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No Inflation Friday: Dollarized Panama Issues Price Controls For Basic Goods

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man

Dollarized Panama Issues Price Controls For Basic Goods

Less than four weeks after starting his new job, Panama’s President Juan Carlos Varela already has a serious challenge to deal with: empty grocery shelves.

This is largely a self-inflicted wound that was bound to happen.

Fresh on the heels of his victory in May, the then President-elect announced that one of his first orders would be to regulate prices for staple food products.

He followed through on his promise, establishing price controls on certain brands of roughly two dozen items like chicken, rice, eggs, and bread.

And within a matter of weeks, many grocery store shelves are already empty, at least for the regulated items.

It’s not quite Venezuela or Cuba where it can be downright impossible to buy a roll of toilet paper. But it’s more proof that price controls almost always backfire.

The larger issue here is why the Panamanian government is controlling prices to begin with. The answer is simple: inflation.

According to the Panamanian government, the price of basic foods rose 4.1% from April 2013 to April 2014.

Over the last five years, in fact, food prices have risen more than 24%.

And when average wages are little more than a few hundred dollars a month, a 24% increase in food prices really hurts.

Now, inflation isn’t a particularly unusual phenomenon in Central America, or in developing countries in general.

But what sets Panama apart is that the country is dollarized.

In its entire 111-year history as a sovereign nation, in fact, Panama has never issued its own currency.

Locals and foreigners alike pay US dollars for goods and services across Panama just as you would in Houston, Jacksonville, or Las Vegas.

This means that the country is subject to all the whims and consequences of US monetary policy; when the Fed conjures money out of thin air, the negative effects are quickly exported to Panama.

Yet while it suffers all of the downside of quantitative easing, Panama enjoys very little of the upside.

Of the jobs that the Fed claims they have created by printing $3.7 trillion over the last few years, zero of those have ended up in Panama.

Not to mention, the Panamanian government doesn’t have an endless supply of foreigners lining up to buy its debt.

So to get a true sense of US dollar inflation… and where it’s headed in the Land of the Free… one only need look at dollarized countries like Panama.

 

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Fri, 07/25/2014 - 15:00 | 5004642 Thecomingcollapse
Thecomingcollapse's picture

Inflation, but they tell me there is no inflation!?! 

Fri, 07/25/2014 - 15:11 | 5004714 casey13
casey13's picture

There seems to be something about selling goods at a loss that turns people off.

Fri, 07/25/2014 - 15:30 | 5004795 SumTing Wong
SumTing Wong's picture

We have freezers stocked, pantry is full, and the gardens are bursting at the seams. I'd suggest it for everyone. 

We've got chickens already, and this is easy for any of you to do. Fresh, good eggs every day. We'll slaughter the meat birds later in the fall, and I've got to get the fences up so that we can have cows and pigs and goats...if we can still afford the cows by the time I can get the work done. Damn, have you looked at the prices of cows recently...over $2 a pound on the hoof. Add in fattening them up, then have them butchered...see how much meat you have, and the price may just come to $7-$8 per pound, including the stuff that us just ground beef!

Well done, Federal Reserve. Well done. 

Fri, 07/25/2014 - 15:32 | 5004806 knukles
knukles's picture

So you don't think that Water Rationing in California's Agricultural areas and ObamaCare will work?
Well, Americans are exceptional and ....

Fri, 07/25/2014 - 15:44 | 5004873 SWRichmond
SWRichmond's picture

Price controls are a guaranteeed way to keep the shelves empty.

Fri, 07/25/2014 - 15:59 | 5004966 BuddyEffed
BuddyEffed's picture

Just another strategic world location showing signs of instability.

Fri, 07/25/2014 - 16:56 | 5005248 Stuck on Zero
Stuck on Zero's picture

Obama says everyone in Central America is now a refugee and will receive free airfare to the U.S. where they can live a life of ease on welfare.

 

Fri, 07/25/2014 - 19:19 | 5005751 BigJim
BigJim's picture

Yeah, its amazing. How many examples from history do these fuckers need before they understand? In a competitive market, the price reflects input costs, risk, and interest rates. If you insist a businessman makes a loss, he'll just shut up shop.

Fri, 07/25/2014 - 15:54 | 5004936 slightlyskeptical
slightlyskeptical's picture

Breed a few of them and in a few years your meat will end up being free.

Fri, 07/25/2014 - 16:13 | 5005034 Rinzler
Rinzler's picture

How do you junk a post like this?  Ass-clowns.

