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UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years
- tines 4y ago> Food inflation hit its highest rate since 1977 last month, having risen to 18.2% in the year to Februaury [sic] 2023. Doesn't anybody read what they write?
- robopsychology 4y agoIs that really the most important point about this? 18.2% is mental. But I do agree, how does anyone not use spellczecher nowadays
- TheRealPomax 4y agogiven that the "work for us" link goes to some guy's personal email address on a completely unrelated domain: probably not?
- hnbad 4y agoFor a second I suspected the author may have been German as the month is literally called Februar in German. Alas that doesn't seem to be the case.
- scientism 4y agoMaybe it's the new old way of making known to the reader that an LLM was not used, like back in the day when printed maps had minor intentional mistakes (for entirely different reasons though) !
- throwaway1777 4y agoAi would’ve never made this mistake!
- xd 4y agoA lot of the inflation on food is increasingly feeling like businesses cashing in. For instance my old go to brand of breed increased by over 50% months ago.
- wnkrshm 4y agoI've switched to buying the bargain bin discounter stuff. It's such a transparent pretense to raise prices while raking in profits that I don't want to give it to them.
- baggy_trough 4y agoFor some reason they didn't want to cash in before?
- Espressosaurus 4y agoThey didn't have the pricing power/their customers didn't have the tolerance for rising prices/coordinated action and corporate consolidation means prices are going up and it doesn't matter what your choices are. Circumstances materially changed over the last few years, and inflation is a great time for profit taking as we're seeing, which reinforces the inflation. In a competitive environment the excess profit-taking should start pulling back eventually, but in the meantime the prices are going to the moon.
- legitster 4y agoI don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg? > They didn't have the pricing power/their customers didn't have the tolerance for rising prices/ Just for everyone's sanity, it's WAY easier to believe that there are underlying market conditions that should be addressed and not worry too much about retailers. They are just doing marginal pricing. If there is a shortage on eggs, it's better for everyone that they price eggs so they stay on the shelves than to price them as if nothing is happening and then people panic because they can never find them anymore. The profits may be up, but the revenue is still down overall.
- engineeringwoke 4y ago> Or a magic 'greed' button that they refused to hit before now. There's some empirical evidence from Australia that this is exactly what they did. Also an island nation that heavily imports food https://www.theguardian.com/business/2023/feb/24/an-economic-fairytale-australias-inflation-being-driven-by-company-profits-and-not-wages-analysis-finds https://www.theguardian.com/business/2023/feb/24/an-economic...
- foreverobama 4y ago[dead]
- ShivShankaran 4y ago[dead]
- GalenErso 4y agoAs someone who doesn't live in the UK, the impression I get from headlines is that the UK is becoming poorer by the day, the NHS has collapsed, crime is exploding, poverty is rising, most people can't afford anything anymore, the Royal Mail is hanging by a thread, and the economy is in free fall. What's the reality? In London and outside?
- pydry 4y agoThe reality is not good - from the outside and the inside.
- jaqalopes 4y agoAnecdotally, my buddy (31M) in London says he's having the time of his life. Making a lot of money at BP, parties every weekend, just moved into a nice flat with a partner. I suspect, just like in America, that if you're inside the "formal economy" (corporate job with real benefits and potential for career growth) your life is pretty great. If you're outside that (service worker, gig economy, small business owner, NEET) then things are pretty grim.
- havefunbesafe 4y agoNooooot a great time for innovation (read: productivity)
- ChuckNorris89 4y ago>Making a lot of money at BP, parties every weekend Sounds just like the roaring twenties.
- piuantiderp 4y agoExcept the furniture is Ikea
- _puk 4y agoThat the same BP that is making record profits during the cost of living crisis? [0] I suspect the "formal economy" is hurting in a number of places, just not the energy sector. 0: https://www.bigissue.com/news/social-justice/we-asked-experts-how-oil-giants-shell-bp-make-record-profits-cost-of-living-crisis/ https://www.bigissue.com/news/social-justice/we-asked-expert...
- kneebonian 4y agoThis was predicted when Ukraine was invaded. Russia and Ukraine were the world's leading producers of the ingredients in fertilizer. They are now no longer exporting, and many countries in the world are getting 50% or more of their calories from import. Things will get better before they get worse.
