Topic: Corporations use inflation as an excuse to raise prices and fatten profits (Read 394 times)

Well.. corporations are always profit oriented. They have the best lawyers and CAs, and if there is a loophole available to avoid taxes, then they will use that. Actually you can't blame the corporations for that. They are making use of the existing law and not really doing anything that is illegal. If the governments have a problem with that, then they should remove these loopholes from the system. Anyway, everyone benefits in the end. Higher price means a lower P/E ratio and higher stock price in the long run. And those who invest in the stock market benefits as a result.

When the inflation occur in the country,their will be huge money hidden by the whales.They will made huge difference in the market price of the coin.After the price reduced reached high value,they will sell the coin.So the profit is assured for them.Like this whale play the move ,other traders will lose their money.USD was highly used coin for the trade.

I agree, corporations are never going to lose, if governments raise the taxes corporations have to pay,they will fire some of their employees, raise the prices of their products and still use their lawyers to somehow avoid to pay those taxes, so it is not surprising they are doing the same with high inflation, as such this should not be a surprise to anyone as this is a trend that happens all over the world, which in return generates more inflation creating a vicious circle in the process.

Velocity of money directly inverted at the same rate of money printing.  This is the ONLY reason USD is still afloat.  Once velocity returns to the market and the supply chain is back to normal, the price of goods and services will spike.  Assets are in a bubble because people are trying to dump their fiat before this happens.

https://i.imgur.com/0rANDt7.png

Not at all.
The lockdown are the ones causing a lot of the inflation, offer, and demand, if you don't have enough poeple working to supply the needs for other poeple you have inflation even without money printing, there is simply no way to avoid it.
So if the wave passes and everyone returns to work a lot of sectors will actually start to see decreasing inflation, some prices might actually start going back as oversupply might kick in. Also in 3 months winter will be gone, in Europe's case, this will trigger a slowdown in demand for gas and fuel, and electricity, coming with higher production from the now zero in the useless solar panels Germany has spent billions on.


Nothing to do with common good inflation and price discovery has not that much to do with the velocity of money. The main drives between price discovery are the number of sellers and buyers, we already have these figured out since we have inflation.
If you're mentioning assets then maybe you're talking about valuation over cash flow, but this is of no relevance to inflation in necessity goods.

This is called deflection.  Inflation is hiding behind lockdowns right now.  When (if) the world goes back to normal, inflation will spike and it will begin to show itself in everyday life.  Right now, money is not changing hands enough for real price discovery.  Assets are in a bubble and commodities are all over the place. Corporations are greedy and of course they will raise prices to match inflation, but they have no idea what their true prices even are yet.

This is the "norm"! This is how a person is made. "An ordinary man" - never admits his guilt in what is happening, he will always look for someone who is to blame for his problems! To admit to yourself that you are doing wrong is stupid - this is not for the person making up the crowd. Such entities must necessarily have someone (and not necessarily one) who will be to blame for their problems. Someone is necessarily to blame for the fact that there is no high-paying job, and when you say - what you did not study, did not study the professions in demand, the answer is identical - someone prevented him from getting an education. And so in everything. But it's easier to live this way - your soul is calm that it is not you who are stupid, lazy, afraid of difficulties, afraid not to master simple things, and it is someone who is to blame ...

Hihi, yeah let the blame game begin.
First the pagans than the Christians, the nobility then the kulaks, now it's the century where everything should be blamed on corporations, whatever that category would include.

The most ironic thing in this whole fiasco is that for once the actual inflation is only to be blamed on the or governments themselves, they are the ones who made all the moves with a lot of them pretty bad during the virus waves, and they're the ones with the shifting energy policies that triggered rises in energy prices and the main cause for price increases. But yeah, they need a scapegoat for being morons and of course, bussinesinsider who has turned into a propaganda mouthpiece that is against every free business environment lately is seeking any excuse possible for Biden's government.

Easy solution, let's blame the corporations for failed energy policies and money printing, then use the voting mob to slap them with more taxes, crush them completely, and after a few years be forced to either bail them out or use the entire economy crumble in pieces. History repeats itself over and over, complete with the fact that the morons in charge never learn anything from the previous failure.

I believe many posters in the topic also have not truly understood that increasing Inflation + Price Controls = longer, deeper and more volatile Economic Depressions. We should research what happened to the Soviet Union.

Rather the real issue is government. Government is the first culprit of the issue not cooperation because they should take order from the government. Therefore if there is proper regulation and monitoring that is devoid of corruption and bribes from defaulters of the regulation , certain issues won't arise . Government has a role to play in getting rates down like taxes and make raw materials cheaper to access and will help cooperations to follow from the regulation. For example, a corruption shouldn't have the right to fix prices of goods they produce above the regulated price, if this happens it will keep cost of living up and inflation will set in. This is just a circle that I believe government has a major role to play and not just printing of money leading to inflation.

