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Inflation is Already Here… But It's Being Masked
Since 2007, the world’s Central Banks have collectively put more than $10 trillion into the financial system since 2008. To put that number into perspective, it’s equal to roughly 15% of global GDP.
This kind of money printing is literally unheard of in modern history. And it has set the stage for a roaring wave of inflation to hit the financial system. Indeed, the first signs are already showing up... not in the “official” Government data (which is bogus) but in how those who run businesses around the globe are acting.
Most people believe that when inflation hits, prices have to go higher. This is true, but higher prices can be manifested in multiple ways. Firms usually do not simply raise prices in nominal terms as price elasticity can kill revenues because it would hurt sales.
Instead, companies resort to a number of strategies to maintain profit margins without hurting their sales. One of them is to simply leave part of a package EMPTY, thereby selling LESS product for the SAME price (a hidden price hike).
Food manufacturers, like the politicians currently debating health reform, may have a solution to the obesity crisis: Feed Americans a lot of hot air. But this heated air is not just a figure of speech for packaged goods companies including Ralcorp Holdings' (RAH) Post Foods and PepsiCo (PEP) subsidiaries Frito-Lay and Quaker.
In many packaged products, as much as 50% of the contents is just empty space, an investigation by Consumer Reports reveals. And we consumers are buying that nothingness every day.
Another tactic corporation use is to simply sell smaller packages for the SAME price (another means of selling less for MORE= a price hike).
U.S. Companies Shrink Packages as Food Prices Rise
Large food companies have recently announced that they will raise the prices they charge grocery retailers for commodities-based products. For example, a chocolate bar will cost more soon: Hershey last week announced a 10% increase for most of its confectionery goods.
Of course, straightforward price hikes could cause consumers to buy less of those products or to choose less costly store brands. So in many cases, food companies are trying a different tactic: Keeping the price of an item the same while decreasing the amount of food in the package. The company recoups the costs of the rise in commodities and hopes consumers don't notice that they're getting less of the product for the same price.
http://www.dailyfinance.com/2011/04/04/u-s-companies-shrink-packages-as-food-prices-rise/
However, perhaps the most scandalous policy employed by companies looking to engage in stealth price hikes is to swap out higher quality ingredients for lower quality/ lower cost alternatives. One bigname coffee maker was caught doing this just a few years ago.
Reuters is reporting that many of America's major brands have been quietly tweaking their coffee blends. While most coffee companies consider their blends trade secrets, and are loath to disclose exactly what goes into them, both circumstantial and direct evidence suggests they're now substituting lower-grade Robusta beans for some of their pricier Arabica, and degrading the quality of our coffee…
At least one coffee roaster has admitted it. In November, Massimo Zanetti USA, which roasts for both Chock full o'Nuts and Hills Bros., publicly confirmed upping its Robusta usage by 25% this year.
Why the switcheroo? Prepare to not be shocked. The answer is: price.
Last year, a shortage of Arabica caused prices of the premium bean to spike as high as $3 a pound -- $2 more than what a pound of Robusta would cost. This compares to a five-year historical trend of Arabica costing closer to 70 cents more than Robusta. In recent weeks, the trend has reversed, with Arabica prices falling to just a 62-cent premium over Robusta.
In simple terms, inflation is already around us, though it’s not yet showing up in LITERAL price hikes. Instead, we’re all paying MORE for LESS. And it’s only a matter of time before the situation really gets out of control.
For a FREE Special Report on an uniquely profitable inflation hedge, swing by….
http://phoenixcapitalmarketing.com/goldmountain.html
Best Regards
Graham Summers
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Chart did not show but pricing down about 50% at the henry hub.
Our hydro bill is $300 before they even start calculating kilowatt/hours.
Service charge, delivery charge, debt retirement fee,... welcome to Liberal Ontario.
As for the Arabica prices,...profits are up for most coffee companies as they started cutting the blends with Robusta when prices hit $3.
Commodity smackdowns/manipulations will bite us in the ass, most Colombian and Nicaraguan coffee farmers have a hard time being convinced to even pick the crop at under $2/lb
They will be pulling the trees and planting something else.
Coffee fincas are cheap right now, good time to buy if you want to escape your tax farm of birth.
They measure your WATER bill in kilowatt-hours?
I'll say it again: You Canadians are a hoot!
The electrical bill is called the hydro bill because, lo, many years ago most of our electricity was generated by hydro dams.
The water bill is always higher than the hydro bill.
So, then, by that logic, is your water utility fee called the "pump bill"?
(Sorry, I just love tweaking Canadians' noses over this little bit of semantic nonsense! Nothing personal TK.)
Arthur, regarding the Arabica coffee example:
another possibility-
less demand?
Arabica price has gone down because less of it is being used (less is being put into the drinkers' blend).
Has the price of coffee for the consumer gone down to reflect the lowered quality/ingredients? If not, then the article is correct to claim
that THE AVERAGE UNWARY CONSUMER will experience inflation by substitution.
Theoretically, a consumer could avoid that by purchasing quality Arabica blends at what would have to be a non-inflated price. But given the market monopolization of the big food industry, is that even possible? And most ALL the coffee drinkers would have to do so in order for there to be an average generalized aggregate effect to hold "inflation" for retail quality coffee neutral.
Which brings us to another question. How might government statisticians use "substitution" to mask inflation of the better choice (e.g. steak to Sloppy Joe, owned house to rented room, organic foods to glyphosate-laced foods)?
Nope. Over production in response to high demand/prices.
Don't you just hate it when the markets work in text book fashion. It will you you for a while and it won't be pretty for small growers for sure.
Your argument is false..
It should be "Over production in response to the FORMER high demand/prices."
The major coffee distributors shift of ingredients would cause a lowered demand, and hence, price of Arabica ... and continued profits for lower quality retail coffee so long as the deceit lasts.
The markets currently only work in "text book" fashion IF
you consider "oiligopolies", oligopolies, monopolies, unprosecuted fraud, and politically manipulated graft (Pentagon-NSA black box expenses and QE-TARP handouts) as "textbook".
While I am ranting, I bought a kitchen faucet for 149.00 at an unnamed big box store. On installing it I noticed the plate that sat on my sink wasn't even chromed metal it was plastic. Really? For a 149.00 faucet???? I cut meat in 1973 for 4.25 an hour and after taxes I didn't take home 149.00. What is it going to take? Chicken was .39 a lb now 1.29 for whole fryers. I remember mom and going to grocery store with her in the 60's and her spending 30 dollars and six grocery bags full for a family of 9 for a week. Now there was no pop or chips in that cart as that was maybe an every couple of month treat. I don't know what it will take to wake up this country but we have been systematically stolen from over the past 40 years or longer. I remember 5% savings accounts. Not any more. I think people are maybe finally waking up that we have been fed nothing but lies our whole lives and it sure doesn't feel good. What is an honest days work for an honest days pay? Not sure any more. K, done now but don't feel any better.
I hear that deerH -- when I bought a kitchen faucet at BigBoxHippodrome, I did the weight test. I lifted several different boxes and chose the heaviest one. The sink plate turned out to be actual stainless steel.
Hindered as I am by a long memory (old enough to be on Medicare) regarding assorted things, I am constantly having to reprice things mentally while shopping. I remember going to the NY Auto Show in the spring of 1962. Back then a Rolls Royce was priced at about $20K. Or a Ferrari, a bit over $12K. So what I do is consider a price in ounces of silver, and suddenly I am better able to judge the value of things. To simplify matters, I often simply divide by 10 and ask myself if a price seems right for a given product. I can relate to a $.25 loaf of bread better than at $2.50. We all know better, but we price things in relation to the incredible shrinking value of dollars, not real money.
Unfortunately for us, the savings we have also tended to shring when measured in purchasing power. I long ago considered saving in silver dollars, but my wife pointed out that putting them under the mattress would result in lost sleep, not to mention other benefits, since she's pretty much like the princess in the story of the princess and the pea.
Agree. Most quality items are now cheap crap. But not everything. Would you rather have a 1978 Ford or a 2014? A lot more value today.
In general, I blame us all as being stupid consumers and bad/poor regulators who permit cheap dangerous crap to go to market. really hard to find well made goods.
