Posted on 10/09/2012 7:03:04 AM PDT by blam
A Year’s Supply Of Rice
By Addison Wiggin
October 8, 2012
“Better buy now,” advised the rice merchant in Tehran.
The retired factory guard took him up on the advice, buying 900 pounds of the stuff to feed his extended family for the next 12 months.
“As I was gathering my money,” the retiree told The New York Times, he got a phone call. “When he hung up, he told me prices had just gone up by 10%. Of course, I paid. God knows how much it will cost tomorrow.”
Iran’s currency, the rial, collapsed 40% last week under the pressure of Western sanctions and homegrown blundering. We’re not sure if Iran is in hyperinflation, as Cato Institute researcher Steve Hanke asserted in Friday’s 5 Min. Forecast, but at the very least they’re on the cusp.
Austrian economists describe three stages of inflation. In the first stage, people still hang onto their money, expecting prices to come down. In the second stage, people part with their money to stock up on goods before prices rise again. In the final hyperinflationary stage, people buy anything they can get their hands on — even if they don’t need it — because the goods are more valuable than the currency.
As we said on Thursday, Iran today is looking more and more like Iran during the 1978-79 revolution. Now there’s corroboration from someone who lived through those days.
“The new government wanted to prevent flight capital from leaving the country,” recalls Chicago-based derivatives specialist Janet Tavakoli, who married an Iranian while in college.
“In the panic to leave the country with some of their wealth,” she wrote in her 1998 book Credit Derivatives, “citizens found that although there was an official exchange rate of 7 tomans (10 rials) to the U.S. dollar, there was no means to convert money. Banks were closed much of the time. The government put a further restriction on conversion of currency. Citizens could take only $1,000 in U.S. currency out of the country and could take only a suitcase of clothing. The idea was to prevent citizens from taking valuable carpets, now labeled national protected works of art, out of the country.”
“Before a currency goes into free fall,” she writes now at Huffington Post, “its value can be chipped away while a distracted population fails to notice that the currency buys cheaper-quality clothing and less food in a package at a grocery store… That’s the current situation with the U.S. dollar.”
Iran, she says, is far beyond that stage. Where it leads this time, we have no idea… but it’s nowhere good.
Huh? What was that? I was watching the game...
( /no sarc)
Ping.
/johnny
BTW I was perusing some photos my Daughter had taken when we got her her first camera. These were taken Circa 2002.
One is a picture in my Mom's kitchen and just shows the kitchen counter. (She was 7 at the time so she liked to take pictures of anything and everything...)
On the counter was a bag of Lays Potato Chips and it said something like New 1 lb. Family size and a price tag of $1.59.
Yesterday I was at the store and saw about the same size bag (Family Size) yet it held like 11.5 oz. and cost almost 4 bucks.
But there is no inflation... nosiree not a bit.
Pinging Kart!
“Better buy now,” advised the rice merchant in Tehran.
The retired factory guard took him up on the advice, buying 900 pounds of the stuff to feed his extended family for the next 12 months.
“As I was gathering my money,” the retiree told The New York Times, he got a phone call. “When he hung up, he told me prices had just gone up by 10%. Of course, I paid. God knows how much it will cost tomorrow.”
So if you are a “Prepper” in Iran you are rational and sane... Well according to the Huffington Post...
“Before a currency goes into free fall,” she writes now at Huffington Post, “its value can be chipped away while a distracted population fails to notice that the currency buys cheaper-quality clothing and less food in a package at a grocery store… That’s the current situation with the U.S. dollar.”
That is what I got from it.
It continues to amaze me Romney and the GOP are not making inflation an issue. We know the price of gasoline has doubled in four years.
Attached is a link to a website that provides the price of a number of commonly purchased items showing prices from 2008 to today. The “real world basket” of goods has increased 45% in 4 years.
http://www.thepeoplehistory.com/pricebasket.html
The only reason I can think of the GOP is not making an issue of the high rate of inflation for food, gasoline, and health care is they expect their economic policies to continue or accelerate the trend if Romney is elected. By his failure to fight spending during the past two years, House Speaker Boehner has certainly demonstrated he and his Republican majority are not too concerned about runaway spending. The Constitution gives the House the ability to shut off spending any time it wants. Senate Minority Leader McConnell has also acquiesced to the spending spree.
Could it be they know if they stop Bernanke from running the printing presses the government will not be able to finance the debt and interest rates will skyrocket? The elites of both parties, and Wall Street, may have decided it is better to keep inflating by printing money to buy up the debt than really get serious about cutting spending. It troubles me greatly Romney isn’t talking to the American people about the inflation tax given that it is a winning issue.
Barter will come next.
You can still get simular deals if you are sale saavy and coupon saavy at the same time. I remeber when the grocery store had a sale 10 for 10 on campbell’s soup and had a coupon that was 50 cents off a can of the same soup, limit 10. so I got a lot of soup for somewhat cheap.
But it will get harder and hard to do this...
I'm thinking that is because of the drought.(?)
[Could it be they know if they stop Bernanke from running the printing presses the government will not be able to finance the debt and interest rates will skyrocket? The elites of both parties, and Wall Street, may have decided it is better to keep inflating by printing money to buy up the debt than really get serious about cutting spending. It troubles me greatly Romney isn’t talking to the American people about the inflation tax given that it is a winning issue.]
The longer the pain is put off the more it will hurt later. Sadly the state of politics today feeds the habit of kicking the can down the road.
The U.S. Social Security Administration says the cost of living has gone up this year 01.8%. Anybody here believe that? S.S. recipients may expect a raise of 01.4%.
The sanctions are beginning to bite. The question is - will it be enough to turn the mad mullahs away from enriching plutonium?
Yeah understood. But what I was pointing out was the "Family Size" in 2002 was a 1 lb. bag. Now it seems its a 11.5 oz. bag. and over double the price.
I've seen the same with canned goods. More water in the can of green beans with less of the vegetable, yet charge more for less.
I've seen plastic peanut butter Containers suddenly acquire a conical shaped column in the bottom of the jar. Thus making the jar look the same size but have a good deal less product in the container yet they usually cost more.
Price rises are being hidden from consumers with packaging changes and "fake sales" tactics. (Buy 3 get one free but it still cost you more than the previous month's price for the same product.)
Still have a WIN (Whip Inflation Now) Button. The ramification from an admission of the error of lower inflation is enormous. Think of the COLA for any government program. Bernanke knows that if he quits pushing buttons a rise of just 2 point in the interest rate would mean game over for the US. But then maybe that’s the ultimate end game.
Prepare accordingly.
I am told by my BIL (he works at a meat delivery service) that pork prices are going to soar because of a perfect storm of drought, dollar inflation and rising feed prices due to idiotic subsidies for bio fuels from crops.
Seems strange the MSM hasn't noticed the food inflation - guess we'll have to wait until Romney's President before they'll open their eyes again...
Not BACON!!!???? Ahhhhhhh.
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