Just to sort this out in my head-greedflation is causing the Fed to raise rates to combat inflation, and until enough people get laid off that they can't afford these and other company's goods and they will all then have to lower prices, rates will continue to rise or stay high. At the same time, these rates are causing a credit crunch and causing banks and certain businesses to fail, largely because other businesses are gouging the consumer and tightening lending. So, basically large companies with low debt are charging higher prices and killing mostly smaller companies who need liquidity (and are calso trying to charge higher prices) and causing layoffs which will put us in a recession, bring inflation near 2%, and eventually even hurt their own business. Then rates go down and lending starts and we repeat. It's like a circular firing squad and as clear as mud.
Great article once again Sam. But if consumers are willing to pay higher prices, are prices really too high? Yes, everybody needs to eat, but do we really need Pepsi, Chipotle, and Starbucks? There are cheaper alternatives. Even Warren Buffett doesn't buy expensive things if they don't provide good value.
Just to sort this out in my head-greedflation is causing the Fed to raise rates to combat inflation, and until enough people get laid off that they can't afford these and other company's goods and they will all then have to lower prices, rates will continue to rise or stay high. At the same time, these rates are causing a credit crunch and causing banks and certain businesses to fail, largely because other businesses are gouging the consumer and tightening lending. So, basically large companies with low debt are charging higher prices and killing mostly smaller companies who need liquidity (and are calso trying to charge higher prices) and causing layoffs which will put us in a recession, bring inflation near 2%, and eventually even hurt their own business. Then rates go down and lending starts and we repeat. It's like a circular firing squad and as clear as mud.
Great article once again Sam. But if consumers are willing to pay higher prices, are prices really too high? Yes, everybody needs to eat, but do we really need Pepsi, Chipotle, and Starbucks? There are cheaper alternatives. Even Warren Buffett doesn't buy expensive things if they don't provide good value.