- miroljub 4y ago> They are now no longer exporting, and many countries in the world are getting 50% or more of their calories from import. Things will get better before they get worse. It's not like they wouldn't like to export when they could. But they are not allowed to export due to various sanctions and limitations. It's almost like one side taking half of the world as hostages and letting them hunger, so they could harm and blame the other side. But yes, "Carthago delenda est" no matter the costs and victims.
- PartiallyTyped 4y agoWhat about grocery store profit margins? > Bread was up 20.8%, with pasta products and couscous up 25.3% This is unjustified. Under no circumstances could this happen unless a) price gauging, or b) supply chain is drying up. Edit for the ignorant: > The UK is largely self-sufficient in production of grains, producing over 100% of domestic consumption of oats and barley and over 90% of wheat. Average yields over recent decades have been broadly stable but fluctuate from year to year as a result of better or worse weather. Increasingly unpredictable and extreme weather as a result of climate change is likely to exacerbate these fluctuations. Wheat yields in 2020 were the lowest since 1981 due to of unusually bad weather. However, preliminary data indicates they have since increased in 2021. > In meat, milk, and eggs, the UK produces roughly equivalent volume to what it consumes. In 2020 it produced 61kg of meat, 227L of milk and 172 eggs per person per year. By value, the UK is a net importer of dairy and beef. This reflects UK consumer preferences for eating higher value products, while lower value products are exported. > The UK produces a significant proportion of its other crop needs, including around 60% of sugar beet, 70% of potatoes and 80% of oilseeds. Apart from a recent pest-related reduction in oilseeds, these proportions have remained stable over the last ten years. Climate change represents a risk to production both in terms of making conditions unsuitable for some crops and allowing new pests to proliferate but it may also benefit new types of crops. > The UK produces over 50% of vegetables consumed domestically, but only 16% of fruit. 93% of domestic consumption of fresh vegetables was fulfilled by domestic and European production, while fruit supply is more widely spread across the EU, Africa, the Americas, and the UK. https://www.gov.uk/government/statistics/united-kingdom-food-security-report-2021/united-kingdom-food-security-report-2021-theme-2-uk-food-supply-sources https://www.gov.uk/government/statistics/united-kingdom-food...
- danem 4y agoThey just decided to start price gouging now?
- cbg0 4y ago> This is unjustified. Electricity prices have sky rocketed in most of Europe.
- c0brac0bra 4y ago
- noelsusman 4y agoIs this at least partially Brexit related? For comparison, the US has seen food go up by around 10% over the same time period, which is pretty high but also far from 18%. https://www.bls.gov/news.release/cpi.t02.htm https://www.bls.gov/news.release/cpi.t02.htm
- pydry 4y agoBrexit plus war.
- miroljub 4y agoBrexit plus sanctions. War has nothing to do with that, at least not war in a classical sense. Economic or total war that some countries are involved in can be considered as a major reason.
- shigawire 4y agoMy understanding is the Russia and Ukraine both contribute meaningful portions of the global food supply. Wouldn't destabilizing these two countries affect food prices globally?
- guerrilla 4y agoYes, this is well known and has been tracked in the finance and economic press. Just as an example, both grain production and transport (due to disturbances in rails and shipping) were both effected directly and indirectly which had significant impacts in Africa.
- iamflimflam1 4y agoVery high costs of energy have been caused by the war. Food production can be very energy intensive.
- miroljub 4y agoNo, energy costs started raising before the war. Once war started, the sanctions made sure they stayed high.
- jacknews 4y agoObviously, inflation will destroy the value of wealth, and disincentivise future investment, so in order to reduce inflation, we need to raise interest rates. :extreme sarcasm:
- aww_dang 4y agohttps://en.wikipedia.org/wiki/Edict_on_Maximum_Prices https://en.wikipedia.org/wiki/Edict_on_Maximum_Prices >The Edict on Maximum Prices is still the longest surviving piece of legislation from the period of the Tetrarchy. The Edict was criticized by Lactantius, a rhetorician from Nicomedia, who blamed the emperors for the inflation and told of fighting and bloodshed that erupted from price tampering. >During the Crisis of the Third Century, Roman coinage had been greatly debased by the numerous emperors and usurpers who minted their own coins, using base metals to reduce the underlying metallic value of coins used to pay soldiers and public officials.
- lezojeda 4y ago[dead]
- juniordev7 4y ago[flagged]
- chatmasta 4y agoEurope is also experiencing high inflation.
- juniordev7 4y agoWar ends sooner or later but Brexit and it's effects are here to stay forever.
