Not so hidden inflation

User Forum Topic
Submitted by SD Realtor on March 13, 2012 - 11:27am

Been amazing to see how fast prices on gone up. The other day wifey said that food for our pets has gone up close to 30% over a year ago. Pretty much all staples across the board are up substantially. Also saw the yahoo article about Tide.

Get used to it.

Submitted by bearishgurl on March 13, 2012 - 11:36am.

I have several pets and am quite often able to buy them heavily discounted premium food in taped-up (broken) bags and boxes and bent cans (at the Navy Commissary and other stores, such as Vons and Ralphs and occasionally, Albertsons).

Yes, Tide is very expensive and always was but there are much cheaper alternatives out there (with avail $1.50 to $3.00 coupons in the newspaper and pennysaver).

So, there ARE ways to (economically) feed a pet and wash clothes for the persistent shopper :=]

Submitted by SD Realtor on March 13, 2012 - 11:59am.

Ignored

Submitted by scaredyclassic on March 13, 2012 - 11:59am.

Tide is superior.

Submitted by Rich Toscano on March 13, 2012 - 12:23pm.

That's just silly SDR... don't you know that we are at the brink of a deflationary spiral?

BG, I believe you are misunderstanding the point of the post. SDR's point is that prices of staples and the like have risen substantially. The fact that you use coupons, buy dented cans, etc, to reduce your shopping bill from what it otherwise would have been is not actually germane to the topic of whether prices of staples are rising in general.

By the way, we are (or at least recently were) BELOW the Fed's newly stated official inflation target of 2%. This is because the Fed is targeting the core PCE deflator, which last I checked (this might have been Jan or so) was at 1.7% or thereabouts. (This is to say nothing of the fact that they've acknowledged that they will allow inflation to get higher than target in periods of high unemployment).

So however high the inflation is that you are observing, SDR, Bernanke thinks it's not high enough.

Submitted by SD Realtor on March 13, 2012 - 12:49pm.

Ah yes Rich, this is one our pet topics eh?

Intuitive consumers note this is not a new event. By our own family accounting we have seen these increases for the past few years.

I think over the next few years we will start to see some media awareness (only a couple years to late... kind of like housing eh rich?)

All in all though the inflationary bubble (to me) has been slowly inflating for a few years now and we will start to see that pace quicken.

For those who actually lend credence to any official government or fed statements regarding inflation or even unemployment for that matter, just go back and google what they were saying about housing in 2006.

Nothing to worry about!!

Submitted by pemeliza on March 13, 2012 - 12:51pm.

Sudden jumps in prices of a few goods end up getting smoothed out in the inflation data. It takes large and sustained (over many months) price increases of many goods to move the needle.

Submitted by bearishgurl on March 13, 2012 - 12:57pm.

Rich Toscano wrote:
That's just silly SDR... don't you know that we are at the brink of a deflationary spiral?

BG, I believe you are misunderstanding the point of the post. SDR's point is that prices of staples and the like have risen substantially. The fact that you use coupons, buy dented cans, etc, to reduce your shopping bill from what it otherwise would have been is not actually germane to the topic of whether prices of staples are rising in general....

Rich, I fully understand that prices of food and commodities, gas and everything else a typical household uses has risen substantially in recent years. (For instance, I've had pets all of my life and KNOW what pet food/supplies USED to cost.)

All I'm saying is that there is more than one way to "skin a cat" when it comes to groceries. There are several ways to buy/acquire them which does NOT involve "paying retail."

If one is "hell bent" on paying retail, far be it from me to suggest ways to economize.

I don't care if you continue to "ignore" me, SDR. Just be prepared to keep opening your wallet wide at the grocery store :=]

Submitted by briansd1 on March 13, 2012 - 1:01pm.

bearishgurl wrote:
I have several pets and am quite often able to buy them heavily discounted premium food in taped-up (broken) bags and boxes and bent cans (at the Navy Commissary and other stores, such as Vons and Ralphs and occasionally, Albertsons).

Yes, Tide is very expensive and always was but there are much cheaper alternatives out there (with avail $1.50 to $3.00 coupons in the newspaper and pennysaver).

So, there ARE ways to (economically) feed a pet and wash clothes for the persistent shopper :=]

I agree, there are ways to cope with inflation. One of those ways it to consume less, and switch to less expensive products.

How about the Costco powder detergent? I use that and it takes me like 2 years to finish the whole bucket. Personally, I don't like the fragrance in detergent, and I don't use fabric softener.

Submitted by briansd1 on March 13, 2012 - 1:05pm.

