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Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

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Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#41

Post by bserge »

randomsearch wrote: post #38
RobertoG wrote: post #29

Earlier quoted context omitted.

I'm pro-MMT, not hiding. From the article, that you obviously didn't bother to read: "Drought and heat continued to hurt the wheat harvest in July in Canada, the world’s biggest supplier of durum wheat, months after a harsh winter hit the Russian crop. Grain shipments from Western Canadian port terminal elevators tumbled 41% in the third week of August from a year-ago, according to a Quorum Corp. report. European cro…

For anyone else wondering about MMT, fascinating: https://www.investopedia.com/modern-monetary-theory-mmt-4588...

So basically, the way I understand it, money is just a means of getting people to do work.

All of this work/activity is for fiat currency what gold was in the gold standard.

So the ceiling is much higher, but there's still a ceiling - go too high and your currency is in trouble.

Also manage the removal of money properly - too much tax and people are in trouble, which leads to your currency being in trouble.

Can it ever recover if people lose trust in it? Since that's a major part of what's keeping such a system going.

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#42

Post by the-dude »

giuliomagnifico wrote: post #7
csomar wrote: post #6

Earlier quoted context omitted.

Wow. Just a few Kms across the Mediterranean, Pasta sells for around 0.29€/kg. Also, this is the "favorite?" food for people who have tight incomes, so they might be very sensitive to these changes. > Instead I see the inflation rising in the fruit and vegetables prices! There’s a 25-30% increases since the beginning of the 2021. It's only a matter of time it spreads to the rest of the basket. I guess the pro-MMT fol…

A Barilla box usually is about 0,8-1€ but half a kilo in Italy. There’re cheaper brands but also more expensive. I don’t think you will find a box of 0.5kg of pasta at 0.15€ in Europe. Maybe you’re getting confused between a box (half a kilo) and a kilo of pasta.

Barilla box @ 500g is €1,50 - €1,60 in NL.

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#43

Post by yaa_minu »

bserge wrote: post #41
randomsearch wrote: post #38

Earlier quoted context omitted.

For anyone else wondering about MMT, fascinating: https://www.investopedia.com/modern-monetary-theory-mmt-4588...

So basically, the way I understand it, money is just a means of getting people to do work. All of this work/activity is for fiat currency what gold was in the gold standard. So the ceiling is much higher, but there's still a ceiling - go too high and your currency is in trouble. Also manage the removal of money properly - too much tax and people are in trouble, which leads to your currency being in trouble. Can it ev…

>>Can it ever recover if people lose trust in it? Since that's a major part of what's keeping such a system going.

This is the most important thing MMT supporters seem to ignore. Fiat money is a confidence game and all the theories will be pointless if people lose trust in the money.

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#44

Post by RobertoG »

bserge wrote: post #41
randomsearch wrote: post #38

Earlier quoted context omitted.

For anyone else wondering about MMT, fascinating: https://www.investopedia.com/modern-monetary-theory-mmt-4588...

So basically, the way I understand it, money is just a means of getting people to do work. All of this work/activity is for fiat currency what gold was in the gold standard. So the ceiling is much higher, but there's still a ceiling - go too high and your currency is in trouble. Also manage the removal of money properly - too much tax and people are in trouble, which leads to your currency being in trouble. Can it ev…

Do you have any historical example where people lose trust in it and it didn't recover?

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#45

Post by RobertoG »

yaa_minu wrote: post #43
bserge wrote: post #41

Earlier quoted context omitted.

So basically, the way I understand it, money is just a means of getting people to do work. All of this work/activity is for fiat currency what gold was in the gold standard. So the ceiling is much higher, but there's still a ceiling - go too high and your currency is in trouble. Also manage the removal of money properly - too much tax and people are in trouble, which leads to your currency being in trouble. Can it ev…

>>Can it ever recover if people lose trust in it? Since that's a major part of what's keeping such a system going. This is the most important thing MMT supporters seem to ignore. Fiat money is a confidence game and all the theories will be pointless if people lose trust in the money.

A government only accept its currency to pay taxes -> you have to pay taxes -> you need the currency even if you lose trust in it.

It's the power of raising taxes what gives money its value.

"Variations of the modern-money narrative are found repeatedly throughout history. The levying of monetary ­taxes to create waged labor was “a nearly universal experience throughout Africa” in the colonial era, explains economist Randall Wray. Hut taxes, coupled with extreme violence and racial segregation, forced unwilling migrant laborers into the gold and diamond mines of South Africa. Bernard Magubane, an anthropologist, described the purpose of these taxes as being to “increase the economic pressure on the African peasants” to force them into waged work."

from: https://thenewinquiry.com/the-world-according-to-modern-mone...

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#46

Post by bserge »

RobertoG wrote: post #45
yaa_minu wrote: post #43

Earlier quoted context omitted.

>>Can it ever recover if people lose trust in it? Since that's a major part of what's keeping such a system going. This is the most important thing MMT supporters seem to ignore. Fiat money is a confidence game and all the theories will be pointless if people lose trust in the money.

