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Stores covering their butts!

Discussions about the economic and financial ramifications of PEAK OIL

Re: Stores covering their butts!

Unread postby Concerned » Thu 14 Feb 2008, 16:49:00

$this->bbcode_second_pass_quote('wisconsin_cur', '')$this->bbcode_second_pass_quote('LoneSnark', 'J')ust glancing at the articles, it appears food inflation was higher in 1990. And since 1990 was not a big deal to my memory, it must not be a bid deal this time either.


The last time I had a funny looking mole the doctor said it wasn't a big deal and cut it off.

This funny looking mole must not be a big deal either...


Im sure someone is sitting around with a puzzled expression scratching the top of their head :)
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Re: Stores covering their butts!

Unread postby MrBill » Fri 15 Feb 2008, 11:24:29

Any and all posts from those with inside industry experience are more than welcome, BastardSquad, as specialist knowledge is a great way to dispell myth and replace it with reason. Have a nice weekend. Cheers. MrBill.
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Re: Stores covering their butts!

Unread postby Ferretlover » Fri 15 Feb 2008, 11:34:18

$this->bbcode_second_pass_quote('WildRose', '.')..it was suggested in this clip that consumers stock up on grocery products, especially those made with grains and rice, early in the year to avoid much higher prices at the end of 2008.

Well, at least the news reported it and can say so when the story becomes more prominent.
However, I wonder what (small) percentage of people caught it, and what (smaller group) of people understand what it is signifying?
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Re: Stores covering their butts!

Unread postby LoneSnark » Wed 20 Feb 2008, 13:35:38

$this->bbcode_second_pass_quote('', 'T')he last time I had a funny looking mole the doctor said it wasn't a big deal and cut it off.

This funny looking mole must not be a big deal either...

That is a terrible metaphore. A mole implies cancer. High food prices do not imply cancer, they imply high food prices.

If food prices jump to the level they were at in the early 1980s, that still would not imply cancer. We survived 1980s food prices. If they jump to th level they were at in the early 1960s, then again, we survived the 1960s. If they jump to the level there at in the early 1890s, then maybe we should worry: not all of us survived the 1890s. But we have a long way to go before getting there.
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Re: Stores covering their butts!

Unread postby JoeW » Wed 20 Feb 2008, 15:21:56

$this->bbcode_second_pass_quote('LoneSnark', ' ')We survived 1980s food prices. If they jump to th level they were at in the early 1960s, then again, we survived the 1960s. If they jump to the level there at in the early 1890s, then maybe we should worry: not all of us survived the 1890s. But we have a long way to go before getting there.


Easy for you to say these things, Snark, knowing that anyone who did not survive the high food prices of the 1980's and 1960's will not likely reply to your post! And even those who DID survive the high prices of the 1890's will probably not reply!

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Re: Stores covering their butts!

Unread postby wisconsin_cur » Wed 20 Feb 2008, 15:46:03

$this->bbcode_second_pass_quote('LoneSnark', '')$this->bbcode_second_pass_quote('', 'T')he last time I had a funny looking mole the doctor said it wasn't a big deal and cut it off.

This funny looking mole must not be a big deal either...

That is a terrible metaphore. A mole implies cancer. High food prices do not imply cancer, they imply high food prices.

If food prices jump to the level they were at in the early 1980s, that still would not imply cancer. We survived 1980s food prices. If they jump to th level they were at in the early 1960s, then again, we survived the 1960s. If they jump to the level there at in the early 1890s, then maybe we should worry: not all of us survived the 1890s. But we have a long way to go before getting there.


...but this mole doesn't look that funny... maybe I'll wait and see if it starts to look funnier later on. When it begins to look like Groucho Marx, then I will worry.
----
edit: oh yeah ceo of potash is worried about famine, world grain stocks are low and food prices are going up, I'd call that a pretty funny looking mole. Perhaps you don't care, because it appears to be on the postierier of the third world and not your own rump?
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Re: Stores covering their butts!

Unread postby LoneSnark » Wed 20 Feb 2008, 19:40:03

Using the metaphore again does not make it any better.

If you think food prices are going to continue rising then argue that. But current prices are no where near detrimental.
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Re: Stores covering their butts!

