And so...the "recession" begins

[againstthegrain]

^^^I would think most ingredients of Kellog's RB would be of American origin and made in America so no tariff worries there. But some producers and resellers may spread the pain around to products not subject to tariffs or not subject to much of a tariff.

 

[againstthegrain]

The winners in this are the treasuries of governments, and not just the US Treasury.

Overall it's going to be a net negative for all governments and most people around the world. America has essentially sanctioned itself like much of the the world has sanctioned RU, IR, NK, Syria, and Cuba.

 

[dilettante]

Tariffs can impede opportunistic mercantilism, but that's a far thing from recession.

 

[seadoug]

^^^I would think most ingredients of Kellog's RB would be of American origin and made in America so no tariff worries there. But some producers and resellers may spread the pain around to products not subject to tariffs or not subject to much of a tariff.

That is precisely what the CEO of Walmart mentioned. He indicated they might raise the price of some non-tariffed items to keep the costs down on items with tariffs. Sort of equalizing the increases across the board.

 

[smiley]

you skating on thin ice here or is it still considered non-political?

 

[smiley]

anyway as a thin ice skater - don't ya just love it when we still see all these big important people meeting in different important places to try to solve a lot of important problems - and we all sit watching on our tv screens and wonder how our lives are gonna improve or not? just sayin like?

 

[smiley]

We will collect off tariffs from Heard and McDonald's Islands to make it all worthwhile. That said,I won't touch this thread with a ten foot pole.

show us ya ten foot pole and I'll suggest the best position for standing in ?

 

[smiley]

I love the feeling of beach walking close to the sea and just paddling ; no swimming ; no getting in too deep and needing lifeguards? just wandering along with a song in mind - and we all like different tunes heh?

 

[mathjak107]

while we look at the price increases as inflationary, they really aren’t inflationary.

Adding tariffs cannot cause inflation anymore than removing tariffs can cause deflation.

There are two schools of thought regarding inflation:

• “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” -- Milton Friedman, 1976 Nobel Prize in Economics winner. That is, expanding the money supply too quickly causes inflation.
• “Persistent high inflation is always and everywhere a fiscal phenomenon, in which the central bank is a monetary accomplice." -- Thomas Sargent, 2011 Nobel Prize in Economics winner. That is, too much persistent federal government spending causes persistent inflation.

According to the Fiscal Theory of the Price Level (FTPL), inflation is primarily caused by fiscal policy rather than monetary policy. According to this theory:

• Inflation occurs when government debt is larger than what people think the government will repay through future budget surpluses.
• The real (that is, inflation-adjusted) value of government debt, which declines with inflation, is equal to the present value of expected future fiscal surpluses.

Notice that neither tariffs nor relatively high US labor costs cause inflation. They cannot.

But what tariffs can do is change the relative price of imported goods compared to domestic goods. For example, we can expect tariffs to cause the price of Vizio TVs made in China but sold in the USA to go up relative to the price of Broadway tickets or a season's lift pass to Deer Valley. That isn't inflation; that is a change in relative prices. We consumers react to changes in relative prices of goods - in aggregate, we will buy fewer Chinese made TVs and instead spend the money on, for example, Broadway tickets and a pass to Disney World.

but an increase in the competition can allow american manufacturers to raise prices to just under the competition.
plus the tariffs can add extra costs to things like insurance.

if the value of cars go up and parts are more costly insurance will go up .

so every dollar we have to spend more for something is a dollar less we will have for spending else where. so by definition that isn’t inflation since inflation is a rise in all general prices and that isn’t likely to happen since we can only buy this or that and not this and that