Chip shortage: Toyota to cut global production by 40%

I was just giving it as an example of how whole tertiary industries that aren't directly part of the military-industrial complex will none-the-less vote (R) like their lifestyle depends on it, and for the same reason as contractors.

> MSI has admitted that one of its subsidiaries has been selling RTX 3080 graphics cards on eBay at almost double the MSRP.

> The controversy first appeared on Reddit, where users accused MSI of scalping its own RTX 3080 graphics cards on eBay under the name Starlit Partner. Since, it’s been confirmed in a Justia Trademarks listing that Starlit Partner operates under MSI Computer Corp and was first set up in 2016.

https://www.techradar.com/uk/news/msi-subsidiary-gets-caught...

The whole point is for manufacturers to raise the price until desperate companies/consumers can no longer afford it and don't buy them. Im not sure where scalpers come in. If prices are set high enough, scalpers can't make a profit.

Why would we do that if the fabs themselves don't think it is worth paying their equipment manufacturers enough to afford their own chips?

Giving "special treatment" is a price control. It is forcing a transaction that otherwise wouldn't settle at that price.

The amount of disrespect to highly skilled professionals in this thread working like crazy to respond to a massive exogenous shock, and then following it up with the idea that "well, the government should fix it" with no specific idea of how exactly, the government would fix it, is mind-bending.

The Fed was established by Congress and the Chair is appointed by the President, however the Fed is still a private institution. That independence makes it a very different organization than what most people mean by government.

I might be more time efficient by speeding everywhere, but that efficiency gain needs to be understood in terms of how much additional risk it incurs.

I am by no means against government intervention. Companies have short memories, and market forces will force eventually pressure a return to JIT. But now is the exact wrong time to intervene.

Think of each stage of the system, not just the components you bring in but also the partially assembled components you produce along the way as well as the finished product. US auto manufactures (in particular) had an operating method where they kept inventories high at all stages. This wasn't entirely deliberate. They weren't saying, "We need 5000 car doors just sitting here." They were, instead, saying, "We can't stop making doors just because everything else down the line is stopped due to <event> so keep churning them out and pile them up." The tail end inventory of "complete" vehicles were sitting there due, often, to quality issues (misaligned assemblies, missing parts, whatever the reason may be).

So inventory piles up everywhere along the chain, which also worked because there was a large turnaround period when retooling and equipment downtime (not always planned). Because Nobody Ever Gets Credit for Problems that Never Happened [0] there was an underinvestment in maintenance and improvement efforts. High inventory across the line papers over this issue. Lean discourages high inventory in order to make these issues apparent so that they can get the attention that they deserve. Also, rework is viewed as waste so quality issues should be addressed when they're discovered, not by assembling hundreds or thousands of vehicles incorrectly and then fixing them, fix the assembly line issues causing that misassembly.

[0] https://web.mit.edu/nelsonr/www/Repenning=Sterman_CMR_su01_....

And then multiply across everyone in a supply chain for a single product having to deal with waiting to receive giant parts orders from their vendors before they could start their own giant order to supply their customers.

For compact/subcompact sedans/hatches and midsize sedans the OEMs typically make a super stripped down variant so they can advertise an insanely low "starting at" MSRP. Dealers don't typically buy a lot of them so they're very hard to find and you'll likely have little room to haggle on price.

Nowadays there's a pretty long list of mandatory electronics and everything has at least one bus network in it but if you want to minimize the number of extraneous modules on that network then a stripped down economy car is your best bet.

No, they are nice to haves. anyone who is looking to save money on a car will buy a used car with those features because they get the cheaper price and the features.

It has lost value against lots of commodities and "real" goods.

(Amsterdam, Copenhagen, Malmö)

Something else is the problem. Maybe infrastructure or terrain.

It wasn’t cheap initially ($7000 CAD), but the cost per km drops enormously every year while the bike still rides as well as ever. The kids have all loved it, too. My youngest is disappointed when we drive places - he wants to walk or ride all year.

We do have a temperate climate which helps. Our cold days in winter are typically around 5 degrees outside of cold snaps, but even then we rarely dip below 0.

It’s a major quality of life improvement for us. They’re amazing grocery getters, you don’t get all sweaty on them, kids tend to love it, and they’re quite a bit easier to buy, maintain, and park than a car.

We went with the spicy curry because of its insane cargo capacity (we’ve used it for its full capacity many times, especially while bike camping), but you can spend far less if you don’t need to carry that weight.

With a bike you don't expect it to be there after locking it in the street for more than 15 minutes. I don't know anybody personally whose car was stolen.

Inflation can be caused by many things: reduced supply, increased demand, expectation of future price increases, degradation in the quality/desirability of alternative products (eg bond yields), and, yes, an increase in the amount of dollars chasing an asset class/product/service.

Re: your original question, to be a bit pedantic, the supply of money on its own cannot cause inflation in consumer goods except via extremely odd channels (e.g., inflation expectations). A trillion dollars sitting in a bank account has approximately no effect on prices. Like a bullet in a chamber, money at rest has no effect on consumers' experience of inflation until it's propelled forward.

But it's important not to conflate causes with definitions. Also, attributing causes of inflation to particular instances of inflation is often extremely and inherently political. The inflation we've seen in consumer goods is a complex phenomenon with many disparate causes. Beware of anyone selling you a "just-so" story for the cause of inflation in a few dozen disconnected goods and services.

Especially if that story aligns perfectly with their ideology/product/investment/political campaign.

And even more especially if they start the story by conflating one possible cause of inflation with the very definition of the thing.

If supply goes down, prices go up. If money supply grows, prices go up. If money velocity (number of times money changes hands in a given period) goes down, prices go down, etc.

(It's worth noting that in 2020 when money supply exploded, money velocity fell by a lot, which is why GDP fell, and why there wasn't that much inflation)

edit: s/inflation/prices/

If the supply of these chips causes a loss in supply of in demand items, like cars, then it will cause an increase in the price of cars.

The thoughts are that this is temporary, until the components that are in low supply can catch up and meet the demand.

But if the lack of supply lasts for too long then people become used to the increase price and manufacturers can just keep the price there at the inflated price. Now it's permanent inflation. Or that can happen if the supply doesn't keep up with the demand.

If you give the bottom 80% of the income distribution more money, they will spend it right away like a river. If you give the 81-90%, portion of it will be saved in their lake(say, a 401k) and they will spend some of it. And if you give the top 10% more money, they save all of it in their reservoir.

The way that we have been introducing new money into the system is not by melting ice in the middle of the ocean. We also haven't been raining all over. The key way that new money has been introduced over the past 50 years is by lowering the interest rate. When you lower the interest rate, what happens is that people refinance, and suddenly they can pay less, but quickly realize, oh, I can also borrow more, so they do.

I'll show you a few numbers, which I got by going to the zillow housing affordability page with default settings. I only modified the interest rate, all other values stay the same.

Year | Average Interest Rate 30 Year Fixed | Home you can Afford

1981 | 18.39 | $124,797

1991 | 9.00 | $200,862

2010 | 6.26 | $244,531

2020 | 2.67 | $328,569

And so what we see people and REITs and companies doing is taking out larger and larger loans, and putting those dollars into assets. Companies take out a bond and buy back their own stock. And why wouldn't they, it's profitable because the environment makes it so. And that money flows throughout the system. We can track the inflow of all of this money by looking at say.. the M2. This seems to be the crux of your point, if the amount of money in the M2 has gone up by 40x since 1971, why is inflation not out of control?

The CPI is a measure for inflation that does not track the oceans water level. The M2 tracks that, and as you can see the M2 is out of control. The CPI doesn't track stock purchases. If the CPI were to track stocks weighted at 1971 levels, inflation WOULD be out of control. The CPI tracks, specifically, an average of tangible items that the bottom 80% spends their money on. Therefore the inflation number is based on the height of certain rivers. Now that's an important figure to keep in mind, after all if you get inflation in that bracket and income isn't rising, you quickly run into a revolution. And so that's what the FED has found, if you track the CPI you get the perfect amount of heating to boil the frog without them noticing.

But when you introduce money into the system by lowering interest rates, you are in effect giving the money in proportion to the assets already owned. Someone bought that home in 1981, and someone with the same exact income would bid 328k for it today. You basically tripled(and it was a leveraged sale, so 15x!) that home owners asset, without any need to compare anything else, like actual income rises, or for instance SF has moved upmarket which would also effect prices. And so if you don't have much assets, it's a desert. If you do, it's a rain forest. And because the wealthy already have all that they want, demand for those items that the bottom 80% spend their money on doesn't change. So the supply and demand of those items don't change. So the CPI value stays the same. But money was introduced. If you take a look at the velocity of the M2, the M2V, you can see this take place. The wealthy get the gains of the new M2 dollars, and store it away. The more dollars created, the lower the velocity.

The lower the velocity, the lower inflation. But that rain is being stored in the reservoirs. If inflation causes stored wealth to lose value it's like a dam bursts and the wealthy start to spend and not save their money, it starts as a trickle and ends in a tsunami.