Making more with less (Food, real estate, property taxes, gasoline)

Corporate profits are on the rise yet the volume of goods delivered to the marketplace are declining. Real estate activity has declined but banks are making huge profits on rising interest rates. Especially on mortgage renewals. The irony of inflation is that it inflates the pockets of the few while evacuating the pockets of the many. Grocers are charging more claiming less available products yet experiencing better bottom lines. As you can see in the simple example below, as prices rise and retailers maintain their gross profit percentages, gross profit will increase. While some expenses are variable and increase as well, the overall effect is to increase bottom line.

Wholesale Price	5.00	6.00
Retail Price	7.50	9.00
Gross Profit	2.50	3.00
Gross Profit %	0.33	0.33

One industry that has teetered is the automotive industry. While automobile sales have fallen dramatically most dealers have never done so well. In a buoyant market, dealers always carry excess inventory and combined with manufacturers' incentives overall selling prices and borrowing costs are lower. With restricted inventory levels dealers are selling for full MSRP and charging for all the goodies in order for you to buy the vehicle. Dealers are making more selling half their previous volumes. Fewer salespeople are required in this now order-based selling system. With rising interest rates and higher selling prices, bank auto loan revenue is skyrocketing. We've yet to see what the default rate will be.

Covid protocols have created the excuse for the many businesses to charge more. Everyone has devised a reason to charge 5-20% more for sanitizing the office space, adding protective barriers, using rubber gloves and masks etc. What a crock of shit. The cash job industry has also seen a rise in rates, I call it the "H" industry (housekeepers, hookers, handymen, host/hostesses, holistic health and hourly help). Fewer people with higher prices.

You would think that property taxes would go down if property values have gone down. After all, Ontario bases property taxes on market value assessment. What about gasoline? Western Canada Select (dirty oil) sells for much less than Brent Crude. Canadian oil is about 20-25% cheaper than Brent Crude but we are paying more for gasoline. Don't you feel like you've had a banana stuck up your ass.

Thank you,

Joseph Pede