SD Realtor wrote:

For those who actually lend credence to any official government or fed statements regarding inflation or even unemployment for that matter, just go back and google what they were saying about housing in 2006.

Nothing to worry about!!

It sounds like you believe that there is higher inflation and higher unemployment than is reported.

If there is higher than reported inflation, does that mean that higher interest rates are to follow in short order?

Will we see commensurate wage inflation?

It will be interesting to watch it all unfold.

Submitted by harvey on March 13, 2012 - 1:13pm.

Rich Toscano wrote:
BG, I believe you are misunderstanding the point of the post.

[...]

[whatever the heck she is rambling about now] is not actually germane to the topic [...]

Feature request: An automated script that posts the template above to every thread.

Submitted by no_such_reality on March 13, 2012 - 1:14pm.

My observation is that any fresh food is dramatically increased. Particularly meAt and milk. Meat seemingly has an on sale price today equal to last years regular price. The regular price is really up there. Other places like Phoenix make Cali look cheap

I suspect it will just it worse as more production is converted to organic or grass fed due to the higher profitability and decreased hassle factor

Submitted by briansd1 on March 13, 2012 - 1:15pm.

I'm of the belief there there bifurcation.

There is indeed inflation in food and consumer products such as Tide and pet food.

But there is stability and maybe deflation in imported products such as computers, plastic items such a laundry baskets, cell phone service, etc...

So the net number of low inflation reported by the government is believable to me.

Submitted by bearishgurl on March 13, 2012 - 1:24pm.

pri_dk wrote:
Rich Toscano wrote:
BG, I believe you are misunderstanding the point of the post.

[whatever the heck she is rambling about now] is not actually germane to the topic [...]

pri_dk, why don't you tell us where you obtained the (bolded) "quote" above??

Submitted by bearishgurl on March 13, 2012 - 1:25pm.

briansd1 wrote:
I'm of the belief there there bifurcation.

There is indeed inflation in food and consumer products such as Tide and pet food.

But there is stability and maybe deflation in imported products such as computers, plastic items such a laundry baskets, cell phone service, etc...

So the net number of low inflation reported by the government is believable to me.

Agree with this, brian.

Submitted by SD Realtor on March 13, 2012 - 1:27pm.

We have had this conversation before Brian. Of course the items you mentioned are cheap. Not so sure they are as crucial to life as food, fuel and basic staples.

I believe in my quickbooks and quicken ledgers alot more then what the government tells me. I believe that statistics are quite easily manipulated. I don't believe anything the government tells me regardless of who is in power. Other people lap up government stats because they actually believe that the government is actually looking out for them.

I don't think it matters what interest rates do. Behavior of bubbles is trivial to understand. They all inflate according to what can and cannot control. The govt cannot control prices of basic foodstuffs and other basic goods. the govt has been doing backflips to keep a lid on treasuries with fantastic success. I do believe interest rates will rise someday but it may be a year or it may be 10 years.

However I am not coupling the price increases with the basic things we need to live on with interest rates.

Submitted by The-Shoveler on March 13, 2012 - 1:31pm.

Well as long as you don’t have to eat, (I could lose a little weight anyway).

I guess it’s a good time to be a farmer (as long as you have owned the land a while and you can control your other cost, water etc…).

What I am seeing is there are just a lot fewer sale items available, where as you used to be able to cut your food bill by just buying whatever was on sale that day and forgoing whatever was not on sale. Now it’s a lot harder.

Submitted by harvey on March 13, 2012 - 1:33pm.

Anecdotal pricing information is extremely subject to confirmation bias.

Most people notice when prices go up, but not when they go down.

If anyone thinks that the CPI numbers are not accurate, then let's discuss potential flaws in the methodology.

And let's not even mention shadowstats. If I'm reading the chart on their homepage correctly, they claim that inflation since 1990 has averaged 7.5% or more. Easily debunked with a little common-sense analysis.

7.5% compounded over 22 years is a factor of five. Things today are not five times more expensive than they were in 1990.

More on the junk shadowstats data:

http://traderscrucible.com/2011/02/01/wh...

Submitted by sdrealtor on March 13, 2012 - 1:37pm.

Here's a real data point. In 1999 I used to eat at Borelli's a few times a year. Its a very run of the mill family owned italian place in Encinitas. Not fancy in the least. I always ordered Chicken Parmesean dinner which includes side of pasta, steamed veggies, garlic bread and a salad. It used to cost $7.95 back then. I hadnt been there in years and went there last week and it was $15.95. Nothing about the food has changed except the price which doubled. That seemed quite expensive to me.

Submitted by harvey on March 13, 2012 - 1:39pm.

