Is "YOLO" Causing Inflation?

LemonShapedRock on 23/09/2022 - 18:26

Was having this conversation with a friend of mine and thought it would be worth sharing.

There are lot's of reasons for our higher than trend inflation numbers including; supply chain shortages, excess savings etc

But underwriting all of these factors is a "YOLO" mindset I feel like I've been hearing a lot more since lockdowns have ended.

Talking to a few restaurant owners they've all said that the average bill per person has increased, and they're read on it is people splurging to fill the gap left after prolonged lockdowns still in recent memory.

Inflation is very much a psychology so I'd be interested to hear your thoughts.

Financial

Comments

  • elgrande on 23/09/2022 - 18:28
    +9

    Maybe.

    • Nugs on 23/09/2022 - 19:12
      +8

      yes, where's the poll?
      .

      • jizmo on 23/09/2022 - 22:44
        +2

        Usually in a GoGO bar

    • Kangal on 26/09/2022 - 01:09
      +3

      I'd say "not really".
      Inflation affects different classes of people differently. The low-classes either die or revolt, whilst it's usually the middle-class that gets stretched thin. The upper classes aren't affected by inflation much, it's different. The biggest disparity of wealth in Australia comes down to property. Whilst, the-haves look well off compared to the have-nots.

      Just don't forget most of the proceeds from rent just gets funneled up to mortgage payment. It's The Banker who's benefiting the most from the current system, and they're making the rules.

      All the extra profit The Banker has made with the price doubling in the past 5 years (2017-2022) it came from the back-pockets of your ordinary working Australian who is paying their rent or single-mortgage. A big part of that has been: International Investors, Locals with FOMO and lastly great Marketing/Low Interest Rates. YOLO and FOMO go hand in hand. It's effectively been a tool used by the top 1-10% to get richer at the expense of the middle-class.

      Whilst the inflation factor is that Australia is mainly an importer of goods. We're not a big producer on the international market. We export natural resources, have some tourism, and a decent medical industry. So we're somewhere above average. But we don't have strong military might, nor does our dollars have the same influence as the USD, Euro, Yuan, or Rubles. This means we can't quite cheat and get away with it, unlike the elites with those currencies.

      So to come out ahead of inflation it means overall we have to be more efficient, better utilising of our spending, not mint more dollars, and look for ways to bring value on the international market. We could do so by subsidizing the middle-class, developing new technologies, protecting our intellectual property, and reducing our reliance on diminishing resources (tourism, minerals, land, utilities, etc etc).

      • Thaal Sinestro on 26/09/2022 - 05:55
        +3

        Australia as a country rates at position 68 in terms of national economic complexity, behind Albania and Uraguay. Australia will never reduce it's reliance on raw material extraction; it is so much easier than converting raw material into useful products, something China does so well. There is nothing for people with STEM education to do in Australia, no manufacturing or high tech industries. Australia is all about overpriced housing; become a real estate agent or a tradesman rather than study hard subjects like mathematics and 'fizzix'.

        We need to tax property (say a 1% annual tax on property, land and buildings included). Exempt farmland being utilized. Also a 50% capital gains tax on all housing. The rich, as you mentioned, own lots of property. By taxing property you tax the rich. Use the money to improve Medicare or pay off debt.

        • Chandler on 26/09/2022 - 10:45

          There is nothing for people with STEM education to do in Australia, no manufacturing or high tech industries

          As someone who has worked in manufacturing (in Australia!) for the last 17 years, this offends me…

      • Chandler on 26/09/2022 - 10:44
        +2

        If anything I think the government has failed in two key areas:

        1. Not investing in knowledge. Research (CSIRO, etc) and Education (primary, secondary and tertiary). Just have a look at any old list of Australian inventions. We do still make some nowadays, but they don't seem to be as prolific nor as groundbreaking as they used to be (call me old if you want…).
        2. Not capitalising on our resources. There are still large multinational mining companies paying minimal tax, and even some mine sites that are happily shipping out our resources and not paying a cent in royalties because they're "not making any profit"…
  • Hybroid on 23/09/2022 - 18:30
    +25

    It's not a difficult concept. A lot of people that continued to work from home normally during lockdowns and beyond, now have a lot more disposable income after couple years of WFH with no commute costs, no work clothes, no dry cleaning, no going out drinks/event/parties, no daily working lunches, no holidays booked etc. They're now spending some of that saved up money.

