Nope, Definitely No Inflation Here

10 Comments on "Nope, Definitely No Inflation Here"

Dwight Eichorn on Thu, 19th Dec 2013 3:00 am 



Being involved in the livestock industry some reasons for the increase in ground beef come to mind. The droughts that a lot of our beef producing parts of the country had been going through the last couple of years, forced many ranchers to sell their Momma cows so that made for more ground beef the last couple of years so naturally the price came down. So now we have way less momma cows to supply us with calves and that makes for way less beef so prices increase. The percentage of beef being ground up has also increased to meet the demand so pricier meats(steaks) are getting ground up. The current model of feeding these cows is also very petroleum intensive (only works with cheap oil) so increase in price(The state of Nebraska alone figures that its feedlots have lost more than 1 billion $ in the last few years). I tend to think that inflation is not that bad, its just the price of oil affects so many other things. And think about this At 7% inflation prices double in about 10 years.

dissident on Thu, 19th Dec 2013 4:21 am 



What you say is definitely part of the story, but the price ramp started in 1999 according to the graph. I find the claim that inflation is 2% during the last 15 years to be ludicrous. Food is supposed to be around 1/3 of the total and food has definitely not been going up at 2% per year, more like 7% at least. Housing costs are another treated in a completely BS manner as well, by inferring a rental rate and not via the actual house price. Housing has been getting expensive dramatically over the last 20 years.

So the shadowstats estimate of around 6% inflation is correct and the official 2% figure is a propagandistic contrivance.

Davy, Hermann, MO on Thu, 19th Dec 2013 11:07 am 



I have 400 acres I am renovating from years of neglect for small scale grass fed cattle operation. I am using http://www.polyfacefarms.com/ as a template. I collect books on 18th and 19th century farming. Without cheap petro chems and nat gas we will be forced to cycle the land and rely on animal power increasingly. Production ag is not going away most likely but will be greatly dimminshed over time. Powers to be will funnel resources to this sector as long as they can. Amish have allot to teach us. In the beginning of the power-down rural areas may be neglected with important energy and food resources in a triage like response to contraction. Let us hope they can lead the way in producing food locally. I am really worried about the generations of skills bread out of 21st century man that we relied on in past centuries to feed and cloth ourselves. I have practiced fasting and I find your mentality changes after a few days without food:)

Makati1 on Thu, 19th Dec 2013 11:07 am 



Here in the Philippines, the government admits to 5-6% inflation. No coverups. It is close to correct as that is about the rise in food costs. But, gasoline has stayed in the $5/ per gallon plus/minus $0.25 for 5 years now. No up and down with the weather/what’s happening in the ME/or if Bernanke sneezes.

:…The Philippines is a net energy importer in spite of low consumption levels relative to its Southeast Asian neighbors. The country produces small volumes of oil, natural gas, and coal. Geothermal, hydro-power, and other renewable sources constitute a significant share of electricity generation…The Philippines had 3.6 gigawatts (GW) of installed hydro-power generation capacity and 1.8 GW of installed geothermal generation capacity in 2011, according to the Philippines Department of Energy. Geothermal (15%) and hydro-power (14%) were major contributors to total generation in 2011…”

Makati1 on Thu, 19th Dec 2013 11:39 am 



BTW: I am the old BillT … new tag to indicate location. ^_^

Tom S on Thu, 19th Dec 2013 7:28 pm 



dissident:

“food has definitely not been going up at 2% per year, more like 7% at least.”

The price of food has definitely not been going up at more than 7%/year. Food at the supermarket has gone up by less than 50% in the last 20 years. I know this because I buy essentially the same things and prices have increased by only that much. I used to buy a 1-pound loaf of bread of a certain brand for $0.99 in 1990, and now the price is $1.49 for the same 1-pound loaf of bread. Prices for things like tuna fish (canned), macaroni and cheese (kraft), rice (Uncle Ben’s), ice cream, and other items, have increased at approximately the same rate. When I bought a can of tuna fish recently it was $0.89. It was not half that amount 10 years ago. Ground beef may have increased at 7% for the last few years, but other things have not.

