Inflation

The hotel price gouging situation has been created by the government. There is only something like 1% of hotel rooms available in Dublin. They block booked City West hotel for 2 years. We'd over 3000 asylum seekers arrive here between January and March thanks to O'Gorman's brain fart of telling them they'd get their own front door within 4 months of arrival. We've had more than 30,000 Ukrainians arrive in the last few months. Direct Provision is full. The fact that hotels and B&B's can charge these prices is that there's nowhere for tourists to stay.

Now that Dublin Airport is looking for the guts of 200 euro to park your car for a week and Car Rental companies are expecting people to pay 4 figure sums to hire a car for a week are going to make this country a no go for tourists. There will be a lot of hospitality businesses closing down because the asylum seekers and refugees won't be spending their money in them. Foreign tourists looking at the gouging here will go elsewhere and many won't even give Ireland a second look in the future.

People haven't even really started to feel the bite of inflation on food yet. I've stopped buying some of the brand products I've bought for years and switched to own brands. The rises in supermarket prices are gouging and not reflective of inflation at all. I used to buy a brand of organic milk and the price shot through the roof so I switched to Dunnes own version of it. They've stopped stocking the 2 litre cartons of the other brand now and the litre of it is 55 cent dearer than Dunnes, I'd expect to stop seeing it soon as the prices increase. There is going to be a hell of a winter of discontent.

Stop buying suff in tesco so. 3 euro for milk!

A hedge fund is mounting a huge short-selling position against Japanese government bonds. Stupid and risky play (not least for the hedge fund because they'll lose their shirt) as the BOJ has more than enough firepower to see them off.

We need demand destruction. There's nothing worse for the economy than high inflation we are seeing now.

That's why the fed in the US are so intent on raising interest rates.

It all starts with interest rates. Companies and people can take loans at very cheap finance costs. This creates money and puts it into the economy. Companies build new factories, this means more demand for building materials, construction workers, machinery etc.

On the individual level, people have no worries about buying anything because the cost of finance is low. Wanna buy a car? Just get it on 0% pcp. Wanna upgrade your bathroom? Just get a low rate loan. Its demand created via low interest rates.

When there's demand created for everything, everyone is expanding. But everyone expanding means they can't get staff so they have to pay more in wages. This gets passed through to the buyer.

We now need rates to rise substantially. When they do, it will kill demand. That person wanting to buy a new car on pcp will be put off by the cost of finance. More people do this and it leads to dealerships closing. Companies don't expand and build new factories so demand for construction workers drops, meaning wages stagnate. Companies have hired based on their expected growth, so because they're not going to grow as expected, they lay off staff. Suddenly there's less of a labour shortage meaning wages aren't rising so prices stagnate. This means companies don't need to pass through wage increases. They may even need to drop prices to raise demand for their products.

Inflation isn't going to drop to the desired level unless there's demand destruction.

The alternative is much much worse.

Dog food is up because of the war.

I switched to that a few weeks ago. I was buying Connaught Gold tubs and it jumped to 3.85. I like butter, so I bought a butter dish. I'm not happy about the jump in the Dunnes price of butter and if it goes much higher then I'll switch to a cheaper dairy spread. We did a very large shop this week, including a few things we buy regularly that were on offer and it was scary how much it had jumped since last week. One thing I noticed was a brand of vegetarian ham that I buy jumped to 3.89 for a pack, I don't buy it since they did that, but there's a vegan version in the same range that has stayed at 2.69, that's a hell of a difference and must be due to the lack of eggs and other dairy products in it. I was going to buy a pack of Birds Eye fish fingers until I saw that they are now 7.20 a pack. In what universe is that an acceptable price for fish fingers. Bought Lidl ones for less than 3 euro.