Just saw a little article (CNBC if mentioning 30 to 35 percent increase in retail lumber prices. It was mostly aimed at how the box stores (Home Depot, Lowes, Lumber Liquidators) will see higher profits tending to boost stock prices. I can't believe what store lumber is running now. Too many snarky comments in my head regarding issues that don't belong here. Just didn't think demand would hold this long.
The money supply was diluted by exactly that same percent in 2020 due to covid stimulus so the lumber price is the truly the same but the money is being falsified. These stores are simply the first to demand the newly correct amount of money so it comes off as gouging.
All goods and services will be repricing to reflect the new watery dollar value for the coming few years. The last to do it will simply be the ones who lost money the longest. And yes this is all evil. Even Jesus demanded sound money and considered it a sin to dilute currency.
Look at the cost of fuel, feed, freight, gloves, syringes, needles, meds., etc. Inputs are going up, so prices have to go up to stay alive. None of it is good.
The fed just today said inflation is still soft.
8) 8)
And its all being done without uttering that ugly word "inflation......" what people used to call government generated corrective action to the valuation of the dollar... Ahh but the education of today, no need to use historical terminology ::)
Being a self employed General Contractor since 94' its been interesting seeing the games played with the various commodities and how it adjusts and alters your business plans, all to become the new norm and forgotten, to make room for dealing with the next shift or game played.
snobdds,
you beat me to it, posted while I was typing.... ;D
So ... do you think this is dilutional effect showing up now vs the supply chain and increase in demand from virus disruption. Do you guys think we will see another mildly delayed round of similar dilution in the coming mid winter after this next round of stimulus? If I were to raise my rates for product /service x so I am to maintain my same standard of living in regards to the silent inflation what percentage would that be? Just throwing out food for thought without any political leanings or musings.
Inflation has always been the answer to debt, regardless of how that debt is generated. Printing money, or cutting taxes below spending, it will always result in inflation. It always goes up in different steps-sometimes small, sometimes large. Buying a home is one of the few things that can work out in your favor. Everything else requires ever increasing piles of money.
Supply, and demand always factor in, as well, with lags causing different sizes in the steps.
I don't saw lumber, but do go up with every job I start, over the last one. My jobs typically last from 6 months, to 2 years though, so not quite like having different customers every few days. Don't get left behind.
The other day I paid the bill for some metal roofing I had a hard time getting, some they had in longer sheets, some they said they had and didn't and some had to be ordered in. I made a fool of myself as the order was supposed to be all on one bill and I thought they billed me twice for one portion. What messed me up was the high price. I hope all you guys are wrong, that would be nice.
Unfortunately, I don't think we are wrong, as much as I wish I were.
One of our current home build customers requested to have a little office built into the shop we built last year for him, a simple 15 x 14 inside another building and this is just the basic frame package as of today:
(https://forestryforum.com/gallery/albums/userpics/53907/Capture.JPG?easyrotate_cache=1614106513)
Being a home builder for the most part (one of the irons I keep going), we had two of our customers pause this upcoming year for a possible better 2022 or so, fortunately, we have a full plate still this year of those that don't think the prices are coming down anytime they wish to wait for and are just biting the huge increase in the lumber package.
Lots of easy money for some folks. I could never get any of it. :D I've seen guys with nothing all the sudden become a 900 acre farmer. It was never that easy when dad farmed. :D
A lot of the local pricing is "because they can". Lumber has never been in short supply here, the mill yard has never been empty, some wood with a little grey around the edges. We can drive over there right now, and you'll see more lumber than you can scale in a day. :D There is more than supply and demand at work. That's the classic answer, but it's not always true. Try living in an ologopoly.
Defined:
An oligopoly is a market form wherein a market or industry is dominated by a small group of large sellers. Oligopolies can result from various forms of collusion that reduce market competition which then leads to higher prices for consumers and lower wages for the employees of oligopolies.
I've been curious, and would love to hear from some people on the "inside" so to speak (commercial mills and manufacturers) if these shortages and higher prices are because of a sudden increase in demand, unexpected supply chain disruptions, both, or something else.
Take sawmills for example. It seems obvious from all the posts around here that all the manufacturers are way behind. Is that because they're suddenly getting more than the normal number of orders or because they can't make them as quickly as they could before due to supply issues?
