Why are prices going up when demand is going down?

Aren't prices supposed to drop when demand drops? We have many people out of work and many of the rest worrying about losing their jobs. Retired people and those about to retire face life on half the funds they had last year at this time. Only government workers and those with generous expense accounts have money to spend freely. Then why are prices not only not going down but slowly continuing to rise? Are we already seeing the beginning of hyperinflation due to printing money with nothing to back it, or is this simply market manipulation: smoke & mirrors?

reply to post by earlywatcher


Depends what prices your on about and what country you're in. In the UK, for example, prices of electronics have gone up (despite the usual case of technology beoming cheaper as it ages) because the pound has lost value against that of the country we import from. Other things, such as the cost of fuel, will bump up prices.

What prices are you alluring too and where do you hail from?

[edit on 26/5/09 by stumason]

cause they keep printing money off its called inflation dude, get some gold and sacrifice it to the God of fire might buy you some time or some food.

There are a bunch of reasons:
a)Inflation.
b)While supply and demand is a great theory, the raising of prices on items that are staples(gas, basic food, etc) is due to the fact that companies are in trouble. They are trying to squeeze every dollar out of the consumer that they can.


There are many others, but these are the two biggest, imho.

reply to post by stumason


I'm from USA but have heard references on other threads to this happening other places.

I understand that people are trying to get as much as possible, but it still seems weird to me. maybe running in the red is no longer seen as a problem, particularly with large chains because they can hope for government money. Though lots of chains with stores in my town Portland, Oregon have closed. I don't know if that means they were in worse shape or what is really going on. There is a lot of unemployment in Oregon.

It is the beginning of inflation my friend.

Might I suggest googling monetary inflation, so you may become more acquainted with it.

You just answered your own question.

It might be a new creature altogether...Hyperstagflation....the price of things you need (food, clothes, fuel) go up, while things you don't need go down....

what demand are you referring to going down

Demand for oil is GOING Up ......Demand in OIL FUTURES that is

and investors are beginning to pile in

whenever the dollar goes down traders take advantage and pile into bullish bets for commodity's based in dollars..........this happened last summer WAY B4 the fed started trowing all that "money" and "inflation" in the system

Europe (EURO) is not spending as much as america and will not have as much difficulty financing their deficts so the dollar goes down (because the EURO is the biggest currency weight in the dollar index)

Does it piss you off that investors can throw money into oil futures and food futures and sent the things we need thru the roof ......(this happened last year ^B4^ the fed really started throwing money at the system.....



[edit on 26-5-2009 by cpdaman]

Deflation is only temporary as manufacturers try to get rid of inventory. Once that's done, prices should be the same as before or even higher. Say a manufacturer makes a million of a certain item at 30% profit, now because of low demand that same manufacturer might make only 100,000 items but it will still try to get the same percentage of profit.

Hey but the Kool Aide is still free! Have a glass, have two, what the heck have one on me.

A wise man once told me when I was quite young, without hope humans simply would wither and die.

Sadly a lot of people put hope in the very things that will kill them.

Once many years ago a political dissident in France was exiled and incarcerated in the infamous Devil's Island penal colony in French Guinna.

He spent 22 years in solitary confinement, in a bare concrete cell with no bed or mattress just a hole in the floor to use as a toilet. The prisoners were lowered into these isolated cells from the roof, that was metal that had only a trap door to be opened three times a day for a diet of bread, water, and vermin infested watery soups. To speak one word to that gaurd when feeding you was an immediate trip to the Guillotine. To be caught speaking to another prisoner by voice or by code through the thick concrete walls was an immediate trip to the Guillotine. The cells were sweltering with the metal roofs picking up the heat of the glaring tropical sun by day, with no ventiallation to offer fresh air or a breeze.

The man lived for 22 years in that condition and one thing kept him alive...one word kept him alive...hope.

Hope is the powerful base ingredient for Kool-Aide.

At the end of World War II, when France, England, Belgium, and Germany gave up their Colonial possesions throughout the world the penal colony was shut down and the man finally released and set free to go back to his beloved gay Paris, that the hope of one day living to see was all that kept him alive.

Within a year of his return, he killed himself.

Evidently what he was hoping for wasn't what he really thought it was or wanted.

It's going to be a rough ride for a little while friends. That which does not kill us only serves to make us stronger.

I shall endeavor to embrace these momentous changes that increasingly confront us. I will look to persevere one way or another, some how or another, and I shall determine to not lament or grieve for the world and times and things that have passed, as like that poor prisoner of conscience who suffered so long imprisoned for the simple crime of daring to speak freely about the hope for a better tommor, nothing in my life to date, no matter how wonderful or bad, happy or sad, thrilling or dull, triumphant or heartbroken has ever in one single solitary case turned out to exactly what I had hoped it would be.

I will continue to embrace the new me, and strive to love my brothers and sisters and do what I can, for whom I can, the best I can, just as I have always done.

I might have to go hungry, I might have to go homeless, I might have to go dirty, I might find myself imprisoned, even tortured, even facing death, maybe many times before a truly brighter tomorrow dawns upon a new age of renewal and plenty.

I hope for only but one thing, as I have always hoped for, that no matter what ever happens I can have compassion in my heart, empathy in my heart, and love in my heart for friend and foe alike.

For as long as I can see and feel that for others and ultimately through that forgive them if only for the fact that I can understand them, then I can forgive and understand myself as well.

Hope shall always thrive that way, and that wise old man was right, it is hope that keeps a human being alive.

Don't drink the Kool-Aide, but always find that hope in yourself. For that which does not kill us only serves to make us stronger.

Should I die, it will no longer matter, that brief final moment shall be what ever it shall be, and then there will be no more...

But should I live, just to see yet one more morrow dawn...as I do myself to greet it, my hope dawns eternal along with it, that this day, which I have always lived each and everyone as my last day, for tomorrow is promised to no one, that this day could very well prove to be the best day of my life.

Another day, another dollar, and a chance to stand taller, by learning, and growing more, adapting to an ever changing world, that each part of has it's own hopes too.

Don't let events frighten you or panick you. Our Masters want only one thing as they always do, to divide and conquer us.

It's going to be a rough time, but when you look back over history, each generation at some point has almost always had to face those darker moments.

It is always darkest before the light. It is in that light that hope springs eternal.

Don't loose yours friends, please.

Originally posted by earlywatcher
Aren't prices supposed to drop when demand drops?

No, the idea that demand dictates the market is a myth.

Companies still want to maintain their profit levels, so less product being sold up goes the price to maintain.

One of the many pitfalls of capitalism, which as usual effects us regular folks the most. Greedy companies want to maintain their profit levels above everything else.

It's not really prices going up, it's the purchasing power of your dollar going down. This leads to recession as people stop spending and prices keep going up to compensate, which in turns again leads to even less people spending money. Workers will then start demanding higher wages to keep up (one reason unions are demonized). A viscous cycle that can get out of control and cause complete economic collapse.