    • jjjaar on 23/09/2022 - 18:33
      +11

      This 100%. And on top of extra money, for those that still do wfh, no commute = more time to spend that money.

    • Herbse on 25/09/2022 - 10:20
      +2

      Sucks for the people who can't wfh like hospitality, nurses, carers etc who aren't getting the benefits of extra disposable income and time. But have to still buy groceries and item at the inflated prices due to the demand from the people who have that extra income.

    • drprox on 25/09/2022 - 10:24

      yep I made this point with mates a couple of days ago. Whilst not everyone got massive pay raises, the actual net disposable for almost all white collar office workers in the last few years has been huge!

  • TEER3X on 23/09/2022 - 18:32
    +4

    Oil… and supply side shocks

  • bemybubble on 23/09/2022 - 18:39
    +3

    What’s causing inflation is the impression that inflation still exists. Unions want a raise. Business in turn use that to justify price increases. And currently people are accepting of that.

    In reality most supply costs are dropping. But not filtering through due to people’s mindset

    • Mechz on 23/09/2022 - 18:52
      +2

      Staffing costs are increasing as there's no one to fill the jobs and you have to pay more to get people interested in the same job.

      • bemybubble on 23/09/2022 - 18:52

        Also true

      • AngoraFish on 24/09/2022 - 01:09
        +22

        No. Staffing costs are largely staying the same, statistically.

        All that's happening is that a few under paid and exploited employees have found better paid work with better conditions doing traffic management on worksites, leading to entitled employers bitching, a lot, on talk back radio about the fact that there are no longer enough international students in the country to backfill shifts cash in hand at below minimum wage.

        Seriously, cry me a river. 5 places to buy coffee in a block of shops is about 4 more than any reasonable society needs.

        • Mechz on 24/09/2022 - 12:40
          -5

          You're only looking at part of the cost. The length of time it takes to find people with appropriate skill sets.

          Also I bet you're the first person to complain when the line for coffee or the wait for a table is more than 10 minutes.

          • Ultimate Gattai on 24/09/2022 - 19:29
            +10

            @Mechz: Wages have been stagnant for almost a decade, it's not the cost of staffing, it doesn't exactly take alot of skill to operate a register, but companies are profiteering by hiring the bare minimum, they also don't care as much if customers complain about the lack of service.

    • Based Bargainer on 25/09/2022 - 11:43
      +1

      Unions want a raise yes, but none of them are getting any that are higher than inflation. There all tiny 2-4% raises.

  • holdenmg on 23/09/2022 - 18:49
    +6

    YOLO has had an impact of the price of Yogo.
    I blame the Cows being in a Union.

    • jjjaar on 23/09/2022 - 19:27
      +6

      Well now I want a Yogo.

      The one with the mini m+ms…

  • Wiadro on 23/09/2022 - 18:50
    +4

    i did yolo on a new iphone 14 pro max and apple watch ultra in the last 2 days

    • WhyAmICommenting on 25/09/2022 - 10:21

      What was the total damage on that pair?

      • Wiadro on 25/09/2022 - 11:01

        like 3700 - work paid half so whatever

    • kaleidoscope on 26/09/2022 - 09:37

      apple watch ultra

      bruh… will you be travelling to those extreme conditions that it's made for is it just for bragging rights and just because 'work paid for it'

      • Wiadro on 26/09/2022 - 21:35

        im going diving this weekend

  • SBOB on 23/09/2022 - 18:51
    +19

    Talking to a few restaurant owners they've all said that the average bill per person has increased,

    Are they ignoring that they've also likely raised their prices also, which would increase the average bill $?

  • outlander on 23/09/2022 - 19:23
    +5

    I'd say that's a pretty good take on it. Except I wouldn't say it's a desire for thrills thats driving it, but fear. When times are uncertain, people tend to splurge more when they buy things, because they can't envision a future where that money might be used better because they future is so uncertain. Right now we've been through covid, inflation is going through the roof, there's war overseas, and its all happening in the shadow of looming climate disasters.