Fri, 07/25/2014 - 16:20 | 5005063 Peak Finance
Peak Finance's picture

Chickens are fun, and very friendly if handled from when they are young. They cost only 2 - 3 bucks each ( 2 - 3 bucks for a good breed, shit genetically fucked breeds like Cornish X Freaks can be had for 1.25 or less) They eat table scrapes and cheap feed, and require little space and are so easy to care for!

I have 8 laying hens, they provide all of the protien needs for me, my mom, and 6 dogs!

My only problem is predation, I live in a really rural area with lots of beasties about. 

I don't freeze ANYTHING becuase if the power goes out, it's either a total loss, or, you spend too much in generator fuel costs to keep the freezer going than the food is worth. Keep everything "on the hoof" so to speak. 

Fri, 07/25/2014 - 16:55 | 5005237 SumTing Wong
SumTing Wong's picture

People don't realize the other great thing that chickens provide...fertilizer. And they'll provide a LOT!

Sat, 07/26/2014 - 00:45 | 5006467 willwork4food
willwork4food's picture

You guys are my heros. My wife & I planted rasberrie bushes, blueberrie, plums & peach trees, tomatoes, hot peppers, basil, lettuce, beans, cucumbers. Most of which came around this year.No animals yet..I have never done that because slaughtering it would proly make me puke for a week. Call me a pussy. Go ahead.

Fri, 07/25/2014 - 20:13 | 5005942 TheMeatTrapper
TheMeatTrapper's picture

I'm always well stocked with meat, but I'm learning some invaluable lessons on gardening this year. Raising fresh salad greens in 100 degree heat is a challenge to say the least. I'm having to order seeds from Cambodia and Thailand to experiment with tropical greens. 

I think when I'm done in another year or two I'm going to make a "survival garden" video and sell it. Finding crops that will grow unattended, won't get devoured by bugs and will produce year after year is a challenge. 

 

Fri, 07/25/2014 - 20:17 | 5005951 JoeSoMD
JoeSoMD's picture

In our area it is $4 a pound on the hoof.  Staggering.

Sat, 07/26/2014 - 06:58 | 5006727 Aremo
Aremo's picture

Careful - I understand that if you go co-op the government will show up and make you destroy all your eggs, pour your milk in a ditch, and shoot you if you don't comply.  Monsanto will not get such treatment of course and you'll find a large selection of packaged corn syrup for your larder available for purchase.

Fri, 07/25/2014 - 16:07 | 5005001 Rinzler
Rinzler's picture

Coming soon to a market near you.

Amazing that these guys run the same frakking plays every game without a thought that this play has never, ever worked.

Fri, 07/25/2014 - 16:13 | 5005031 Seize Mars
Seize Mars's picture

No, it works every time.

Works, that is, if your goal is to destroy people and dominate them.

Fri, 07/25/2014 - 16:18 | 5005056 Anusocracy
Anusocracy's picture

If you are totally unneeded, you have to create a situation where you are needed.

Government breaks your leg, then offers itself to you as a crutch. - Harry Browne

Fri, 07/25/2014 - 16:33 | 5005152 syntaxterror
syntaxterror's picture

Works wonders for Jeff Bezos who has a net worth of $30 billion.

Sat, 07/26/2014 - 11:00 | 5007033 Kirk2NCC1701
Kirk2NCC1701's picture

Wait a doggone minute Black... Only last year (April 2013) at your Offshore Summit, Panama was one of those great places to go to.

Why is it that every place you recommend turns to shit after you do so?  TPTB must really hate you or your clients.  At this rate... please recommend the US next.

Fri, 07/25/2014 - 19:19 | 5005752 Idaho potato head
Idaho potato head's picture

Panama red, panama red.....

Fri, 07/25/2014 - 20:53 | 5006056 Buck Johnson
Buck Johnson's picture

That wave of inflation is on it's way back into the US.

 

 

Fri, 07/25/2014 - 15:00 | 5004646 CrashisOptimistic
CrashisOptimistic's picture

US 10 yr now 2.468%.

When you have buoyant growth, you get demand for loans, and when there is demand for something, the price of it (the interest rate charged) rises.

So guess what? THERE IS NO BUOYANT GROWTH.

The economy is weak and getting weaker.

Fri, 07/25/2014 - 15:41 | 5004853 Dr. Engali
Dr. Engali's picture

The ten year yield will head even lower before this is all over with. We will have 1% treasuries and bread will be $20 a loaf.