Unread postby dorlomin » Wed 20 Feb 2008, 19:52:08

$this->bbcode_second_pass_quote('LoneSnark', ' ')But current prices are no where near detrimental.
Too Americans.
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Re: Stores covering their butts!

Unread postby FreakOil » Wed 20 Feb 2008, 23:33:43

$this->bbcode_second_pass_quote('', 'J')ust glancing at the articles, it appears food inflation was higher in 1990. And since 1990 was not a big deal to my memory, it must not be a bid deal this time either.


Food price inflation was slightly lower in 2007 than in 1990, according to U.S. government statistics. But I would be very suspicious of U.S. government statistics; they have a tendency to get fiddled around with until they are an indicator of very little.

$this->bbcode_second_pass_quote('', 'F')ood-price inflation is running at an 11% annual rate in major developing countries, up from about 4.5% in 2006, according to Bank of America Corp.


Food Price Inflation

Prices for some commodities have doubled.

Furthermore, the food price inflation in 1990 was a one-off event caused by war in the Middle East. Prices for energy commodities rose 27.9 percent from July to October 1990, leading to the spike in consumer prices across the board. That was a result of the Iraqi invasion of Kuwait. That was solved by the U.S. invasion of Iraq, after which energy prices returned roughly to pre-war levels, as did consumer prices across the board.

The problems we are dealing with now – increasing energy costs, loss food-producing land to biofuels, loss of arable to desertification and environmental degradation and increasing consumption, particularly in Asia – are long-term, intractable problems. There is no end in sight. That’s why you should be worried.

An invasion will not solve these problems.
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Re: Stores covering their butts!

Unread postby wisconsin_cur » Thu 21 Feb 2008, 03:50:55

$this->bbcode_second_pass_quote('LoneSnark', 'U')sing the metaphore again does not make it any better.

If you think food prices are going to continue rising then argue that. But current prices are no where near detrimental.


$this->bbcode_second_pass_quote('Bloomberg News', 'F')amines May Occur Without Record Crops This Year, Potash Says

By Christopher Donville

Feb. 20 (Bloomberg) -- Grain farmers will need to harvest record crops every year to meet increasing global food demand and avoid famine, Potash Corp. of Saskatchewan Inc. Chief Executive Officer William Doyle said.

People and livestock are consuming more grain than ever, draining world inventories and increasing the likelihood of shortages, Doyle said yesterday in an interview on Bloomberg Television. Global grain stockpiles fell to about 53 days of supply last year, the lowest level since record-keeping began in 1960, according to the U.S. Department of Agriculture


link

Does one need to argue that shortages themselves breed an increase in prices? If there are shortages, then people will bid up the price even further.

How are those stocks to be built up when Australia (historically one of the largest wheat exporters) continues to be stuck in a drought that is destroying their production? There is hope that they are turning the corner in their low yields the last few years (Click here for a hopeful report) but that is just hope until it manifests itself. I guess if I cannot use trends to support doom than even shorter trends should not be admitable in the case for cornicopia.

Every year we are adding more mouths to the globe, we are not (despite your protestations) making more topsoil and neither are we making the same gains in yields that we did during the green revolution. I'm no math wiz, I'm a humanities guy but I'm pretty sure that same or decreasing yields/more mouth=less grain per mouth. And I am no economics wiz but as those dynamics continue some people will buy more thus bidding up the price. Some people (the world poor not you snarky) will not be able to afford it. Again I am no biology wiz but human life requires a minimum amount of caloric intake, if that minimum is not met, the person dies.

So yes, current events are an ominous sign, like a mole gone bad. It does not mean that there is cancer but one should go to a professional and have it checked out. Snarky, you are not a professional you are an idealogue. I am not a professional, I am an over-educated hillbilly but their are postives to being a hillbilly:

I have a fair idea of what I don't know. If I got a funny mole, I go to the professional. I want to make sure that if I make a mistake about my mole it is about being to cautious or when it comes to something as basic as food that we err on sounding the alarm too early rather than too late. I am no engineer, but engineers call this fail safe.

