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World food prices reach new peak since July 2011
- simonsarris 5y agoI guess I still don't buy this being very serious inflation. Food finally costing as much as it did in 2011 just doesn't sound very inflation-y, in context. The price index from 2009 to 2011 was a similarly substantial jump (actually a slightly larger one) than 2019 to 2021, and didn't even require global supply chain and labor madness. But many narratives seem to be "this is world changing inflation", and not "we're seeing food increases that are just as bad as they were in 2009-2011" or something a little less hyperbolic. For that matter, it seems like prices are doing considerably better than that increase, given extenuating factors that will eventually be normalized. Yet I don't recall nearly as much doomsaying back then, with the exception of some geopolitical concerns that it may have kickstarted (the Arab Spring). (And dairy, cereals, and sugar are still at lower prices than they were in 2011) Generally I find it very funny that people are using the exact same graphs (though often with different starting points) to show that "inflation is definitely happening" (eg, lots of bitcoiners) and "here is proof that prices have been flat for a decade, and are only finally starting to surpass the prices of 10 years ago" (eg, taleb).
- toomanydoubts 5y agoMaybe try coming to Brazil, living on a BRL paycheck, where people are BUYING bones with DECAYED MEAT because it's more profitable to the food industry to export the actual food instead of selling it on the local market because the FED is exporting the USA inflation to poorer countries. Then, maybe, you will buy it's serious inflation.
- ak_111 5y agoA major difference with 2009 imo (actually which you alluded to) is inflation expectations going up or inflation getting “embedded” in public’s psychology. That means people start factoring it into their decision most importantly salary negotiations. It feels inflation talk is cutting through to the public much more than 2009 (am I right in this, those who were around back then?). More objectively more “serious” folks seem to flag it up as a major risk than in 2009, even some who were major supporters of 2009 QE (CEOs, Larry “secular stagnation” Summers, El-Erian) Long term this might have greater impact on prices than covid induced supply shortages. At the very least it creates second order dynamics that are hard to predict.
- deleted 5y ago[deleted]
- nostrademons 5y agoAlso note that in 2009 there was a substantial minority of (generally well-educated) people that were saying "deflation, then hyperinflation". I didn't fully understand their reasoning at the time - I was like "How do you get the hyperinflation?" - but it seems like that's exactly the script the world will follow.
- mountainb 5y agoThe key was really what the banks would do with excess reserves. If regulators and the Fed had followed Krugman type advice, they would have encouraged or pushed the banks to increase lending again on those massive reserves. Instead they encouraged the banks to sit on the reserves and so that they could pass extreme 'stress tests.' The current situation is like a permanent stress test combined with the already passed COVID relief bills encouraging aggressive lending. So they are basically following the dovish nostrum and we are getting the consequences that were warned about. It's a bit of a red herring to say that the stalled super-spending bills will push inflation off a cliff. That gun has already been fired. You would have to roll back the banking stuff in the emergency relief bills and raise rates to, uh, stuff the bullet back in the gun. The super-spending bills won't pass, but honestly both parties have an interest in obscuring their collective responsibility for the runaway inflation. Another thing that isn't mentioned much outside of FX circles is that the USD is sharply down versus the Yuan. Typically China has been criticized for enthusiastically printing Yuan to improve their export competitiveness. Instead we have record imports from China combined with a substantially more expensive Yuan.
- anm89 5y agoDebt to GDP is 130% and structurally basically guaranteed to nominally increase over the next 10 years given the epic insolvency of social security and medicare. Anyway, imagine our current congress not running a deficit. It's never going to happen. But the record is pretty clear, there are a limited ways out of this situation. 1) Default on your debt : The US is never going to do this. It would be insane given the global position of the dollar and the fact that the fed can always buy treasuries to finance debt 2) Run persistently high inflation: This is how the US managed it's debt after WW2 : Real rates were around -15% for the better part of the decade. And at the end bond holders were screwed and the country was solvent. 3) Hyper inflate : basically off the table for the dollar given the huge structural demand for dollars and also going back to the point that the Fed doesn't want to short term implode all global capital markets. 4) Pull a japan and have no growth for a third of a century. The easy choice is # 2. We have to have inflation. The supply chain stuff is just a detail. CPI for energy is 25% percent right now. I've seen a figure for housing sales prices at around 17. Spy is up 33% year on year. Bitcoin is up I think about 600 yoy. The inflation writing is on the wall. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm https://www.bls.gov/charts/consumer-price-index/consumer-pri...
- j7ake 5y agoSome of the options here assume that one can dictate what will happen in the future in a top-down manner. "Pulling a Japan" and "Hyperinflating" are not choices that bureaucrats can dictate will or will not happen.
- Retric 5y agoInflation isn’t relative to any one commodity you need to look at everything from Big Mac’s and steel to street drugs. Using the normal inflation measurements gives you a number around 5%. Which is all of 2% above the FED’s target. It’s a point of concern but no where near the double digit numbers people are talking about. As to energy costs, those always fluctuate. Oil is at 81$ today and it dipped under 20$ in 2020, except in 2008 it hit 140$ even ignoring inflation.
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- chiefalchemist 5y agoIn the USA poverty is fairly significant. Those living just above that line, also very significant. To that add those in the "paycheque to paycheque" category. That's bad enough. Now to that add (coming up on) 2 yrs of Covid terror and even a small price increases, in the context of no clear vision of better days ahead, and the result is plenty of stress and suffering. Logically, you're correct. Emotionally, it's a different story for plenty of those in the USA.
- emodendroket 5y agoSurely slamming the brakes on the economy so that we can reduce inflation is going to hit those people worse.
- leppr 5y agoBecause poor people have their networth in assets? No, the lower class depends on salary from employment, which hasn't recovered[1]. What the Fed interventions did to the economy is inflate assets, that's it. Real GDP, productivity and employment have declined. "Slamming the brakes on the economy" i.e. raising rates would allow the stock market and other asset markets to deflate, which would proportionally affect the upper classes more. Lower classes would enjoy reduced food, gas and rent prices, while not seeing meaningful net worth reduction. Of course this is precisely the reason this won't happen. Nobody whose voice matters benefit from the inequality gap being reduced to pre-QE levels. [1]: https://tradingeconomics.com/united-states/employment-rate https://tradingeconomics.com/united-states/employment-rate
- emodendroket 5y agoPoor people are dependent on wages, which would go away if people started getting laid off.
- epistasis 5y agoI think it's pretty clear that most inflation talk right now is just about political ideology. Maybe economic ideology. Some people are just sure that hyperinflation is around the corner, and desperate to find hints of it whatever they can, seemingly sure that 3% CPI means we will see hyperinflation in a few days.
- reducesuffering 5y agoUS CPI has been approximately 5.4% for 5 months. That kind of sustained inflation hasn’t been seen in over multiple decades.
- hajile 5y agoThe UN reported back in April 2020 that lockdowns would cause over 130,000,000 people to starve. That's close to half of the US population. Most of countries in South America pay an average of $1-3 per hour. Bangladesh pay as little as $0.09 per hour and Sudan pays a mere $0.04 per hour. Dozens of poor, African and Asian countries pay less than $0.30 per hour. https://en.wikipedia.org/wiki/List_of_countries_by_minimum_wage https://en.wikipedia.org/wiki/List_of_countries_by_minimum_w... When international food prices go up, the "poor" in the US become inconvenienced. Elsewhere across the world, hundreds of millions starve.
- freewilly1040 5y agoHave those predictions come to pass?
- ekianjo 5y agoEver heard of something called the Arab Spring?
- hajile 5y agoYes More precisely, they say 118M extra people in 2020 which is 12M less than projected, but that's small comfort to the hundred-million people who can't get enough to eat. https://www.worldbank.org/en/topic/agriculture/brief/food-security-and-covid-19 https://www.worldbank.org/en/topic/agriculture/brief/food-se...
- danans 5y agoThat's not all due to the pandemic, according to your own link: > Hunger was trending upward even before the COVID-19 pandemic, which exacerbated existing effects from extreme climate events, conflict, and other shocks to economic opportunities.
- hajile 5y agoCOVID death toll across the entire world is only around 5M. Only a tiny fraction of that 118M is needed to make COVID look like nothing in comparison.
- DantesKite 5y agoThe price of coffee has been the cheapest I’ve ever seen at my store.
- mensetmanusman 5y agoConsider we might be in a bubble: https://www.reuters.com/world/higher-food-prices-help-fuel-40-jump-global-hunger-un-agency-2021-07-08/ https://www.reuters.com/world/higher-food-prices-help-fuel-4... Experts predicted that there might be more hunger deaths from the pandemic than from Covid. Will be interesting to see what happens.
- emodendroket 5y agoAs ever, people have the answers ready to go and crowbar events to them over and over.
- juanani 5y agoEasy to be in denial when it doesn't affect you richies. Dont see the need to let everyone else know how hard you clutch the pearls.
- libx 5y agoThank the elite and their agenda. On one hand, they create enormous quantities of debt (their money) to fuel their financial system. On the other hand, they are paying farmers to burn their crops or get fined. All this in order to make people suffer.
- DaiPlusPlus 5y ago> Thank the elite and their agenda. Who, exactly, are you referring to? Be as precise as possible. Difficulty: no hand-waving, use of any parentheses, or references to the Rothschild conspiracy bollocks.
- biofox 5y ago> no hand-waving, use of any parentheses, or references Not a fan of Lisp?
- jhgb 5y agoWho could possibly be a fan of lots of irritating superfluous politicians?
- cecilpl2 5y agoI'd say we should all strive to irritate them :)
- gunfighthacksaw 5y agoWhat does the triple parentheses mean in Lisp? Coincidences? Shadow variables?
- JoBrad 5y agoEcho chambers.
- deleted 5y ago[deleted]
- deworms 5y agoLike everything, this effectively becomes a new tax on the middle class. I did not consent to this, did you? As time goes by more people will start noticing their total lack of power when it comes to politics, and will start to look for alternate avenues to exert their influence on their living conditions.
- diordiderot 5y ago> I did not consent to this, did you? The US does not teach civics adequately and it shows Edit: Apart from that line, I agree
- goodpoint 5y ago> this effectively becomes a new tax on the middle class Middle class but, even more, low-income class.
- paulpauper 5y agodid you boss consent to paying you more? Inflation in the US is mostly just a shifting of the y axis like algebra.
- borkt 5y agoThis has been going on all along - van life, buying out Austin in the 2000s, retiring/cashing out To buy multiple Airbnb properties to live off of, buying out Austin in 2020, etc.
- emodendroket 5y agoIt seems pretty obvious to me that the alternative would have been far more calamitous so, sure, they can have my consent.
- coolso 5y agoMore mean tweets would have been far more calamitous than, well, everything we’re seeing today?
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- goodpoint 5y agoThat's some poorly crafted charts.
- jb_s 5y agoInflation aside, I'm more concerned with civil unrest. This correlates very closely with food prices. Last time was the Arab spring (Jan 2011 basically)
- paulpauper 5y ago2 data points. real convincing. people have been predicting unrest forever. they have a really poor track record at this. Living standards for most Americans are higher than ever. Food affordability is the least of America's problems.
- betwixthewires 5y ago> world food prices > Arab spring Emphasis mine. We aren't talking about America right now.
- whymauri 5y agoSure, but at any given time there is unrest in the world. Is there more convincing evidence for a causation? Did food in the Arab world rise even more than other countries? Is the general unrest, when dissected to specific regions, usually tied to higher food and water? Just pointing to a correlation when there's always some country in civil war or unrest seems a bit shaky. But I'm no expert on Arab countries, so I might just be naïve. It just feels like we're fitting causation to something that's pretty much always happening in the modern world.
- deleted 5y ago[deleted]
- bellyfullofbac 5y agoTip, if you think you're being naive, don't insist that others don't know what they're talking about. Ctrl-F for "food": https://en.wikipedia.org/wiki/Arab_Spring https://en.wikipedia.org/wiki/Arab_Spring , especially in the References.
- ffggvv 5y agohow many people have to starve to death as a result of these doves trying print unlimited money and give it to people out of "compassion"?
- paulpauper 5y agoobesity rates are rising everywhere. a bigger problem is too much nutrition, not people going hungry
- frankbreetz 5y agoYou can be obese and malnourished. I would imagine most obese people aren't getting the correct nutrition, that is why they continue to eat after they have had enough calories. You shouldn't need to "control" yourself around food, your should just eat what you crave and stop when you are satisfied, but the increase of processed food and obesity rates show this is currently not the way it works anymore. The problem is not too much nutrition, but too much nutrient lacking food
- elhudy 5y ago> You shouldn't need to "control" yourself around food, your should just eat what you crave and stop when you are satisfied, but the increase of processed food and obesity rates show this is currently not the way it works anymore. I disagree with this. There are plenty of well nourished people who are obese. I eat very whole foods yet still find myself gaining weight if i don’t watch my caloric limit. As humans we’re basically beagals and would eat ourselves to death if we didn’t have the intellectual capacity and self awareness to stop.
- ekianjo 5y agoand yet we are to believe the official propaganda numbers of "5% inflation". If even remotely true this will cause way more death than 10 COVIDs combined.
- jnmandal 5y agoI see a lot of people commenting about inflation and printing money but if you actually read the FAO's analysis, they say a lot of this is due to supply reduction. Maybe the cause is actually more related to climate than monetary policy?
- therealdrag0 5y agoI thought lockdowns and supply chain disruptions.
- mym1990 5y agoIt’s more likely a combinations of lots of things…printing money, checks from government, supply chain disruptions, etc…
- emodendroket 5y agoI'd throw in warfare and labor force reduction too.
- RobertoG 5y agoAnd don't forget energy prices. Several fertilizer plants have temporarily close because with current energy prizes it's not good business. Energy is an input to everything, and directly to food through fertilizers and oil prizes (for agricultural machines and transport). Some people has been predicting inflation because "printing money" for more of 50 years. I predict that if current inflation disappear, nothing will be learn.
- post_break 5y agoI'm very price conscious when it comes to grocery shopping and I'm starting to just buy less of everything. Cookies, meat, everything is either getting shrunk, or the price is making me walk away. I'm going to have to start taking a real hard look at my spending habits when it comes to food now more than ever. Steak was once a week or two is now lucky to be once a month if that.
- seibelj 5y agoYour inflation cope is "lowered expectations / standard of living". Not everyone is as realistic.
- neals 5y agoDo yourself a favour and don't buy cookies at all ...
- post_break 5y agoIf I did myself a favor and didn't buy anything that wasn't good for me I'd probably die or be even poorer due to the cost of "healthy" foods.
- neals 5y agoJust a humble suggestion, but maybe you should read up a little on food, cooking and nutrition. It's actually easier than most assume and you will feel healthier and happier if you change some minor things around. You deserve better than the way you might be treating yourself. Don't be afraid to think that. Good luck.
- wcoenen 5y agoThe actual high food prices are still to come. The spike in the price of natural gas in Europe and Asia caused shutdowns in a few types industry, one of which is fertilizer production [1]. It will take some time for the effect of that to appear in food prices. Some countries are already putting restrictions on fertilizer exports[2]. [1] https://www.theguardian.com/business/2021/sep/16/fears-for-uk-recovery-as-record-energy-prices-shut-fertiliser-plants https://www.theguardian.com/business/2021/sep/16/fears-for-u... [2] https://www.reuters.com/business/energy/nitrogen-fertilizer-shortage-threatens-cut-global-crop-yields-cf-industries-2021-11-04/ https://www.reuters.com/business/energy/nitrogen-fertilizer-...
- MrPatan 5y agoThere's no inflation when you account for how cheap money is. Banks can borrow for nothing, and you have to pay double for your food, so it all evens out. No inflation. You just have to think like an economist and it all makes sense. Brrrrr!
- Proven 5y agoThat's what the IMF and central banksters wanted. Inflation = good. I suppose now we need moar gubmint to protect us from the mysterious inflation.