of course, it is the very basic concept of supply and demand. The price in general is a result of that equation. I know someone who bought an 911 GTS in the middle of 2020 for $20K off msrp because nobody was buying cars. You can't even touch the same car for at least $20K over msrp now.
IMO, Powell is failing in fighting inflation. He sat on his behind for way too long... "transitory" my a$$. All these crazy rate hikes and QT's haven't done much. Perhaps a recession is needed.
Quote:
Originally Posted by vtec to vvel
There's nothing "normal" with the current market. This is actually a first to where the Feds cannot refer to a previous play or scenario to guide them through the current economic situation. Jerome Powell even admitted to not understanding inflation: "We now understand better how little we understand about inflation" - June 2022.
Barry Habib (one of the world's most respected economists) so eloquently describes inflation as "too many dollars chasing too few goods". When COVID happened, Feds drastically cut rates to prevent the economy from crashing, but the other half of the equation is supply. Due to COVID, the global supply chain was disrupted, so there was alot of money pumped into the economy, but not enough goods to support the demand. This is when inflation really became out of control and the Feds were too late on raising rates to keep inflation in check. Inflation will continue to rise as long as supply is scarce. Raising rates may help, but the biggest key is getting the supply chain back in order.
Buying/selling cars at higher inflated prices will NOT keep car prices high. It is the lack of supply/inventory that will keep prices elevated. If more supply become available, this should stabilize car prices.
|