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Real Inflation rates in Canada, why nobody want to discuss

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AppMan

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While the official inflation rates are usually less than 2% , the reality and the market seem to have their prices going far faster than that ratio , example, a patio chair was $99 last year , this year it is $130 , same applied for houses that are expected to increase 20-30% this year.
What does that mean , employees purchasing power will shrink by 30% . What does that mean :
People will buy from Dollar store shops more
Less demand on luxury items
Less vacation trips
More buying on credit.
More focus on fulfilling basic stuff.
In other words people who are on fixed wages will get poorer.
People on pensions will get poorer .

Time to think in side business that is inflation proof
 

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WJK

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My building materials have gone through the roof over the last year. In the last month, the price of gas has really gone up.
 

Spino

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While the official inflation rates are usually less than 2% , the reality and the market seem to have their prices going far faster than that ratio , example, a patio chair was $99 last year , this year it is $130 , same applied for houses that are expected to increase 20-30% this year.
What does that mean , employees purchasing power will shrink by 30% . What does that mean :
People will buy from Dollar store shops more
Less demand on luxury items
Less vacation trips
More buying on credit.
More focus on fulfilling basic stuff.
In other words people who are on fixed wages will get poorer.
People on pensions will get poorer .

Time to think in side business that is inflation proof

Totally agree, I think this will affect the global economy and not only Canada, but it's not something Mass Media can be loud about.
The amount of Quantitative Easing adopted by most governments to avoid a collapse of the markets is unprecedented in such a short timespan, so it's a natural consequence that inflation will be much higher than usual.

I agree with the K shape recovery shared by many economist, wealthy people that have assets (stocks, property) will become wealthier while the working class with no assets will lose purchasing power.

On your post I just am not sure if the demand for luxury items will decrease, because as mentioned, wealthy are staying wealthy or becoming wealthies.

So perhaps, a business targeting the wealthy will do well while a business targeting the "less wealthy" will struggle...
 

WJK

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MitchC

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I’m looking at buying a Ute (car) at the moment. The 2021 models are around 5-15k more than the 2020s with only minor changes. On a 60-70k price.

My girlfriends Dad bought a new one a couple years ago for 43k. The same model is selling used with 80k kms on them for 50k plus now. When has a used car ever gone up in value.

Houses have gone up 20% in the area I just bought in this year, we waited to buy thinking they would drop. The government gave everyone a 6 month mortgage holiday and 1400 a fortnight for free if they lost thier jobs. We were waiting for this to run out and prices to drop but they just went through the roof.

3 month waits for new utes due to demand and production delays. Same for furnishing our house.

Crazy times.

I disagree about your conclusions, I wish I had a high ticket business right now, people are spending everything they have because they want to get rid of thier money as they know it’s worthless and prices are only going to go up. interest rates are also so low they can buy things now interest free and pay for them later with money that’s worth a lot less than it is now.
 

Spino

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I’m looking at buying a Ute (car) at the moment. The 2021 models are around 5-15k more than the 2020s with only minor changes. On a 60-70k price.

My girlfriends Dad bought a new one a couple years ago for 43k. The same model is selling used with 80k kms on them for 50k plus now. When has a used car ever gone up in value.

Houses have gone up 20% in the area I just bought in this year, we waited to buy thinking they would drop. The government gave everyone a 6 month mortgage holiday and 1400 a fortnight for free if they lost thier jobs. We were waiting for this to run out and prices to drop but they just went through the roof.

3 month waits for new utes due to demand and production delays. Same for furnishing our house.

Crazy times.

I disagree about your conclusions, I wish I had a high ticket business right now, people are spending everything they have because they want to get rid of thier money as they know it’s worthless and prices are only going to go up. interest rates are also so low they can buy things now interest free and pay for them later with money that’s worth a lot less than it is now.
Are you in Australia too by any chance? lol that sounds like Victoria...
 

MitchC

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Are you in Australia too by any chance? lol that sounds like Victoria...

Sunshine Coast which is even worse because everyone is leaving Sydney and Melbourne to move there
 

The-J

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Inflation is becoming a real problem in Canada and it predates COVID. The housing market is exploding, and I'm not just talking about Toronto and Vancouver. Rents are going up very fast in turn. Every day goods are getting more expensive and have been for years.