Fri, 07/25/2014 - 16:35 | 5005159 syntaxterror
syntaxterror's picture

But those 2.5% bonds will triple in value once the 10-year goes down to 1%. Translation: expanded Ferrari and Super Yacht collection for Bill Gross.

Fri, 07/25/2014 - 17:27 | 5005369 CrashisOptimistic
CrashisOptimistic's picture

Yup.

And every CNBC mantra is "bonds are only 2.5%, is that all you want?  You can have much more in stocks."

I do believe the typical intermediate term bond ETF probably has outperformed stocks in total of capital gains and monthly interest payout.

Fri, 07/25/2014 - 15:02 | 5004655 JustObserving
JustObserving's picture

They need to hire a few economists from the US BLS and vanquish inflation once and for all.

Fri, 07/25/2014 - 15:12 | 5004725 astoriajoe
astoriajoe's picture

those guys can wield a keyboard.

Fri, 07/25/2014 - 15:20 | 5004757 MarkD
MarkD's picture

And hand out EBT cards.

You get free food...... and you get free food..... everyone gets free food

Fri, 07/25/2014 - 16:08 | 5005002 Matt
Matt's picture

I don't know why they wouldn't issue cards to give a limited quantity of staples at a subsidized price, unless they (Panamanian government) could not afford to do it.

I guess the flip side is, if you let stores set their own prices but gaurantee to subsidize it a certain amount or down to a certain effective price for consumers, how would you prevent stores from abusing the system and raising prices excessively?

Fri, 07/25/2014 - 17:05 | 5005287 MachoMan
MachoMan's picture

I guess the flip side is, if you let stores set their own prices but gaurantee to subsidize it a certain amount or down to a certain effective price for consumers, how would you prevent stores from abusing the system and raising prices excessively?

In a nutshell, this is the U.S. economy.

Sat, 07/26/2014 - 00:52 | 5006476 willwork4food
willwork4food's picture

Abusing the system? as in trying to get more money for their products? Isn't that what everyone in business does? If they are getting a subsidy from the .gov and others are abusing the system there would be other companies coming in to accept lower profits and wipe the others off the map. THIS is what true capitalism is.

Fri, 07/25/2014 - 15:23 | 5004769 The Longest Call
The Longest Call's picture

Couldn't agree more.  Price controls?  Really?  That's a bit drastic.  They just need some creative accounting.

Fri, 07/25/2014 - 15:29 | 5004786 XitSam
XitSam's picture

What they need is a good slogan, like Whip Inflation Now!

Or Panamanian Inflation So Sorry!

Fri, 07/25/2014 - 15:04 | 5004657 TheRedScourge
TheRedScourge's picture

"But it’s more proof that price controls almost always backfire."

 

Not almost always, ALWAYS. Either they set the price control too loose and it doesn't affect the market at all, or they set it too tight and they kill the production of that item. If they set it on the border of too tight, they kill off the high cost producers of that item.

Fri, 07/25/2014 - 15:31 | 5004796 XitSam
XitSam's picture

Price controls and the three bears

Fri, 07/25/2014 - 15:03 | 5004664 Chief Wonder Bread
Chief Wonder Bread's picture

Coming soon to your local supermarket.

Fri, 07/25/2014 - 15:03 | 5004668 darteaus
darteaus's picture

Following the Venezuelan economic model.  Of course, this time it's different!

Fri, 07/25/2014 - 15:04 | 5004671 NOTaREALmerican
NOTaREALmerican's picture

Ok,  interesting article but it doesn't really explain why there's inflation in Panama.  

Fri, 07/25/2014 - 15:11 | 5004713 buzzsaw99
buzzsaw99's picture

the oligarchs control supply so as to jack prices higher. crony crapitalist swine.

Fri, 07/25/2014 - 16:19 | 5005058 Matt
Matt's picture

From the Article:

"when the Fed conjures money out of thin air, the negative effects are quickly exported to Panama."

So one of two things (or both) is happening in Panama:

1. USD are losing purchasing power

and/or

2. The price of food is increasing due to some reason other than inflation

The government tried to "solve" the problem by setting prices, so the stores, who would lose money at the new prices, stopped carrying the items with price controls on them.

Fri, 07/25/2014 - 15:07 | 5004685 Loophole
Loophole's picture

Another reason we will see the dollar's status as the world's reserve currency disappear. Foreigners are tired of being robbed this way.

