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> If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly. Costco occasionally

> If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly. Costco occasionally sells gold below spot if Reddit is to be believed. Most of the time it's right around spot. These 1oz bars were going for $1900 give or take, which is spot give or take. It's fairly common to see a small ~$50 ish premium on small quantities like this, around 2-3%. Costco is also not a monopoly, and it's not really vertically integrated - these bars come from PAMP, a Swiss company. You can get gold for exactly spot if you have a lot of money - just buy a futures contract and stand for delivery.

noduerme 3y ago
Costco's not a monopoly by the current definition, but they do occupy a very cozy spot between wholesale and retail, and they do vertically control everything Kirkland from mayonnaise to roast chicken. We have a strange situation right now, in the US, in which any company with at least one major competitor is considered good for the free market; and it takes a hell of a lot of work to show that those two competitors are working together. But they don't actually need to be price-fixing with each other in a classical way. One has $5 roast chickens and the other has free oil changes. This, then, is the apotheosis of consumer choice? Fuckit, I own stocks of both of them and I just hope the American consumer goes broke before I do.
- chiefalchemist 3y ago
  > But they don't actually need to be price-fixing with each other in a classical way. Spot on. There doesn't have to be a conspiracy. Like entities with like goals and finite ways to maximize will follow similar or like paths. The example I like to use are starlings (birds) and murmurations. Obviously, the birds aren't conspiring in any way. And yet they magically move in sync. Business competitors can do the same. So do political parties. It's not a conspiracy. It's murmuration. p.s. There's actually a more scientific term. I think it's in the math theory field about the study of such patterns. Starlings are simply the goto example. https://m.youtube.com/watch?v=uV54oa0SyMc&pp=ygUVc3RhcmxpbmdzIG11cm11cmF0aW9u https://m.youtube.com/watch?v=uV54oa0SyMc&pp=ygUVc3Rhcmxpbmd...
  - noduerme 3y ago
    Thank you for reading what I was actually saying. Yes; flocking behavior is sufficient to explain how two or three supposed competitors can simulate a free market while profiting from monopolistic behavior. And it's also a fantastically nifty adaptation to allow any one entity to skirt the legislative hammer.
    - chiefalchemist 3y ago
      Cronie Capitalism does help as well. When the gov puts it thumb on the scale and clears a clear-enough path, only a fool wouldn't follow the path of least resistance.
      - lotsofpulp 3y ago
        Suppose the government did put its thumb on the scale here, how would it impact consumers? Will they now be able to shop for lower prices at a business that earns 1% profit margin or less instead of the 2.6% profit margin that Costco has managed to climb to?
        chiefalchemist 3y ago
        The government is not supposed to be in the favoritism business. When that happens, as we're seeing, there are unexpected and/or unwanted consequences. The government is supposed to level the playing field, not the other way around.
        lotsofpulp 3y ago
        How does the government favoritize Costco? Technology and economies of scale favor Costco, and Walmart and etc. And people obviously like the low prices due to the economies of scale.
        chiefalchemist 3y ago
        Two examples come to mind... Regulation. Be it local, state and/or federal. The larger the organization, the more resources it has to mitigate / remedy such friction. The irony? Regulation is also self-serving to gov in the sense it perpetuates ththe gov's need to prove it needs to exit, "create more jobs", etc. But that's another discussion for another day. Two, lack of national *affordable* universal healthcare. Again, larger companies are better able to fill this gap, offer the benefit, and thus draw better employees, etc.
- rewmie 3y ago
  > We have a strange situation right now, in the US, in which any company with at least one major competitor is considered good for the free market; (...) Wasn't Amazon just sued by the FTC due to anticompetitive practices?
  - lifechoseme123 3y ago
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  - deleted 3y ago
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- deleted 3y ago
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- lotsofpulp 3y ago
  >But they don't actually need to be price-fixing with each other in a classical way. Because they operate with 2% and 3% profit margins. How much better do you think the prices can get for buyers? >they do vertically control everything Kirkland from mayonnaise to roast chicken. No, they do not. They hire other businesses to make everything that is branded Kirkland. They do not own any factories or poultry farms. If anything, Costco spreads horizontally. They sell groceries, car tires and batteries, medicines (pharmacy), clothing, electronics, etc.

