Inflation, or not?

[Syrinx]

I hear people on TV saying inflation is not a problem right now. That maybe we're even in a period of deflation.

But I'm thinking I might be talking about something different than those people on TV.

Maybe if you factor in real estate prices, and things like that, inflation isn't your biggest worry.

But I'm too poor to be worrying about real estate prices. I'm not exactly buying and selling real estate on my way to easy street.

Have those beltway talking heads been to the grocery store lately?

To use one example... a 10 ounce bag of Lay's potato chips now costs four dollars and twenty-nine cents!

I certainly don't live on potato chips. But I consider that emblematic of what is going on in the real world, with ordinary, everyday people trying to put food into their grocery carts and onto their tables.

I can't readily quote statistics on the subject, but DAMN!, the prices on food seem to be skyrocketing.

A couple of years ago, I could pick up a flank steak for four or five dollars. Flank steak is a potentially tough piece of meat, but if you handle it just right, it can be tender and delicious.

I spotted one at the store the other day, and sort of lunged for it. It looked great. I dropped it quickly when I saw the price on it was seventeen dollars plus. For flank steak!

And for things like potatoes and onions, sometimes they are on sale, for what seem like decent prices. But when I get home and cut them open, they are rotten inside.

And my childhood junk-food favorites, like "pizza rolls" and "hot pockets," once delicious, have devolved into disgusting facsimiles of cardboard and paste.

And the packages of everything, cookies and crackers, and everything else, continually and subliminally shrink ounce by ounce, while the prices still increase.

And it's just about impossible to get a decent-tasting fast-food meal or snack from a chain anymore. A quarter-pounder with cheese at McDonalds used to be a juicy, tasty ten minutes of abandon. Now it's a Grande Royale ordeal of yuck!

I'm just saying. Maybe inflation doesn't seem so bad right now, if you're a millionaire real-estate investor. Maybe it's another story if you're just trying to feed yourself and your family.

Quality's down, prices are up, and we're supposed to say "Thank you master, may I have another?"

[Divernan]

1. As a Sr. Citizen friend commented re groceries: "The prices go up every damn week."

I also related to your comments about cutting open potatoes and finding them rotten inside. Look for a plain Idaho baking potato. At the two grocery stores where I shop (different chains), the open bin Idahos all have at least one rotten spot visible from the outside. The old fashioned, unblemished Idahos are wrapped in fancy cellophane or foil and cost considerably more. And forget about buying a whole bag of any kind of potato (in hopes of getting a better price), because you KNOW there will be more than one rotten one in the bag.

[Syrinx]

6. thanks for the potato insight

Maybe I'll run for prez, with the slogan "potatoes are too damn high." :)

[Divernan]

32. Or, "Something's rotten in the state of Idaho."

[divvy]

2. NOT ..... there must be upward pressure on jobs and wages to support it.

We have no jobs and no prospects for raises.

[Syrinx]

11. if there's not technically "inflation"

Prices for food and other needed things are still going through the roof.

[Jim Warren]

3. Biflation

If you want it, prices are down.
if you need it, prices are up.

[Syrinx]

4. I think that might make sense

Let me process it for a second. :)

[JVS]

8. +1

[fasttense]

5. Your corporate overlords want you on the brink of total desperation.

And your government is helping them make sure you stay there.

Because they want to hire maids for 25 cents an hour like in Calcutta.

They want to hire factory workers for $3 an hour and no benefits like they do in Mexico.

They want you hungry, afraid, exhausted and quiet.

Democracy is too messy and uncontrollable for them. They much prefer feudalism and they are working real hard to get America back to the times of kings and serfs.

But we are millions and they are just a handful of petty little men. They can only control us (and overcharge us) if we let them.

Join the fight. http://october2011.org/welcome

[Syrinx]

7. I'm following that with interest

Thanks.

[Taitertots]

9. It always seems like there is inflation when you cherry pick sectors with the highest price change

That is why we use indexes to accurately analyze inflation.

[Syrinx]

10. "cherrypicking" groceries doesn't seem an unfair measure

For progressive purposes, at least.

[Taitertots]

13. How is intentionally misrepresenting inflation a progressive value?

I'm all for a discussion of how to curtail rising food prices. Just don't try to pretend that single sector price increases mean there is high inflation.

[Syrinx]

14. You surely know what I mean

Higher food prices hit most people harder than real estate values. By a long shot.

[Syrinx]

17. "intentionally misrepresenting"

That's exactly what I'm speaking against.

Even though inflation may be down for the "investor class," it is up for the vast majority of real people out here.

[Taitertots]

26. OK produce some data that counters the preponderance of data that proves you are wrong

Why won't you provide anything to support your assertions?

[TheKentuckian]

18. Food higher, energy higher, fuel higher, rent higher, health care higher, education higher

Most of us spend the lion's share of our incomes on those "cherries".