Fri, 07/25/2014 - 15:07 | 5004686 Dubaibanker
Dubaibanker's picture

How come no mention here on ZH of the biggest currency experiment in Ecuador by ditching the USD and creating the first ever legal digital currency?

Ecuador Embraces ‘Electronic Money,’ Misses the Whole Point

Since 2000, USD has been the defacto currency in Ecuador. However, this will change this weekend when the new digital currency backed with the assets of the Ecuadorean Central Bank will be launched.

Ecuador President met the Chinese President last week and China has been investing billions in Ecuadorean oil projects.

Let us see what happens on the weekend and over the coming weeks...after a small country takes a giant step away from the USD.

Fri, 07/25/2014 - 15:36 | 5004828 knukles
knukles's picture

Fucking Great Idea.... Oh Jesus H Christ

Backed by the assets of the Ecuadorian Central Bank?
Horeshit collateral

And all electronic?
Hacker's paradise

Doomed.   Fucking Doomed I Say, Doomed

That's about (no, sorry an even dumber fucking idea) that fiat currency alone.

Fri, 07/25/2014 - 15:43 | 5004864 A Nanny Moose
A Nanny Moose's picture

Backed by horseshit? At least horseshit has productive uses, and is renewable.

Fri, 07/25/2014 - 15:48 | 5004899 Dubaibanker
Dubaibanker's picture

It is still linked to the USD but with an as yet undetermined rate.

It is confusing as to why are they creating this currency. Perhaps to move away from the USD and have a 'local' currency internally in the country but for the parameters of comparing it to any other country's FX rates, it is being linked to the USD. They are not using the word pegged.

Dont know what the ultimate formula and concept will be and its impact and its usage can only be known when all the information is available, hopefully soon.

Fri, 07/25/2014 - 16:26 | 5005114 Matt
Matt's picture

"The bill then outlines a plan for the creation of a national electronic currency backed by the Banco Central de Ecuador, which will be pegged at a yet unknown rate to the US dollar."

 

If you have a purely digital national currency, there can be no bank runs. The reserves are probably the US dollars, which are presumably non-redeemable. All transactions can be tracked and taxed. The taxes can be remitted back to the gtovernment to spend instantly, or within a few days if you allow time for transactions to be reversible. 

Fri, 07/25/2014 - 15:59 | 5004955 lasvegaspersona
lasvegaspersona's picture

Ultimately what the world needs is/are secure reliable media of exchange.

If people did not save the currecny and only used it for trade then we would not get hyperinflationary levels of currency.

Ultimately these age old problems will be resolved. The ECB is leading the way by using gold on it's balance sheet marked to market. If the Euro gets rejected (and becomes less valuable due to overprinting) gold will rise in Euro terms. The citizen holding gold will be protected.

THIS is the biggest part of the ECB/ Euro that is never mentioned....not by Sprott/ Turk/ Schiff/ Willie/ Faber/ KWN/ Rickards/ Kirby  ...no one...yet there it is on the balance sheet month after month...ever wonder why they did it that way?...it is worth wondering about.

Rather than just calling the Euro just another evil fiat currency...think deeper. It was developed by 2 Nobel Laureates and several intellegent economists inspired by Triffin (actually he worked on it) and Rueff and others. It was created for a reason, one that is about to become more obvious and (unfortunately) soon.

Fri, 07/25/2014 - 16:38 | 5005177 Matt
Matt's picture

"If people did not save the currecny and only used it for trade then we would not get hyperinflationary levels of currency."

No. hyperinflation is due to loss of faith in the currency.

Inflation, which undermines faith in the currency and can lead to hyperinflation, is simply due to government diluting the currency by continually spending more than it brings in through taxes.

If a government never ran deficits, and checking accounts were full reserve, there would be almost no real inflation.

Fri, 07/25/2014 - 18:32 | 5005607 Buckaroo Banzai
Buckaroo Banzai's picture

The Euro was an interesting idea that failed in execution. You can't have a currency backed with debt that isn't consolidated politically. Which means either the "intelligent economists" were duped, or they were participants in a scheme to use the euro as a trojan horse to politically unite europe against its will.

Venal or stupid? The age old question. As always, the correct answer is, "both".

Fri, 07/25/2014 - 16:00 | 5004974 pazmaker
pazmaker's picture

Did you read your own link???

 

This is Ecuador government trying to completly control any electronic currency, thereby making the use of crypto-currencies like bitcoin illegal.  It means they will be in the loop of any and all electronic money transactions= 0%PRIVACY.

lookat some qoutes:

"The new legal code would establish Ecuador’s central bank as the sole legal issuer of “electronic money,”effectively making decentralized cryptocurrencies such as Bitcoin illegal as forms of payment."

