Lumber Prices ... wow

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Submitted by sdduuuude on April 29, 2021 - 8:44am

250% increase in lumber prices.

https://www.newsnationnow.com/us-news/lu...

By the way, that link is to News Nation Now, a news service that started last year billing itself as "opinionless".

I find it does a good job of holding true to that.
I spread the word as much as I can, hoping to kill the effects of Fox/CNN.

Submitted by The-Shoveler on April 29, 2021 - 9:01am.

First time in 20 years I am starting to worry some about run away inflation.

I think/hope it will remain somewhat in control somewhere below 5% but I am starting to be concerned.

It it gets out of hand could ruin 401K retirement dreams fairly fast IMO.

May not be a bad Idea to have some RE as back-up/inflation hedge IMO.

Submitted by sdduuuude on April 29, 2021 - 12:05pm.

A single cheese enchilada, ala carte, is $8 at Fidels. That's pretty serious.

Submitted by scaredyclassic on April 29, 2021 - 12:15pm.

i went to buy something, waited a few days, thing went up in my cart. softstar shoes. seems like the stuff I buy definitely is going up.

Submitted by teaboy on April 29, 2021 - 2:15pm.

scaredyclassic wrote:
i went to buy something, waited a few days, thing went up in my cart. softstar shoes. seems like the stuff I buy definitely is going up.

-If it goes up in price in your cart, you think "shit, i better buy it before it goes up more"
-If it goes down in price in your cart, you think "shit, i better buy it before it goes back up again"

What do we learn from this? Well, maybe we should all have a piece of AMZN in our portfolios...

tb

Submitted by scaredyclassic on April 29, 2021 - 5:20pm.

well, yeah. prolly. but it wasn't amazon. i am consciously trying to never buy off amazon. I hear others trying too. I wonder if there can be a meaningful backlash. Is the future of everything amazon? probably yes, ecept for a few oddball protestors. hell, I still buy a few things there. bastards.

Submitted by deadzone on April 29, 2021 - 9:45pm.

I've already come to the conclusion that there are only two likely end games to the current Federal Reserve policy madness (i.e. the Everything Bubble). One is massive market collapse that if it were allowed to happen, would be far worse than 2008. Second is runaway or hyper inflation. I would say the odds favor the second case because the Fed is defiant with their plans to keep ZIRP forever along with QE infinity. Plus really they have no choice. Any interest rate hikes would pop the bubble and destroy the economy since it is totally reliant on the Fed's help.

So that said, for either result I would want all my money in Real Estate and Precious Metals/Gold. Nothing else. No more cash than is necessary for emergency. Cash will be destroyed in either case.

Submitted by carlsbadworker on April 30, 2021 - 9:23am.

Inflation is like toothpaste– once it's out, you can hardly get it back in again.

-Karl Otto Pohl, German-Swiss economist

Submitted by scaredyclassic on April 30, 2021 - 10:14am.

deadzone wrote:
I've already come to the conclusion that there are only two likely end games to the current Federal Reserve policy madness (i.e. the Everything Bubble). One is massive market collapse that if it were allowed to happen, would be far worse than 2008. Second is runaway or hyper inflation. I would say the odds favor the second case because the Fed is defiant with their plans to keep ZIRP forever along with QE infinity. Plus really they have no choice. Any interest rate hikes would pop the bubble and destroy the economy since it is totally reliant on the Fed's help.

So that said, for either result I would want all my money in Real Estate and Precious Metals/Gold. Nothing else. No more cash than is necessary for emergency. Cash will be destroyed in either case.

It does seem that way. But...when...perhaps in my kids lifetimes. Or maybe never...it just kind of staggers along, growing and growing, and squeezing money from workers to shareholders

And why not diversified us/ world stocks.

Submitted by gzz on April 30, 2021 - 1:20pm.

Up 250% "since April 2020." In other words, they picked an extreme outlier month as their base month. Not a good start to being "opinionless," but suggestive of someone hyping inflation risk.

It is common to have outliers in inflation. This is why to measure shorter term inflation, we often use trimmed measures that remove the highest and lowest figures.

https://www.dallasfed.org/research/pce/

Have a look at this chart:

https://d2t794khe5w43b.cloudfront.net/ti...

From this article:

https://oilprice.com/Latest-Energy-News/...

I can find deflation anecdotes like this as easily as inflation anecdotes.

But US elites don't like the redistributive aspect of inflation, and control the mass media and endlessly and incessantly hype inflation risk.

This bias is so intense and omnipresent that people rarely realize it is there. Here's a chart to wake you up:

https://twitter.com/tomkeene/status/1340...

EVERY SINGLE YEAR since 2005 the "consensus" has been rates will go up over the next 12 months.

PREDICTION: the next fifteen years, every single year the "expert consensus" will continue to be rising rates.

Submitted by deadzone on April 30, 2021 - 2:30pm.

Well inflation is very real, and very noticeable in the real world. Anyone looked at housing costs and rent? How about food? My inflation barometer has always been the Carne Asada Burrito, up over $10 now at my local taco shop. According to my paycheck the government measured inflation was less than 2% last year. But government will always under-report inflation because they need to be able to justify 0% interest rates. Everyone knows if interest rates go up it is game over. They can't raise rates.

