By: pol_pak
1/07/2008
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The inflation effect of Carbon Trading... ?
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By: almurrie1@y7mail.com
3/06/2008
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An idea that fascinates me is the concept of a choice between the way we accept inflation. If everyone woke up to the chicanery that we have to accept on a daily basis the world would be a half decent place to live in. Firstly inflation is squarely the result of money being printed by governments. Just look at Zimbabwe if you think you can find a flaw in this reasoning. The ultimate example, Mugabe printing money to buy guns. What is it now, over a million for a loaf of bread!! Governments do not want people to know this, look at what happened to Pauline Hanson when she reply to the question of how her policies would be funded. She said that it would be easy just print more money. And that is exactly what the governments already do but they howled her down! It is not bananas or even oil that is the underlying cause of inflation although they do have some effect.
So we have a system where money is created by banks through lending AND charging interest. Increasing the interest rate actually increases inflation until lending slows or stops. The government prints the money for distibution through the reserve. Oh and there may be extra income from issuing new bonds. Then it steals some back to fund its election promises!! $1.5 billion more this year.
The alternative is to have the same inflation as now but instead everyone benefits equally from it. The government gives the people the equivalent of the money it prints, instead of the banks. I have heard that Canada is doing something like this. That would switch most people from a debt cycle to a saving cycle, which would cripple the big banks. They would take their bats and balls and sulk out of the game. It would take a very courageous government to do this but heck, are they representing us or the Banks? Leave that up to you to answer. Banks provide a very lively source of tax for governments. Just think also that for every dollar in circulation more than a dollar in GST is generated every year. Food for thought. |
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By: ecchi.gaijin
29/05/2008
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| The anti competition laws COULD (unlikely) be used to remove barriers of entry like the one Beach mentioned. The powers are quite broad and vague enough to include many practices. But the ACCC has always been a toothless mutt. |
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By: pol_pak
29/05/2008
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This partly why there is an enquiry at present.
Competition from Aldi etc just fit in, through limited range of products on the shelf... then again, who wants to stack things on shelves which will not sell ?
How do you see our shopping complex managements fitting into our competition or lack of scheme of things ?
Anti competition efforts to block gaining approval for entry of new competition continue... will recent changes have any impact ?
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By: beachgolfer62
29/05/2008
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Hello ecchi as a supplier in a previous life it was like dealing with a vampire.
One of the worst was if you wanted to introduce a new range of products into their stores they would charge you up to $100K to put them on file.
That was a real incentive to walk away. |
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By: ecchi.gaijin
29/05/2008
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| The supermarkets have more than a few tricks up their sleeves in pushing high margin products. The one that irks me the most is spreading products out across a wall so you have to search like a needle in a hay stack to find what you want. Meanwhile the products they want you to buy are smack damn in front of your face. |
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By: beachgolfer62
29/05/2008
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Hello Pol pak good to hear from you.
House brands will always fill a market segment and I guess your talking about groceries.
Both Woolies and Coles are very aggresive in pushing their house brands but they have realised that most consumers will only buy bottom end staples of this type.
So both Woolies and Coles have introduced their own premium house brands which are as expensive as the true brand products.
Their ultimate goal is to remove the brand names from their shelves and only have house brands across the price spectrum.
All these goods will be manufactured by the current brand companies.
I went to a Coles meeting several years ago with all of Coles suppliers (Target and Myers as well of course)and we were told this was the future for CM and if we wished to sell to CM then we had to get on board.
They would still accept our brand product but we had to supply a cheaper quality product at a much cheaper cost to them and (heres the killer) a premium product exactly the same as our brand products at a much reduced cost to them so they could price it anywhere within the price band of the cheap one and our brand product.
This was across every CM store and products.
If you didn't sign off you were to be dropped as a CM supplier.
Most suppliers told them to jump and that started the demise of the CM group.
However Coles have been successful (Woolies have the same strategy)and are employing it in their grocery business |
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By: pol_pak
29/05/2008
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Brand loyalty was the biggest driver of sales.
Now whilst many people remain brand loyal seems more are looking for plain old price or quality first; Yet many looking at plain price may not understand difference and between price and value - or the advantage of value.
Coles and Woolies etc with their own brand products have are eating away brand margins.
