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Recorded sold prices of detached houses in my post code are up 30% in the last 12 months. Nuts!
Isa, t perkins anounced recently cement price rise of 15 p cent and chipboards etc 10 p c . My joinery timber going up weekly . Inflation deffo here for a fair while .
Re house price inflation ,in my area in the west prices were going up a year before covid but has gone insane this year .Never seen houses go so fast here before . Thinking about cashing in as this cant go on indefinitely .
I have never been so busy personally with work .
Tourism has gone nuts here . Rather uncomfotably so tbh .
Dont think interest rate rises are going to be viable tbh to control inflation .the levels of debt are too high.
Slightly ot ,heres the latest Nica politics .
https://abcnews.go.com/International/wireStory/nicaragua-arrests-opposition-leaders-crackdown-78254104
ISAPENSION, fine I too see all that pent up demand but that expenditure is supported by £300Billion a year of government borrowing (20% of GDP). Surely this is not sustainable long term. We are currently in a twilight zone where people and companies don't realise they are bankrupt. If the furlough schemes and other government support ends we will see a collapse in demand and deflation.
Basel 3 is to eliminate the "unallocated" gold i.e. paper transactions from bank balance sheets.
Such transactions are at risk if counterparty defaults---see Lehman Bros derivatives 2008!
Do not see how this would reflect in higher borrowing costs to producers.
Ivybush - If Basel 3 increases the costs of lending against future Gold production then the costs for new mines will increase and their value will fall.
@nero120 yes Alistair McCleod is your man on gold price outlook--worth looking at
a couple of recent videos.
Forward selling by banks/central banks of "paper gold" has held down spot price.
Basel 3 will mean these positions will have to be unwound and not recycled.
BIS has stipulated by end of June for EU. UK has extended this until end Dec.
Should only be positive for POG.
Ps Erdles, look at house price inflation. Yes it was kick started by the stamp duty benefit however after July 1st it’s negligible for a house £250k plus yet there is still limited supply and huge demand (I should know as just going through a sale and buy). Low interest rates and money saved in lockdown are fuelling this, not stamp duty alone!
Equally look at all the work people are doing on their houses, ie new drives, roofs, extensions, knock through kitchens!
We are in a post Covid boom and while interest rates are low people are borrowing (or spending money saved) driving up prices.
It will end in tears for some unfortunately!
Erdles, I can assure you prices are going up and will stay up this side of Xmas on general merchandise goods (non food) that are manufactured in the Far East.
I envisage an average 5% increase with big boxed items considerably more! Yes you could argue volumes will be lower however the lack of supply due to longer lead times and shipping issues will ensure items aren’t discounted down again.
Arguably the strength of the pound versus dollar has offset some of the increases but it’s no where near enough!
Will high prices hold next year or is this temporary, well there may be certain companies/individuals struggling but we are currently in the post Covid boom! Let’s also not forget people aren’t going on holiday this year or not abroad so extra money available.
I do agree though if inflation kicks in and interests rates rise it will lead to more pain and as always the rich will benefit!
there will be a big shift back to economies to manufacture there own goods..it happens all the time we become to reliant on one country .. remember taiwan japan ect..most countries service industry's are broken..they will move back to manufacturing
ISAPENSION; I just don't see how you get price inflation when once the furlough schemes end millions of people will have no jobs to go back to, businesses will be bankrupt by the thousands and landlords will find their tenants unable to pay their rents. In my area for example, I see a shortage of paving slabs (due to cement shortages and lack of Indian supply) but I don't see people scrambling for the remaining product nor any price increases. Fewer are simply buying the products.
Scary times Campbells, for once the media isn’t scaremongering or exaggerating!
Sein I never said that was the result of the delay, I may not be an expert in gold or cryptos however I consider myself an expert on dealing with the Far East and the challenges it faces!
Shipping companies have hugely inflated prices as a result of the world waking up after COVID (particularly the USA) and containers being in the wrong place at wrong time. Yes Suez has compounded however PPE shipments and demand has heightened the problem!
