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Does the law of Supply and Demand even apply anymore?

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posted on Sep, 3 2011 @ 01:26 AM
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I was thinking today about how much information is available about the economy. In our nations founding instant information was not readily obtainable and if a store ran out of something, or it was hard to get then prices for that item rose accordingly. Likewise, items on the store shelf that sat without purchase the price dropped.

Today the economic landscape is changing. We are at a point in America at least where unemployment is rampant. Shipping is overnight. And stores have buying down to a science. With all the unemployed people not buying anything, why are the prices of everything going up? Obviously inflation plays a factor in it, but the prices keep going up on most things when people are not buying them. Tell me I am not the only one who notices this?

So the law of supply and demand generally says that when there is less of something and demanded, prices will rise. And when there is more of something and less demanded, prices will go down. Except that does not appear to have occurred in our current economy. The winners in this economy are maintaining higher prices while cutting back on everything they purchase. Yet the prices seem not to drop and the production stays the same. So they do more with less expenditures and increase their profit margins.

If supply and demand was in play in our economy, shouldn't the prices on nearly everything be more cheap?




posted on Sep, 3 2011 @ 01:41 AM
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your an idiot of course it applies, if it didnt i would be able to sell you anything for as much a I wanted to



posted on Sep, 3 2011 @ 01:42 AM
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Not to everything like oil, Fact is US has a lot of oil sitting in Alaska they know the companies know. They're NOT going to open the taps though because it would lower their profits greatly.



posted on Sep, 3 2011 @ 01:45 AM
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Originally posted by thegoods724
your an idiot of course it applies, if it didnt i would be able to sell you anything for as much a I wanted to


Utilities, Petrol and Interest Rates are 3 of the biggest expenses for most...

All controlled and nearly always going up...



posted on Sep, 3 2011 @ 01:47 AM
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if you have monopolies and cartels on utilities and oil, then supply and demand hold true, the supply is just artificial



posted on Sep, 3 2011 @ 01:57 AM
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One of the things you are missing is overseas demand.

The demand for anything made of steel, concrete, plastic, or rubber is high overseas in emerging economies like China and India... this creates a world demand on limited supply commodities.

So, washers and dryers may not be selling here in the USA, but the steel they are made of is selling in Asia... this makes the manufacturing costs go up and thus, the retail price rises... even though they may not be a hot ticket item.

Secondly, everytime the Fed prints dollar bills...the value goes down. Who was it that said..."Sure the US can pay it's bills, we'll just print more money"..? Anyway, as the value of the dollar goes down, the costs of items and products bought with dollars goes up.

Pasta used to be 4 for a dollar... then it went to 2 for a dollar...now it is a pound of pasta for a dollar..... maybe a $1.25.

This also applies to everything bought and sold here....have you noticed the Dollar Value Menu at the fast food joints has been getting smaller...just like the portions?

Go look at the Weimer Republic of 1920-24... that is where we are headed if we do not change things soon.



posted on Sep, 3 2011 @ 02:11 AM
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Originally posted by thegoods724
your an idiot of course it applies, if it didnt i would be able to sell you anything for as much a I wanted to


"your"
2nd line to emphasize the "your"ness.
How ironic to call someone an idiot one word after idiotically using "your" instead of "you're".
Learn YOUR grammar so that YOU'RE no longer a jack head.



posted on Sep, 3 2011 @ 02:14 AM
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Originally posted by ExPostFacto
If supply and demand was in play in our economy, shouldn't the prices on nearly everything be more cheap?


You betcha! Not.
www.abovetopsecret.com...

Utterly glorious!!!



posted on Sep, 3 2011 @ 02:18 AM
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Originally posted by thegoods724
your an idiot of course it applies, if it didnt i would be able to sell you anything for as much a I wanted to


This really added a lot to the discussion. You realize I asked a question and you give me some lame remark as an answer to a question. I don't see how you selling something for anything you want makes me want to buy it, if I can get it somewhere more inexpensive. I doubt you have anything I want anyway.



posted on Sep, 3 2011 @ 02:19 AM
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reply to post by eldard
 


Uhm...you do know that they outbid us, because they are making it over there?



posted on Sep, 3 2011 @ 03:40 AM
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reply to post by ExPostFacto
 


Like US pecans and US raised beef and South American coffee?




posted on Sep, 3 2011 @ 05:44 AM
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The prices are going up because commodities prices - the raw ingredients - are going up - well in US dollars they are going up.
The wheat for bread, the oil to transport it, all traded in US dollars.
And it truly is supply and demand.
There is a huge supply of US dollars, thanks QE1, QE2, and so on,
and no demand for US dollars.
2 years ago, it cost me $1.30 Australian for a US dollar.
Now its only 94 cents.
So as more dollars become available, your dollar becomes worth less and people demand more for a given amount of goods e.g. a tonne of grain.
The economy isn't growing but the amount of money in circulation is, so that just reinforces the problem of no demand for US dollars.
Can escalate out of control rapidly, as in Zimbabwe,
Without restricting the amount of quantitative easing, the dollar will fall further, commodities will rise in US dollar terms and it's a self sustaining explosion in inflation.
edit on 3-9-2011 by Colbomoose because: Edit for grammar and meaning



posted on Sep, 3 2011 @ 11:08 AM
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reply to post by Colbomoose
 


So you believe that the rising prices are responsible for inflation in currency? I tend to agree with that. It is like supply and demand is flipped upside down, where it really doesn't matter much anymore as people want more dollars, even though the demand for the goods is down.



posted on Sep, 3 2011 @ 12:14 PM
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reply to post by ExPostFacto
 


There seem to be so many economics/financial experts on here I hope I am not out of place.

www.spiegel.de...

The link above may have have been posted on ATS on another thread or elsewhere on the web. I cannot remember.It discusses speculations influence on the theory of supply and demand.

While there are some elements of pure supply and demand in play today, there are too many other factors which make it almost unrecognizable. Specifically, the manner in which speculation derails the entire theory. Supply gets controlled and distorted. Demand is artificial and has little relation to market fundamentals.

So the invisible hand is not so invisible.



posted on Sep, 4 2011 @ 10:48 PM
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reply to post by ABNARTY
 


Thank you for this. This is exactly what I was getting at. If we go back many years ago, supply and demand seemed to ebb and flow. Now there is nearly a constant stream feeding companies to continue to produce. It seems to me that products hardly have any supply and demand problems; rather it is the material on the manufacturing end. However, there are so many tools available right now, companies do not want to put a product to market with a shortage of materials to provide that product. So the demand is avoided and the product never goes to market. Additionally, certain products that have special purposes are ran off in batches and only certain people need these products. Since there are so many tools to forecast how many are needed, again there is no demand or supply problem. The product is made expecting a certain amount to be purchased.



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