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Food Prices Are Soaring Faster Than Inflation and Incomes

bloomberg.com

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Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#351

Post by mnw21cam »

uxp100 wrote: post #193
mnw21cam wrote: post #140

Earlier quoted context omitted.

In the UK, last year we had a terrible shortage of bread flour in the supermarkets. Actually, what we had was a sudden reduction in the amount of flour being used by bakeries, and an increase in the amount of flour being used at home. There wasn't a shortage of flour - there was a shortage of small bags to put it in for selling at a supermarket. The industry was all set up for selling a decent proportion of flour in…

Yes, similar in the US. First all flour was sold out, then as it became available again it was bulk bins first, and then brands that sold in 1 and 5 pound bags last. Interestingly (well kinda) the similar yeast shortage is still not back to normal. The shortage was partly related to packaging and the yeast at my grocer is still in the post COVID foil packaging and not in the packages it was before. (Luckily I had yea…

We had a load of news stories on TV about dairies and brewers pouring their milk/beer down the drain, and people spluttering about how they couldn't find any beer or milk on the supermarket shelves. That isn't a supply/demand problem, that's a logistics problem.

(Also - seriously, you have 1 pound bags of flour over there? Most bags here are 1.5kg (3.3 pounds), with some specialist flours in 1kg (2.2 pounds) bags. 1 pound seems a little small.)

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#352

Post by gruez »

throwawaygh wrote: post #338
gruez wrote: post #334

Earlier quoted context omitted.

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

Housing prices reflect the cost of shelter for literally everyone who doesn't already own a house. Shelter is much closer to "food" than to "a piece of paper representing a stake in part of a corporation".

>Housing prices reflect the cost of shelter for literally everyone who doesn't already own a house.

Right, but using the raw purchase price of the house isn't a good measure. Mortgage rates dropping would cause housing prices to go up even if monthly payments stay the same. What actually matters is how much you spend per month on rent, or if you owned your house, the imputed rent.

>Shelter is much closer to "food" than to "a piece of paper representing a stake in part of a corporation".

From a finance perspective there's no difference between a house and a share in a corporation. They're both productive assets that provide returns. In the case of a house, it provides shelter as a service, which can either be consumed by the owner (by living it it), or by selling it (renting it out). The only difference is that with a house, the relation to you is more direct, as opposed to a tiny fraction of a multinational entity.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#353

Post by phendrenad2 »

elzbardico wrote: post #335

Jeebus folks! This is not about the USA. This is about the vast majority of the mankind that lives on developing countries, vast armies of people already under the threat of food insecurity in the best of times, now unemployed and facing the threat of food inflation. This is the stuff that create coup d'etats, dictatorships, rampant crime and wars. Meanwhile you're working on automating work to make this people even…

Who's making it about the USA? The article is clearly about the world. Food scarcity hits people in developed countries too, especially the US where there's no safety net against homelessness if you're unfit to work. That "small price increase in the friggin US of A" is a big deal to people below the poverty line. There's always someone poorer in the world, it's just weird to draw a line in the sand and say "you must be this malnourished to speak up". As for automating work, how far back should we go? Should people be forced to abandon their cars because having horse-drawn chariots employed more people?

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#354

Post by gruez »

kache_ wrote: post #345
gruez wrote: post #334

Earlier quoted context omitted.

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?

>Assets are items that generate cash flow. If you live in it, it's a liability and not an asset

imputed rent is the cashflow if you live in it.

https://en.wikipedia.org/wiki/Imputed_rent

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#355

Post by mywittyname »

whoisninja wrote: post #297
fennecfoxen wrote: post #291

Earlier quoted context omitted.

> CPI is absurd, it only perpetuates consumerism and punishes savers. Okay okay back up. The consumer price index is a series of numbers designed to help people understand what dollar-denominated figures mean to ordinary people going about their lives, spending those dollars. If that's "consumerism," well yes, it's a portrait of consumerism. Many economists, mind you, believe CPI doesn't correct quite enough, and sus…

do you realize all the calculations use CPI? the bond market is highly manipulated because of that, why have a market then? why are retail accounts in germany, netherland already negative rates? does that make sense to you? can banks make money that way? danger of nationalization of banking? personal beef? no. I thought this is a forum for civil discussion and reasoning?

The European bond market has little connection to the American CPI. European rates are determined by a complex market of futures and interest rate swaps between various banks and markets. Knowing that, negative interest rates make plenty of sense, because interest rates in Europe are relative to other currencies -- unlike in the US, where interest rates are based in a single currency.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#356

Post by dominotw »

throwawaygh wrote: post #346
dominotw wrote: post #281

Earlier quoted context omitted.

> 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…

> But, this describes maybe a few dozen housing markets.

Its a national problem

https://www.redfin.com/us-housing-market

'few dozen' is what like 3 dozens? Assuming its a problem only in 36 markets. Wouldn't that be a 'national problem' ? 36 markets should covers a majority of population in the country.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#357

Post by lottin »

gher-shyu3i wrote: post #328
hedora wrote: post #325

Earlier quoted context omitted.

Save the money in a way that encourages economic growth (buy stocks, invest in a small business, etc).

So they're forcing me how to spend my money. What if I don't want to engage in interest (practically all companies deal with interest in one form or another), so when I buy their stocks I'm dealing with interest in some form.

Do you really expect the entire country to change its monetary policy in order to accommodate the peculiar way in which you conduct your finances? That doesn't seem very reasonable.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#358

Post by gumby »

kache_ wrote: post #345
gruez wrote: post #334

Earlier quoted context omitted.

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?

Because you have to pay something to live somewhere (that's how gravity + weather works) there's a cost.

If you own vs rent you transfer that payment stream into servicing an asset. Assuming the asset goes up that's generating an implicit cash flow (one you will have access to later when you sell the asset).

If you can buy your house with cash then your "housing" cash stream is suddenly freed to be spent elsewhere, so you "gain" a cash flow you didn't previously have.

You can make a fair argument that this is a semantic quibble or one of the usual human self-deceptions but this is how people implicitly think of it.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#359

Post by whoisninja »

eru wrote: post #326
whoisninja wrote: post #306

Earlier quoted context omitted.

ah, i mean it is still ok to try to read arguments of both sides ... it's not like Hayek or people like us know it all

I wouldn't call it 'both sides'. For one, there are more than two sides. For the other, George Sergin is very much some-kind-of Austrian. Perhaps the most interesting one. See also eg https://www.alt-m.org/2015/07/29/there-was-no-place-like-can...

good point man

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#360

Post by [deleted] »

fennecfoxen wrote: post #315
whoisninja wrote: post #297

Earlier quoted context omitted.

do you realize all the calculations use CPI? the bond market is highly manipulated because of that, why have a market then? why are retail accounts in germany, netherland already negative rates? does that make sense to you? can banks make money that way? danger of nationalization of banking? personal beef? no. I thought this is a forum for civil discussion and reasoning?

> do you realize all the calculations use CPI? Whose calculations? The Federal Reserve's calculations? The Federal Reserve has access to a variety of data sources, and while the CPI is the one that gets the press, they also use series like the chained CPI, the producer price index, bond yield curves, unemployment (and not just U3, but things like U6 and the labor force participation rate). If all you hear about is va…

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