Suspect so given their eagerness to expand these they may achieve better returns from own brand than brand name products, |
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By: beachgolfer62
28/05/2008
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Hello ecchi, In my previous life (I'm now retired) we would cyclically reduce our price on certain ranges of products to simply maintain income during quiet periods.
This of course was to pay the fixed costs (wages, electricity, rent etc).
Then when the period was over up would go the prices to their previous levels.
Bear in mind fixed costs become variable per unit so the more you sell the less % of total sales your fixed costs are.
Regardless of what our competition was doing we expected our products to be driven by other factors than just price.
Brand loyalty is the biggest driver of sales.
Our real impact on inflation was to sell the same product the following year at a higher price than any increased costs we had.
Please see my other response as to why this was done
That's what every business is trying to do and its financially and morally a very serious concern for our country
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By: beachgolfer62
28/05/2008
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Hello Reynard, Raising prices to cover cost increases is certainly the accepted norm of businesses to maintain their margins.
However I was a senior executive in my working life for a few companies.
At Business Plan time the costs were incidental to the price we put on our products for the coming period.
We employed all sorts of ways to reduce costs with new technologies giving us the best tools across all our business units whether it be for raw materials, manufacturing, selling, distribution or whatever.
Our international HO would give us the new margins ie exponential margin growth over the previous year and we would simply lift our prices to realise the new margin.
No rocket science just maths.
So imagine how easy it is for those companies like the oil cartel or the grocery duopoly to do this.
I'm not astute enough to debate the effect of the Iraq war on world inflation, except to say that whenever there is a war that the US is involved in you can bet there a more than a few influential US companies that make a motza.
The current world credit crisis caused by banks and other financial institutions lending $00K's to Americans without jobs or the means to pay back the loans was a crime of monumental proportions and if there was any justice in this world they would be held accountable and the senior guys locked up for a very long time.
This is fraudlent practice of the most sinister kind
But you are certainly right in expressing your disgust with the collusion between banks and governments.
However as long as our only complaint is on a blog then nothing will change.
Accountability is non exsistent in the political and commercial world.
Look how many ex pollies get high paying fake jobs with their previous business masters after they have left politics.
Again we sit back and let it all happen with a squeek and a whine |
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By: ecchi.gaijin
28/05/2008
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| Take all these pizza franchises out there. They used to sell pizzas for over $10 each, but now you can buy them for well under $10 each. Does that mean that suppliers reduced their prices significantly or just increased competition and increased demand has forced prices down? Price points can cost OR sales driven. |
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By: ecchi.gaijin
28/05/2008
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| Beach, shops are always playing with price points in order to maximise gains without unduly effecting volume. The supplier can keep his prices down but the shop can also see an opportunity to raise it's prices. The supplier would presumably follow suit seeing the shop making a bigger margin. |
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By: reynard2008@y7mail.com
28/05/2008
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beach - in the current climate the reason the supplier raises his prices is to cover his increased costs. in fact, in many industries that is heavily reliant on oil based products (fuel etc) they are not even able to do that. workers go for higher wages to cover increased food, housing, education health etc costs.
when bush, howard and blair went to war they had to pay for it. they printed money and paid the bills with that. as a direct result we have inflation.
the central banks and the governments knew what they were doing, why and now expect us to pay for it |
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By: beachgolfer62
28/05/2008
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Hello ecchi, Having more money to buy more is only inflationary if the supplier raise his prices.
Regardless of supply and demand issues if the supplier doesn't raise his prices then there is no inflation
Inflation is the reduced value of your finite resources to purchase the same goods over a measurable time period. |
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By: beachgolfer62
28/05/2008
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Hello Reynard, I can't agree that monetry inflation leads to price inflation.
If the extra money in the system isn't spent by any group, (including all the sectors, public, commerce, industry and government) then it has no impact.
It will just lift the mattress a little higher.
However this of course is tongue in cheek and as long as demand for all things increases then suppliers will gouge more for their goods and shareholders and this kicks the old inflation cycle off for us all.
It's just a runaway train after that |
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By: ecchi.gaijin
28/05/2008
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| But that was my point Anthony, has the rising $AU (against the $US) conteracted the rising $US oil prices at all or are the oil companies just slipping up a mickey? |
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By: ecchi.gaijin
28/05/2008
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| Having more money to buy more quantity does create some inflation (depending on the elasticity of supply and demand) but not as much as having more money to buy the same quantity of goods. |
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By: beachgolfer62
28/05/2008
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Hello ecchi, your oversimplied example is flawed.
