Any clue in '70s inflation?

[nutmeg]

A few thoughts,

I worked in hardware and lumber in the 70's. We could not keep up with the price changes. The prices would rise between shipments. Our invoiced price often were higher than what we we selling the current stock at.

Existing old inventory obviously we made a great mark up on, but that profit was eaten up by the price increase we missed. Customers were always irate.

This was a time many stay at home mothers entered the work force.

This was the era that ushered the mafia in, full force, because of taxes. The underground cash economy flourished.

 

[Daal]

Quote from nutmeg:

A few thoughts,

I worked in hardware and lumber in the 70's. We could not keep up with the price changes. The prices would rise between shipments. Our invoiced price often were higher than what we we selling the current stock at.

Existing old inventory obviously we made a great mark up on, but that profit was eaten up by the price increase we missed. Customers were always irate.

This was a time many stay at home mothers entered the work force.

This was the era that ushered the mafia in, full force, because of taxes. The underground cash economy flourished.

what about the period of price controls?

 

[Stosh]

Quote from nutmeg:

A few thoughts,

I worked in hardware and lumber in the 70's. We could not keep up with the price changes. The prices would rise between shipments. Our invoiced price often were higher than what we we selling the current stock at.

Existing old inventory obviously we made a great mark up on, but that profit was eaten up by the price increase we missed. Customers were always irate.

This was a time many stay at home mothers entered the work force.

This was the era that ushered the mafia in, full force, because of taxes. The underground cash economy flourished.

I remember those things. Not only were prices skyrocketing, there were lots of shortages in materials: sheetrock, cement, roofing, etc.
Since the definition of inflation is too much money chasing too few goods and services.......inflation could have partly been due to less production. One poster mentioned wage and price controls of the early '70s........perhaps the inflation of the mid '70s was partly a result of those restrictions being lifted. Stosh

 

[gnome]

Quote from nutmeg:

"... This was the era that ushered the mafia in, full force, because of taxes. The underground cash economy flourished.

All the more reason for a consumption tax.

 

[RiceRocket]

Another cause of inflation is a nation's currency falling in value against its major trading partners.

 

[harkm]

Quote from RiceRocket:

Another cause of inflation is a nation's currency falling in value against its major trading partners.

You know that inflation is brewing right now with the Yen rising.

 

[nutmeg]

I really don't recall any hardships from the price controls. I remember this being an issue on the news but I grew up in a union family and didn't notice any gripes from the relatives or changes in standards of living.

 

[Smart Money]

Quote from jficquette:

Oil Shocks were primary. Deficit spending to fund the military and the wind down of the war were significant.

All so this was pre personal computer days. Our productivity was very low back then and with out the computers to help them improve it was slow going in some industries.

Also unions had big companies by the ball and were always coming out with new contracts. It drove the airlines, car companies, steel companies in the ground.

John

x2. The cost of everything went up because energy costs were such a large part of the final cost of products. I remember prices climbing like mad...every time you went to the grocery store, stuff was a few cents more.

Had a friend that attended my MBA school before I did who got into an argument with a professor about whether the cost of oil was the root cause. When I took the same class, I perpetuated the argument, and his response was, "I'm evaluating that". It was, and has always been debateable, but with our recent oil shock, I'm confident that is what it is. I now believe for an unnatural thing like stagflation to exist, you must have an outside force acting on a marketplace. We started seeing it again a few months ago, IMHO.

SM

 

[TGregg]

Quote from lrm21:

we are right on track for reliving the 70's x 10

Man, if I can grab some super duration CDs at 20 points I'm gonna load the boat.

 

[blackjack007]

i don't think by itself federal spending during the 1960s was the primary cause, because the annual deficits as a percentage of GDP were very low in the 1960s. fairly restrained spending like that must have been combined with other factors like dwindling productivity for there to have been that much inflation.

table 1.3
http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf