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Food for thought
The folks at the USDA released their projections for 2011/2012-food price inflation. The bad news is that feeding ourselves will cost ~4% more in 2011. The good news is that USDA thinks prices will rise only ~2.5% next year.
I shop (I hate it). My food inflation is closer to 10%. It depends on what you eat. For example, from the report:
Meats, poultry and fish +6%
Seafood +6.5%
Beef +9%
Fresh vegetables +5%
Cooking oils +7.5%
These items are all well above the average set by the USDA. The following kept the index low:
Processed vegetables +1.5%
Beverages +2%
After looking at this I loaded up on canned peas and Coke.
There’s other information at the site I thought was interesting. For example, what’s your guess on the amount spent for food prepared at home and the amount spent on eating out?
Answer: 52% is prepared at home, 48% is purchased and eaten onsite or taken home. Half of what we eat is “out”. I find that to be a surprisingly high number. Behind that 50-50 ratio is, no doubt, the problem with diabetes and obesity.
If you were wondering how the restaurant-bar business did during the depression the USDA has the numbers. My conclusion is that depressions are very bad for eating establishments. It takes a long time for a real recovery in spending habits. It’s also clear that wars are very good for the restaurant biz.
The “eat out” numbers did fall in 2009. But they recovered in 10’ and are headed higher again in 11’. We had recession. A big one. But consumers barely batted an eye. I’m surprised at this result.
The At Home and Away total 2010 food bill came to $1.2T. That makes eating the largest industry in America.
In 1930 19% of all food consumed was Produced at Home. By 1960 that percentage had fallen to 6%. In 2010 it was only 1.6%. While this trend is not surprising, the magnitude of the drop is worth noting. At one time we were a nation of gardeners, today we just do ‘drive through’.
The food we eat makes us sick. The 2010 estimate for food related illnesses came in at a lumpy 76,000,000 people (About ¼ of us get sick every year). These illnesses caused 325,000 hospitalizations and 5,000 deaths. The economic costs of these illnesses came to $152 billion. In other words, the bad food we eat cost us significantly more in 2010 than the combined operations in Iraq and Afghanistan.
It’s not surprising that the US pays less for food as a percentage of income than any other country. But the comparisons are still interesting. The US spends 6.5% of disposable income for food. Poorer countries like Nigeria, Kenya and Cameroon are forced to pay ~45% of incomes to put food on the table. The high population countries are as follows:
Vietnam = 38%
Indonesia = 32%
India = 28%
China = 22%
I find these numbers troubling. There is only one direction for them to go. The developing countries with big populations will see greater gains in income, with that will lead to increased food consumption. Approximately 30% of income goes to food in these areas. It’s hard not to see that this is going to push up the prices the globe pays for everything we eat.
For example, the USDA put the per person food cost in China at $129 in 2000. Today that number is $360 (280% increase). Over the same period the USA consumption increased only 42%.
It’s old news that China and the other big/fast growing populations are consuming an ever-increasing amount of the world's supply. But these numbers are scary big. If the underlying trends continue (why would they not?) then we are headed into supply problems that can only mean rapidly rising prices.
This conclusion gets back to the beginning. Food inflation in America is running today at 5+%. The USDA says the inflation will moderate next year. This is more government hopium. I’ll take the “over” on their numbers. In my view rapid increases over the next decade are baked in the cake.
The most regressive economic consequence is for food inflation to take place. We have 45mm Americans on food stamps and tens of millions of others on the edge. I find it ironic that the Federal Reserve excludes food inflation when setting monetary policy. While the Fed can’t be blamed for rising food costs, they are most certainly stoking the fires.
Bernanke has said he wants to contain inflation (excluding food and energy) at less than 2%. Food inflation is running at double his target. Possibly Ben needs a new Mandate.
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We are on opposite life tracks. I was born in USA, went to Peekskill schools and eventually renounced my US citizenship and became Swiss... and we agree on most things. I always look for your posts.
Peekskill you say? We are on opposite tracks. I hope you get a CHF pension. Then you can come back to the Hudson Valley and live like a king.
Lets do lunch!
If Bruce is complaining about a few dollars increase in inflation costs his investment returns must be a dismal failure.
Expect to pay for the lunch that you do.
Born in Switzerland and emigrated or do you Swiss blood get citizenship by right?
Good thing for Bruce that his Swiss half aren't the same kind of taxholes as his American half. If the Swiss were anywhere near as bad as America then Bruce would have been forced to give up his Swiss citizenship. Only a flaming hypocrit could still believe in the IRS and a "highly progressive" income tax when he knows that if the Swiss played the same kind of games he would no longer be able to brag about his inner Swissness.
Ha ha CH...facts are hard.
but +1 for "taxholes""
Swiss marginal tax rate = 20%. Average marginal tax rate in US =27%. But the Swiss also have VAT. I think the net is pretty close.
