Replies to post #79682 on ajtj99's Market Pulse

[RRBrownOH]

AJTJ

So far this discussion hasn't entirely broached the dramatic rise in material costs along with energy. Manufacturers can't absorb (eat) these increases into infinity, especially in our profit driven, capitolism model. Althought the laws of demand do effect pricing, there is a break point where profitability risk has a drag as well. On another note, there is the issue of a distinct difference in manufacturers being much leaner at this time and the lack of flexibility that portends.

Quite an interesting thread.

Thanks

[marwick]

AJ, read my response to Sylvestor. Rising energy prices (aka sending more of your money to OPEC) and falling wages (behind the rate of inflation) just isn't inflationary. Inflation is caused by an increase in the money supply. Think rising wages and lower energy prices. More money chasing around fewer goods. You seem to think it works the other way, that if folks have less money and inventories on store shelves are rising, then that's inflationary. I disagree with that.

I guess you're just on another page on inflation.