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Coming inflation…

At what I believe to be the best website on the Internet (www.seekingalpha.com) I read an article. The article said that Walmart is predicting serious inflation soon.

Here’s what I think about that. First, Walmart is a big player, and big players don’t like being wrong and they will do whatever it takes to be right. So it should be an interesting ride. Second, what exactly do I need from Walmart? All Walmart has been able to do for me is make it possible for me to buy more useless crap. I haven’t bought anything that I actually needed from Walmart in years. I am trying to think of the last thing I bought from Walmart… I think it was some paint that makes a chalk board, it didn’t really work. The stuff was cheap, maybe $4 for a can. So let’s imagine the same can now costs $400 dollars a can. What would I do? I’ll tell you what I would do, I wouldn’t buy the can. Would anyone in America buy a can of the paint? Probably not. The crap didn’t work anyways.

My point is that Walmart raising their prices by 10000% would probably be the end of Walmart.

So I guess that’s not really the point, I guess the point is that things like energy and food will probably go in price too. We need energy and food to survive. It’s one thing if a can of paint goes from $4 to $400 dollars that’s one thing, but if a gallon of gas costs $400 then that’s a different story.

So let’s imagine a gallon of gas costs $400, then what. Well, I probably won’t buy much gas. You know what, no one would buy any gas. It’s been a long time since I took an economics class, but if I remember correctly when demand goes to 0 the price goes to 0.

So let’s all admit that the price of gas won’t go to $400.

It’s really simple. We in the USA buy way too much worthless stuff. The more prices go up, the less stuff people buy, the less stuff people buy the more prices go down.

The only prices can really go up is if a group of people have bunch of extra money and if they buy the stuff you want to buy. So if some guy gets a billion dollars and he decides to start buying 100,000 gallons a day then it might impact me, but if they go and start buying things like million dollar paintings then it means nothing to me.

So I don’t think prices are going to skyrocket, but I do think prices will go up and demand will go down.

See there’s two sides of the equation. The price goes up, demand goes down. If the price of that can of paint goes from $4 to $5 the demand for the paint can will probably drop in half if the demand for the paint drops in half, then the demand for the stuff in the paint will drop in half.

I keep going round an round on this, but the price of things can’t just go up and if they do, then people will just quit buying stuff.

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