Stagflation - USA Only or Spread

Discussion in 'Property Market Economics' started by RPI, 3rd Nov, 2021.

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  1. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

    Joined:
    18th Jun, 2015
    Posts:
    2,025
    Location:
    Brisbane
    I''ve always been an optimist. But I'm genuinely concerned about stagflation hitting the USA an the spread.

    This was sort of discussed in the Hyperinflation Thread, but Hyperinflation is somewhat extreme. Whereas, Staglfation was widespread in the 1970's

    The USA's insane spending under the change of government has driven a lot of of OS manufactured construction material price increases in Australia, as well as other things.

    There are serious supply chain issues in the UK and USA.

    The shipping cost of containers is heading that way it may actually be cheaper to build here. I'm told a storage hot water system will soon have a cost of $354 just in shipping from China to Australia.

    Some of our basic networking and switch gear we get through a National Electrical Electrical wholesaler, they can't get enough supply.

    The counter to Stagflation here that I've seen:

    1. Two top tier law firms have given 10% pay increases across the board;
    2. IT staff wages have gone up a lot

    but they may not flow into the wider wage increases.

    Our service divisions struggle to be able to get cleaners and gardeners at the maximum we can afford to pay them (plus supply vehicles etc). There is no profit in those areas for us and the fees are set under the NDIS so we can't increase (High inflation would increase that).

    Countries have a lot of debt to payback from Covid, a lot of wealth was destroyed and it will be hard and brave for people to start new businesses in a lot of areas.

    Maybe it's cause I'm getting old and grumpy, but it's looking to me like our kid's living standards may be lower than ours, at least for a while.
     

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  2. scientist

    scientist Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    835
    Location:
    sydney
    What's behind the supply chain issues? There's no material change in our productive capacity recently, there's just a backlog with cascading effects. Temporary issue I'd say