    Normally when people save their money, it's to make bigger life changing purchases like a car or a house. But the car market is still high, and the house market.. forget about it. May as well be saving money for a trip to Jupiter

    • SlavOz on 24/09/2022 - 20:04
      -2

      comparing COVID and war to climate change?

      Ouch.

    • plmko on 23/09/2022 - 20:47
      +2

      Did you forget that 2008 happened? That was a pretty rough time.

      • Switchblade88 on 23/09/2022 - 20:51
        +5

        They seem to forget that people 'born after 1990' were also the ones getting unemployed during that recession. And also didn't have Newstart/JobSeeker that was kept up to date with inflation over the last 30 years.

      • Benoffie on 23/09/2022 - 23:08
        +5

        Yeah 2008 was nothing. Certainly in Australia it was a whole lot of nothing.
        Compared to the recession of the 90's, the 70's oil crisis etc, we've seen nothing of significance in Australia in 30 years.
        People are soft.

        • Quantumcat on 24/09/2022 - 00:48
          +2

          It wasn't nothing - my grandparents lost about 2/3 of their retirement savings

          • Kangal on 26/09/2022 - 00:56

            @Quantumcat: If that was the value in stocks, it would've bounced back in around 4 years and then doubled in value before the pandemic. During the pandemic it doubled again, and it's only starting to cool-off and crash again.

            But yes, 2008 was a whole lot of "nothing" for Australia, except for young people who couldn't find jobs during those uncertain times.

      • SlavOz on 26/09/2022 - 23:17

        Anybody born after 1990 was not directly affected by the 2008 crash. That generation was only 17/18 years old at the time - hardly the age of the typical working class employee with a mortgage.

    • AngoraFish on 24/09/2022 - 09:31
      +14

      Anyone born after 1990 has spent most of their life subsidising their parent's real estate investments, paying through the nose for education, and working in insecure casual employment with stagnating wages while watching their parents bitch the whole time about how lazy kids are these days.

      • BluebirdV on 25/09/2022 - 20:58
        +1

        My parents paid off their home loan in 3 years in the mid 1970s working as a school teacher and a boiler maker. That was on the far north coast of NSW where property prices boomed. I was born in 1978 and struggled all my life with casual work picking fruit.

    • Zorlin on 25/09/2022 - 11:30
      +8

      Yeah, it's been awesome working multiple jobs and scraping by for large portions of my generation when the previous one could get by with a part time minimum wage job and afford a home. Just awesome.

      Your next OzB investment should be a mirror.

      • SlavOz on 26/09/2022 - 23:16
        -1

        Previous generations didn't have Ozbargain, the internet, smartphones, affordable airfares, and a whole bunch of other stuff that most people today could not go without.

        • [Deactivated] on 26/09/2022 - 23:32
          +1

          so you think our generation is better off than previous generations because of…. cheaper flights and ozbargain?

  • SF3 on 23/09/2022 - 19:31
    +9

    Is "YOLO" Causing Inflation?

    CEOs increasing their own salary and bonus.

  • plmko on 23/09/2022 - 20:48
    +3

    Talking to a few restaurant owners they've all said that the average bill per person has increased

    Did it not occur to you that Victoria has had Government entertainment stimulus for basically the entire year?

  • tebbybabes on 23/09/2022 - 22:27
    +2

    Anecdotally, I can share that quite a few ppl I know that would never have considered flying business class before are now actively trying the get it. With the rationale being they weren't able to go on flight for ages and that it's alright to splurge on it now.

    • LemonShapedRock on 24/09/2022 - 14:28
      +1

      I've also heard many of these stories

    • daft009 on 25/09/2022 - 23:14

      Yeah I see with my own eyes all business and first cabins are full on my recent trips to Europe and Singapore.

      I booked these a year ago on points when we were all still in lockdown

  • AdosHouse on 23/09/2022 - 22:54
    +6

    Hard to say, I'll try living twice and seeing if it's cheaper.

    • idonotknowwhy on 26/09/2022 - 12:45

      Could someone tl;dr that other perspective?

