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70's or worse inflation about to hit?


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I understand that China is hoarding rubber. On a lighter note: I drive long haul in the summer  and sometimes end up on small county roads. I was in the woods of Wisconsin yesterday  and was close to fond du lac today. Saw at least 5 hand written " wood for sale" signs. One was selling  2x4 cut off bundles for about $5.00. Nothing waslonger than 12 inches. Another was selling small pallets for $4.00 and larger for $6.00. They were lightweight throw aways.  Crazy.

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Someone mentioned the toilet paper hoarding.  We were returning from the Monacoer's gathering when all of this started happening.  I could not understand why people were hoarding toilet paper when the Rona was not causing someone to need that much toilet paper.  Proves once a panic starts it may not make sense.  So what might be hoarded the next time?  Add human nature in the mix and we get an uncivilized society.  Along with toilet paper you could not get hand sanitizer.  I just happened to be standing in a Wal-Mart store when a pallet came in and there were a couple boxes of hand sanitizers on it.  I took one bottle and started walking away.  There was a commotion and I looked back and people were grabbing as many bottles as they could carry.  The pallet was empty in a couple of minutes.  So much for a civilized society.

Bad part about being in a RV is the lack of storage.  So it was tough getting from Florida all the way back to Spokane, WA. while all this was going on.  We never knew if we could find water, toilet paper or paper towels.  And meat was another problem.  Even if we found some we didn't have storage for it.  We made it back home OK, but I do have some concerns about hitting the road again in late fall before the white stuff arrives here, hopefully diesel won't be in the $8 a gallon range.  Still going anyway, we are booked so we'll pay what we have to.

Woody Miller

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I still believe that while there is a true shortage of items in some cases there is also corporate greed and gouging going on.

In regards to lumber I had an interesting conversation with a Lowes director. I asked if once the lumber market rights itself and there is no more shortage if the prices would come down and he stated " just a little ". We own 4 companies and all of them except one has been hit with shortages and price increases. I spend a lot of time on the phone talking with peers who own other companies that are large and small and all of them are saying they are having to spend copious amounts of time checking prices on the materials they use in their businesses. Some are experiencing daily increases while others like us are experiencing weekly increases.

We have already dropped one product of ours because of stainless prices ( our Coolant surge tank ). Stainless is going up weekly. We go through a lot of mirror stainless every week and we are getting killed. Our margins are nearly to the point of being even with the product price. I am in the middle of a pricing audit and will be raising the prices on our Guardian Plate systems. It wont be popular with RV'ers but we have no choice.

Those trucks sitting in those lots are all due to computer chip shortages. The last I knew it would be 2 years before the market is back to normal on chips. A major chip manufacturer in Japan had their plant burn to the ground and it is nearly impossible for other companies to step up production to steady the market.

If anyone is sitting on the sidelines waiting to start a project to see what happens with prices, they will not come down. Chances are they will only go up or stay flat. We purchased an industrial property and are just starting the interior build out. Lets just say my budget is blown before I even got started. 4 inch conduit we bought last year for $ 35 is now $ 75. A year ago I built a new pool house and equipment building and was paying $ 3.50 for a 2 x 4. Today that same 2 x 4 is $9.79. Anyone checked the price of electrical wire lately ? It has gone nuts due to copper prices. I just finished doing the underground electrical on our new property - 300 ft of 1/0 wire and 200 ft of 2/0 wire and 125 ft of # 2 wire, all buried in conduit. You would die if you seen the receipts from the electrical warehouse. I wont even get into the 200 ft of sewer line and water pipes. 😞

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Yup, the little 23X26' enclosed shop I built I figure cast almost 3 times what I could have built it for a ~year earlier.  I went back and checked some prices and they were 2-3 or more times higher.   Luckily I did have quite a bit of the electrical supplies on had, had to buy one 250' roll of 12/2.   I did need a couple 50 amp breakers, I could not find any in stock at any of the local big box stores, had to order on line and these sellers had not increased their cost dramatically YET!

And yet they are still reporting record levels of new housing starts and existing house sales are still blazing hot.   Sooner or later this is going to have to come to a screeching halt.

 

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There is a good article published this Monday am. By Bloomberg. 

 

Shipping costs skyrocket 

80% of goods are shipped.

Some costs up almost 600 %

I remember when you could only afford a third hand tractor with a million miles on it to haul logs .

