posted on Oct, 24 2013 @ 01:33 PM
reply to post by Ameilia
Sorry, I did not have time to watch the video, although that is something I would lso predict for the near future.
I believe there one major argument to add, which also plays a large role in the inflation rates - consumer behaviour. The constant economical meltdown
talk in the media leads to insecurities among consumers, which leads to lower consumption, people think more before buying something
When some of you have visited European nations, you probably have noticed that the prices are significantly, often even times higher. Of course
certain part of it comes from VAT, although majority of it comes from the lower number of clients. The populations are smaller, while people also
tend to make smarter decisions when it comes to purchases limiting the consumption. This leads to companies having to raise their prices in order to
survive, due to smaller population the bulks of products ordered are smaller, which also sets the bulk price higher than for example what Walmart gets
their products for. For example, here were the average salary is 3rd of what it is in US, the prices are significantly higher and to be honest, most
people do not have much financial issues.
US markets on the other hand are the opposite. The companies are able to order extremely large bulks, which is cheaper than smaller bulks, while
thanks to the extreme demand (consumption) they are able to sell at nearly the price it costs them to get the product. Walmart for example gains
roughly 3 cents of net profit per every dollar worth of items sold and this can earn them billions due to the large amounts sold. Here for example,
companies often have to add up to 200% to the value what the product is actually worth in order to survive=not bankrupt. As the taxes are already
incredibly low and different companies are already selling their products at near to their own price, there is not much playing ground left to
increase the consumption. If the consumption drops significantly, the companies might have to start raising their prices in order to not work at loss,
which leads to inflation. Add in the dollar losing its value and hyperinflation might happen.
Although at the end I believe something like that happening in US sooner or later. The salaries compared to prices are simply too high compared to the
rest of the world. US keeps and keeps importing and importing stuff and consuming it while creating much less wealth themselves. There needs to be at
least some balance. The current system is not sustainable either economically or financially - current American lifestyle is not sustainable in the
edit on 24-10-2013 by Cabin because: (no reason given)