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Food Prices Are Soaring Faster Than Inflation and Incomes

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Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#341

Post by AuthorizedCust »

sandworm101 wrote: post #280
AuthorizedCust wrote: post #225

Earlier quoted context omitted.

Do we have a way of seeing periodic media obsessions? Seems like a good AI challenge, although would require a good corpus. I saw another analysis suggesting a 75% drop in media coverage of Biden vs. Trump, at this same point in each’s presidency. That’s a useful statistic that I have a hard time finding in a comprehensive way.

>> Do we have a way of seeing periodic media obsessions? We have dozens. Countless companies have tools to show you how things are happening on social media, and all the big new outlets mirror their content to social media. At the most simple level, basic word counts can track how issues appear and disappear. When you hear about a 75% drop in coverage of "Biden v. Trump" that is almost certainly taken from the number…

Topic modeling is a better technique than simple word counts. Topic modeling can use ML.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#342

Post by lottin »

dominotw wrote: post #268
lottin wrote: post #233

Earlier quoted context omitted.

In my opinion it's a perceived increase in prices, which may or may not real, and may or may not have to do with inflation.

Not quite sure what you mean by 'may not real'. Its not possible for most ordinary ppl to even think about buying a house right now. Why isn't this a concern for policy makers.

I mean that the prices need to be measured objectively, because people aren't very good a tracking prices. They may think prices have risen when they have not.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#343

Post by tinus_hn »

itsumoiru wrote: post #235
tinus_hn wrote: post #165

Earlier quoted context omitted.

I’m sure these 13.5 million people in the US, who now can’t afford food anymore, wouldn’t have been such enthusiastic lockdown supporters had they realized they would pay the price themselves.

The most enthusiastic lockdown supporters are unlikely to be the ones that can't afford food now. Much more likely to be people reading HN or writing for the NYT.

The mainstream masses were supporters, definitely not limited to niches like you mention.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#344

Post by ChuckNorris89 »

AlexandrB wrote: post #317
bryanlarsen wrote: post #278

Earlier quoted context omitted.

For rich people.

Also for people that put their life savings as downpayment on an overpriced house.

But at least the bubble popping would make it easier for the middle class newcommers enter the market.

Just inflating the bubble further, as every European bank and government is doing, to make existing property owners richer on paper and get their votes, is not a viable long term solution.

IMHO, it can't pop sooner. Houses should be for living, not for speculation and hoarding wealth. The younger generations have been screwed enough by the old established wealth hoarders.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#345

Post by kache_ »

gruez wrote: post #334
kache_ wrote: post #269

Earlier quoted context omitted.

Everyone knows CPI is not analogous to reality. Why would it be. Just look at house prices

Because houses are assets, which are closer to stocks than food or cars.

Assets are items that generate cash flow. If you live in it, it's a liability and not an asset. Just because its value increases in relation to funny money doesn't mean it's generating cash flow. How much bitcoin do you need to buy a house?

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#346

Post by throwawaygh »

dominotw wrote: post #281
bryanlarsen wrote: post #176

Earlier quoted context omitted.

Interest rates are at zero. When official inflation starts ticking up they'll raise interest rates which will deflate the stock & house price bubble and cut inflation off at the knees. We have lots of things to worry about -- inflation isn't one of them.

> We have lots of things to worry about -- inflation isn't one of them. I really hate this comment. I am worried about not being able to ever being afford a house for my family. Avg income in my neighborhood is ~49k but a 2 bed condo here are selling for 450K and getting outbid by 75k over the asking price. Its insane. Maybe you already own a house and are happy that prices are up. But its really weird to tell other…

> Avg income in my neighborhood is ~49k but a 2 bed condo here are selling for 450K and getting outbid by 75k over the asking price. Its insane.

Sure, and your point about housing prices mattering is a good one (see my other comment on this story). But, this describes maybe a few dozen housing markets. Probably only a couple dozen if you cut out resort/ski towns. It's a regional problem, not systemic problem with the national economy.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#347

Post by em500 »

Wolfenstein98k wrote: post #194
lottin wrote: post #188

Earlier quoted context omitted.

Food price rises are not inflation. Inflation is an increase in the general price level, and specifically it's not an increase in the prices of a selected set of goods.

There is no significant inflation measure that does not include food. I agree they're not the entirety of the basket, but they are a core component. There is no "general price level".

Food and Beverages make up 15% of the US CPI basket. Some other major components are Housing (42%) and Transport (15%).

Here's the full list, which make up the "general price level": https://www.bls.gov/cpi/tables/relative-importance/2020.htm If you believe food is underweighted, then what category do you believe is overweighted?