Obviously your ideology brings you some psychological benefit. Perhaps you have a need for things to be well ordered, I'd have to look at your sock drawer to have an reasonable opinion on the matter. But we do live in a world where there is both cancer and famine. Don't let your fear of cancer (or famine or uncertainty or change) get in the way of having the mole checked out. At the very least, don't advise people to ignore thier own mole or prepare for the possibility of higher prices, just because it doesn't fit your idealogy.
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Re: Stores covering their butts!

Unread postby FreakOil » Thu 21 Feb 2008, 06:02:05

$this->bbcode_second_pass_quote('dorlomin', '')$this->bbcode_second_pass_quote('LoneSnark', ' ')But current prices are no where near detrimental.
Too Americans.


Not to be too contentious, but rising inflations are starting to hit average Americans pretty hard, and it's only going to get worse. People are spending a greater and greater portion of their income on food and fuel, leaving little left over for other stuff. "Other stuff" makes up a huge part of the economy. And there are already people in the bottom margins of society struggling just to pay for food and fuel.
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Re: Stores covering their butts!

Unread postby MrBill » Thu 21 Feb 2008, 06:24:37

$this->bbcode_second_pass_quote('FreakOil', '')$this->bbcode_second_pass_quote('dorlomin', '')$this->bbcode_second_pass_quote('LoneSnark', ' ')But current prices are no where near detrimental.
Too Americans.


Not to be too contentious, but rising inflations are starting to hit average Americans pretty hard, and it's only going to get worse. People are spending a greater and greater portion of their income on food and fuel, leaving little left over for other stuff. "Other stuff" makes up a huge part of the economy. And there are already people in the bottom margins of society struggling just to pay for food and fuel.


And yet they vote for politicians that would give them lower taxes and more freebies from the government, so that deficits increase, which are stimulative as well as devalue the external value of the US dollar that increases imported inflation. Your average American is not complaining too loudly about the Fed dropping interest rates despite those higher food and fuel prices, so ultimately that is also exacerbating inflationary pressures in the economy. Hmm, it sounds like we need more hard choices and less hand wringing? ; - )
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Re: Stores covering their butts!

Unread postby wisconsin_cur » Thu 21 Feb 2008, 06:45:32

What we need are more adults in the public debate but after 50 years of promoting a youth culture we should not be too surprised if adults are hard to find.
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Re: Stores covering their butts!

Unread postby FreakOil » Thu 21 Feb 2008, 06:48:30

$this->bbcode_second_pass_quote('wisconsin_cur', 'W')hat we need are more adults in the public debate but after 50 years of promoting a youth culture we should not be too surprised if adults are hard to find.


I think that America may be suffering from full-fledged infantilism.
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Re: Stores covering their butts!

Unread postby FreakOil » Thu 21 Feb 2008, 08:00:08

$this->bbcode_second_pass_quote('MrBill', '')$this->bbcode_second_pass_quote('FreakOil', '')$this->bbcode_second_pass_quote('dorlomin', '')$this->bbcode_second_pass_quote('LoneSnark', ' ')But current prices are no where near detrimental.
Too Americans.


Not to be too contentious, but rising inflations are starting to hit average Americans pretty hard, and it's only going to get worse. People are spending a greater and greater portion of their income on food and fuel, leaving little left over for other stuff. "Other stuff" makes up a huge part of the economy. And there are already people in the bottom margins of society struggling just to pay for food and fuel.


And yet they vote for politicians that would give them lower taxes and more freebies from the government, so that deficits increase, which are stimulative as well as devalue the external value of the US dollar that increases imported inflation. Your average American is not complaining too loudly about the Fed dropping interest rates despite those higher food and fuel prices, so ultimately that is also exacerbating inflationary pressures in the economy. Hmm, it sounds like we need more hard choices and less hand wringing? ; - )


Do you think that a falling dollar will have any positive effects like a rebound in manufacturing? Some other posters and I discussed it briefly at this thread:

U.S. manufacturing rebound

I would be interested in your opinion.

And it's definitely time to make some hard choices. I've been waiting for a presidential candidate to say the word "sacrifice."
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Re: Stores covering their butts!

Unread postby Chesire » Thu 21 Feb 2008, 08:09:53

$this->bbcode_second_pass_quote('wisconsin_cur', 'W')hat we need are more adults in the public debate but after 50 years of promoting a youth culture we should not be too surprised if adults are hard to find.


Try after 50 + years of ignoring Eisenhower's warning. 30 + years of ignoring the Opec Gas crisis and Carter's warning . 140 + years later Lincoln is still getting the last laugh .

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Re: Stores covering their butts!

Unread postby MrBill » Thu 21 Feb 2008, 09:40:48

Freakoil wrote:
$this->bbcode_second_pass_quote('', 'D')o you think that a falling dollar will have any positive effects like a rebound in manufacturing? Some other posters and I discussed it briefly at this thread:

U.S. manufacturing rebound

I would be interested in your opinion.

And it's definitely time to make some hard choices. I've been waiting for a presidential candidate to say the word "sacrifice."
_________________


US exports are at record highs due to a weaker US dollar and a stronger euro who are the main competition.

JAN US exports vs. DEC

Goods 1037.50 billion vs. 1031.4 bio +2.4% YOY
Services 418.0 billion vs. 410.4 bio +7.5% YOY
Total 1455.5 billion vs. 1441.8 bio +3.9% YOY

US exports

JAN US imports vs. DEC

Total 1975.90 billion vs. 1974.30 bio +0.30% YOY

US imports

JAN NET XPTS/MPTS vs. DEC

Total -520.4 billion vs. -533.5 bio -3.6% YOY

So you see that exports are rising faster than imports due to a weaker US dollar, but the

JAN import price index is +12.7% vs. +10.4% in DEC,

so that weaker US dollar is also importing inflation.

Source: Bloomberg

The problem that I would see is that some components of exports such as aircraft tend to skew the results, and I am not sure how many Boeing Dreamliners that America can export? Anecdotally, there appears to be a glut of used aircraft on the market, and if the global economy slows down, so will air travel, and therefore that export segment as well.

But as the US runs a current account deficit (trade deficit + budget deficit + balance of payments on interest and dividends paid abroad) that is a net wealth transfer from the domestic economy to foreign trade partners and creditors. That is a long-term drag on growth that can only be offset by FDI into America.

Image

But that means allowing more foreign ownership of American assets and not just increasing foreign held debt.
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Re: Stores covering their butts!

Unread postby FreakOil » Thu 21 Feb 2008, 23:49:09

$this->bbcode_second_pass_quote('MrBill', 'B')ut that means allowing more foreign ownership of American assets and not just increasing foreign held debt.


Some 55-60 percent of China's exports are from foreign-owned enterprises or joint ventures. They make up a huge part of the economy, but Chinese rarely complain about this. Americans, on the other hand, seem to get all paranoid when it comes to foreigners owning assets on U.S. soil.
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Re: Stores covering their butts!

Unread postby wisconsin_cur » Fri 22 Feb 2008, 23:59:54

UK pork producers threatened by high wheat prices

$this->bbcode_second_pass_quote('', 'F')arming leaders believe that a viable domestic pig sector could be wiped out within months unless urgent action is taken by the government and retailers. The national pig herd has already halved over the past 12 years.

Desperate UK pig farmers have doubled the usual number of breeding sows they are sending to slaughter to 7,000 a week because they can no longer afford to feed them following a doubling of wheat prices since last summer.

The high number of animals being culled lays bare a crisis that is devastating the pig industry. Wheat is the main constituent of pig feed, and, on average, farmers are losing £27 per pig due to the massive increase in overheads.
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Re: Stores covering their butts!

Unread postby bodigami » Sat 23 Feb 2008, 03:04:15

$this->bbcode_second_pass_quote('dorlomin', '(')...)

Overall the diet we in the west [s]east[/s] eat in increadibly wastefull.

Id guess that meat will be one of the first industries to feel dramatic strains of profit and rising costs, if the amount of feedstock being purchased for meat goes down the amount available to the market for biofuel and food will increase. This will be a subtle, market led change to a more vegitarian diet.

A good thing in a ham fisted way, and one meat farmers will have little love for.


hmmm... so becoming almost vegetarian some years ago was actually a preparation for PO?!
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