Switzerland has VAT, which ranges from 8% to 10% but no sales tax. What is sales tax in new york city? 16% - 18%??
US citizens are the only people in the world who are charged income tax no matter their country of residence. Essentially, you are a tax slave to the war machine. Any Swiss income less than the equivalent of $70,000 incurs no income tax. Any income derived from outside the county incurs a 5% tax rate. As a result, the average net worth of all Swiss exceeds half million dollars.
Run those numbers through your personal spreadsheet.
... and property taxes on reidences averages 2% of the equity, meaning purchase price minus outstanding loan balance, not some artificial appraisal set by the local governments whenever they need more money. What are people paying in Westchester county?
What is sales tax in new york city?
8.875%, but that's not added to the NYS sales tax of 4%, that's the total.
Bruce, the tax rates are not the point. As a Swiss living in the US you are not subject to FACTA or any other laws created by the Swiss parliment targeting expats because the Swiss don't do that. Christoph Blocher or even Calmy Ray don't behave like Frank, Levin or Schumer and demand that you completely give up all forms of financial privacy and report and pay taxes on everything you own anywhere on the planet to the swiss.
If you lived in Switzerland and ran a small business there you would be very aware of what the IRS is up to. If the Swiss were like the US, you would have to give up every single non-US bank based brokerage or bank account that you have and only bank with the Swiss. Unfortunately like every other non-expat American you couldn't care less what the IRS does to US expats. If you opened your eyes a little you would realize that all these income taxes around the world are nothing more than paying bribes to thugs so they will leave you in peace, yet for some reason you think progressive income taxes are "progressive" when they are nothing more than theft.
Yeah the IRS are coming after Canadians with US citizenship: http://www.theglobeandmail.com/news/opinions/opinion/help-im-on-the-irs-...
I know government is a dirty word around here but the Canadian government is actually pushing back on this.
The Canadian government is probably in on it. Canada is also cracking down on expats as is the UK and every country in Europe. The OECD is constantly pushing for less tax freedom the same way the RIAA would love to own our ipods. These guys have already ganged up on Switzerland and other havens for financial freedom, and those havens have all buckled under to their pressure.
Hey, you sound like you know a thing or two. How do you get money from the US to a foreign country with a different currency, such as the euro, without having the US banks take their huge cut of 5% or more on the "conversion"? If you have a pension and social security that you want sent to you overseas, the damn banks always skim 5% or more right off the top. Do you know any way to avoid this? This is highway robbery!
If you need to move serious money, buy shares of a company that trades on both the US stock markets and the stock market of the destination area. Open a brokerage account at the destination and transfer the account. Or, get paper stock cewrts and carry them with you.
Perfectlly opaque and completely legal.
If you need to move serious money, buy shares of a company that trades on both the US stock markets and the stock market of the destination area. Open a brokerage account at the destination and transfer the account. Or, get paper stock cewrts and carry them with you.
Perfectlly opaque and completely legal.
Not sure about that. On a recent trip to Vancouver B.C. I was told by a brokerage that Americans could not open brokerage accounts. Check around.
You might want to look into everbank.com. You could open, for example, a euro-denominated CD with everbank. Then open a bank account in Paris. When the CD matures, have the proceeds transferred to the Paris account.
The IRS has thoughtfully provided a space on your 1040 so that you can report that, yes, you did open a foreign bank account this year.
Thanks, Amish Hacker, that could save a lot of money! Yes, I know about the reporting requirements for the IRS, and I would recommend to anyone not to hide foreign bank accounts from them--very stupid.
Big bag of Ruffles potatoe chips pre-QE 2.39
Post-QE 4.29
The low costing items have doubled...
Schluchtenscheisser?
bless you
Gesund Heite
a bagel and coffee is still five bucks. and i'm still bitchin' about it.
there ain't no lack of arable land. it surrounds me...and has been laying fallow for decades. let those "prices" soar.
Fuel and fertilisers. Gonna pull the plough yourself?
Food inflation is an energy inflation problem. We eat oil.
There are some good articles here:
http://www.energybulletin.net/
what, are horses illegal now days?
Another good source for all things energy-related is theoildrum.com.
Eat the rich!
Strip all the market analysis and "economics" away from the topic of food.
WHAT THIS IS REALLY ABOUT:
It is very much about control. A number of cities are trying to make living off the land, having a well, or collecting rain water illegal. I think such things have been tried before and are typically met with fierce opposition, but it is still best to be away from population centers when hyperinflation in essentials really picks up. The petrol dollar will end soon, sooner than most think.
Eat the rich? That would be eating the devil itself. The truly rich, not the Barry Soetoro definition of rich, not even the Buffet rich, they are a joke, I'm talking the Rothchild et al rich, The Federal Reserve (sic) rich.
there aren't enough of them.
Eat the thieves!
You're being redundant.