Posted on 04/19/2021 7:10:47 AM PDT by bert
What will be the results of a Pelosi/Biden government?
Many think there will be inflation. Milton Friedman taught us that “Inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output.” The $2Trillion Covid relief plus the !5% minimum wage plus the forgiveness of college loans all pump money into the economy.
Those actions are the very definition of monetary phenomena. The Bureau of Economic Analysis keeps us informed on the inflation rate but fails in one respect. The inflation information provided leaves out food. So, in the era of Pelosi/Biden induced inflation, bert has developed a basket of 20 common food products and will track prices and compute the inflation rate on the basket total and each individual item at a one month interval.
The reason given for excluding food in the BEA inflation figure is because there are so many variables that effect prices that monetary inflation gets lost in the shuffle. So, there will be no attempt to correct for other variables.
The current news includes articles pointing to food price inflation all over the world. Some places are more alarming than others.
One we know that is already happening is China. China is in terrible food shape. Crop failure, massive flooding, swine disease and poor management of stock piles have forced China to import phenomenally large quantities of soy beans and corn.
Being bert and being conservative, I choose to ignore China and blame all the food price increases on Pelosi/Biden
The first monthly food inflation presentation is posted below. The Market Basket priced increased by 1.9%
Will it happen? As President Trump was fond of saying……..We’ll see
| Item Cost | Measure | January | April | Increase |
|---|---|---|---|---|
| Bread | 2# Loaf | $1.69 | $1.99 | 18% |
| Eggs | 1 dozen | $$1.99 | $1.99 | 0% |
| Bacon | 12 ounces | $4.99 | $4.99 | 0% |
| Ground Round | 1 pound pkg | $4.19 | $5.99 | 43% |
| Hot Dogs Oscar Mayer | 10 count | $2.99 | $2.99 | 0% |
| Zesta Saltine Crackers | 1 Box | $1.49 | $2.49 | 67% |
| Cambell’s Tomato Soup | Can | $1.00 | $1.00 | 0% |
| Le Suer Green Peas | Can | $1.89 | $1.89 | 0% |
| Campbell’s Pork and Beans | Can | $0.69 | $0.69 | 0% |
| Kellogg’s Frosted Flakes | 13.5 oz Box | $2.99 | $2.50/td> | -16% |
| Pic Sweet Frozen Corn | 28 Oz | $3.29 | $3.29 | 1% |
| Holly Farms Chicken Breast | Per Pound | $1.99 | $1.99 | 0% |
| New York Select Strip | per pound | $11.99 | $12.99 | 8% |
| Milk 2% | per Gallon | $1.99 | $1.99 | 0% |
| Water | 6 pack | $3.99 | $3.99 | 0% |
| Maxwell House Coffee | 11.5 Oz | $3.99 | $3.99 | 0% |
| Coca Cola | 12- 12 Oz | $5.99 | $5.99 | 0% |
| Budweiser Beer | 6 pack 12 Oz | $7.29 | $7.29 | 0% |
| McDonalds Big Mac | Each | $4.29 | $4.29 | 0% |
| Basket Total | $72.59 | |||
| Percent Increase | 1.9 % |
The various grocery items are those in common usage. Both National and Store brands are represented. Prices are taken from the local grocery store website and are current on the fifteenth of the current month.
The 1.9% increase is inflation and other variables
Maybe the government will fix it by handing out free money.
Welp, it looks like tomato soup, saltine crackers with a side order of Frosted Flakes for me!
I buy most of my food at Aldi.
Aldi has done a good job at holding food prices in check.
Stuff for house repair has shot up.
Meat shot up in price last year, but Aldi has brought its meat prices back into line.
The Lebanese currency has gotten very weak.
Ramadan there is rather lean this year.
Incidentally, they now have an Aldi right next door. Admittedly not a huge Aldi fan. I don't dislike it just don't really see a reason to go there.
Big fan of Lidl though when traveling.
I suspect that the injection of liquidity that many are pointing to as a reason for inflation are stuck in 1979.