It seems to be the same story for all kinds of woodworking equipment and tools and presumably for lots of other things I'm not aware of because I don't pay attention to them.
Alan
Quote from: Nebraska on February 23, 2021, 12:24:57 PM
So ... do you think this is dilutional effect showing up now vs the supply chain and increase in demand from virus disruption. Do you guys think we will see another mildly delayed round of similar dilution in the coming mid winter after this next round of stimulus? If I were to raise my rates for product /service x so I am to maintain my same standard of living in regards to the silent inflation what percentage would that be? Just throwing out food for thought without any political leanings or musings.
Im just a man with a hammer here so take it for what its worth.. economies are always a combination of events and this one is no different.
-The knowledge of a future price rise spurs a purchase today. So those who understand free handouts causes dilutionary printing are gonna go buy that real asset now. Be it a car, porch, land, house, sxs etc. Its real and they arent printing it.
-the hoarding of 2019, the layoffs, closed businesses and the discovery that govt can do whatever it wants has generated a lot of relocations. Moving means you spend until its done at any price.
-this has created a battle for houses and land in non urban locations.
-The stock market is also massively overpriced and people who understand this and actually have the discipline not to just say 'buy low sell high' but actually do so, is causing wealth shifts into real goods. A change of presidents almost always dramatically alters the stock price.
-there is a contingent of people genuinely scared to die from covid so youve also had some bucket list spending in there. Mid life crisis behavior, that sort of thing.
Probably a dozen more motivators for massive spending. Not to mention greenspan pushed interest rates to nothing in oct 87 and they have never really risen much since.. Borrowing at 5% in a 30% inflationary period is like making 25% .. Think about it. Why not borrow? Lock in your price and rate now and repay with diluted money. Thats the only way the US can even pay the interest on its debt.
If a law was passed by the banking lobby that mortgages adjusted for inflation and the monthly note would continue to rise, home sales would crash. As it is now, the more they print money the bigger the debtors discount. And the bigger the saver's tax. Its a crime.
Quote from: snobdds on February 23, 2021, 10:53:15 AM
The fed just today said inflation is still soft.
8) 8)
And they arent lying either. Inflation is when genuine new economic developments cause industry to experience a shortage of labor so industry competes within itself to poach in workers from other companies or regions with the lure of higher pay.
The workers come racing in and get the money then flood to the store to buy buy buy. Due to manufacturing constraints, shipping etc etc, the volume of real goods cannot expand fast enough and the shelves will go bare if the brakes are not put on this purchasing train, so the store owner must raise the price until supply and demand go back into equilibrium.
The thing we have going on with the money, this printing press dilution, debauching of the currency... the fed has never even named. so it doesnt have to be managed.
Plausible deniability. Sort of like how DNR will say theres no wolves or mountain lions.
Under 2% so they say.
(https://forestryforum.com/gallery/albums/userpics/43722/1610542116264.jpg?easyrotate_cache=1610542265)
Maybe they meant weekly and said anually by accident. In my lifetime its approached 700% by their own charts.
Quote from: alan gage on February 23, 2021, 03:16:30 PM
I've been curious, and would love to hear from some people on the "inside" so to speak (commercial mills and manufacturers) if these shortages and higher prices are because of a sudden increase in demand, unexpected supply chain disruptions, both, or something else.
Take sawmills for example. It seems obvious from all the posts around here that all the manufacturers are way behind. Is that because they're suddenly getting more than the normal number of orders or because they can't make them as quickly as they could before due to supply issues?
It seems to be the same story for all kinds of woodworking equipment and tools and presumably for lots of other things I'm not aware of because I don't pay attention to them.
Alan
From my corner of the world - hardwood plywood - demand has increased. Home Depot has sold a LOT more of our product beginning early 2020 and hasn't let up. Other channels - cabinet makers and lumber yards - buying more as well. Our mills have been full bore for the last 12 months.
Am I missing something but it seems to me based on the size 15 x 14 room why would you need that much lumber?
Quote from: mike_belben on February 23, 2021, 03:37:38 PM
Quote from: snobdds on February 23, 2021, 10:53:15 AM
The fed just today said inflation is still soft.
