Like Hell There’s No Inflation

Business Insider tells us:

  • Post Raisin Bran goes from 2.50 to 3.00 per box at Walmart.
  • My favorite yogurt goes from .50 to .58 each at Walmart.
  • Cherry tomatoes go from 4.98 to 5.98 per package.
  • Walnuts go from 9.98 to 13.98 per bag at Sam’s.
  • Bottom round goes from 2.48 to 2.68 per pound at Sam’s.

Al Dente tells us

What was once purchased for weekly meals at the supermarket for under $100, now exceeds $120. We have cut back on many items and we still pay more for our weekly food bill.

Econbrowser, however, tells us everything is coming up roses:

If the expectations hypothesis of the term structure (EHTS) holds, then these movements imply that as of 11/8, the average inflation rate over the next five years will be a breathtaking 1.6%!

Here is a free clue for Econbrowser: The tips market does not predict what the inflation rate will be. It predicts what the government will report the inflation rate to be – and indeed, the government is going to report near zero inflation during the next five years – because the government thinks you are stupid.

4 Responses to “Like Hell There’s No Inflation”

  1. Matt C says:

    I’ve noticed a pushback from many econ bloggers against the now-evident inflation. The basic message of which is, “who are you going to believe, the official statistics or your own lying eyes?” I’m rather disappointed in some of these guys.

    Apparently there has been a tangible decline in the prices of everything I don’t actually buy, offsetting the visible and painful increases in the prices of all the things I do buy. Sucks to be me!

    All of our insurance rates went up this year. I don’t even want to think about what my health insurance increase is going to look like in March.

    • jim says:

      I’ve noticed a pushback from many econ bloggers against the now-evident inflation. The basic message of which is, “who are you going to believe, the official statistics or your own lying eyes?” I’m rather disappointed in some of these guys.

      I also notice that supposedly radical and heterodox economics bloggers, such as Friedman and Bryan Caplan, even though they are not advocating the orthodoxy, are unwilling to buck it. Academia tolerates small heresy in small mattes, to fit its self image of tolerance, but there are limits, and these guys know where the limits are.

  2. sbenard says:

    …and as an ag commodities trader, I don’t think we’ve even begun to see the true magnitude of the food inflation that’s coming! I’ve noticed this week that while come commodities that had been going parabolic (like sugar and cotton) have declined modestly from their recent stratospheric highs, just this week, some other ag commodities like livestock (cattle and to a slightly lesser degree, hogs) are reaching new highs day after day. Meat is going to soon be much more expensive (as if it wasn’t already). I may have to become a vegetarian soon, but only if I’m going to continue to eat. 🙂

    My own perception of the lag time between ag commodity price levels and prices at the grocery stores is about six to nine months. That varies by commodity. (It’s much shorter in the crude oil to gasoline environment.) Many companies that buy ag commodities to hedge their input costs are buying grains between six months and 18 months out. Once those supplies are used up, even large corporations will be forced to increase prices substantially!

    In some cases, I expect to see price increases of 50 to 80 percent! Grains especially are going to be impacted, and any product that uses them will increase substantially. Even baby diapers have corn in them!

    And none of this even includes the potentially catastrophic impact of new energy legislation on ag products that the EPA promised us at Christmastime last year. The indirect land use provision alone will remove several tens of millions of U.S. farmland from production, and we still haven’t even mentioned higher oil prices and their impact on farm machinery use or fertilizer costs.

    This new regulatory environment is still several months away, and the impact on food prices and availability won’t be seen for some time. But its impact will be immense! I dread that day! As a preview, however, the leading grain analyst in the US told me this past summer that this new regulation will “fundamentally transform” the US from the world’s leading producer of ag products, to a net IMPORTER of food within a few years’ time. Imagine the domestic and global implications of the world’s largest food producer being transformed into a food buyer! Where will it come from? How much will it cost? I shudder to think what’s coming!

    • jim says:

      sbenard wrote:

      This new regulatory environment is still several months away, and the impact on food prices and availability won’t be seen for some time. But its impact will be immense! I dread that day! As a preview, however, the leading grain analyst in the US told me this past summer that this new regulation will “fundamentally transform” the US from the world’s leading producer of ag products, to a net IMPORTER of food within a few years’ time

      There is a widespread attitude among the ruling elite that capital and entrepreneurship is simply harmful. Whereas the old socialists believed that they should take over factories, replace entrepreneurship with central planning and private capital formation with government capital formation, the new progressive attitude is that they should just shut the evil factories down, stop the horrid evil of private capital formation, and forbid the oppressive evil of entrepreneurship.

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