RE:RE:RE:RE:Oil Not Seeing Normal Recession-Related Declines: SenBigbear7405 wrote: You do undestand that another 10% increase means average cheques people get are 20% low. A 20% paycut across the board would equal a depression. We are already seeing people adjust there spending to neccessites.
Best buy spending slumps as they state:
"As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened even further," Best Buy Chief Executive Officer Corie Barry said."
Walmart is stating the same thing. stock tumbled after the retailer slashed its fiscal second-quarter and full-year profit guidance. Blame inflation, which is helping push up overall sales, but crimping shoppers’ ability to spend on anything but essentials.
<a data-cke-saved-href="https://www.barrons.com/market-data/stocks/wmt" href="https://www.barrons.com/market-data/stocks/wmt" "="" target="_blank" style="background: transparent; font-family: Aileron, Arial, sans-serif, Arial, sans-serif; font-size: 16px; margin: 0px; padding: 0px; vertical-align: baseline; text-decoration-line: none; border-bottom: 1px solid var(--blue);">After the close of regular trading Monday, Walmart (ticker: WMT) said it now expects adjusted earnings per share to fall between 8% and 9% for the second quarter and between 11% and 13% for the full year. Excluding divestitures, EPS will decline between 10% and 12% for the full year. Oldnagger wrote: If inflation goes up another 10 % and oil goes up with it by 10 % , then free cash flow will probably go up by about 20 %. Even more if oil companies stop deleveraging and increase share buy backs !!
I was simply trying to illustrate the point that cash flow grows faster than pricing. I do not believe that the high recent inflation is caused solely or even mostly by oil priicing. Rather it is most likely a symptom of excessive money supply, coupled with sudden shifts in demand and of course all the post covid entanglements. I am not an economist, and I am too young to remember the Post WW 2 period (which is probably more analagous to our present situation ) I do know one thing however and I have stated that before. Owning necessary assets that would cost large sums to replace, is a very safe haven when the forecast may be bleak !!