8) 8)
And they arent lying either. Inflation is when genuine new economic developments cause industry to experience a shortage of labor so industry competes within itself to poach in workers from other companies or regions with the lure of higher pay.
The workers come racing in and get the money then flood to the store to buy buy buy. Due to manufacturing constraints, shipping etc etc, the volume of real goods cannot expand fast enough and the shelves will go bare if the brakes are not put on this purchasing train, so the store owner must raise the price until supply and demand go back into equilibrium.
The thing we have going on with the money, this printing press dilution, debauching of the currency... the fed has never even named. so it doesnt have to be managed.
Plausible deniability. Sort of like how DNR will say theres no wolves or mountain lions.
Under 2% so they say.
(https://forestryforum.com/gallery/albums/userpics/43722/1610542116264.jpg?easyrotate_cache=1610542265)
Maybe they meant weekly and said anually by accident. In my lifetime its approached 700% by their own charts.
The US is basically using Modern Monetary Policy to justify the massive spending. However to prevent hyperinflation, the money supply has to shrink by non governmental means. The only way that happens is higher taxes. If you take money out of the system via taxes, it works to calm inflation.Higher taxes are coming...
I just got in from the country, after the cattle were done, two of the guys helping were talking about one of them getting called by a mutual acquaintance asking if he felt like working some extra hours. Their friends reason is he's a centerpivot irrigation dealer and has 32 new systems to put in and is hurting for help. I am guessing the Ag Bankers are pushing the inflationary borrowing theory land is super expensive.. Just wondering how rosy things will be with what I fear fuel/electricity is going to do in the near future.
There's also if you don't buy/build now, can you afford to later on....
I am certainly no economist, but have a lot of concern about the national debt and the current massive spending. Looking at what the so-called experts put on the computer to poo poo concerns about the debt is incredible. The US does not borrow money from other countries, we sell them treasury notes. That is just the tip of the iceberg on their creative way to mask the enormity of this mess. Some of these people claim that a high debt load is a good thing. ??
Quote from: Nebraska on February 23, 2021, 06:02:00 PMI am guessing the Ag Bankers are pushing the inflationary borrowing theory land is super expensive
Oh yes they are, and the Co-Op Ag banks, both the ones guys like us belong to and the Co-op that the bank itself belongs to, made massive profits last year. Not sure if that parent Co-op is a member of another Co-Op or they get their money from the Fed. Got my newsletter last week.
Quote from: KEC on February 23, 2021, 08:59:43 PM
I am certainly no economist, but have a lot of concern about the national debt and the current massive spending. Looking at what the so-called experts put on the computer to poo poo concerns about the debt is incredible. The US does not borrow money from other countries, we sell them treasury notes. That is just the tip of the iceberg on their creative way to mask the enormity of this mess. Some of these people claim that a high debt load is a good thing. ??
"There are two ways to enslave a nation: by the sword, or by debt."
Weve basically been standing on the very top step of a pretty high metaphorical ladder, reaching up on our tippy toes. Statistically, the probability of rising further is very low. Much more likely is going down.. Much faster than planned.
Dont panic, but give it some thought. There is potential for another great depression.
It seems those with the high paying jobs, big city areas, plan on working from home forever. They are going farther north to by homes and have driven real estate way up. They are in for some surprises as they come from municipal water and sewer to name a few. All the problems they bring with them, the worst for me will be the taxes.
We have noticed over the last couple years, almost all and almost all but I think two that are on the books right now are all "exodus" professionals from major metro areas, buying up grossly over inflated blank land out here in the sticks and dumping crazy money into development, all good for us in the short term, short sighted vision.
Most members on here are astute enough to recognize the medium and long term ill effects of such an exodus into your once rural community.
Its just a rinse and repeat, just occurring in our neck of the woods at the moment.
Moonda - In fact the ground breaking we are starting next week is a new home for a couple, both medical professionals, both are navigating to maintain their "work from home" lifestyle for the foreseeable future, and to do such from their new pocket of paradise.
All seem to have one thing in common, they have no clue to provide for "one's self" when everything has been service provided to them for as long as they can remember. They think there is garbage service at the curb, roads cleared of snow, tree services to remove those pesky downed trees across the road, etc. etc.
