No inflation? Not buying it

Posted: March 27, 2021 by ng36b in blogs, economy, Uncomfortable Truths
Tags: , , , ,
I affectionately call her The Kraken!

During the early part of 2020, when COVID restrictions were in full swing and everything fun had to arrive in an UberEats or Amazon delivery vehicle, I built a pirate ship. A big, frickin’ pirate ship. Like, adult sized, complete with cup holders for your adult beverages. Home Depot had a massive truck drop off all the lumber, and every weekend until the beginning of summer, there I was, building away on the ship. Luckily, as the summer and COVID dragged on, my kids had something to play on while the city shut down all the other playgrounds.

The lumber I purchased was fairly hefty: 4×4 posts, 5/4 decking board, 2×6 framing, and all of it is pressure treated. Recently I went to add a simple enclosure for my garden, and looked at the price for some 4x4s. And man, did they look expensive. Curious, I pulled up my receipts from the pirate ship project. And sure enough….4x4s had nearly doubled in price.

If 4×4 was a stock, it would have beat an awful lot of the market. I also looked at our Walmart receipts, and sure enough, food prices bumped up a bit too. Gas is more expensive as well.

So I’m super skeptical when I get told we have little to no inflation. In real prices, I don’t see it. Everything is more expensive, and a lot more than the 2% you would normally expect. Maybe that makes me dumber than an economist, but I’ll take my actual experience of buying things over some book knowledge that seems to have no place in reality. Given how high these prices really are, I’m worried that inflation is going to skyrocket once people start buying things again in large numbers. If ever there was a time to worry about inflation, now would be that time.

This post represents the views of the author and not those of the Department of Defense, Department of the Navy, or any other government agency.

  1. Bill Heffner says:

    There is a clever mechanism they use to eliminate inflation. They have a “basket” of goods on which they list prices. If steak in the basket gets expensive, they assume people will switch to hamburger, so they replace the steak in the basket with hamburger. The basket’s total remains the same, so there is no inflation.

    Your pirate ship would cost the same because you would build it with 2x4s instead of 4x4s, so there is actually no inflation in the cost of lumber.

  2. John says:

    Lumber prices have doubled mostly because of tge very low interest rates have increased both new building and remodeling
    Low interest rates gotta blame that new Prez