The money the family has or the number of people in their family is not the problem.
The cost of the goods they buy is.
If the exact same goods in quantity and volume they bought for $100 costs them more next year then they have been affected by inflation.
If they have more disposable income (for whatever reason)and they spend more and this demand causes suppliers to increase their prices then once again they are part of the inflationary cycle.
If they use credit to purchase their goods causing a "false cost" in the mix ie interest charges then they are creating inflation.
If suppliers increase their prices simply because they have greater demand then they are creating inflation.
Governments printing lots of new money to cope with all of this is only reflecting this cycle and of course a much bigger one of supply and demand pricing and cost of credit that flows right through our economy |
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By: reynard2008@y7mail.com
28/05/2008
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ecchi - the AUD is only rising against the USD and perhaps some other pieces of paper.
Against real value it is falling |
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By: ecchi.gaijin
28/05/2008
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| Anthony, I would expect that this would definitely be the case in regards to gold and oil (being quoted in $US) and since the Fed injected billions of extra dollars into the system. The thing I would be interested to see is if the rising $AU has counteracted in any way the inflationary effect coming out of the US, or if the oil magnates have just tried to stick it to us. |
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By: reynard2008@y7mail.com
28/05/2008
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“Dear CIGAs,
The following is a classic statement. I just heard a talking head say that he agrees with the Bernanke approach:
"If you can control inflationary expectations, you can control inflation."
Translation: If you lie your butt off, issue skewed statistics and do it all at once as a choir singing a single note, all will be ok.
In the last 10 business days CEOs of the following companies have declared the credit problem solved:
Citigroup.
Goldman Sachs.
JP Morgan.
Lehman.
Merrill Lynch.
Morgan Stanley.
And, of course, Secretary of the US Treasury Henry Paulson has declared the credit problems under control.
My answer:
Monetary inflation leads to Price inflation which is a Consequence that cannot be stopped by lying. Consequences are unavoidable.”- Jim Sinclair, JSMineset.com |
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By: reynard2008@y7mail.com
28/05/2008
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ecchi - let's look at this another way.
the 'normal' view is that oil prices have risen and this is inflationary - keeping it simple.
that assumes that the purchasing unit has not changed but the item being purchased has changed.
what if we assume the opposite - and using oil and gold as benchmarks.
looking at the numbers:
26/10/07
Oil - USD 90.46 AUD 99.52
Gold USD 768.90 AUD 845.90
28/5/08
Oil - USD 128.46 (+42%) AUD 134 (+34.6%)
Gold - USD 905.53 (+17.77%)/AUD 944.59 (+10.45%)
This is the usual way of lloking at it.
But if we allow the dollar to move we get the following:
Against Gold: USD -17.77%/AUD -11.67%
Against Oil: USD -42.01%/AUD -34.65%
We can allow for supply/demand forces at work in regard to oil buyt gold is generally regarded as a form of currency and a 'safe haven'. Thus, in seven months, the USD has lost nearly 18% of its value and the AUD has been debased by nearly 12%
what were those M3 numbers again?
It is the actions of the central banks and their puppet governments that has caused and is continuing to cause inflation and to point the finger els here is pure obfuscation.
I note the ANZ projection of two more interest rate rises this year anbd the AUD to reach parity with the USD. THEY know what is going on. |
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By: ecchi.gaijin
27/05/2008
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not always, as I keep saying it is only one of the relevant factors.
Take an oversimplified example of a family budget for 2 adults. A family is given $100 a week to spend on groceries etc. Next year they have twins and are now given $175 a week to spend. Does this create inflation on what they buy? No because they have to use the extra money to buy an increased quantity. If they received the extra money and had no kids THIS would cause inflation. |
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By: reynard2008@y7mail.com
27/05/2008
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"help my view" ? what on earth does that mean?
M3 has increased by over 16% in the last 12 months following a 14% or so increase the previous year.
what view is that? it is a fact published by the RBA on their website
do you not think that increasing money supply is an inflationary act? |
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By: ecchi.gaijin
27/05/2008
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As I said Anthony, "Not saying it will necessarily give a different result "
but you still should look at all the relevant facts to reach a conclusion not just the ones that help your view. |
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