A government only accept its currency to pay taxes -> you have to pay taxes -> you need the currency even if you lose trust in it. It's the power of raising taxes what gives money its value. "Variations of the modern-money narrative are found repeatedly throughout history. The levying of monetary ­taxes to create waged labor was “a nearly universal experience throughout Africa” in the colonial era, explains economist…

OK that makes sense. But what about everything else besides taxes? If people don't trust a currency, they can begrudgingly use it to pay taxes.

What about food, fuel, clothes, etc? Taxes on everything will only go so far, at some point people will just trade all that illegally, on black markets, using different currencies.

Actually, I think that's the case in some countries today and the Soviet Union had a similar situation, people practically bartered, ignoring the state.

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#47

Post by bserge »

RobertoG wrote: post #44
bserge wrote: post #41

Earlier quoted context omitted.

So basically, the way I understand it, money is just a means of getting people to do work. All of this work/activity is for fiat currency what gold was in the gold standard. So the ceiling is much higher, but there's still a ceiling - go too high and your currency is in trouble. Also manage the removal of money properly - too much tax and people are in trouble, which leads to your currency being in trouble. Can it ev…

Do you have any historical example where people lose trust in it and it didn't recover?

If "changed/rebuilt/replaced" counts as recovered (and I guess it does), then no.

In the end, there will always be a government and people will need to trade.

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#48

Post by touisteur »

touisteur wrote: post #40
MomoXenosaga wrote: post #31

Earlier quoted context omitted.

Well it's not a big deal for people in Europe if grain prices go up or down by 50% so the headline is a bit ridiculous. Nobody in Italy is going to starve.

I did food distribution to students last winter and... The kids are living on pasta & rice, the cheapest one near the ground in supermarkets. They've teamed up to try and buy larger quantities/lower price. Same w/ dairy and basic staples. The kids I met there probably won't handle that increase well. I mean the nonprofit giving them food flyers were all 'give veggies, fruits, bottled/canned sauce, they're already onl…

And, we've taken (big corp) as many interns we could take (4 times more than usual), stretching everything, and I know some of them interns would have liked more attention, more guidance and I was upfront, this is a special time, we're taking as many as we can, they'll have a (not so great, but better than most SMEs) salary for 4 or 6 months and industry experience in a well-known company, and we'll give them real subjects and treat them with respect. Just less availability and guidance than what we were used to. Sorry not sorry.

Of course we got work in exchange, but if you don't try to help now, when will you.

Turns out, the results of this are amazing. Success or failure of the internship subjects, we've learned SO much from all the experiences, many of our young colleagues now have a tiny management experience, some really want to take more next years, some are more 'not for me but I'll help if you ask' and some are 'uh people management is not for me'. And there's a good mood from all this.

Most of the interns were amazing, ultra motivated, and (it's cynical, I know) so grateful. It's going to sound very trumpian but some of them, (not 'big guys, strong guys') when announced we were taking them in, literally melt down crying. One of them came in the last days of his stay, telling me he was so grateful we 'saved' him, because he couldn't find anything (the boy is top-5 in his school, WTF). Most of them came to me or their supervisor in the last days saying how hard it was out there and how relieved they were.

It was a hard year (try seriously reading, reviewing, correcting, RE-READING 35 internship reports/memos in 3 weeks), but no regrets.

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#49

Post by RobertoG »

bserge wrote: post #46
RobertoG wrote: post #45

Earlier quoted context omitted.

A government only accept its currency to pay taxes -> you have to pay taxes -> you need the currency even if you lose trust in it. It's the power of raising taxes what gives money its value. "Variations of the modern-money narrative are found repeatedly throughout history. The levying of monetary ­taxes to create waged labor was “a nearly universal experience throughout Africa” in the colonial era, explains economist…

OK that makes sense. But what about everything else besides taxes? If people don't trust a currency, they can begrudgingly use it to pay taxes. What about food, fuel, clothes, etc? Taxes on everything will only go so far, at some point people will just trade all that illegally, on black markets, using different currencies. Actually, I think that's the case in some countries today and the Soviet Union had a similar si…

Maybe the most important lesson of MMT is that public debt, deficits and all those things that so frequently are at the center of the public debate are irrelevant compared to what's really important: real resources.

It doesn't matter if you have a big or small public debt (in your own currency), what's important is the real things in the economy.

If people is, for instance, using dollars instead of the currency of the country, it's, probably, because your country depend totally on imports (in the worst cases for basic things like food or energy).

If that's the case, the first steep to solve it, it's to recognize the problem. If you don't recognize the problem, you will finish addressing virtual problems like deficits or public debts instead of real resources constrains. Those are very difficult problems to address, but it will be even more difficult if you don't understand them.

The mainstream advice to development is: open your economy to competition, reduce deficits and public debt. The result of that is the impossibility of an agricultural, infrastructure or industrial policy that solve the real resources problem.

Re: Italy Braces for Pasta Inflation Amid Soaring Durum Wheat Prices

#50

Post by austinjp »

MomoXenosaga wrote: post #31
retrac98 wrote: post #27

Seems the real story here is climate change significantly increasing the price of a staple food. “Pasta is cheap anyway” is such a privileged point of view.

Well it's not a big deal for people in Europe if grain prices go up or down by 50% so the headline is a bit ridiculous. Nobody in Italy is going to starve.

Not really sure I follow? For anyone living in poverty, increases in the price of staple foods will be a disaster, no?
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