Now all new Peterbuilts are hauling log wagons to mills in Palatka Florida and others all over the country 

 

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20 hours ago, woodylmiller said:

We had a very large trip planned this coming winter, well over 10,000 miles and many RV parks.  We are now scaled way down, just heading south to Palm Springs for the winter and will hang out there for 6 months.  Diesel prices are climbing every week.  I'm a retired builder.  I can't imagine how you bid a job these days with the prices of building materials so unstable.  Material that used to just be "consumables" are now too expensive to throw away.  A ten foot stick of 3/4 galvanized pipe for $44, really?  Lumber, forget about it.  I need to buy new tires since my date codes are at the 7 year mark.  Was going to go with Toyo's, I hope I can find some and I'll have to pay a ransom amount for them.  Not to worry, we'll probably get another 1% cost of living adjustment on our Social Security.  5% inflation, bullcrap.  We are at double digit rates without any doubt.  Gas at Costco in Spokane was $3.11 last week, up a dollar a gallon from a year ago.  Diesel is running around $3.40 a gallon, right now.

Woody Miller

09 Dynasty Regal IV

 

 

 

I just put 8 Toyo's on in Phoenix. Out the door $4,400 if that gives you a number to start with. 

Good luck

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7 minutes ago, Grampy OG said:

I just put 8 Toyo's on in Phoenix. Out the door $4,400 if that gives you a number to start with. 

Good luck

When I got tires last month I wanted Toyo's, I had gotten prices for these the year before for ~$3400 out the door, none of the 3 vendors I called could find any close.  Ended up with getting Yokohama's, 6 tires out the door $3600.   I was talking to the owner of the place I bought them from and he said that sourcing tires was getting harder.  He said he just got some smaller tires in that were 4 years old. 

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Price of lumber will not come down until the demand decreases. Loggers are still limited on how many days they can sell their logs and that price has not gone up. During the 10 year downturn, many mills went out of business and the equipment was sold…much of it sold to countries were labor costs are lower.

A new mill costs $millions and takes 3+ years to build IF the permitting is easy. Will this bubble last another 3 years? Not likely so doubt any new mills will be built.

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We have not yet experienced the havoc this inflation will cause. Freight rates are out of sight. Some are 50% higher than pre endemic. Consumers are the ones who will cover those increased costs. Large trucking companies are worried about not being able to buy tires. Forget favorite brands. Prices for HD truck parts are also high. Companies hesitate  to stock up as many parts are year and truck brand specific.  Do any of you remember when Nixon imposed price and wage controls. We are Canadians and always did a lot of rving in MN and ND. We quickly learned which food items were greatly cheaper than  in Canada. We had no price controls. I am also worried about interest rates. As a retired person higher rates would be good. But high mortgage rates will kill the economy. These are not normal times and no one can predict what is going to happen. Will prices keep going up? Will availability become worse? What will prices return to normal? Food for thought.

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6 hours ago, throgmartin said:

I still believe that while there is a true shortage of items in some cases there is also corporate greed and gouging going on.

In regards to lumber I had an interesting conversation with a Lowes director. I asked if once the lumber market rights itself and there is no more shortage if the prices would come down and he stated " just a little ". We own 4 companies and all of them except one has been hit with shortages and price increases. I spend a lot of time on the phone talking with peers who own other companies that are large and small and all of them are saying they are having to spend copious amounts of time checking prices on the materials they use in their businesses. Some are experiencing daily increases while others like us are experiencing weekly increases.

We have already dropped one product of ours because of stainless prices ( our Coolant surge tank ). Stainless is going up weekly. We go through a lot of mirror stainless every week and we are getting killed. Our margins are nearly to the point of being even with the product price. I am in the middle of a pricing audit and will be raising the prices on our Guardian Plate systems. It wont be popular with RV'ers but we have no choice.

Those trucks sitting in those lots are all due to computer chip shortages. The last I knew it would be 2 years before the market is back to normal on chips. A major chip manufacturer in Japan had their plant burn to the ground and it is nearly impossible for other companies to step up production to steady the market.

If anyone is sitting on the sidelines waiting to start a project to see what happens with prices, they will not come down. Chances are they will only go up or stay flat. We purchased an industrial property and are just starting the interior build out. Lets just say my budget is blown before I even got started. 4 inch conduit we bought last year for $ 35 is now $ 75. A year ago I built a new pool house and equipment building and was paying $ 3.50 for a 2 x 4. Today that same 2 x 4 is $9.79. Anyone checked the price of electrical wire lately ? It has gone nuts due to copper prices. I just finished doing the underground electrical on our new property - 300 ft of 1/0 wire and 200 ft of 2/0 wire and 125 ft of # 2 wire, all buried in conduit. You would die if you seen the receipts from the electrical warehouse. I wont even get into the 200 ft of sewer line and water pipes. 😞

This is where we are stuck. Just received a loan to build a new kennel. Already own the land and have run most of the utilities. The interest rate is very low, and would love to start, but I’m watching steel prices to see a turn, down. 
 

I was in heavy construction for years and always laughed at “surcharges” for fuel or whatever. They never go away. The new “tariff” charges that we’ve been paying will not go away, even if he tariff goes away. Once an industry knows what people will pay, it becomes the new floor for pricing till a catastrophic economic event happens (ala 2008) 

BTW, love your plates, looks like I need to get my order in for my other slide. LOL 

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