Major Inflation In the Near Future

[LittleWyvern]

Well, fine, but take it up with the BLS, not me. I just looked up their data and copypasta'd it.

[Quin]

That is not correct data. The cost of food is going up at a much higher rate than that along with other items. Ask anyone who pays attention to the cost of food in the United States and they will confirm. At least 15 percent higher prices every year on most food items.

Cost of food depends on where you live.

In some places it's rising, in others it's lowering.

Take the Pacific Northwest & New England for example. Both tend to have the highest cost of food ($5 for a half gal of milk, $12 per pound of sandwich meat, $5 per pound for hamburger $20 per pound for steak as so e examples of consistently normal).

It's lowering in the PacNW (family there I see every summer). Although I know a LOT of people who have moved to Seattle for grad school who have to scrape their jaws up off the floor at the prices. I went shopping for my mom wit a friend who just moved to the UW for medachool and this was an actual conversation :

"OMG! Look at this! This is ridiculous"

"Hey! Sweet! It's so cheap!"

Said at the same time. Concerning the same food. And same price. 2 different frames of reference

... I suspect, in addition to droughts floods & other aggie disasters that food companies have been redefining their price systems. For most of the recession certain areas (Boston & Seattle classically) have been SUBSIDIZING the cost of food in other areas. The jimmy dean sausage that is $2.50 in New York City & $1.75 in rural Illinoise is $6 in western WA. Well, pigs are raised in the Midwest MIGHT float... But Carnation, Tillimook, & other local dairy producers still charge locals 3x what they charge Midwest $ East coast thousands of miles of trucking away.

I know Portland has taken a recent price hit (Portland is usually about 25% less expensive than Seattlw, and Or has no sales tax). Fam in Portland is groaningn about food costs, while fam in Seattle are buying food to store while its cheap.

Then, of course, there's the international market/ the subsidized farmers/ the transportation issues (not just quadrupled gas prices over the past 10 years), et cetera so forth and so on. Then there's also sales tax (and sales tax shenanigans... Like the fact that 'tourist' taxes apply to prepared foods... And people keep voting to increase tourism taxes, not thinking that it effects food prices), changing POS Store boundaries (in so e areas stores haven't updated their boundaries since the 70s... So food is less expensive in affluent areas that are still zoned by Kroger corporate as low income farmland...meanwhile poor areas are zoned as affluent.)

Shrugs.

Point being... It's a complicated system.

It may be rising 15% in your area... But my parents food costs (in Seattle) have lowered more than 25% in the past couple years. In other areas food costs are fairly static.

Q

Edited August 11, 2013 by Quin

[NeuroTypical]

October, 2008:

Anybody else watching what is going on? The United States is printing loads and loads of dollars. Major inflation is likely in the near future.

August, 2013:

I'm glad we are not seeing hyper inflation presently. We are seeing bad inflation though. I think at least 10 to 15 percent per year.

Interesting decision to resurrect your thread, StillSmallVoice. So, the Gov says annual inflation looks to be under 2%, and you figure it's 10-15%. Ok. I'm wondering - at what rate of yearly inflation (government numbers) do you believe we will see government price controls on food, panic, and food shortages?

[Still_Small_Voice]

October, 2008:August, 2013:Interesting decision to resurrect your thread, StillSmallVoice. So, the Gov says annual inflation looks to be under 2%, and you figure it's 10-15%. Ok. I'm wondering - at what rate of yearly inflation (government numbers) do you believe we will see government price controls on food, panic, and food shortages?

I have lived in New York and Utah. In both states I have watched food prices increase by at least 15 percent per year recently on most items. I have no clue on if government will ever impose price controls on food. It would not surprise me if the Federal Government does do it sometime in the future. The trend is toward more control of everything.

I think there are too many regulations and laws presently. There needs to be a move to bring more liberty to the people and power away from the Federal Government. The States generally listen to the voices their people better than the Federal Government does.

[yjacket]

October, 2008:August, 2013:Interesting decision to resurrect your thread, StillSmallVoice. So, the Gov says annual inflation looks to be under 2%, and you figure it's 10-15%. Ok. I'm wondering - at what rate of yearly inflation (government numbers) do you believe we will see government price controls on food, panic, and food shortages?

I personally don't believe it is 10-15%, but I do believe it is higher than the under 2% the Fed claims. A good place to check is MIT's Billion Prices project. Their inflation rate tracks similarly to the official rate, but it is higher. Right now it is above 2.5%.

I think the biggest problem people have in general is not recognizing that inflation is a non-uniform event. In other words, it doesn't affect all things the same way. We have had serial bubbles in the past 15 years in stocks, housing, bonds, stocks again, etc. These bubbles are the manifestations of inflation. When housing was increasing at 15% a year, the official inflation rate was around 5%. The newly created money that the Fed was printed didn't go into other goods, it went into the housing bubble.

When the Fed. prints money, the newly created money goes into the area that will get the greatest return. In 1999 that was stocks, in 2005 it was housing, in 2010-2013 it was bonds and commodities, now it is stocks again. Just because the conglomerate inflation rate isn't 10% doesn't mean there isn't a lot of inflation going on; there is it is just directed into certain areas. So while housing was going up at 15%, clothes and other items were going down because of increasing in productivity, outsourcing overseas, machines taking over human jobs, etc.

This is part of the structural problem with the economy right now. Before the recession, there were a lot of jobs that had simply become outdated b/c of productivity gains but companies still held onto those positions. During the downturn, the companies cut all the dead weight. Now they find they can thrive just as well without the dead weight because of productivity gains. They have dire needs for some positions and not enough people to fill them b/c they are different kinds of jobs. It's a skills mismatch and why it is taking so long for jobs to recover.

Interestingly enough, the biggest necessary resource in the economy, oil has had about an 8.7% inflation rate since 2001. I'm just waiting for the next oil shock to hit . . .

[yjacket]

. . . .I'm wondering - at what rate of yearly inflation (government numbers) do you believe we will see government price controls on food, panic, and food shortages?

As long as the government does not institute price controls there will be no shortages of food due to inflation. Many people will not be able to buy a lot of food-because it will be expensive, but it will always be there to purchase -barring some natural disaster or drought, etc.

The minute price controls are instituted is the minute shortages will start occurring. Hopefully, those in government have learned the lessons of the past, price controls do not work, they only exacerbate the problem.

[Blackmarch]

Think of the upside, it will take care of our outrageous deficit.

and then we can use all this paper money we have for fire fuel... won't be able to do much else with it by then.