Fender Price increase overnight

[LetItGrowTone]

I didn't say 2013.
Oh, never mind.

 

[Metropolis_488]

I'm not an economist and this is very recent history, so I have no particular expertise. What the chart shows, starting in 2014, is a jump in the Dollar Index, which is the US $'s value relative to a basket of other world currencies. That seems to me to show the opposite of what was being claimed, that your money lost value after 12/2013. It actually gained.

From what I understand a high dollar means Americans have an advantage buying from abroad (or traveling, for that matter) because the money we spend goes further in other countries' currencies. It also means the global community has a high confidence in the US and want to invest their money in dollars (supply and demand, the more people want dollars, the higher the dollar's value). However, it can also create problems for the US economy because it affects balance of trade - people abroad want to buy less US-made goods because they're more expensive.

From what I see, there's not a whole lot significant here. The DXY is set to an index where 100 = the dollar's value against the basket in 1973, when it was first calculated. Right now it's at about 96, just a little under that. The climb in 2014 was getting out of a slump the dollar had been in since the early 2000s (Iraq War, maybe) when it was down in the 80s. During the 1980s it was way up, peaking around 160 or something. Instead of setting the chart to show ten years, select "all." Then 2014 doesn't look nearly as significant. To me, this is a nothingburger.

Current high inflation is concerning, but the real question is if it's a blip due to pandemic recovery or a new normal. I strongly suspect it's a blip, albeit disrupting in the short term.

https://www.investopedia.com/terms/u/usdx.asp

I do have an Economics degree and work in Global Markets for one of the largest financial service providers on the planet - definitely the largest Financial Data provider on the planet.

The USDX is not really an indicator of inflation. It is more for arbitrage and weighs the US dollar against 6 other currencies, each weighted differently in the calculation. Missing from that calculation are the currencies of the #2 and #6 largest economies in the world - China and India. In many ways, CPI misses the mark on true inflation - it does not account for price increases in durable consumer goods, insurance premiums, college tuition, used-car prices etc. It also is an aggregation of the whole country, not a regional number - and the US has many economic stratifications correlating to regions and sub-regions.

Quantitative Easing from 2009 through 2014 was a hyper injection of liquidity into the monetary system should have caused an immediate spike in inflation, but banks held onto the money as reserves to bolster their balance sheets for years - that money slowly trickled into the system and is a large part of why we are seeing inflation now. Of course, there are other significant factors. The pandemic and the responding legislation compounded the effects of QE and the absurdly long run of low interest rates. While we all understand the intention and there were absolutely people that needed the expansion of unemployment benefits, it was done in a way that is analogous to using a chainsaw when a scalpel is required. Compound that with the $1.9 trillion that was dumped into the system earlier in 2021 and we are in inflation soup (never mind the supply chain issues that are persisting far longer than anyone could have imagined).

 

[fishdude101101]

Thanks for the clarification on that. I was just trying to make sense of @LetItGrowTone 's statement that something happened in December 2013 such that "your money is worth less" since then. The DXY chart was offered by @Bassinthemudd as an explanation so I was trying to figure from that what he was getting at. I can see an accelerating increase in the money supply (Federal Reserve Board - Currency in Circulation: Volume) especially in 2020, so I get what you're saying about monetizing the deficit. But I'm still not seeing anything that explains why 12/2013 would be a significant date. I'm not getting data that would indicate any meaningful change in money's value (in whatever sense) linked to it.

I have no idea about 2013 either. Put simply though, every year that the US Treasury runs a deficit, and doesn't increase tax revenue, they are just doing the same thing, but to a lesser extent.

Some things, pre covid, were actually cheaper in terms of labor hours worked to pay for them than they were previously, some more expensive. Price fluctuations were not uniform, but now everything is shooting up. I really feel for the people on the margin of just getting by.

 

[sleddogn]

The end is near.

of my thread soon, i hope, its depressing

 

[groooooove]

I know a family that just booked a trip to Disney for next October for ELEVEN THOUSAND BUCKS!

a friend of mine, just him and his wife spent $12k on a disney trip about 2 months ago.

it was their last big splurge before they bought a house and knew trips would be limited for a while... but still... just 2 adults. wow.

i mean, i don't blame fender for trying to keep up with inflation. printing money causes these problems, and we all know a lot of US dollars were recently printed. I expect this to get worse for a while.

A friend of mine who does freelance work started increasing his yearly prices according to inflation. from what I understand his clients think he's a little nuts, but he'll say "last year was $100/session, so this year itll be $107.50 because inflation was 7.5%"

i suspect fender is doing the same.

don't like it, don't buy it, but lots of people are still buying them so i guess that technically makes it a "good decision."

 

[GretschWretch]

Absolutely not a shot at anyone. Just feeling especially joyful this morning looking out at the snow. I hope all of you have a fantastic 2022. Rock this year.

Yeah, we got snow as well. Loved the snow; hate the freezing temperatures it brought with it.