- chatmasta 4y agoSure, but keep in mind that will be true regardless of whether its "effects" turn out to be the same effects you're predicting.
- okeuro49 4y agoThe UK will last longer than the EU. The EU has a fundamental schism of a shared monetary policy, without a shared fiscal policy (see euro sovereign debt crisis). It also has a problem regarding the population becoming increasingly sceptical of freedom of movement, voting for more socially conservative parties. Hopefully the EU can be reformed to go back to a trading bloc, with a liberal visa regime for member states, rather than an idealistic United States of Europe model, punctuated periodically by brutal austerity.
- juniordev7 4y ago[flagged]
- londons_explore 4y agoI think the UK was doomed inside or outside Europe. Not quite sure why, but their relative productivity per worker has been dropping since 2007 compared to all other developed nations. [1] With low productivity, it doesn't matter if you have sweet trade deals - you're still going to decline eventually. [1]: https://www.bbc.com/news/business-47826195.amp https://www.bbc.com/news/business-47826195.amp
- legitster 4y ago> This saw select fruit and vegetables rationed in UK supermarkets, due to shortages caused by bad weather conditions in the South of Europe and Northern Africa and many growers having to cut back due to rising costs of heating greenhouses. Besides the obvious degradation of the energy and fertilizer markets from the war in Ukraine, the collapsed Pound is probably the biggest factor here.
- GalenErso 4y agoI'll leave this here: https://exchangeconversions.com/charts/CAD-GBP-chart-1-year.jpg https://exchangeconversions.com/charts/CAD-GBP-chart-1-year.... As someone who occasionally orders stuff from UK businesses, I wish the pound would collapse against the Canadian dollar. Like, 1:1 or 1:1.2
- pcthrowaway 4y agoAh yes, I too, as a Canadian, wish for the collapse of an entire other country's currency because I like to buy things online sometimes.
- GalenErso 4y agoYes?
- _Wintermute 4y agoNot really, the biggest factor is how supermarkets source their produce in the UK.
- fauxpause_ 4y agoFrom other countries, requiring the pound not collapsing to get a good price?
- legitster 4y agoUh, how does one source produce except through imports? A weak Pound will make it more expensive. Even for things that can be domestically produced, like greenhouse tomatoes, they will still be more expensive even if they are now competitive with imports. And for items like rice and couscous you're not really going to be able to domestically produce them anyway.
- illiarian 4y agoMeanwhile in Sweden the CEO of ICA, the largest supermarket chain in the country (53% of the market) said yesterday: "It is actually the consumer who controls what they are prepared to pay for a product. In the end, it is they who decide." https://omni.se/icas-vd-det-ar-kunderna-som-avgor-matpriset/a/3Ex1zd https://omni.se/icas-vd-det-ar-kunderna-som-avgor-matpriset/...
- contravariant 4y agoThat does not contradict the situation in the UK.
- illiarian 4y agoI didn't quote it to contradict the situation.
- jorts 4y agoThe way you phrased it made it seem that way. Starting with "Meanwhile" is a common way of introducing a contradictory scenario.
- illiarian 4y agoIt might be my own idiosyncrasies coming through (non-native speaker + how we use the term among friends to point out stupid stuff)
- skybrian 4y ago"Meanwhile" means there isn't any particular connection, but replying in disagreement is very common and on social media it's often assumed if ambiguous.
- kzrdude 4y agoThis seems to happen all the time. Someone is just trying to make conversation (like me, here) and people try really hard to see in what way they were attacked by the comment.
- crop_rotation 4y agoThe UK politics seems like a separate level of dysfunction. It seems like all the worst decisions being made together. For some reason people voted for Brexit. The PM who was the chief Brexit Campaigner (Boris Johnson) had to resign because of entirely avoidable mistakes. The next PM had to resign too soon due to trying to bring policies which were not well thought out. The current PM had to be annointed since it didn't seem like the Party membership would vote for him. It doesn't seem like Labour has a charismatic leader either. I could never even find a concrete stance by Corbyn on what he was running on wrt Brexit. HNers from UK, what does the outlook look like policy wise for the UK.
- 2b3a51 4y ago"what does the outlook look like policy wise for the UK" I'm hoping for boringly competent management of the economy plus a gradual drift back towards relatively friction free trade (both goods and services) with our largest neighbour. Wage growth would be good and some action on housing so wage gains don't just turn into house price rises.