 

another qoute:

Reaction

The group BitcoinEcuador drafted an open letter to the assembly on Monday to make the case that the new monetary code fails to respect the privacy of individual finance and fails to embrace the potential of decentralized cryptocurrencies.

“Creating an electronic currency brings unquestionable benefits such as reduced costs for the system and user convenience; however, inadequate technical implementation may severely affect user privacy,” reads the letter, which is posted on the group’s home page."

Fri, 07/25/2014 - 16:23 | 5005086 Dubaibanker
Dubaibanker's picture

As far as I understand, there will be no Ecuadorean Sucre, no USD, but a NEW currency in a digital form 'linked' to the USD. Isn't that a new thing?

http://www.cityam.com/1406278303/bitcoin-banned-ecuador-until-new-state-...

They are talking of making payments to public sector employees and payments to contractors in this new currency. This should lead to lower demand of USD currency in Ecuador if everything else is illegal. Probably they need more time to transition to completely obliterate the USD.

Dont know the final outcome until the final bill is signed into law by the President and analysed by all.

Fri, 07/25/2014 - 18:36 | 5005622 Buckaroo Banzai
Buckaroo Banzai's picture

99.99% of all dollars are digital, therefore it is already a digital currency. And it goes without saying that the dollar is 100% linked to the dollar. Why bother creating a new currency in the first place, when it is functionally identical to the dollars you were already using?

Talk about a half-baked plan!

"Dont know the final outcome until the final bill is signed into law by the President and analysed by all."

Did you forget the /sarc tag, or was that a little bit of unintentional comedy?

Fri, 07/25/2014 - 21:48 | 5006162 ThroxxOfVron
ThroxxOfVron's picture

Is this a pegged or floating/speculation driven digital currency predicated upon a leveraged derivative of the debt-based Federal Reserve Note?

 

Note to self: send Blyth Masters more prosecco and roses...

 

 

Fri, 07/25/2014 - 16:26 | 5005113 Oldrepublic
Oldrepublic's picture

Bravo Ecuador, first they kicked the US out of the Manta base and now they are trying to dump the dollar

Fri, 07/25/2014 - 16:33 | 5005150 meghaljani
meghaljani's picture

At the same time, Equador also banned bitcoin. 

Fri, 07/25/2014 - 15:08 | 5004693 slightlyskeptical
slightlyskeptical's picture

Price controls can only work if the country itself controls the production of such. I personally think that countries should take control of basic goods and resources. If only one could figure out how to do it without corruption and incompetence.

Fri, 07/25/2014 - 15:09 | 5004702 youngman
youngman's picture

Sorry slightly...but that does not work either....

Fri, 07/25/2014 - 16:02 | 5004838 knukles
knukles's picture

Karl Marx had that idea a long time ago... and was preceded by many more...
The state owning the means of production.
The biggest most important means of production are the people.

Go figure how that works

I cannot believe some dumb ass redded you for that comment.....
Either an Egomaniac or
Dumb Fuck
(or both of the above)

Fri, 07/25/2014 - 15:31 | 5004791 Dr. Engali
Dr. Engali's picture

A) Price controls always lead to scarcity, and B) Statists are always corrupt.

Fri, 07/25/2014 - 15:46 | 5004883 A Nanny Moose
A Nanny Moose's picture

Price controls = scarcity for the tax livestock and wealth accumulation for corrupt statist oligarchy.

Fri, 07/25/2014 - 16:11 | 5005026 Thought Processor
Thought Processor's picture

 

 

Just ask Venezuela.  

 

There is ample historical evidence that says that when price controls are activated the real problems have only just begun.  

Fri, 07/25/2014 - 18:02 | 5005504 Jethro
Jethro's picture

I was going to mention Venezuela.   Thank you for making my point for me.

Fri, 07/25/2014 - 15:56 | 5004953 NOTaREALmerican
NOTaREALmerican's picture

Re:  If only one could figure out how to do it without corruption and incompetence

The curse of all the ISM's.    Even capitalism would work if we didn't have sociopaths and assholes.

Fri, 07/25/2014 - 16:15 | 5005041 Seize Mars
Seize Mars's picture

slightlyskeptical

Yeah, if only one could figure that out.

Meanwhile, several hundred million shallow graves around the world will tell you how "this time we'll get it right."