Submitted by gzz on April 30, 2021 - 2:51pm.

My inflation monitors are LCD computer monitors and cow's milk.

A 24 inch monitor cost $3000 in 2002, and now costs $110.

Milk cost about $2.50 a gallon in the 80s, now is around $3.

Really massive deflation!

Submitted by an on April 30, 2021 - 3:11pm.

If only the rest of my life's cost of living decrease like tech hardware.

Submitted by an on April 30, 2021 - 10:29pm.

.

Submitted by Sdcateacher on April 30, 2021 - 5:51pm.

I agree. I see hyperinflation to the point it will destroy people's savings. The best bet at this point is liquidate if you have the means and move to an area where you can buy a house cash and have very little overhead. I would also start learning how to trade E-mini future contracts and stop chasing stocks. I see the market moving into a sideways range bound low volume muted market reminiscent of 2014-1015. I have enough right now to move to an hour outside of Knoxville, or Charleston, etc have enough to pay a house cash and have a substantial amount left over to diversify. The taxes and cost of living in San Diego and SoCal will mirror what I saw happen in the suburbs of NYC where the average 2000sqft house is paying up to 3-5% a year in property taxes. It is absurd, but as the demographic of SoCal continues to change, population increasing and middle class people moving, I don't see good things. Moving forward I liquidated most of my investments on 1/15/21 after a phenomenal 4 year return and over 800% in the past year. Why push it? After trading for 25 years, there is a time to take it off the table.

Submitted by deadzone on April 30, 2021 - 10:18pm.

gzz wrote:
My inflation monitors are LCD computer monitors and cow's milk.

A 24 inch monitor cost $3000 in 2002, and now costs $110.

Milk cost about $2.50 a gallon in the 80s, now is around $3.

Really massive deflation!

I think most folks would gladly accept paying $3000 for monitors in exchange for paying 2002 rental rates.

Submitted by an on April 30, 2021 - 10:49pm.

deadzone wrote:
gzz wrote:
My inflation monitors are LCD computer monitors and cow's milk.

A 24 inch monitor cost $3000 in 2002, and now costs $110.

Milk cost about $2.50 a gallon in the 80s, now is around $3.

Really massive deflation!

I think most folks would gladly accept paying $3000 for monitors in exchange for paying 2002 rental rates.


I'd also gladly accept 2002 gas price, electricity price, home price, etc.

Submitted by sdduuuude on April 30, 2021 - 11:56pm.

gzz, I was thinking more of a covid-related supply issue than inflation, myself. And relevant to the housing market.

Submitted by Hobie on May 1, 2021 - 5:59am.

What is Canada doing with tariffs re exporting its lumber? Lumber mills in OR and WA have plenty of labor available and trees to harvest. Is this just the industry maybe taking advantage of the current construction boom.

Are we seeing,"What the market will bear" pricing. Families with 2 spouses working have more cash-- expect the cost of goods in there living area to rise. Not necessarily an indication of inflation.

Look at ice cream. Not long ago, the industry colluded and changed to smaller packaging keeping same price. Now, prices are higher for smaller quantity. Clever marketing or just manipulating the market knowing it has a comfort product that will always sell.

I can relate to the burrito index!

Submitted by svelte on May 1, 2021 - 8:46am.

I could certainly be wrong, but my impression is that the price increases we are seeing right now are temporary. They are a result of interrupting the supply chains due to the pandemic shutdowns.

Once the supply chains are up and running in some semblance of normalcy, I think prices will come back down. It all boils down to supply and demand as it normally does.

I heard one explanation to the skyrocketing house prices that I think has merit: due to the interruption in the supply of lumber for building new homes, the supply of new homes dwindled. Many of those who would normally have bought a new home instead shopped for older homes, driving up the number of buyers for them and thus driving up prices.

Submitted by svelte on May 2, 2021 - 7:11am.

Hobie wrote:
What is Canada doing with tariffs re exporting its lumber? Lumber mills in OR and WA have plenty of labor available and trees to harvest. Is this just the industry maybe taking advantage of the current construction boom.

This WSJ video takes a look at why lumber prices are up, pretty detailed.

https://www.youtube.com/watch?v=m_5MkGbXXKc

I didn't know about the US Government encouraging farmers in the south to plant trees, which will result in an abundance of lumber for years to come.

Submitted by The-Shoveler on May 2, 2021 - 12:50pm.

Warren Buffett
"We are seeing substantial inflation," Buffett said at the Berkshire Hathaway annual shareholder meeting broadcast exclusively by Yahoo Finance. "We are raising prices. People are raising prices to us, and it's being accepted."

Whirlpool appliance maker just jacked up prices by 5% to 12% to counteract rising steel costs.

Proctor & Gamble said recently it would begin to hike prices on baby care, feminine care and adult incontinence products in the United States. Price increases will range from mid- to high-single digit percentages. The hikes will go into effect in mid-September.

Submitted by gzz on May 3, 2021 - 12:07pm.

I just noticed an adaption to the lumber price surge already at Home Depot.

After a few months of no stock or absurd pricing on fence pickets, now they have lower quality lumber in place of redwood and cedar at the old price of about $2 a picket.

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