SD Realtor wrote:
I believe that statistics are quite easily manipulated.

Just to reiterate my point from above:

You are correct that numbers can easily be manipulated. But only for a year or two.

Remember, inflation is compounding. If the numbers are consistently biased by just a few percentage points every year, the effect would snowball over a few years. After 10 years it would be impossible to notice. After 20 years the numbers would make no sense whatsoever.

Maybe the government cheated a little this year. Maybe they cheated last year also. But it is mathematically impossible that they have cheated all of the past 20 or even 10 years.

Submitted by harvey on March 13, 2012 - 1:41pm.

sdrealtor wrote:
Here's a real data point. In 1999 I used to eat at Borelli's a few times a year. Its a very run of the mill family owned italian place in Encinitas. Not fancy in the least. I always ordered Chicken Parmesean dinner which includes side of pasta, steamed veggies, garlic bread and a salad. It used to cost $7.95 back then. I hadnt been there in years and went there last week and it was $15.95. Nothing about the food has changed except the price which doubled. That seemed quite expensive to me.

The word got out that you were eating there and the place became very popular.

Submitted by SD Realtor on March 13, 2012 - 1:47pm.

Agreed pr. To my point exactly. I think what we have seen over the past 10-15 years are a few bubbles in series. A bubble would inflate, then pop or deflate rapidly, only to inflate another bubble. I don't believe that prices have been wildly rising for 10 or 20 years. I think that the prices I am noting have been moving upwards for the past few years now. Maybe 2-3 years. To me there is still a few years of paper mache the govt can apply to the issue with selective statistical gathering and reporting.

Submitted by AN on March 13, 2012 - 1:47pm.

Here's another data point. In 1998 a gallon of regular gas was ~$1. Today, that same gallon is ~$4.

Submitted by briansd1 on March 13, 2012 - 2:03pm.

SD Realtor wrote:

However I am not coupling the price increases with the basic things we need to live on with interest rates.

Yes, I would agree with this.

I think the effects of globalization are taking effect.

Food needs to be grown and is more limited in quantity. There is a higher world demand for quality food. Is is also more demand for ready to eat food, such a pre-washed salad. The stores are nicer and remodeled, so there is a service component added to the price of food.

As far as other basics such as Tide go, the "reputable" brands have more pricing power because people are reluctant to switch.

Other consumer products have become such widely available commodities that prices are dropping relative to incomes.

Submitted by all on March 13, 2012 - 2:35pm.

I barbecued my pet beta fish when the time came to buy more food.

Submitted by harvey on March 13, 2012 - 2:45pm.

AN wrote:
Here's another data point. In 1998 a gallon of regular gas was ~$1. Today, that same gallon is ~$4.

Pro tip: If you destroy one of the top oil-producing nations, it may have an effect on gas prices.

Submitted by AN on March 13, 2012 - 4:02pm.

pri_dk wrote:
AN wrote:
Here's another data point. In 1998 a gallon of regular gas was ~$1. Today, that same gallon is ~$4.

Pro tip: If you destroy one of the top oil-producing nations, it may have an effect on gas prices.


How do you explain the price of Milk then? IIRC, milk was around $1 in late 90s and now, they're mid $3.

Submitted by harvey on March 13, 2012 - 4:20pm.

AN wrote:
pri_dk wrote:
AN wrote:
Here's another data point. In 1998 a gallon of regular gas was ~$1. Today, that same gallon is ~$4.

Pro tip: If you destroy one of the top oil-producing nations, it may have an effect on gas prices.


How do you explain the price of Milk then? IIRC, milk was around $1 in late 90s and now, they're mid $3.

http://future.aae.wisc.edu/data/annual_v...

Milk price in 1995: $2.50
Milk price in 2011: $3.60

Annual rate of change: 2.3%

Submitted by Blogstar on March 13, 2012 - 4:28pm.

You could just steal your soap.

http://www.chicagotribune.com/news/natio...

Submitted by sdduuuude on March 13, 2012 - 4:40pm.

Surely, the dollar will surely collapse soon, right ?

Submitted by no_such_reality on March 13, 2012 - 5:59pm.

pri_dk wrote:

http://future.aae.wisc.edu/data/annual_v...

Milk price in 1995: $2.50
Milk price in 2011: $3.60

Annual rate of change: 2.3%


National averages for foodstuffs is a bad measure.

http://www.cdfa.ca.gov/dairy/uploader/do...

Average 2010 San Diego whole milk price $3.03.
Average 2011 whole milk price $3.51.

January 2010 San Diego Price $2.96
December 2011 San Diego Price $3.60
Annual rate of change 11%.

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