Fri, 07/25/2014 - 15:08 | 5004695 youngman
youngman's picture

And that French construction company is making so much money on the canal remodel....lol

Fri, 07/25/2014 - 15:12 | 5004717 NoWayJose
NoWayJose's picture

Coming to Amerika... Better grab some extra TP while you can...

Fri, 07/25/2014 - 22:53 | 5006277 Freddie
Freddie's picture

I sort of hoarded clothing like khaki pants, shirts, socks.  I would buy things on sale at Target or KMart when they had khaki pants, etc. $12 sales or clearences, etc.  Good stuff.

A lot of it I have not even worn yet.  The cost of clothing is up quite a bit.  I should have bought more underwear.  Some of the prices have gone up 40%.

Stocking up on basic goods is a good idea.

Sat, 07/26/2014 - 01:05 | 5006494 willwork4food
willwork4food's picture

Batteries for flashlights, devices have doubled in the last few years too. I tend to invest in tools. Silver is great but tools you can use and will usually retain their value if well maintained.

Fri, 07/25/2014 - 15:18 | 5004724 Dutti
Dutti's picture

As far as I can see, there are no empty store shelves here in Panama. However it's true, there is inflation, but Panama is absolutely not heading in the direction of Venezuela or Argentina. It's the best country in Central America.

Fri, 07/25/2014 - 15:13 | 5004726 jirv25
jirv25's picture

ZH is wrong, pls apologize. Panama issue its own currency in 1941 (could be wrong by some years). Panama ordered the canadian mint to issue the equivalent of 2 million dollars in Balboas. We want the seniorage over our currency. All transaction should be done in Balboas since then. 

So not true.

PS..misteriously a week later for some inexplicable reason...REGIME CHANGE. The democratically elected president was kick out by a coup from a military boss. And then for another inexplicable reason Balboa was dissmised and king dollar back.

Fri, 07/25/2014 - 15:26 | 5004780 Dr. Engali
Dr. Engali's picture

"ZH is wrong, pls apologize"

 

Simon Black is no more Zero Hedge than you are. Does the Hedge need to apologize for your posts too?

Fri, 07/25/2014 - 19:31 | 5005801 jirv25
jirv25's picture

You take this too seriously.....if you read all the post it was a 1 week currency, and more like a joke when I refer to Zerohedge apology.

You read too much fearmongering, calm down.

 

 

 

 

 

 

 

 

 

 

 

 

Fri, 07/25/2014 - 15:14 | 5004730 kchrisc
kchrisc's picture

History does not repeat, the crimes and criminality of government do.

 

"Guillotine use repeats as well."

Fri, 07/25/2014 - 15:14 | 5004731 Jack Sheet
Jack Sheet's picture

Old DDR joke, in the grocery store

Customer: Shit, do you not have potatoes here?

Salesperson: You've got it wrong. Here there are no apples. No potatoes are at that counter over there.

Fri, 07/25/2014 - 18:00 | 5005500 Grumbleduke
Grumbleduke's picture

Konsum - what we don't have, you don't need!

Fri, 07/25/2014 - 15:21 | 5004763 BeetleBailey
BeetleBailey's picture

Talked to my soon to be ex FX broker in Sydney this week.

FATCA was implemented in AU July 1st.

THAT was the straw that broke the Koala's back.

He lamented that when they started in business, they ogled and eyed US business.

Now, they cannot get rid of it fast enough....

speaks volumes....

Fri, 07/25/2014 - 15:22 | 5004766 Super Hans
Super Hans's picture

I haven't had toilet paper in a month!  I'm fine as long as I get a clean break!

Fri, 07/25/2014 - 15:39 | 5004842 COSMOS
COSMOS's picture

Price controls or high inflation all result in a net lowered food intake which means you shit less and less need for toilet paper.  It all takes care of itself in the end, dont worry about the toilet paper.

Fri, 07/25/2014 - 15:45 | 5004878 Jack Sheet
Jack Sheet's picture

high fiber, home grown, and a country shit every 24 hours.

Fri, 07/25/2014 - 17:01 | 5005270 edifice
edifice's picture

If you eat mainly vegetation, your shit will be the size of a small country, every 24 hours.

Fri, 07/25/2014 - 15:41 | 5004852 lasvegaspersona
lasvegaspersona's picture

The 'rabbit diet' yields pellets...more reliable than 'clean break'.

Fri, 07/25/2014 - 22:04 | 5006193 DoChenRollingBearing
DoChenRollingBearing's picture

Ha ha ha ha ha ha ha.....

