The Surprising Disappearance of Inflation

Townhall.com ^ | October 22, 2015 | Steve Chapman

[IC Ken]

re>In September, the Bureau of Labor Statistics reported that U.S. inflation over the previous year was zero

Everything we are told is a lie. I'm getting tired of it.

[Kaslin]

Yeah a pound now is 14 ounces instead of 16 but costs as much as 16 ounces if not more

[FredZarguna]

Nope. There is no drought in most of the US.

https://www.ncdc.noaa.gov/sotc/drought/201507

Based on the Palmer Drought Index, severe to extreme drought affected about 14 percent of the contiguous United States as of the end of July 2015, a little less than last month. About 24 percent of the contiguous U.S. fell in the severely to extremely wet categories.

The cost of beef generally has gone through the roof, not just hamburger. Hamburger is not really the same as beef, for economic survey purposes though. About half of hamburger comes from dairy beef. Although CA is the #1 dairy state in the US, dairy production in CA is declining because of environmentalist pressure being applied to dairy farms, which, unlike nut and grape growers [and many others] have plenty of places they can move to outside of California. And they are. But it doesn't make that much difference anyway. Most dairy beef doesn't come from drought country, but from the Northeastern US and Upper midwest.

Higher beef costs across the board are a function of the cost of feed, and US energy policy is a part of that problem. It is simply INSANE to mandate the production of corn ethanol when corn is our #1 grain product. Corn cereals and sugars are used in all kinds of food, and turning good food into bad fuel drives up the price of corn and all foods and animal products.

[FredZarguna]

Even more significantly, go use those tires, and discover that even with good, regular rotation they only get you 50K miles instead of the 70K they used to get.

[jimmygrace]

If people aren’t getting jobs and raises and buying extra things, there will be no upward pressure on demand. Not having inflation is not necessarily a good thing.

[ForYourChildren]

http://www.thepeoplehistory.com/pricebasket.html

The link has details as to what was used to calculate the prices.

------------------

Our Price Basket - or Cost Of Living 2008 - 2014 Latest Inflation Update December 2014 Interest Rates, Housing, Food, Gas, Stamps, Dollar Exchange Rate, Dow Jones, Movie Ticket, College Tuition and Wages. We created this page to address two specific needs 1. Providing a comparison for earlier years and 2. As a means of watching how prices and wages react and the effects on inflation, prices and wages when the world comes out of the recession . As you can see we have changed the format to make it easier to read. Hope You Like the new style. To gain an idea of true inflation check 2008 prices to current with our Price Basket Graphic -- Steve As you can see from our table the overall basket of goods has increased significantly from 2008 to 2014, Our real world Price basket of goods shows an increase of over 45% from May 2008 to September 2012 far above published inflation figures and I believe reflects how the working class and the middle class have been effected by real world prices and stagnation in wages due to high unemployment, our basket is representative of the goods and services we all use and buy. Obviously different people spend on different amounts and types from our food basket dependent on multiple factors 1. Size of family, 2. Income, but we hope it offers an insight into real world inflation we are all affected by as opposed to government statistics. Our basket of goods shows a slight increase from 2013 to 2014 which could be suprising when you consider the price of Gas has decreased ( the big factor was the increase of Tide Soap Powder ) other factors including rent, taxes ( local and State ) College Tuition, Cost of a Stamp, Movie Ticket or going out for a meal all affect how much disposable income we have available

And even the fed numbers shows household income declining during the same years from $58,000 to $54,000.

[Oatka]

They’re doing the same crap as they did in the 70s. Shrinking the product, selling you less—at the same price.

As in:

And, if they don't shrink the product, they make quantum jumps in prices - no more 5-10c at a time. A large jar of Claussen dill pickles at Wal-Mart just went from $5.68 ($5.00 six mos ago), to $6.58.

[Gaffer]

That must be why I’m having to buy same day expired hamburger. :0)

[Buckeye McFrog]

A large jar of Claussen dill pickles at Wal-Mart just went from $5.68 ($5.00 six mos ago), to $6.58.

Clever. There's no inflation, you're just dyslexic.

[RipSawyer]

“Has he ever seen the size and thickness of a candy bar pre-1970s?”

I have, I entered first grade in 1950 and when I had a nickel I could buy a candy bar that was all I could eat. You didn’t buy a ten cent candy bar unless you were going to give half of it to someone else. I paid five cents a day for school lunch when I started school. It was only up to a quarter a day when I finished high school. Now the dollar and a quarter I paid for a week of school lunches my senior year won’t buy what used to be a five cent candy bar.