noduerme 3y ago

Costco's not a monopoly by the current definition, but they do occupy a very cozy spot between wholesale and retail, and they do vertically control everything Kirkland from mayonnaise to roast chicken. We have a strange situation right now, in the US, in which any company with at least one major competitor is considered good for the free market; and it takes a hell of a lot of work to show that those two competitors are working together. But they don't actually need to be price-fixing with each other in a classical way. One has $5 roast chickens and the other has free oil changes. This, then, is the apotheosis of consumer choice? Fuckit, I own stocks of both of them and I just hope the American consumer goes broke before I do.

chiefalchemist 3y ago
> But they don't actually need to be price-fixing with each other in a classical way. Spot on. There doesn't have to be a conspiracy. Like entities with like goals and finite ways to maximize will follow similar or like paths. The example I like to use are starlings (birds) and murmurations. Obviously, the birds aren't conspiring in any way. And yet they magically move in sync. Business competitors can do the same. So do political parties. It's not a conspiracy. It's murmuration. p.s. There's actually a more scientific term. I think it's in the math theory field about the study of such patterns. Starlings are simply the goto example. https://m.youtube.com/watch?v=uV54oa0SyMc&pp=ygUVc3RhcmxpbmdzIG11cm11cmF0aW9u https://m.youtube.com/watch?v=uV54oa0SyMc&pp=ygUVc3Rhcmxpbmd...
- noduerme 3y ago
  Thank you for reading what I was actually saying. Yes; flocking behavior is sufficient to explain how two or three supposed competitors can simulate a free market while profiting from monopolistic behavior. And it's also a fantastically nifty adaptation to allow any one entity to skirt the legislative hammer.
  - chiefalchemist 3y ago
    Cronie Capitalism does help as well. When the gov puts it thumb on the scale and clears a clear-enough path, only a fool wouldn't follow the path of least resistance.
    - lotsofpulp 3y ago
      Suppose the government did put its thumb on the scale here, how would it impact consumers? Will they now be able to shop for lower prices at a business that earns 1% profit margin or less instead of the 2.6% profit margin that Costco has managed to climb to?
      - chiefalchemist 3y ago
        The government is not supposed to be in the favoritism business. When that happens, as we're seeing, there are unexpected and/or unwanted consequences. The government is supposed to level the playing field, not the other way around.
        lotsofpulp 3y ago
        How does the government favoritize Costco? Technology and economies of scale favor Costco, and Walmart and etc. And people obviously like the low prices due to the economies of scale.
        chiefalchemist 3y ago
        Two examples come to mind... Regulation. Be it local, state and/or federal. The larger the organization, the more resources it has to mitigate / remedy such friction. The irony? Regulation is also self-serving to gov in the sense it perpetuates ththe gov's need to prove it needs to exit, "create more jobs", etc. But that's another discussion for another day. Two, lack of national *affordable* universal healthcare. Again, larger companies are better able to fill this gap, offer the benefit, and thus draw better employees, etc.
rewmie 3y ago
> We have a strange situation right now, in the US, in which any company with at least one major competitor is considered good for the free market; (...) Wasn't Amazon just sued by the FTC due to anticompetitive practices?
- lifechoseme123 3y ago
  [dead]
- deleted 3y ago
  [deleted]
deleted 3y ago
[deleted]
lotsofpulp 3y ago
>But they don't actually need to be price-fixing with each other in a classical way. Because they operate with 2% and 3% profit margins. How much better do you think the prices can get for buyers? >they do vertically control everything Kirkland from mayonnaise to roast chicken. No, they do not. They hire other businesses to make everything that is branded Kirkland. They do not own any factories or poultry farms. If anything, Costco spreads horizontally. They sell groceries, car tires and batteries, medicines (pharmacy), clothing, electronics, etc.