Fri, 07/25/2014 - 16:37 | 5005164 edifice
edifice's picture

In CO, we call this, "The Perfect Pinch". Duuude, I didn't even have to wipe! I got the perfect pinch!

Fri, 07/25/2014 - 15:39 | 5004843 icanhasbailout
icanhasbailout's picture

24% over five years is less than we've seen here

Fri, 07/25/2014 - 15:39 | 5004844 lasvegaspersona
lasvegaspersona's picture

Alpo and Wiskers still in good supply...quicherbichin...

Fri, 07/25/2014 - 15:40 | 5004849 Obama LaForge
Obama LaForge's picture

I don't know, if oil and other fossil fuels are getting scarce, all of these prices would naturally rise too. That's not necessarily inflation. And all as gold steadily declines. I think the world is going to end up selling all their gold to buy fuel. Gold can neither be created nor destroyed, but fossil fuels can't be created en masse and they're being consumed at alarming rates.

Which is going to be scarcer in the future, something you absolutely need in order to get the tractor running, or a yellow metal that doesn't do much other than look expensive?

Fri, 07/25/2014 - 15:47 | 5004891 Dr. Engali
Dr. Engali's picture

Oil will be scarcer, but sooner or later it won't be sold for paper (which is getting a lot less scarcer).

Fri, 07/25/2014 - 17:27 | 5005370 slightlyskeptical
slightlyskeptical's picture

Those who own and control the production of fossil fuels will own EVERYTHING including all the GOLD before that last drop of oil is pumped out of the ground. The people that produce the food will also flourish. How much would you pay to get the water or heat to keep you alive?

Which is exactly why I think government control of natural resources and agriculture is so neccesary. Just to be clear this ideal requires a very different set of people running government than we currently have. We have computers to track where every dollar goes, to measure efficency levels, etc. Make it all 100% open, so that even you and I can audit the government down to the employee level. I don't believe that GREED can be the only incentive that drives the economy. We need accountability more than anything.

Socialism for our needs

Capitalism for our wants

Fri, 07/25/2014 - 21:10 | 5006088 Chief Wonder Bread
Chief Wonder Bread's picture

You need to change your tag to 'highlygullible'.

Fri, 07/25/2014 - 15:43 | 5004863 Itchy and Scratchy
Itchy and Scratchy's picture

Coming to a supermarket near you soon!

Fri, 07/25/2014 - 15:47 | 5004898 Roger Shermanator
Roger Shermanator's picture

Price controls Almost always back-fire.  Fixed it for you.

Fri, 07/25/2014 - 16:01 | 5004979 Dr. Engali
Dr. Engali's picture

Price controls always back-fire.

 

There fixed that for you.

Fri, 07/25/2014 - 15:54 | 5004934 TalkToLind
TalkToLind's picture

And it begins:  The Venezuelization of Panama.  But it's for the chillrens...so don't worry about the empty shelves.

Fri, 07/25/2014 - 16:01 | 5004961 10mm
10mm's picture

Give it time. Panama's Prez sooner or later will be on phone with BRIC leaders. And you folks in Panama saying shelves are fine and full now must understand the Dollar is cooked by D.C.

Fri, 07/25/2014 - 16:04 | 5004990 Latitude25
Latitude25's picture

Colon Panama.  The city where you can't walk around in broad daylight without the risk of being robbed at gun point.  But don't worry the taxi drivers are armed and will protect you if you pay the fare.  Otherwise carry a  handgun and be ready to use it because you will be forced to in short order.

Fri, 07/25/2014 - 16:21 | 5005070 Spungo
Spungo's picture

Simon Black's penis is not as large as Black Simon's penis.

Fri, 07/25/2014 - 16:23 | 5005085 Anusocracy
Anusocracy's picture

He's definitely smarter than your average Simple Simon, though.

Fri, 07/25/2014 - 16:30 | 5005139 JaKst3r
Fri, 07/25/2014 - 16:34 | 5005154 world_debt_slave
world_debt_slave's picture

puppet gov with fiat finger up its arse

Fri, 07/25/2014 - 16:43 | 5005195 q99x2
q99x2's picture

Make Bitcoin the official currency of Panama and you will rapidly become the ruler of the world. Not that anyone in their right freakin mind would want to rule the world.