With a decade of nearly 0% percent inflation for most things and a matching effective interest rate, with the amount of cash floating around on corporate balance sheets, we should have ALREADY seen late 70’s style inflation by 2017.
It has not happened and I don’t believe it will. People that still have millions of other people’s and their own money to invest are still committing BILLIONS to fixed income assets yielding...
2.2% for 30 year BONDS (University of Texas last week)
Dallas ISD just issued $150 Million of competitive paper. True Interest Cost of 67 BASIS POINTS; the 20 year terms are yielding 1.6%.
When the market for TIPS starts leading on Bloomberg, inflation will be reality. Until then, meditate on what happens to this “liquidity” when it flows through the economy once or twice and then ends up on a bloated balance sheet with nothing but financial instruments for all that cash to get turned into. Think about what that would look like. You would see Equity Prices and Bond Prices doing what they have done since 2008 (to the moon) and prices for clothing, entertainment, vehicles, and food (the stuff we all use) increase modestly or not at all over the same span.
The economic models and theory we grew up with never anticipated that in an economy with 340 MILLION participants, would end up with about 800,000 households and corporations controlling 60% of the system wealth. And when those folks are done buying solid gold plumbing fixtures for their 8th mansion, WTH are they trickling down, exactly?
I don’t eat most of the stuff on your list so it’s maybe better to have a personal food inflation list. I know you can get 40 bottles of water at costco for 1.99. Ribeye, a better cut of meat than strip, is going for less than your price at costco as well. 42 oz maxwell house coffee is 7.99 at costco. I don’t think big mac would count as a grocery item. I don’t own costco stock, I hate their mask policy, and I know they are large rat contributors, but I go there to experience capitalism.
People shop for various items where they are cheapest, usually.
What about toilet paper?
I still remember the inflation caused by Jimmy Carter the Incompetent! Our union reps later tried to blame it on Reagan but it was CARTER that caused it.
At the livestock auction here in MO, slaughter goats are bringing an avg of $4.25/lb live weight for #1 rated 50-60 lb animals. They dress out at 50-60% of that weight so with some markup, store price would probably be around $10/lb. This is the time of year they bring the best price due to Easter & Ramadan. I'm just getting started with a herd of meat goats. Got one chunky little buckling that would probably be considered grade #1. Goats are the only meat animal I can practically raise on this hilly, rocky 14 acres. That and I do want to get a small breed of pig. Gotta have some fat to go with that lean goat meat.
Need to get my high tunnel put up this year to extend the growing season two months on either end. Some years winter is so mild here that I could probably grow something year round. Got one hen that lays pretty much every day and I don't even feed it. Need to get a half a dozen fertilized eggs from the neighbor and let her raise them as she is a survivor. She can also be broody. The other two hens and a rooster all got killed by hawks.
Slowly getting as food self sufficient as possible.
The other day I ate some Kellogg’s Frosted Flakes for the first time since I was a kid. They weren’t as crunchy as I remembered them, and there was hardly any sugar frosting on them.
No wonder they dropped in price.
Beer and coffee are unchanged. I’m good.
There has been food inflation going on for a long time.
You now get less in the package for the same amount....or more
Try cooking a recipe... calls for one pound of sausage...now the packages are all twelve oz..
Do you live overseas or on a different planet?
the local Fred Meyer had tuna on sale...a name brand....look closely and you’ll see the tuna cans have again shrunk....4oz now....
I used to be a Sam’s Club member but there’s neither a Sam’s or Costco anywhere near us now because we went rural. I buy meat at our little independent grocery store and prices are decent except for beef. Only beef we can afford is ground chuck or a cheap roast that we cook in the instant pot. Ribeye is $15/lb here.
“we should have ALREADY seen late 70’s style inflation by 2017”
People have used a lot of their money to inflate the prices of stocks and houses, and the stuff that goes into houses.
The price rise of housing wood leaves late 70’s inflation in the dust.
The price of landscape plants is up a lot.
Necessities are becoming cost prohibitive; gas, lumber, ammo
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