Then comes COVID and now the government is printing immense amounts of money and plans to continue to do so until September 2021. It's a response to an emergency, but now we're going to have to deal with the fallout.

This affects everybody.
 

Zaratustra

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Does anybody know book about inflation that covers in-depth analysis of various theories + examples?
 

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AppMan

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Stats canada just revised their inflation from 1.5% to 1.77%.
Still not enough, we are talking about inflation rate between 10% to maybe 30% .

On your post I just am not sure if the demand for luxury items will decrease, because as mentioned, wealthy are staying wealthy or becoming wealthies.
Wealthy people will not get wealthier , they will only keep floating and having same purchase power. So there will be less people to buy Rolex , Tiffany gold , etc
 

AppMan

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My building materials have gone through the roof over the last year. In the last month, the price of gas has really gone up.
Do you know the increase rate I bet it will be between 10 to 30% ؟
 

WJK

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Do you know the increase rate I bet it will be between 10 to 30% ؟
On some items, the price has doubled. Overall, they up at least 50%. Lumber is worst -- especially treated lumber. Treated lumber is in very short supply if I can get it at all.

And we're having supply chain problems with other stuff. Several critical items and parts are not available. I'm having to run them down and ship them in -- in Alaska, that's bad news. The shipping is many times higher than the price of the part. I ordered a part this last week for an appliance that was $18.99. (It was usually a $10 part.) The shipping was over $30 + a handling fee. They wouldn't ship it USPS flat rate -- only UPS. My normal supplier didn't have it, so I was stuck. I paid about $60 for that part.
 

mguerra

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On some items, the price has doubled. Overall, they up at least 50%. Lumber is worst -- especially treated lumber. Treated lumber is in very short supply if I can get it at all.

And we're having supply chain problems with other stuff. Several critical items and parts are not available. I'm having to run them down and ship them in -- in Alaska, that's bad news. The shipping is many times higher than the price of the part. I ordered a part this last week for an appliance that was $18.99. (It was usually a $10 part.) The shipping was over $30 + a handling fee. They wouldn't ship it USPS flat rate -- only UPS. My normal supplier didn't have it, so I was stuck. I paid about $60 for that part.
Damn... this is bad.
 

AceVentures

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The worst for me? $20/lb for some chicken breast!

Meanwhile there's literally 6 people that have died of COVID in all of Quebec since yesterday, and the government continues to push their narrative for further measures. Very likely the summer will be cancelled here. All the festivals, everything that makes the city beautiful, will likely be cancelled. They've already cancelled the summer in Toronto...

More printing, more handouts, more inflation. Production levels are not going up. Trudeau doesn't even have vaccines, they keep pushing back their delivery dates and placing more red tape on vaccines based on bureaucracy.

It's getting ugly.
 

AppMan

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May 25, 2019
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I disagree about your conclusions, I wish I had a high ticket business right now, people are spending everything they have because they want to get rid of thier money as they know it’s worthless and prices are only going to go up.
They are spending because they are getting free money for now, once free money fry, they will head to dollar story to buy their stuff.
Does anybody know book about inflation that covers in-depth analysis of various theories + examples?
Read Germany after WW1 inflation crisis , there are some lessons there.
The answer is to get paid in things that inflate as well.

Own a business.

I own a service business.

Inflation causes prices to go up? We raise our prices.
but if most wage slaves will not be able to pay for new prices, you will start losing this segment of customers, unless it is not your main segment .
 

Freddy270291

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Time to head to asian markets! They still have chicken breasts $5/lb
This is what I am talking about , people will look for cheaper options because purchasing power will diminish
And these cheap asian markets will see a huge increase in gains, without paying for the consequences of something they have created..
 

Zaratustra

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Time to head to asian markets! They still have chicken breasts $5/lb
This is what I am talking about , people will look for cheaper options because purchasing power will diminish
I buy for $2.5
 

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AppMan

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And these cheap asian markets will see a huge increase in gains, without paying for the consequences of something they have created..
There is a study that discount stores like dollar store and other cheap place will soon lead the more expensive stores to go bankrupt because people even before covid19 were more and more using them.
 

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