Cheap eleletrical fixtures abound and they can cause fires. Had three switches fail last year in a six year old house. My parent record ws one in 30 years.
Arthur
take the next step toward understanding:
Ask why and how the "regulators" are "bad/poor"?
Ask how an army of lobbyists and corporate "benefactors" (aka "legal persons") corrupt the political process.
Ask why most every "regulatory" law is actually written by the lawyers of companies supposedly being regulated.
Ask why and how the public is misled, misinformed, and uninformed about unsatisfactory products from food to prescription drugs, and from financial handouts to the weapons and "security" rackets.
Ask "who benefits"? "Who profits"? And who doesn't?
Sheeple wake up? Fat frackin chance. Baaaaa Baaaaa
Somebody put a dick back in Arthur's mouth.
It is not mask, the manufactured tobacco prices index from Bloomberg is up about 30% since 2009 and Bernanke is talking about "dinsinflation"?
My food budget has gone up in the ballpark of 30-50% in the last few years. And I am spending far more time trying to find the best deals.
More Bboadly, what are costs, food or whatnot, done relative to average take home pay? ...with the average unempoyed or under employed included considered in this average.
Inflation should be considered relative to average income.
wisp, but any frozen fish and do the same. The frozen fish I buy, usually mahi, halibut and cod also has gone from 16 to 14 and now down to 10 oz per package, same pricing. Heck at 10 oz per package that is barely enough for two adults. No inflation though right? I have seen hot dogs made and it isn't pretty. I used to work at a wholesale beef plant and we sold choice trim to an Eckrich plant that made hot dogs and bologna and such. So many additives in our food now it is truly scary in addition to the water.
Shouldn't less product for the same price, show up in the official inflation rate? After all, they use hedonics to artificially lower inflation, so less for the same price should show up as higher inflation rate, even though the price itself does not change.
But flat panel TVs are cheaper than ever, not to mention smartphones and many other electronic gadgets, so on average there is little or no price inflation. What, you can't eat electronics? Well, perhaps if we tried eating more electronic chips and fewer potato chips we wouldn't be suffering a worldwide epidemic of obesity. Win-win.
take a frozen pack of chicken, and lift the meat off and weigh the tray and the huge sponge they lay on the bottom, you can not tell me all that water weight is Normal, Pour a bunch of water out of every pack of hotdogs or ham or turkey, the meat industry has made a science out of selling you water
Especially true with shrimp
But hey, as long as that chicken (or chicken + water) is still only $0.99/lb, then all is good with the world and inflation is dead, right? I mean, that's what Orly keeps telling us.
Oh, and never forget the profound monetary wisdom of former poster JimmyJames:
"Constant inflation-adjusted prices prove that there is no inflation".
(I kid you not, he actually seriously tried to make that claim!)
I do not think there is an inflation distinction in meat. If a sirloin or ribeye costs the same ten years ago as pink slime hamburger today. Presto! No inflation. Next serving Americana, Alpo Steaky treats.
I think pink slime is a meat product ,but very often the list of ingredients includes soy products but they never say the %. The liberals want it to be 100% vegan whether you want that or not.
"Since 2007, the world’s Central Banks have collectively put more than $10 trillion into the financial system since 2008."
That's a lot more debt that can't be paid back.
This couldn't be in cahoots with the government, could it?
BLS, IRS, and every USSA government agency is tell perpetual lie for benefit of political class, and political class is quick sell like aging whore to cheapest bidder from banking class. This is cyclical demise of democracy, which is why finding father is create republic, not construct of asinine democracy.
"Is republic ma'am, if you are can to keep."
...meh, but what is Boris know...?
Boris,
If you believe the USA is currently an actual "democracy",
you are badly mistaken.
The general voter does not have the final say in government policies, (except to decide between already corrupted and about-to-be corrupted politicians),
an inevitable outcome when the political process is badly corrupted. Relevant information is kept from the public, deliberate deception is common, and heavy-handed policing stifles grass-roots opposition.