      • DashCam AKA Rolts on 26/09/2022 - 14:07

        TL;DR
        Corporate greed, pushing profits to record % rates is being noted as having a big impact on inflationary trends.

  • jimbler on 24/09/2022 - 00:11
    +9

    Young people aren't living within their means! /Every old person on Whirlpool/Ozbargain

  • EightImmortals on 24/09/2022 - 08:30
    +2

    As long it's my fault and not that governments have been printing up trillions of dollars over the last couple of years…

  • 2esc on 24/09/2022 - 10:38
    +2

    Statistically there hasnt been much movement on wages. Current inflation is a combination of world events, media hype, genuine increase in business costs, a lot of businesses taking advantage of the situation and increasing prices and blaming Inflation etc and this is a circle thats starting to feed itself.

    • Vanceer on 25/09/2022 - 15:45

      This pretty much covers all the ground.

  • Ultimate Gattai on 24/09/2022 - 19:23
    +3

    I would say that's definitely a factor, I've seen some people spend big on things they normally wouldn't as "why not enjoy life rather then work yourself to death" since we've all left lockdown. I know one couple who just splurged on a camper van (the rational being you don't know if a hotel user has covid and the cleaners haven't cleaned properly) and buying Chinese takeout once a week when they wouldn't do that before. I've also heard people rationalize spending money since there's no point holding onto alot of savings due to inflation eroding the value of their money, it's not like people are earning more (although some are through job changes), it's a case of spending their money before it loses too much value.

    working in a supermarket, I've also noticed that people haven't really decreased spending even though the shopping bill is getting bigger, most seem to be buying roughly the same amount of product.

    • Based Bargainer on 25/09/2022 - 11:45

      Have you ever thought about joining the union for retail workers RAFFWU?

      • Ultimate Gattai on 26/09/2022 - 01:12
        +1

        I've heard of it, I know the SDA hasn't done a very good job over the past 5 plus years, would I be able to claim RAFFWU fees on my tax like I do with the SDA?

  • SlavOz on 24/09/2022 - 21:38
    -2

    I love how everyone looks for alternative reasons for the inflation to avoid the inconvenient truth.

    It's the irrational human mind and propensity to spend. Oh really? And nothing at all to do with shutting down the entire planet for 2 years so nothing could be manufactured, shipped, researched, collected, improved, or organised?

    Keep telling yourself the easier lie. Y'all wanted to protect the community from the flu, this was warned and you persisted anyway. Now you're in the shit bucket and dragging the lower class down with you. But don't worry, Bill Gates and Pfizer got their pay bumps thanks to your loyal bidding.

    Sleep well.

    • HelpMeiCantSee on 25/09/2022 - 10:10
      +4

      I don’t want to defend you, but you do raise a valid theme. Whilst my beliefs on covid, bill gates, Pfizer et al are different, I have an overwhelming concern that these supply shortages and sky high prices and general difficulties are indeed orchestrated.

    • drprox on 25/09/2022 - 10:27
      +1

      It's unfortunate your provocative explanation gains neg votes but yes. We shut the world down because of covid and now we are playing catchup which is causing inflation.

    • KozieSeller on 25/09/2022 - 10:58
      +1

      Looking back at all the get a booster advertising, what a rort for trillion dollar pharmacies, usa (profanity) with the world again? just like the meddle east war

    • randomvis on 25/09/2022 - 12:59

      Don't blame those downvoting you— they are vaccinated and don't know any better.

    • Vanceer on 25/09/2022 - 15:50
      +3

      And nothing at all to do with shutting down the entire planet for 2 years so nothing could be manufactured, shipped, researched, collected, improved, or organised?

      Not every country shut down, and those that didn't fared worse based on actual and observed outcomes, i.e, facts. You wanna know the non-conspiratorial answer? They got sick and spread a contagious novel virus to their workmates, making them sick too. And they spread it to their families who worked in other places. Almost sounds like a global pandemic.

      I love how you pick your own answer and then backwards rationalise based on your opinion.