- johndunne 4y agoYou’re spot on calling uk politics a separate level of dysfunctional. It feels like we’re stuck with a shower of gobshites for a while! Exporting immigrants to Africa is a particularly shambolic/shameful recent effort. And don’t mention ‘the Brexit’ - I’m not saying it’s the only reason but it’s certainly a huge pain point on many fronts. I think UK politics is at a rock bottom at present but hopefully it’ll spur enough of us on to hold our representatives to a a higher standard…
- sgt 4y agoExporting illegal immigrants who had no business being in the UK in the first place.
- petesergeant 4y ago> what does the outlook look like policy wise for the UK Sunak will gracefully lose the next election, by a lot, but a lot less than Truss or BJ would have lost it by, and having helped to slow the freefall in reputation by the Tories and steadied the economy a bit. Keir Starmer will be a decent and competent but dull leader for two terms, and the who the heck knows. But the next ten years or so should be pretty dull, in a good, centrist sort of way, ideally culminating in rejoining the EU.
- boc 4y agoDemand for food is inelastic, so it makes sense that companies are raising prices as high as possible since people still have to eat. Generally this leads to price competition from other food brands, but when single companies own dozens/hundreds of food brands it’s easy to act like a cartel and keep prices high.
- packetlost 4y agoIf there is anything that drives antitrust action, I imagine it would be food supply.
- killjoywashere 4y agoHistorically, food supply doesn't drive anti-trust. It drives revolutions in the street.
- hef19898 4y agoThe Arab Spring started over them as well
- baremetal 4y agoIn 1906, Alfred Henry Lewis stated, “There are only nine meals between mankind and anarchy.”
- Arrath 4y agoShould deliveries stop, the stocks inside modern superstores might hold out a bit longer than 9 meals, but not much longer.
- packetlost 4y agoRight, but a government worried about that might be inclined to be less friendly to monopolies.
- killjoywashere 4y ago
- yeahsure22 4y ago[dead]
- dougmwne 4y agoSomething interesting is that this article breaks the narrative about it all being about the vegetables and the weather. Veg inflation was 18%, slightly below the average. Several other food categories like grains and fats had higher inflation. This certainly seems to be more of a sign of a weakening pound not buying as much in n imports than something about food alone.
- killjoywashere 4y agoThere's got to be a couple trillion dollars worth of friction in international shipping. There have to be tech plays here for someone.
- havefunbesafe 4y agoDig into this bad boy https://www.freightwaves.com/ https://www.freightwaves.com/
- okasaki 4y agoIt's way more than that. I'm paying double for nearly everything now.
- _Wintermute 4y agoFor reference, that's a fairly average value for Europe at the moment. Not sure why the UK is being singled out. https://i.redd.it/8hbhiqhowjpa1.png https://i.redd.it/8hbhiqhowjpa1.png
- manojlds 4y agoPart of the reason is UK ran out of tomatoes, peppers etc. EU didn't have the same issues. Source: live in UK
- fennecfoxy 4y agoBut the core reason for those shortages were poor weather in Spain etc where the produce is grown, I'd be surprised if the EU didn't have the same issues. I wouldn't be surprised if those countries such as Spain reduced the amount available for export so that they can meet demand for local markets though, but capitalism would dictate that they sell to the highest bidder instead.
- imwithstoopid 4y ago[flagged]
- dougmwne 4y agoMedia narrative obviously. This looks like a story about the war’s effects on energy and resources. Better to redirect people’s anger so they they don’t lose their appetite for the proxy war.
- Aachen 4y agoI'm curious why the values aren't identical to within rounding errors for countries like the Netherlands and Belgium which are nearly the same size, in essentially the same location, and don't have different amounts of welfare like north/south Korea or USA/MX. Can't be that one has tech or purchasing power that the other doesn't, or that food needs to travel a lot further, and I would also not expect vastly different foreign relations (also because EU, but also because the countries are so similar in beliefs and histories). And similar for slightly different but still nearby and similar countries like Germany, Luxemburg, and the UK. Anyone know what causes these differences? Edit: to answer your question, I wouldn't look for meaning behind that but rather assume that a limited scope article is a lot easier to write than a broadly scoped one. In the ~global context of HN, the headline then sounds like they're singled out.