Governments, or more precisely the politicians that decide on what the government should do, gets paid bribes and that's how oligarchs stay wealthy. They get laws passed for themselves. Just the biggest example is the oil industry, they give money to politicians and then pollute and kill the planet as they wish while the whole humanity hurts because of it whereas they are racking up more profits.

Same with everything else, people end up doing whatever they want to do and end up bribing the politicians for doing it and politicians are not really doing anything about it and that's why I feel like we are not going to see something decent made by the government to protect the people like us who live pay check to pay check.

Since the demand for goods is expected to increase, a company knows that their goods are in great demand so increasing margins makes us inevitably have to pay for them. Although this clearly makes the goods will be more and more hunted. You're right we paid dearly and we love it. If there are other alternatives, it certainly does not mean that the price of an item will have the same quality. Therefore, companies know that the holdings generated by them have a market of their own. Finding other alternatives that fit the criteria is not easy. So we buy their stuff and they will get more demand.

At the same time, do not forget - we ourselves will become the final assistant and acceptance of this rise in prices. If we continue to buy an unjustifiably expensive product - who is to blame? Corporations? No, we ourselves, paying our money for an unjustifiably risen product, say "yes, take our money, we like it, raise it more, we'll get it out of our wallets." Why not stop bulk buying such products? There are alternatives anytime, anywhere

Its domino effect towards that happening and only greedy businessmen gain from this and the one who suffer are those people who live on pay their pay checks so maybe its good for government to take action on this and always monitor on what oligarch does since if they let the rich men run the economy and the government will be their puppet then for sure the economy sinks and poverty will be rampant in the country.

There is something our there called pricing power, and it is one of the forces that Porter describes as the ones that configure the market and the competitive position of the companies. Those companies that enjoy some type of monopoly or leadership in the market that allow price-setting usually have the price already set to the point in which they obtain either maximum profit or maximum market (to deter competence). Those companies that compete in open markets and have saturated markets with little differentiation cannot set the price.

When inflation comes to e.g. the food market which is quite open and has little barriers to entry, it means that traders cannot be greedy as they would simply not sell. This is simply the market in action.

My thought is so simple, why does the price of goods rise when inflation rises? the answer is the raw materials for production have also increased due to the value of money which is no longer valuable, and the funny thing is that the government when inflation increased during this pandemic did not even increase the minimum wage for workers. As a result, the wages they receive will not be able to meet the basic needs of their families. The current economic system is very cruel for those of us who are poor.

Companies making profit and hiding behind inflation is one of the ugly sides of capitalism. Regarding the question of inflation and corporations, I think the inflation is making money decrease somewhat in value, but then the corporations make it even worse by raising the prices for consumers disproportionately.
I wanted to learn if the same happened in my country, but couldn't because the data on 2021 isn't available yet. From the things I googled, it's common for top supermarket chains in my country to actually report losses, not profits (I'm very unsure about the honesty of such reports), and the one that did report profits, had them increased by 20% in 2020 compared to 2019, but that's not exactly the data I was looking for. Also, a funny thing: in my country, apparently such investigations aren't being made at all, as, when I googled our inflation rate, the top result has shown me a table with numbers, and a message that 'the inflation index' is the same thing as 'the index of consumer prices'. So, basically, it's assumed that the prices are rising exactly in accordance with the inflation rate.

That's how the economy works for you.

Everyone tries to pass on the production costs, and then some. After all no one is really interested in the greater good.

This is also the reason why inflation was always going to be inevitable and no way in hell was it going to be transitory. It is something that is programmed into how the fiat system is set up from the get-go.

I just don't know what to think about this article.  It's baffling to me.  Obviously Business Insider's aim was to write an inflammatory article, which you know just by looking at the title, but the relationship between corporate profits and inflation seems like it should be a typical thing that happens during inflationary periods. 

In this case, demand and/or the money supply increases so people are buying more things--and that would drive up the price.  At the same time (and as noted by the Colgate-Palmolive CEO) raw materials are getting more expensive, and there's also the issue of global currency fluctuations.  Why wouldn't corporations hike up the prices of the finished goods?  Why does this warrant an article attempting to stir up outrage?

In addition, I'd really love to see the annual report of Colgate-Palmolive from 60 years ago.  I'm betting their quarterly/annual profits were much less in absolute dollar terms than they are in 2021.  If that's true, it seems kind of like how wages have risen over the years and have more or less adjusted for inflation.  My head isn't quite wrapped around the complexities here, but my gut is telling me that the topic of this article is "The rich get richer!!" and Business Insider ought to know that this is all business as usual.

The US corporate structure is set up to squeeze as much out of customers as possible in order to hand it over to shareholders. Management who do not pursue this line of reasoning are quickly replaced in most companies. It is inevitable that costs will rise and have to be factored into the costs of products - for example if you are a bottled drinks manufacturer and the price of plastic goes up, you have two options: 1) eat the cost which results in lower profits 2) pass the cost on to consumers. They might take option 1 for a little while but option 2 becomes inevitable over time. It actually makes sense, if you think inflation keeps rising, to tack a little extra on the top so you don't have to raise prices further so soon in future.