      Gr8 b8, I r8 1 squatting slav/8

      • SlavOz on 25/09/2022 - 17:34
        -5

        lol this trope again - weren't the most affected places massive vaccine/lockdown havens? Victoria comes to mind given that they had the world's longest lockdowns yet fared much worse than the rest of the country.

        Work colleagues spread viruses among each other all the time. In 2018, we used to say there's a bug going around, nothing to skip work for. Suddenly the whole world turns to germaphobes.

        Trump took blame for being too careless with the virus yet Biden took over and implemented countless mandates and policies yet more people actually died under Biden's leadership.

        These are the facts that your mainstream media thinks you're not ready to hear.

        Morality aside, lockdown advocates are eating their cake now that the world (particularly the working class) are struggling with the cost of living and have mountains of national debt to pass on to their children. Hope they're happy.

        • [Deactivated] on 26/09/2022 - 16:02

          why is inflation so high in - let's say - the US, where they barely had any lockdowns in comparison to anywhere in Australia?

          by your logic, the cost of living/inflation should only be going heavily up in places that had heavy lockdowns. how is brazil doing? tell us how bolsonaro's leadership (by essentially ignoring that covid is a thing) has helped brazil's economy flourish

          • SlavOz on 26/09/2022 - 16:27
            -2

            @[Deactivated]:

            the US, where they barely had any lockdowns

            Probably the same reason they had a baby formula shortage, petroleum companies hit with tarrifs, and countless vax mandates forcing people to stop working.

            Answer: Joe Biden and the empathetic, tolerant, and progressive left.

            • [Deactivated] on 26/09/2022 - 16:28
              +1

              @SlavOz: is that jumble of words meant to mean something?

              answer my question about brazil then

              • SlavOz on 26/09/2022 - 20:17
                -1

                @[Deactivated]: What's Brazil got to do with anything? It's a third world country that would've bene just as worse economically with any other leader.

                You keep ignoring the fact that so many places which proudly advertised themselves as lockdown resorts were often the worst hit with cases and deaths. The only knee-jerk excuses people use to do defend this is "yes but it would've been way worse if we didn't lock down!"

                • [Deactivated] on 26/09/2022 - 20:34
                  +1

                  @SlavOz:

                  It's a third world country that would've bene just as worse economically with any other leader

                  false, their economic struggles are a result of their current leadership. how about you educate yourself and read about Lula, who brought Brazil to being the 8th largest economy in the world when he was in office.

                  You keep ignoring the fact that so many places which proudly advertised themselves as lockdown resorts were often the worst hit with cases and deaths

                  another empty, false statement. give us an example of a country that had no lockdowns and did better than Australia.

  • pnalarobe on 25/09/2022 - 10:15
    +1

    ozbargainers causing inflation by brodening bargains

  • Herbse on 25/09/2022 - 10:17
    +1

    Along with many other factors. Yes, people buying shit they don't need is one of the causes of inflation.

    When supply is down and demand is up, companies will find a way to continue selling what they sell, and if people are willing to pay, they will increase the cost.

    If people stopped buying things, the companies would take the hit and discount things and use their savings reserves or other measures to survive. But that's not happening.
    This is the reason new cars, houses, furniture, game consoles, electronics etc are all going up in price. People just can't help buying shit.

    Thr RBA is trying to reduce inflation by increasing the interest rate so that people become more money conscious, but it's not enough to work at the moment. So they'll keep doing it in small increments until people decide the cost of paying off that 1.8M house in Preston is too much or they really shouldn't buy that 65" oled right now.

  • OzzyOzbourne on 25/09/2022 - 10:23
    +1

    I always thought FOMO is huge here, not just relating to buying things (property….toilet paper!), but in every day life too (especially the way people drive). So yes, I think YOLO also falls into the same category and does drive inflation.

  • randomvis on 25/09/2022 - 12:45
    +2

    "Blaming inflation on selfish people going "YOLO"

    Is this the reserve bank of Australia— If so, stop printing money.

  • Bid Sniper on 25/09/2022 - 13:00
    +4

    Honestly think its profiteering but those instructions that can exploit it.

    Record profits in all sectors, yet demand is supply constrained, yeah right

    • leelemon on 25/09/2022 - 15:00
      +2

      it totally is this - but the people with peasant brain defend these wealthy people by blaming their fellow poor people on spending too much…

  • ego22 on 25/09/2022 - 14:17

    Ozbargain is single handedly causing Australias inflation.