Quote from: Mike W on February 24, 2021, 10:33:13 AM
All seem to have one thing in common, they have no clue to provide for "one's self" when everything has been service provided to them for as long as they can remember. They think there is garbage service at the curb, roads cleared of snow, tree services to remove those pesky downed trees across the road, etc. etc.
The modern day Mr. Haney hears opportunity knocking.
The people who move out to the (former) "country" talk like they are doing us a favor by pushing up home values. My home is my place to live, less so an investment. When home values rise, so rises the tax asessmant. Then they want the school to spend megabucks and we have to pay higher school taxes to pay for it. I have been told that our school district is reputed to have a great special education program. People who are fairly well off move to this school district to get their handicapped child in this school. The per child cost to the school is very high for handicapped children. A few years ago they wanted to build a big sports stadium, complete with astroturf at the high school. I better shut up.
All the above happened here years ago. Where those houses are now we used to cut hay. This development would stop and start back in the 60's. It got a little crazy in the 80's but would still stall. After the attacks they bought homes sight unseen/ not built yet. This areas is about finished, hard to believe I once ran hounds. To drive a tractor on the road is dangerous. We are 60 mi. north of nyc. Now they are going to the Catskill mountains. They well vote a new school built and when it drops dead [ the economy ] they move away. The last recession they abandoned there golf club. I got a kick out of that, bunch of quitters. I better stop to.
From my little corner of the world, hay prices are absurd - seen kijiji ads for $10cad for a small square - $100cad for a 4x5 round (I'm not paying that much lol) , was talking with a friend who said cull ewes are the highest he's ever seen.
Work at a steel service centre, hot rolled structural - angles channels tubes etc - we buy from the North American mills and sell to manufacturers - hydro transformers, hydro line hardware, caterpillar parts, Deere parts, Raymond reach, sky jacks, just to name a few.
Boss told me last week that price of tubes is up $51cad/ton since September 2020, over a dollar per pound! The flat rolled mills can't get steel, so the tube mills can't make steel, therefore they have no stock and have orders booked out 3-6months in advance so the price is only going to keep going up for the foreseeable future. So expect the price of everything to double in the next 6-8 months.
I figure once the mills start putting inventory in stock the crash will happen faster than it's gone up. But it's hard to say with the billions and trillions of dollars every government has injected into the system.
(https://forestryforum.com/gallery/albums/userpics/55256/20210224_203634~0.jpg?easyrotate_cache=1614225415)
Just for kicks.
Price of a 2x4x8 local box store I was in this evening. I should've taken a picture of the picked over pile of junk that was in the bin for sale. Wife and I added a big addition on to our house in 09/10. I bought a lift of 1/2 in osb sheeting for around $ 8.00 and studs were $ 1.88.
Looks like Menards 😂
These prices are insane
Won't get it from me, especially since the local mill is stuffed with wood. We always overproduce up here anyway, way more than we can use because it's an export market for them. The local mill isn't even interested in selling direct to the local consumer anymore. They used to do local delivery out of the mill. Not anymore, you gotta go through the middle man. Modernization. ::)
I did hear in the news a couple weeks ago that 6 workers got COVID at a mill. They worked in a separate area from others. But still, one thinks in their mind they must mingle with others at some point on their breaks. Never heard a word since. I know for awhile after Christmas that the restrictions were elevated for a few weeks, but has since been less so. We've never had huge numbers of infections at any time here in NB. I mean the total active cases here has never reached new cases that were reported in one day in any US state or provinces west of here. I like to keep NB as rural as possible, but we are seeing some folks filter in here. We won't see a monsoon of folks though. Some day most of those folks will wake up and see what they left behind including that job. :D How long are they going to be allowed to work out in no man's land where the spot their house is, is 100 miles from anything that comes close to being a city, and a darn small one at that. Someone is going to be called into work some day, and their ain't no plane service in this region at the moment unless it's charter. No via passenger rail service and a broken bus service that ain't coming to your door step, but to a small gas station 10 to 30 miles away. And your internet sux to. :D
The less conveniences people have, the nicer they are.
Boy, ain't that the truth ! :(
Quote from: moodnacreek on February 25, 2021, 08:32:56 AM
The less conveniences people have, the nicer they are.
Quote from: moodnacreek on February 25, 2021, 08:32:56 AM
The less conveniences people have, the nicer they are.
For certain. But don't try to cross us. :D :D