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#348

Post by leetcrew »

evrydayhustling wrote: post #273
PragmaticPulp wrote: post #198

Earlier quoted context omitted.

From the article: > In the U.S., prices rose close to 3% in the year ending Jan. 2, according to NielsenIQ, roughly double the overall rate of inflation. The study found that food prices are rising faster than inflation. 3% is high, and 1.5% over inflation is also concerning, but I think a lot of people are jumping to conclusions based on the headline. Those inflation numbers would go unnoticed by most during normal…

Disagree that this is alarmism. The question is whether the way inflation is being measured matches the way we use it to make decisions. Graphs like AEI's Chart of the Century [1] have been highlighting for years that inflation numbers are inappropriately averaging decreasing costs for discretionary purchases, while costs for essentials like healthcare and education grow out of control. When food also starts outpacin…

> When food also starts outpacing the average (historically it has paralleled wages in the USA), you really have to ask what inflation is measuring.

inflation is measuring the value of a currency. CPI is a way to infer inflation from the nominal price of consumer goods; but it is not the definition of inflation. put another way, if an apple costs twice as much as it did last year, that fact is not enough to say whether the currency inflated.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#349

Post by cs702 »

...due to TEMPORARY restrictions, such as border closures, that will be lifted once the pandemic is history.

--

On a related topic, quite a few commenters here have made uninformed or intentionally misleading comments about the relationship between inflation indexes and food/energy prices. Let me quote this explanation posted 10 years ago by a PhD student of economics at MIT:

"Food and energy are not excluded from the Consumer Price Index. The standard CPI, which is used to make cost of living adjustments to Social Security (among other things), reflects a full consumption basket, including food and energy.

The index that excludes food and energy is the core CPI, which is used for a very different purpose -- namely, the U.S. Federal Reserve's decisions about U.S. Monetary Policy.

A few observers seem to believe that excluding food and energy from the core CPI reflects either deep ignorance or conspiratorial neglect on the part of monetary authorities. Nothing could be further from the truth. In fact, core CPI (along with some alternatives like mean-trimmed price indices) is a very sensible reaction to the dilemmas facing monetary policymakers.

Suppose that the Federal Reserve had a mandate to stabilize the full Consumer Price Index, and that food prices suddenly doubled. To keep the CPI at a stable level, other prices would need to decrease. The problem, however, is that many prices are sticky, meaning that they do not instantaneously respond to changes in monetary and macroeconomic conditions. This is especially true in the service industry (which comprises the bulk of both Gross Domestic Product and the CPI).

To create these compensating price changes within a relatively short timespan, the Fed would have to impose extremely tight monetary policy, with sky-high nominal interest rates. And as we saw in the early 1980s, a large increase in nominal interest rates is extremely destructive to the real economy, leading to a massive increase in unemployment. Given our already weak economic conditions, such a policy would be even more damaging today.

Core CPI is a way to prevent this kind of needless suffering and unemployment. By targeting a stabler set of prices, the Fed avoids the wild swings in monetary policy that would inevitably arise from targeting an index that includes commodity prices. In other words, the demagogues who assail core CPI have it all wrong: the average American would be much, much worse off if the Fed targeted a volatile measure like headline CPI."

Source: https://www.quora.com/Why-are-food-and-energy-costs-excluded...

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#350

Post by Mediterraneo10 »

__s wrote: post #302
tinus_hn wrote: post #165

Earlier quoted context omitted.

I’m sure these 13.5 million people in the US, who now can’t afford food anymore, wouldn’t have been such enthusiastic lockdown supporters had they realized they would pay the price themselves.

Lockdowns aren't free, but neither would ignoring the pandemic be. There's no way to avoid the cost Looking back at the Spanish Flu, https://www.inquirer.com/health/coronavirus/coronavirus-covi... showed that lockdowns ended up being cheaper than no lockdowns Unfortunately the ruling class will always find a way to trickle down costs, so it's no surprise that the poorer you are the more impacted you are. With or with…

The costs of ignoring the pandemic are very country-dependent. In countries whose economies are based on extraction of natural resources, only a fairly small amount of people are needed to run the extraction and export sector. All the other tens of millions of people living in that country have bluntly been called things like "superfluous population" by thinktanks. That small workforce maintaining the economy is little affected by a disease like COVID with its median death age of ~80.

Also, it was believed that COVID presented a threat to the broader economy because it could overwhelm the healthcare system, preventing the broader workforce from accessing treatment. However, one approach is to triage COVID victims, denying them hospital beds so that those beds remain available for the broader population. Liability or elected officials’ sensitivity to accusations of "letting grandma die" prevented some countries from implementing this triaging, but other countries could.

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