  • drfuzzy on 25/09/2022 - 15:04
    +3

    I have been investing every penny and depriving myself of wants for many years.
    Post-pandemic I am under alot of mortgage and inflation pressure but I now have a "don't care" attitude and want to live life and travel. I've increased my spending (and decreased investing).
    I wonder if there are others who will keep buying/travelling/spending despite larger mortgage payments.

    • LemonShapedRock on 25/09/2022 - 17:02
      +1

      Totally understandable, I've heard loads of people in a similar situation. Especially here in Victoria, it was crazy to think having people locked down for so long wouldn't have any second or third order impacts on spending psychology.

      What's making it harder is that there isn't the workforce available here to expand the supply of these "splurge" industries. My neighbours daughters pulled out $10,000 or $20,000 from their Super and have been using that buffer to delay their entrance back into the job market. They're in their late teens and work in a hospitality.

      • drfuzzy on 25/09/2022 - 21:17

        Yes. I think the super withdrawals and government welfare are partly behind the problem.
        I'm not saying that it wasn't necessary - but the hangover effect is quite bad.
        In hindsight the economy would be in better shape if these policies were more restrictive and better targeted.

  • xtremehell on 25/09/2022 - 15:12

    According to this article (below), yes. It offers few solutions though, which is worrying.

    I mean, if the mentality is that everyone else is spending and driving inflation and making your money worth less, then you are losing out by been the among the first to HODL, no? Kind of a collective action problem.

    https://www.abc.net.au/news/2022-09-24/whats-inflationary-ps…

  • shap08 on 25/09/2022 - 16:13
    +3

    I know tradies are now adding 10% onto quotes for an "insurance" against inflation. It's a cycle now.

  • Willy Beamish on 25/09/2022 - 16:55
    +3

    …..

    Couldn't be because they literally gave out money to people for doing nothing over the last 2 years, nah couldn't be that at all.

  • LemonShapedRock on 25/09/2022 - 17:04
    +1

    Thanks for the insight everyone, it's really powerful hearing your different perspectives.

    I have a gut feeling that central banks will redefine the inflation target before we get inflation "back under control" within the 2% - 3% target band.

    What do we think of this?

    • drfuzzy on 25/09/2022 - 22:34

      The global 2% target was never scientific.
      NZ announced a 1% target and a 1% buffer for error.
      Sometime later the rest of the world adopted the "me too" approach and the global target became 2%.

  • stealthpaw on 25/09/2022 - 17:25
    +2

    No. Late stage capitalism is.

  • Shame on 25/09/2022 - 21:13
    +2

    "Inflation turned the moral universe upside down, so that the traditional values of thrift, saving, and delayed gratification suddenly became meaningless, even counterproductive."

    • Thaal Sinestro on 26/09/2022 - 05:58
      +1

      Saving is pointless since the interest rate on savings is less than half what inflation is. Spend and borrow is the paradigm of the 21st century.

    • idonotknowwhy on 26/09/2022 - 12:44

      meaningless

      Not really? If you manage to save $1000 per month for a year, you end up with $12,000 at the end of the year. Even if that's only worth today's equivalent of $10,000, that $10,000 is better than $0 or a credit card debt.

      • Shame on 26/09/2022 - 13:04

        It's a quote about Weimar Germany

  • Eeples on 26/09/2022 - 08:18

    I’m wondering if half rate minimum drawdowns on super income streams will be extended past June 30, 2023 in an attempt to contain inflation.

    The measure must be currently keeping billions of dollars out of the spending economy.

    Also, with an ageing population, and the current aged pension setup, many may well spend a million dollars each between the ages of 60 and 67 in order to qualify for full or part pension.

    YOLO for older Australians is harder to criticise imo.

  • kaleidoscope on 26/09/2022 - 09:41

    it's a little bit of everything. Inflation is nothing new and it just the way it is. This time around what's changed are the covid and people's wasteful mindset (essentially "YOLO" and "just because I can" mindset and the consumerism fuelled through social media)

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