“Housing costs are another treated in a completely BS manner as well, by inferring a rental rate and not via the actual house price. Housing has been getting expensive dramatically over the last 20 years.”

Housing has not been getting much more expensive in most of the country, in general. It has increased significantly in the last 2 years or so, but that’s a recovery after a significant slump following a massive bubble. If you pick a typical city such as Las Vegas or Minneapolis (neither is a boom town like San Francisco, and neither is a bust town like Detroit either) and look at properties at random on zillow and compare to their last sale dates, it appears that prices have recovered to about where they were in the year 2002, meaning the increase in prices has been 0% on average in that time. (Housing was already slightly overvalued in 2002).

Prices for electricity, natural gas, and clothing have not doubled in the last ten years. Natural gas has declined absolutely, and electricity and clothing is up only slightly.

Prices for new cars are increasing only gradually. I bought the cheapest new car I could buy (Hyundai Accent) for $10,000 about 20 years ago, and the same model sells for $14,000 today, which is an increase of less than 2% per year. The average new car selling price may be increasing, but that’s because Americans do not buy the cheapest cars they can afford now. Sales of low-end cars like Hyundai Accents, Nissan Sentras, etc, make up only a very small fraction of new car sales now.

Among the things you listed, only gasoline has increased in price at 7% per year. Other things clearly have not increased at that rate.

“So the shadowstats estimate of around 6% inflation is correct and the official 2%”

The shadostats inflation graph shows that inflation has been almost 10% per year on average since 2005. That is obviously extremely wrong.

Also, the shadowstats inflation graph indicates that prices have gone up by (on average) approximately 7%/year since 1990. That would mean that prices have increased by approximately 5x since 1990, which is clearly way off. Even things like gasoline, medical care, and university education (which are the fastest-increasing items) are nowhere near 5x as expensive as in 1990. Gasoline prices more than doubled in 2006-2008, and even that has increased less than 6% per year since 1990.

“official 2% figure is a propagandistic contrivance.”

The mechanism for calculating the CPI is adjusted for things like quality improvements and changes in consumer behavior. They are not trying to trick you.

-Tom S

Makati1 on Fri, 20th Dec 2013 1:06 am 



Tom S. If you are not on the government BS payroll, you are deluded. or…

I have been buying the groceries for the last 20 years and every year the prices go up and the quantities in the packages goes down. Read the labels. 24oz has become 18oz over time. 16oz is now 14. Etc.

GregT on Fri, 20th Dec 2013 5:59 am 



Sorry Tom,

You are either 20 something, you are living in a fantasy world, or you are being paid to spread false information. Which one is it?

Davy Hermann,

Stick around, it sounds like you have a great deal to contribute.

chubasco on Fri, 20th Dec 2013 1:54 pm 



The price of a case of Budweiser has definitely doubled in the 10 years since I graduated. Inflation is 7%, case closed.

@Tom: “They are not trying to trick you.”
No, they are trying to keep down the elephant of COLA-linked entitlements, and they’re gonna fail, but at least they’ll put the squeeze on those who can ill afford it on the way down…

Tom S on Fri, 20th Dec 2013 8:19 pm 



chubasco:

“The price of a case of Budweiser has definitely doubled in the 10 years since I graduated. Inflation is 7%, case closed.”

Budweiser has not been increasing in price at 7% per year. That would mean it has increased by more than 5x since 1990, when the actual figure is more like a 50% increase.

Since a case of Budweiser costs $15 now, a 7% yearly increase would mean that it would have costed $3 in 1990, which (for anyone who has a memory of what beer costed in 1990) is way off.

I typed “beer prices historical” into google and found a chart published by the Beer Institute. It shows that the price of a reference beer has increased by about 50% since 1990, which is less than 2% per year, not 7% per year.

-Tom S