Fri, 07/25/2014 - 18:00 | 5005448 Oldrepublic
Oldrepublic's picture

A good place to see price controls in action is on the Colombian-Venezuelan border, Venezuela is a a place where gasoline is cheaper than water, gas costs just 5 cents a gallon,, water one dollar a liter. much of the cheap gas is smuggled across the border to Colombia and sold where gasoline costs around $4.50/gallon

Fri, 07/25/2014 - 18:13 | 5005541 slightlyskeptical
slightlyskeptical's picture

Thats a pretty lame example..similar to people avoiding tax stamps on cigarettes. People are filling up their gas tanks, siphoning and then reselling. I doubt there is much overall impact and it would be easy to put a stop to if it was. 

They did say they need to raise the price a bit so they can decrease usage (lots of waste) and cover the cost of production the oil exporting business doesn't cover. That number is likely $.17/gal.  Without the export biz cost of prduction is about $.40/gal.

Our much better capitalist system has us paying about $4 US and I know Europe is much higher. Go capitalism!

Fri, 07/25/2014 - 19:52 | 5005878 Not My Real Name
Not My Real Name's picture

Forty cents per gallon? You statists are a riot. From Forbes:

"[Venzuelan] oil minister Rafael Ramirez has said that the breakeven cost to supply refined gasoline to the masses is $1.62 per gallon, or about $70 per barrel. But because Venezuela’s refineries can’t even make enough fuel to meet demand, PDVSA [Venzuela's state-run oil company] also has to import about 80,000 bpd of refined products (for which they must pay the far higher market price in excess of $2.50 per gallon). All told, the subsidized fuel costs PDVSA about $50 billion a year — that’s at least $25 billion a year in fuel subsidies plus another $20 billion or so in foregone revenue that PDVSA desperately needs to reinvest into its oil fields."

The impacts go much deeper than that ... think shortages of everything else in Venezuela. You can read all about it here:

http://www.forbes.com/sites/christopherhelman/2014/02/20/cheap-gasoline-...

... or you can keep believing in unicorns and magic fairy dust. Forward!

 

 

Fri, 07/25/2014 - 17:44 | 5005454 pashley1411
pashley1411's picture

Still thinking that the decrees of policy makers are to make the world a better place, however befuddled.   silly boys and girls

The purpose of government actions are to precepitate a crisis, necessitating an increase of power (and so wealth) to the decision-makers, and their psychophants (sic) and handlers.

 

 

Fri, 07/25/2014 - 18:02 | 5005506 gcjohns1971
gcjohns1971's picture

Also note that the people there have been here before, over and over again, and still haven't caught on.

These are the people being imported by the millions into the US.

 

I wonder what they're intended for? (SARC)

Sat, 07/26/2014 - 05:59 | 5006702 Jano
Jano's picture

Few hundret dollars per manth is a luxury wage in Ua. And Bulgaria, or ROmania.

Sat, 07/26/2014 - 15:00 | 5007661 Livermore Legend
Livermore Legend's picture

There is not and will not be "Stagflation".......

If only it could be that "Benign"......

Nor will there be "Hyperinflation" or "$ 20 Bread"..... 

The "Stagflation" of the 1970's was a Temporal State between Outcomes....

We are in the Outcome now.......

They indeed wish they could "Inflate their Way Out"....

Participants want to believe this as those on the Titanic wanted to believe......

This is explained succinctly in:

http://www.talentseekscapital.com/uploads/3/2/6/9/3269986/zugzwang.pdf

 It is no more complicated than that.......

Sat, 07/26/2014 - 15:30 | 5007735 At120
At120's picture

But... but... I thought dollarization was safe?!

Sun, 07/27/2014 - 07:05 | 5009201 AdvancingTime
AdvancingTime's picture

Prices under the pressure of changes in supply and demand can be a lot like a carnival ride. By this I mean fast and abrupt swings can take place and often we see prices go to unimaginable extremes. It would be better to say changes in "supply or demand" because we should highlight and fully realize the market works best when at least one side of the equation remains somewhat stable. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/02/inflation-can-effect-supply-and-d...

Sun, 07/27/2014 - 07:12 | 5009205 AdvancingTime
AdvancingTime's picture

I contend the primary reason that inflation has not raised its ugly head or become a major economic issue is because we are pouring such a large  percentage of wealth into intangible products or goods. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.

The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas.

 It is important to remember that debts can go unpaid and promises be left unfilled. If this happens where does it  leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years.  More in the article below.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

Sun, 07/27/2014 - 21:24 | 5011178 Lostinfortwalton
Lostinfortwalton's picture

What was the Panamanian government's revenue from the canal? Had to be astronomical - where did the money go?

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