Isa , sustainability and recyclability have been ongoing for years . That is not why your containers of far east goods have increased seven fold . Suez canal being blocked probably had a say. We are flooded with cheap chinese products that are often low standard and non recyclable . The tips are full of it.
Historically many items are presently ridiculously cheap compared with 40 years ago and it is time to reballance imv and cut some of the rampant consumerism. I try and avoid rebadged chinese tools and look for good quality secondhand , when they knew how to build things to last .
I am on my third kettle in three years . luckily currys are pretty good at honouring guarantees.
I am adding bitcoin and etherium presently in small lots after the re trace . Foolish not to have a bit in the pf imv . Whatever is good for gold is also v good for bitty and it moves much faster .
Sein, interesting re your comments on throw away society, as sustainability, global waste, carbon emissions and use of plastics and packaging are having a bigger influence on our commercial decisions (which interestingly also drive up costs)
Also if you look at clothing the talk of recycling and hiring clothing, especially for special occasions is gaining traction rather than buyer new!
Isa, interesting info - thanks! Many of us were predicting intractable inflation appearing much sooner however it does look like its finally here. Inflation will mark the end of the current monetary system, with no political will to raise rates with private and public debt levels at historic levels (in fact underreported due to balance sheet trickery - PPP anyone?) which would lead to defaults all over and systemic financial crises, they will continue to print and wont cut spending (in fact will likely increase, $6T US budget this year!) and that will lead to runaway inflation and finally hyperinflation of the major western currencies.
The gold price is set in the futures markets, not the physical markets so we wont initially see inflation reflected in the price. It will actually become more and more scare as physical premiums increase leading to less available supply at official prices. The futures markets will become more and more irrelevant as physical metal is arbitraged to the east where it will be priced by the real market.
Thats my view anyway. I recommend the writing of Alastair McLeod of GoldMoney who comments extensively on the subject.
Whilst a few retailers (on line and bricks & mortar) are resisting they have no choice but to accept Price increases as it’s industry wide issue, and suppliers can’t afford to absorb the increased costs.
If retailers resist or try and play hard ball they will lose much needed sales and in turn profit!
Personally I think there will be a massive realigning of pricing, and consumers still have no idea!
Re volume, of more concern is limited supply of goods due to longer than normal lead times!
Erdles the velocity of money doesn't matter much if an economy heavily dependent on imports (current account deficit) devalues its currency by printing to pay the bills. This is the true definition on inflation - general price increases are merely a symptom. Whether people within that nation are spending or saving, the price of imports are still shooting up!!
Isa,perhaps it will turn into a healthy reballance and we wont be flooded with throwaway items .
Food is the worst thing as everybody has to eat but everybody can do without the latest gadget .perhaps it will stimulate home production .shame the migrant workers have gone .
Hard times for the poorer population as usual.
Yes construction prices going up .havnt noticed it affect customers just harder to source some materials .
Good luck
https://www.kitco.com/news/2021-06-10/Bitcoin-to-surge-to-1-million-in-6-years-as-it-becomes-more-scarce-than-gold-says-crypto-asset-expert.html
Gold has to move up . Interest rates are a busted system now. mayhem if they try raising interest rates.
ISAPENSION, the reason I ask is that inflation is created not only by price increases but also the velocity of money (how quickly people spend and move it on). You need both for substantial inflation. So your customers may be paying more but if they are buying less or less frequently it may indicate inflation is not a real concern.
ISAPENSION, can I please ask whether your customers are actually paying your increased prices or just not placing orders?
Morning All
I would value various opinions.
In my business we are experiencing unbelievable inflationary pressure as a result of raw material increases, Far East labour increases, poor chip availability and shipping costs that have spiralled out of control. Container prices are currently six fold the price they were last year!
As a result alongside all our competitors prices are going up with immediate affect.
I am aware other industries such as construction are also experiencing dramatic increases in costs with less availability.
Surely the above is going to put pressure on interest rates going forward and help the POG
I am just surprised POG hasn’t shot up to date and in turn benefited CNR.
Thoughts and predictions welcome?