 

[punchdrunk]

Hide your money from thieves and learn to speak Mandarin.

 

[GretschWretch]

Having said that, I'm going to start eating NY strips for breakfast, they're cheaper than bacon !

My local coffee, fudge, and gun shop (I am NOT kidding!) just began offering fudge-covered bacon. Want me to send you some?

 

[GodsLove66]

Hunker down, a recession is coming.

Hey, at least Squiers are only up $10?

WRONG!!! Vintage Mod or Classic Vibes are now almost pushing $500!!!! Waited too late to get one of those Precisions....

 

[GeneralElectric]

I'm not sure what the point of raising prices is if you can't ship product.

They still have fixed costs and can only sell fewer units. They raise to price so they can sell less unit while still satisfying those fixed costs.

 

[lyonaudio]

I just bought a american pro ii p bass couple days ago for 1549.99, this morning its 1749.00. Ouch. Not sure how widespread it is, but guessing its everywhere.

Company big whigs out to make more money by the looks of things.

 

[iammr2]

Same thing keeps happening to food, gas, autos... What do you expect?

 

[lyonaudio]

these particular instruments weren't on sale, these were the standard prices up until this morning.

What has always concerned me in these cases is that shops with, say, six Fender basses in stock, bought from Fender at pre-increase prices, sell them for the post-increase prices! Profits all 'round!

 

[sonojono]

Does this mean my Fender Roadworn is worth money!?

 

[lyonaudio]

The price of a full-sized SUV is creeping up toward a HUNDRED THOUSAND DOLLARS in the US.

Anyone that pays $100K for an SUV is an idiot.
IMO of course.

 

[jd56hawk]

I just bought a american pro ii p bass couple days ago for 1549.99, this morning its 1749.00. Ouch. Not sure how widespread it is, but guessing its everywhere.

Yes, and worth every dollar!

 

[felis]

This is not going to end well.

 

[BassDaddy77]

I suppose factoring inflation into the equation, prices for USA Fenders are considerably less than the 1960s. Obviously we have the added benefit of technology advancements and craftsmanship processes that have no doubt elevated the overall quality for the vast majority of instruments coming off the assembly lines. Still a good time to be a bass player, IMO. Prices don't usually go down on much in this world over time, so I suppose it's what we should expect, right?

 

[GeneralElectric]

I work in electronics as an AV integrator.

On our morning call today we had a big discussion about getting creative with old inventory items and RMA products for repair to meet demand because current lead times are pushing 6 months if they're shipping at all.

We just got a very high profile job to redo video distribution for a business with 1200+ displays stuck in 2009. We need expensive network hardware to get it and won't make their March deadline for phase 1 because its literally unavailable pretty much anywhere. They reached out to other vendors and we kept the job only because no one else could get product either.

Cars are the same way. I need a new one since mine has a bad headgasket. Labor rates are up, part supply is down. Not worth fixing but I can't afford to pay 10K plus over sticker for a car, or pay the new sticker price on a 3 year old car with 60k miles on it.

I got covid over the holidays and had a scare a week before that. To be responsible to my staff and clients, we were closed for almost 2 weeks and guys still had to get paid. When stuff like that happens, its just more expensive to do business.

 

[phillipkregg]

Man, I just don't get it. All we hear is that people are hurting these days. Many can't make ends meet.

But real estate has skyrocketed. People are getting/paying CRAZY prices for houses. My house is up $135K in two years. The price of a full-sized SUV is creeping up toward a HUNDRED THOUSAND DOLLARS in the US. But dealerships can't keep them in stock. (I know one lady who drives a Caddy SUV that was almost ninety grand! And that's STICKER...before taxes and fees! I bet it was in the mid nineties out the door.) Electronics are going crazy with prices. Used Dingwall basses are listed for slightly MORE than NEW on Reverb, and even a couple here recently. And they're selling in some cases! I know a family that just booked a trip to Disney for next October for ELEVEN THOUSAND BUCKS! And that's before flights! We've been booking rooms in Charlotte and Raleigh and Richmond VA for my kid's volleyball tournaments coming up. Rooms in average hotels are upwards of a couple hundred bucks or more. The only hotel we could get for Atlanta for an Easter weekend tournament was $249 a night before fees. And it's not exactly a five-star joint.

People can't buy big-ticket items fast enough.

Everything is jumping in price, but the increases are met with mostly shrugs.

A few of us here will shake our heads at the second Fender jump in a matter of months. But I'll bet it will slow down sales exactly zero. I hope people are investing in their futures as much as they're investing in "stuff".

It's not just individuals that are buying up real estate...

In my area - and a lot of others - there are investment firms and corporations that are outbidding families trying to buy homes to live in. Often, they are paying more than 100K over asking price - which is pricing out just about everyone else.

Then, they turn around and rent the property out. Lots of folks priced out of owning a home are then forced to rent at sky-high rental prices.