing the USA with all it's economic problems is not the worst economy in the world - not by a long, long shot. Ours is down recently, but the USA trend since 2020 is up, not down.
The world has a bewildering variety of entirely different types of economies that all seem to be able to interact as they stumble along. That makes dry subjects like comparative finance fun to talk about.

rScotty

 

[Hay Dude]

Randy, kudos to you for saying that. There are so many folks early on that said "heck ... it's free money, why not take it and run". Now those same folks are wishing to be still unemployed because they made so much money in unemployment that it wasn't necessary for them to work well into the end of non vaccination for the general public in post pandemic times.

I believe that's what started the US in it's slow demise and fall into high demand and low supply price increases.
We reacted too late in bringing folks back to work... Trump said immediately after he got COVID and just before he lost the "so called election" that we needed to get every single person that could work back to work, and we need to do it now. I agreed. But we waited and the dollars kept flowing into the hands of work capable folks for another year. In my opinion, that failure to act is what cost us the place we are in now.

Now it's catch-up time with an increase in rates to slow that demand, but it's becoming more and more clear that we can't blow smoke up the skirts of anyone now... the waiting may have cost us two to three years in a recession.

I think that wasn’t the beginning, but the end. The US had already given away all it’s industry to China and Mexico from the mid 90’s (NAFTA) until 2019. Interest rates were too low for too long. The Covid checks and the trillions spent were the final nail.
Now we have what we have. A complete and utter mess.

 

[stso9d]

I totally agree with Hay Dude. I/we watched as asia became our candy maker. I saw the gigantic ships up close loaded with all the neat plastic for us to enjoy. Myself being no exception. But always in the back of my mind that little voice saying ‘something is wrong with America’. Wal mart and the likes found their sweet spot without regard for their own. Money talks and BS stands watching…

Dare i say i am on the side that believes it was a normal election…but again - probably way off topic.

Randy

 

[jyoutz]

I don’t know how the US ever returns to manufacturing of cheap consumer goods; high end manufacturing yes. I can give some examples of great US products I own that will never be economically feasible as a mass product: I buy Whites boots (completely US made) for $500. I own several Pendleton wool shirts at $125 each. This is the cost of US made goods. I love these products and am proud to continue to support these companies, but I think they will always be a niche market. The US cannot compete in the mass market with affordable prices.