Prices of commodities are increasing rapidly, what about the salaries??

Question

Prices of commodities are increasing rapidly, what about the salaries??

Answer 1

Salaries SHOULD increase, but since companies are caught by the high price of oil, this is what might happen:

1. The company faces increase in production costs

2. The company counters it by implementing budget cuts

3. In turn, cuts your salary...

4. Or owrse, makes a massive cut-down on staffs!

Be prepared...stock up on money n food....and get yourself a small house in the country to go to in cae you are retrenched!

Answer 2

Stagflation..   Rising prices (ie: Inflation) with a stagnate economy.

There is a simple solution. Cut the money supply. Cash will become king, the US Dollar will rise in value. Imported Commodities like Oil will cost less..  There is a wonderful solution.

The downside?  A contracting economy, high unemployment, and angry voters...  Thus only a strong politician willing to put their future on the line can accomplish this goal.

Last time this happened it was 1982-1983 under Reagan and Volker.