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If it's commodity, then it's traded on futures. Distributors would sell to retailers who shape consumer-facing pricing to maintain stability. Essentially, Home
by iamwpj 4y ago
If it's commodity, then it's traded on futures. Distributors would sell to retailers who shape consumer-facing pricing to maintain stability. Essentially, Home Depot sells out, looks to their supplier/distributor who says it'll be a few weeks to get enough to meet demand, commodity prices jump as demand increases for short term supply and Home Depot raises their prices.
This is a fabricated sequence of events. It's the SEC/CME/FTC, etc's job to verify the following in this example:
1. Did Home Depot raise their prices _more_ than was necessary to respond to increasing consumer demand and decrease supply?
2. Did the suppliers stockpile or falsely report their availability to result in over charging?
3. Did pricing between sawmills/loggers and suppliers increases proportionally? Did pricing between retail and suppliers increase proportionally?
These questions will help to understand possible unnatural inflation was introduced. In the sequence of events the sawmill behavior is just a single indicator along the way.
- hcurtiss 4y agoSome lumber is traded on futures, some is not, but nearly all of it is manufactured to universal specifications (set dimensions and grades), making it a commodity market. Home Depot and the other box stores were constantly running out. We struggled for several quarters to keep the distribution centers supplied. The box stores were buying lumber everywhere they could. If they were price gouging, the consumer certainly didn't flinch, as quarter after quarter we witnessed historic take-away.