[RipSawyer]

If they told the truth they would have to double or triple social security payments to make up for all the years of understating cost of living and they don’t have any money.

[ConservativeDude]

ok, great points on drought having no impact.

But I’m not sure ethanol is to blame here, b/c ethanol mandates haven’t gone up anywhere in a decade unless I’ve missed something?

So it may well be that the spike in beef is due to the cost of feed...but if beef is at an all time high, where is the price of corn? I can’t say I’ve followed that actually. Is it also at or near an all time high?

[DiogenesLamp]

I think there’s no inflation, because we’re in a depression.

No inflation? Are you outta your mind? Inflation is running rampant. The last seven years are the worst I have ever seen. A Quick example. Quart of oil, 2007? 85 cents. Quart of oil 2015? $4.00.

With regards to hamburger, aren’t high beef prices the result of drought (hits supply) and increasing demand? Basically, market forces? (Sort of the flip side of oil: huge supply glut, global demand down ...b/c of the depression).

There was a major drought in the last two years, and this adversely affected beef prices. But add into that the increased cost of the stupid ethanol program. (where billions of tons of corn are turned into fuel instead of feeding animals and people)

When you take umpteen tons of corn out of the food supply chain, farmers substitute other grains to feed their livestock. This drives the price up for all grain commodities.

This not only affects the United States food prices, but thanks to commodities markets, it affects world wide food prices. I've read that the riots in Egypt were the result of people being unable to afford food due to the rise in grain prices.

I've read that the "Arab Spring" is what happens when you turn corn into fuel because stupid left wing nutjobs and crony capitalist industrial farm outfits collaborate to make government policy.

[DiogenesLamp]

Interesting site that tracks the average cost of a few common items like gas, hamburger meat, loaves of bread, etc. According to their figures, a bag of groceries + 1 gallon of gas that cost $54 when 0bama took office now costs $76. But there’s no inflation ... move along ... nothing to see.

I remember the prices of some things from that time period because I used to buy them.

Milk went from $2.00/gallon to $4.00/gallon. McDonalds Burgers went from 55 cents to $1.25 nowadays.

I put inflation at nearly 100% since 2007. The price of everything has almost doubled since Idiot Man-Child took over.

[DiogenesLamp]

Yup, go buy a set of tires and tell me there is no inflation.

Used tires in 2007 were $20.00. Now they are $40.00.

[DiogenesLamp]

I’ve also noticed that in canned tuna and many other products.

I used to eat tuna fish and crackers for breakfast several times a week. Tuna in 2007 was 50 cents. Tuna today is $0.95.

[RipSawyer]

In truth rising prices are NOT inflation! In economics inflation is an increase in the amount of currency in circulation. Think of inflating a tire, pumping air into the tire is inflation, the fact that the car may be seen to rise slightly higher above the ground is the result of inflation. Likewise rising prices are the result of inflation, not inflation itself but prices may rise for other reasons. If some prices are going up and some down as we have had lately there may be inflation or there may not be. Prices may rise or fall due to a supply/demand change but if prices in general are rising it is most likely due to monetary inflation. Monetary deflation should cause most prices to fall.

What the government has done for years is to tailor the method of calculating cost of living to produce a lower official inflation rate without much regard for reality. Younger people are easier to fool with that kind of trickery, those who, like myself, are past seventy know the truth about the past. We have seen the time when whole families lived on a month’s income that only amounts to maybe one decent day’s pay or at most two days of mediocre pay now. I remember having a long conversation about what a person could do with three hundred dollars a week and coming to an agreement that no sane person could possibly ever have any real need for more money than that. Anyone but an incurable wastrel would live really, really well on half that and bank the rest.

[DiogenesLamp]

If they told the truth they would have to double or triple social security payments to make up for all the years of understating cost of living and they don’t have any money.

Social Security was always a leftest attempt to build an economic "perpetual motion" machine.

Needless to say, perpetual motion machines are impossible, economic or otherwise.

[Billthedrill]

Yup, go buy a set of tires and tell me there is no inflation.

I see what you did there.

[Toddsterpatriot]

Prices may rise or fall due to a supply/demand change but if prices in general are rising it is most likely due to monetary inflation.

And if prices are falling while the money supply is increasing, maybe demand for money is growing faster than supply.