It would seem to me that cherry picking luxury items that many cannot even afford to think about and certainly aren't on the subsistence list to justify low inflation isn't particularly honest or progressive.

Ignore the higher prices for ever less in return on what must be bought and focus on reduced costs for items not in the budget, seems somewhat wrongheaded.

[Syrinx]

12. you mean the "sectors" that actually affect people?

[sendero]

15. Exactly the opposite of what is happening.

.... our government weights all kinds of nonsense we don't need or buy very often very high, and basic necessities are weighted low.

We absolutely have food inflation and nobody really argues that we don't except maybe you. And FOOD is a necessity and the fact that house prices and Kindle prices are dropping doesn't help anyone eat.

This inflation is a direct result of the "quantitative easing" of the Fed. Which could restart any time now.

[Taitertots]

19. So why don't you create your our index instead of bemoaning theirs while producing nothing...

to counter their results.

"This inflation is a direct result of the "quantitative easing" of the Fed. Which could restart any time now."
Food prices are rising due to non-monetary economic realities such as: rising population, using crops for fuel, manipulation in energy markets, monopoly power from large producers (monsanto, conagra)....

[sendero]

21. Your opinion..

.. is in the distinct minority and this time I'm with the majority.

You can't print trillions of dollars without causing inflation. And that is what we have and that is the ONLY reason the Fed stop QE for a while.

And BTW, how do you square your nonsense opinion with oil prices that have risen in the face of falling demand? It's all about the dollar and our precarious precious reserve currency status.

[Taitertots]

23. Non-sense, I'm with the majority of economists

And you are with the majority of bloggers in their parents basements.

"You can't print trillions of dollars without causing inflation. And that is what we have and that is the ONLY reason the Fed stop QE for a while."
We can and we did. The objective indexes prove it. The FED was going to stop QE because without REPUBLICANS fucking everything up we might not have needed it again.

[Syrinx]

22. "So why don't you create your our index"

Is that the most asinine statement I've ever read on DU? I think so.

I guess it passes the "truthiness" quotient.

[Taitertots]

24. Why, are you too lazy to spend a few hours confirming your beliefs?

All the data is easily available because you have an internet connection.

[spinbaby]

16. More packaging, less food

I find myself shocked at how much packaging there is in proportion to actual food.

[starroute]

29. And since the cost of trash pickup has doubled, that packaging is another expense

Pay once to buy it, pay a second time to get rid of it.

Farmers' markets help on both ends, though.

[mmonk]

20. Food yes, overall no, even some deflation.

[JVS]

28. Even with food there is some deflation, but it is in the items that are frills.

Back in about 2007 the normal price for a 12 pack of store brand pop has been $1.99 and it never went on sale. Recently I've noticed ads for it on sale at $1.88.

Also, from 2007-2011 a big bottle of cheap whiskey that I drink has been going on sale once in a while for $19.99. I usually stocked up at this price because it might be a few months before I saw it again. A few weeks ago I saw the whiskey on sale for 18.99. The normal price is 23.99

Now clearly these are not harbingers of massive deflation in the food market, but they do show that demand for these small luxuries must be weak if they're having to offer them at lower prices than have recently been seen.

[unblock]

25. two economies -- commodity inflation but deflation for everything else.

the problem is the rich have too damn much money and nothing good to do with it, so they're hoarding food and energy commodities. so we have inflation in those areas.

the poor and middle class are tapped out and/or overindebted, so whatever they have gets spent on necessities -- like food and energy. to whatever extent they get ahead, rising food and energy prices take it.

that means that demand for anything other than food and energy is stagnant, so prices for anything else aren't increasing, or in some cases are decreasing.



the obvious solution is to get wealth out of the hands of the rich people and into the hands of the poor people, but no, something that would actually work and benefit everyone couldn't possibly be "on the table"....

[Robb]

27. I'd even argue it all comes back to energy prices.

The OP is a great example of how we've allowed a handful of big companies to produce all the food we look for in stores -- in this case, Pepsi, who own Frito-Lay IIRC. When those companies feel the pinch of higher fuel costs (driven up by speculators, as you note) of course they'll pass it along to consumers in higher price. They have to truck those potatoes, truck that cooking oil, truck those chips.

Of course, there isn't a guy on the corner selling his homemade potato chips. But you get the idea.

[unblock]

30. yes, pepsico owns frito-lay, along with gatorade, quaker, and tropicana.

[MilesColtrane]

31. Grocery store prices have risen 4.7% over the past 12 months.

I imagine that we're all noticing it because we went through a period before of very low inflation and because wages have not risen accordingly. (if you're lucky enough to have a job, that is)

Link to the latest figures:

http://www.bls.gov/news.release/cpi.nr0.htm