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Are these record profits adjusted for inflation? As in, are they earning more or is it nominally higher?
My logic being, overhead gets more expensive as the currency diminishes. Companies raise prices (which you’re seeing) to offset that. And then nominally, yes they’d be making record numbers. Like Zimbabwe, they made record numbers when they had hyperinflation. Didn’t mean they were doing well.
And yeah I mean it’s not just devalued currency, there are a lot of factors that go into inflation. But Id say it’s one of the biggest contributors for sure.
Interest rates stayed low for too long and people borrowed up to their eyeballs (corporations included), pumping a lot of currency into the market. That’s got to account for something no?
You can’t print without consequences. The more you pump into circulation, the more currency you need to buy the same goods and services. You’re basically losing purchasing power.
If you give everyone a million dollars, you’re going to see prices increase. If prices don’t rise, people could buy out entire stocks of goods and you’ll have supply problems. So you need prices to increase to adjust for the amount of currency circulating. That’s inflation.
Chart on your purchasing power over the years: