Reitmans Ord Shs V.RET.A

Excess Demand

[TheCount11]

Thankfully the BoC narrative has switched from Supply to Demand

"Overall, excess demand in the economy looks to be more persistent than anticipated."

Blaming inflation only on supply was laughable to anyone with a functioning noodle.  Its supply AND demand.  Demand curves are downward sloping.  Revenues are price times volume.

Example:  RW&Co has monopolistic characteristics in so far as RET can set prices.  No one else can sell that brand.  RW&Co also has a lot of competition from Zara, H&M, etc. so consumers can easily switch between retailers.  When revenues, gross and operating margins increased in Q2 and Q3 that was a function of demand more than an increase in supply costs.  If demand did not increase then the company would lower prices through promotions

[pennylane101]

"Blaming inflation only on supply was laughable to anyone with a functioning noodle.  Its supply AND demand.  Demand curves are downward sloping.  Revenues are price times volume." There were and are supply chain constraints due to worldwide government imposed lock downs of the economy which lasted close to two years..  Too many dollars chasing too few goods will

[Torontojay]

Yes, inflation was caused by money chasing too few goods. Inflation is related to M2 money supply which increased by approximately 40% from the onset of Covid. The economy did not produce 40% more goods so this excess has to be explained by inflation.   In general,  M2*V = P*Y  M2= money supply  V = velocity of money  P= price level (gdp deflator)  Y

[filoux004]

The problem is more and more talking heads ie Elrian are eluding that central banks may have to change their targeted inflation range say from 2% to 3-4%, you know the old change the goal posts trick. Bottom line disposable income is under severe stress. That being said long Ret.a because of very compelling metrics.  Glta

[TheCount11]

Agreed. 

[TheCount11]

"Too many dollars chasing too few goods will result in a disequilibrium of supply and demand and consequently prices will go up." Exactly. I found it funny when central banks pointed their fingers at supply and told us inflation was transitory while money and credit expanded.