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> In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace)
by piva00 3y ago
> In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff.
One way this could happen is if salaries increased to match the new prices over time. The issue is that we are not seeing that happening, prices are increasing much faster than salaries, while corporate profits break records.
The money is flowing upwards, at some point people will get very fed up with that...
- sokoloff 3y agoIn any inflationary environment, corporate profits should be expected to regularly break records (in nominal terms) just like GDP should be expected to regularly break records.
- piva00 3y agoBreak nominal records, yes, not to break record margins.
- sokoloff 3y agoCorporate profit margins are in the range which has been typical since the recovery from the 2007 GFC. https://www.gurufocus.com/economic_indicators/62/corporate-profit-margin-after-tax- https://www.gurufocus.com/economic_indicators/62/corporate-p... They're not currently breaking records and they jumped into this range during a period of notoriously low inflation (by historical and absolute measures).
- bryanlarsen 3y agoSalaries basically only increase 2 ways: job hopping and unions. The bottom 10% are doing a lot of job hopping these days.
- dontlaugh 3y agoAnd everyone is doing a lot of union joining.