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munimula

Producer Prices (mar) Graph

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producer_prices.gif

The graph shows that input price inflation is rampant and yet companies are unable to pass these costs on to the consumer, they are absorbing the price increases themselves and therefore margins and profits are falling. How long can they do this for?

Either the input inflation is passed onto the consumer at some point, output prices rise and inflation takes off or these companies will reduce their employee numbers to maintain profits margins.

Either way, higher inflation (and higher IRs) or higher unemployment there will be a trigger for a crash.

The graph is quite scary

And remember that oil is just about to hit $70 per barrel so input prices inflation is unlikely to subside.

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Edited by munimula

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producer_prices.gif

The graph shows that input price inflation is rampant and yet companies are unable to pass these costs on to the consumer, they are absorbing the price increases themselves and therefore margins and profits are falling. How long can they do this for?

Either the input inflation is passed onto the consumer at some point, output prices rise and inflation takes off or these companies will reduce their employee numbers to maintain profits margins.

Either way, higher inflation (and higher IRs) or higher unemployment there will be a trigger for a crash.

The graph is quite scary

And remember that oil is just about to hit $70 per barrel so input prices inflation is unlikely to subside.

I see that companies like Northern Foods (Pies, chilled meals, biscuits) are unable to pass their extra costs down the chain - the result is that the share price has fallen dramatically (loss of capital for investors) and the dividend will almost certainly be halved (loss of income). As they have already cut staff and the supermarkets won't pay more my guess is that we'll start seeing a reduction in the quality of the product!

Edited by ILikeBigBoobs

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producer_prices.gif

The graph shows that input price inflation is rampant and yet companies are unable to pass these costs on to the consumer, they are absorbing the price increases themselves and therefore margins and profits are falling. How long can they do this for?

Either the input inflation is passed onto the consumer at some point, output prices rise and inflation takes off or these companies will reduce their employee numbers to maintain profits margins.

Either way, higher inflation (and higher IRs) or higher unemployment there will be a trigger for a crash.

The graph is quite scary

And remember that oil is just about to hit $70 per barrel so input prices inflation is unlikely to subside.

I find it interesting that input inflation has dropped off so hard before & that lower rates have followed. Wonderful.

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I find it interesting that input inflation has dropped off so hard before & that lower rates have followed. Wonderful.

from 16% to 12%? a drop would be back to 2 or 3% or to a negative value

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I see that companies like Northern Foods (Pies, chilled meals, biscuits) are unable to pass their extra costs down the chain - the result is that the share price has fallen dramatically (loss of capital for investors) and the dividend will almost certainly be halved (loss of income). As they have already cut staff and the supermarkets won't pay more my guess is that we'll start seeing a reduction in the quality of the product!

People will stop buying these convenience foods, rather than pay higher prices! if manufacturers can't sell their product at a profit, they will simply stop producing the product. Outsource to China or India???

Madras pie and chips :D:D

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I find it interesting that input inflation has dropped off so hard before & that lower rates have followed. Wonderful.

I think the point is that input inflation is very high, price rises can't be passed onto consumers and therefore unemployment is rising, will keep rising and IMO will be the trigger for the crash

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More evidence that unemployment is likely to be the HPC trigger;

KEY POINTS

- January goods deficit revised sharply higher to record

- February underlying deficit also biggest since records began in 1697

- Goods deficit with EU widest since September 2005

- Global trade in goods and services gap biggest since August 2005

And there is a huge inflation risk, if sterling goes down

AMIT KARA, UBS, LONDON

"It clearly looks very weak, a lot weaker than what we would have expected ... It's going to be critical for MPC to see an improvement in the deficit data, particularly for trade with the EU, for its forecasts to materialise. The MPC requires something of a positive contribution from net trade going forward. If that does not materialise, there is a risk to policy rates ... Given the pattern in the recent months of a widening trade deficit, and also a growing current account deficit, there is clearly a risk to sterling going forward."

Lots of risks, unemployment and inflation while the sheeple keep piling up the debt.

Edited by munimula

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  • 335 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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