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Car prices are being driven by supply chain issues more so than a surplus of dollars.

hackeraccount 5y ago
How would you know that? If say the number of cars went down by 50% and the amount of money in everyone's pocket went up by 100% which would driving the upward price more? If the supply of cars is down why would that in and of itself drive the price up? Surely there's some flexibility in demand for cars? It seems like a price increase in any individual item can be explained as a supply problem but every additional item that that gets added to the list is an argument for a money supply problem because on some level every item is substitutable.
- wbsss4412 5y ago
  I don’t know in the sense that I have exhaustively researched the topic in exacting detail, but I believe it is mostly supply related because of a combination of factors: 1. Global supply chain disruptions are well documented, multiple automakers have had to shutdown factories for lack of parts. 2. Cars prices are increasing much more rapidly than the overall inflation rate. (I believe another comment in this thread said ~40% for used vehicles) 3. Total vehicle sales are still below their pre pandemic levels. I never said that the money supply isn’t contributing to inflation. But it is quite clear that there is a significant supply problem when it comes to cars.
  - flavius29663 5y ago
    > Cars prices are increasing much more rapidly than the overall inflation rate There will always be items that increase in price more than the average. Are you proposing to eliminate all the outliers in each report? In the end, people still need to buy cars, which are more expensive, so the inflation rate should reflect that.
    - wbsss4412 5y ago
      The argument wasn’t that it should be eliminated from the inflation rate, the discussion was about what was causing car prices to be inflated. > Car prices are being driven by supply chain issues more so than a surplus of dollars.

How would you know that? If say the number of cars went down by 50% and the amount of money in everyone's pocket went up by 100% which would driving the upward price more? If the supply of cars is down why would that in and of itself drive the price up? Surely there's some flexibility in demand for cars? It seems like a price increase in any individual item can be explained as a supply problem but every additional item that that gets added to the list is an argument for a money supply problem because on some level every item is substitutable.

wbsss4412 5y ago
I don’t know in the sense that I have exhaustively researched the topic in exacting detail, but I believe it is mostly supply related because of a combination of factors: 1. Global supply chain disruptions are well documented, multiple automakers have had to shutdown factories for lack of parts. 2. Cars prices are increasing much more rapidly than the overall inflation rate. (I believe another comment in this thread said ~40% for used vehicles) 3. Total vehicle sales are still below their pre pandemic levels. I never said that the money supply isn’t contributing to inflation. But it is quite clear that there is a significant supply problem when it comes to cars.
- flavius29663 5y ago
  > Cars prices are increasing much more rapidly than the overall inflation rate There will always be items that increase in price more than the average. Are you proposing to eliminate all the outliers in each report? In the end, people still need to buy cars, which are more expensive, so the inflation rate should reflect that.
  - wbsss4412 5y ago
    The argument wasn’t that it should be eliminated from the inflation rate, the discussion was about what was causing car prices to be inflated. > Car prices are being driven by supply chain issues more so than a surplus of dollars.