No, no, no, not as to be fool. USSA is quasi-democracy in final stage of transition to tyranny. Of course, you are understand majority of tyranny, when vote of people is purchase with wealth of people. This is long process. First, you are re-educate children with liberal dogma, and separate child from parent, disintegrate family unit and replace with "the State" which is answer to everything. When majority of citizenry are dependent on state (not on family, because family is disintegrate or family is dependent on state), then political class is can use dependency for garner vote, but then for paltry sum is sell out to bankster and industry, until finally law and order is trash bin and string of "crisis" is grant absolute power to absolute few. Ta-da! Now you have tyranny, and "democratic" populace is beg for it for "save us".
Best defense against tyranny is family ties, so attack on family is crucial to tyrannical political class rise.
Boris butts to the kicks! :>D
Nothing new. It's what Washington DC has been doing for a long time.
More taxes for less intelligent leadership.
I already knew that, you go to the grocery store and it will tell you that. My bill has gone up big time.
Any person with a Colorado ounce (28 grams) of common sense knows that prices at the grocery store have gone up tremendously the past few years.
Minimum wage hikes are the end product of inflation.
More pay...less work ..
+1) and the arguments against the min wage law puts the cart before the horse, the result ahead of the cause
Who is Minimum wage for benefit? Is illogical, because if put floor cap on wage, job where is not worth minimum wage is eliminate, so beneficiary of minimum wage is get $0 and not minimum wage. Thanks you very much government for eliminate job! Teenager and low skill worker is now grovel at feet of government class to subsidize wage loss with welfare. And thus is create the FSA Army.
Sense is make, no?
$0 is minimum possible wage.
$0 is minimum possible wage.
Not sure about that. If the fedsters can get us to pay them to devalue our life savings, they're probably clever enough to get at least some of us to pay for the privilege of working.
After all, the Treasury Borrowing Advisory Committee (chaired by JPM and GS) is asking the Fed for negative interest rates. (Fed pays Jamie and Lloyd to borrow money, bank charges you to deposit your savings with them.) The next logical step is "You want a job, huh? Be prepared to pay for it. Nothing's free, chump."
Millions are already paying for the privledge of of working.
Do some simple math.
College kid finally graduates at the cost of ~$120K for a worthless piece of paper that hangs on the wall. Because of a rigged economy and degree that is not economically viable, he is working at McDonald's for $8.50 an hour / 30 hours a week. That's the best he can do. His take-home pay is something like $10K a year. It will be 12 years before he breaks even, provided his entire existance is subsidized by living in his parent's basement and all his out of pocket expenses are covered by said parents. I am not even counting interest on the outstanding student loan that he most likely has. Add this into the equation and it might be 20 years or more before he is able to yield dime one out of his educational investment.
Yes, people are indeed paying for the privledge of working . . . Welcome to the new normal!
Ah, indeed IC, I can just see the scenario now: mandatory 'employment' to pay for the mandatory Obama(Don't)Care, all monitored and enforced by the IRS and eventually DHS as well.
Actually, it has the chilling ring of plausibility to it, even now.
@ akak:
This was covered back in 2005...... http://rense.com/general63/newam.htm
Why not make people on welfare work a little? I live next to a large housing project (1000 units). We just had a snow storm and the public housing authority immediately shovels them out. I have to shovel myself out plus the public sidewalk in front of my place or I face a fine. Yet they can sit there and collect a bunch of free shit and services and not lift a finger.
I think the reasoning goes like this:
If the unemployed did the shoveling (and other related jobs for themselves) then the public servant who currently provides public works is out of a job. Less tax revenue and less spending. So much of our economy is service based; ie I pay you to iron my clothes and you pay me to clean your windows when really we could have done both jobs ourselves.
Not disagreeing with ya but only pointing out how the jobsworth at the council would look at it.
Cheers
There are some jobs one might pay to have. Just sayin'.
Airline Pilots.
After forking out near on 100 grand in training a lot will literally fly for free just to get their hours up. When they have enough to join the Airlines they can then be asked for fork out another 30-40 grand for the inhouse training.
Hooker testing?
"In many packaged products, as much as 50% of the contents is just empty space, an investigation by Consumer Reports reveals. And we consumers are buying that nothingness every day."
"In many Phoenix Capital Marketing articles, as much as 50% of the content is just empty space, an investigation by Consumer Reports reveals. And few consumers are buying that nothingness every day."
There fixed it.... for you.