- foxandmouse 4y agoNot related but The price of poultry has gone up significantly in the GTA, and a friend who works for the government informed me that there is an outbreak of bird flu in Ontario that's affecting poultry farms. Unfortunately, farmers can't talk about it due to ag-gag laws.
- TJSomething 4y agoUnsurprising. Over 58 million US chickens have died of the H5N1 bird flu in the last year. Although it seems to have slowed down considerably in the last two months. Currently, South America is having a lot of problems with the same strain.
- EForEndeavour 4y agoThe Canada Food Inspection Agency publishes weekly estimates of the number of birds affected by highly pathogenic avian influenza infections. The numbers seem relatively high (any number above zero is concerning), but they have barely increased since January: Week ending 2023-01-18: 748,000 birds affected in Ontario, 7,051,000 in Canada [1] Week ending 2023-03-22: 749,000 birds affected in Ontario, 7,173,000 in Canada [2] [1] https://web.archive.org/web/20230120170319/https://inspection.canada.ca/animal-health/terrestrial-animals/diseases/reportable/avian-influenza/hpai-in-canada/status-of-ongoing-avian-influenza-response/eng/1640207916497/1640207916934 https://web.archive.org/web/20230120170319/https://inspectio... [2] https://inspection.canada.ca/animal-health/terrestrial-animals/diseases/reportable/avian-influenza/hpai-in-canada/status-of-ongoing-avian-influenza-response/eng/1640207916497/1640207916934 https://inspection.canada.ca/animal-health/terrestrial-anima...
- foxandmouse 4y agoThank you for sharing this. It's hard to stay objective when you're observing something happening around you in real time.
- throwaway1777 4y agoHistorically this type of inflation always ends well /s
- JustSomeNobody 4y agoIt is not inflation. It is price gouging.
- bombcar 4y agoIt can be (and almost certainly is) both. Companies LOVE an excuse to raise prices to where they "think" they should be, and inflation is a great time to do such.
- glerk 4y agoThe price of anything is what the market is willing to pay for it. If you are going to buy a carton of milk at $5, why would I sell it for $4?
- JustSomeNobody 4y agoThe alternative is me not buying food. Hmm... Yeah, okay, whatever.
- btreesOfSpring 4y agoThe Economist ran a story the other week on the topic of food costs talking about how the tomato can be looked at as a type of energy store & how British supermarkets differ from other European supermarket chains by rationing out veg rather than increasing pricing. [0] This was to say the "shortages" were more of a quirk of the British market rather than purely due to Brexit. 0. https://www.economist.com/britain/2023/03/02/britains-tomatoes-are-a-victim-of-the-energy-crisis https://www.economist.com/britain/2023/03/02/britains-tomato...
- hdhrufjdi 4y agoOnly a sneak preview to what the future holds as temperatures rise and rise
- nerddadnear40 4y agoComplex issues have complex causes. A scapegoat is a convenient way to dismiss discourse but it's not very useful.
- hdhrufjdi 4y agoI am not dismissing any discourse
- EasyTiger_ 4y agoAs 'green' policies are enacted I think you mean
- tasubotadas 4y agoThat's not inflation just an increase in cost
- missingdays 4y agoThat's not increase in cost, just a change in the amount of money you have to pay
- andy_ppp 4y agoI cannot believe supermarkets these days, it is insane the increases in prices, I’ve seen £5 for a tube of normal toothpaste and £6 for a tiny Pizza that is sometimes available for £3. How people on modest salaries survive I don’t know. Quite often I’m starting to notice dark patterns in pricing where things you normally didn’t worry about will have randomly increased by £2-3 and you get the checkout and you’ve spent £25-30 on next to nothing. I wonder if inequality increases caused by printing trillions of dollars during COVID are anything to do with this inflation? Could it be that making the rich endless more wealthy and increasing asset prices is bad for society? How do we fix this? Some people think redistribution of the increases the wealthy have had over COVID back to the poor would be a good move, but is this all inequality?
- kderbyma 4y agomost definitely. the wealthy are parasites beyond 1-2 magnitude of difference.
- za3faran 4y agoI'm not defending their actions, but they're exploiting the underlying broken and usurious financial system that is using fiat money that can be printed at will. The system is working as designed.
- UncleOxidant 4y agoI saw $6.99 for a pack of 12 flour tortillas yesterday. Could not believe it. At that price I'll try making my own.
- jlengrand 4y agoTrying to be positive in an ocean of poo, making your own tortillas is cheap, fast, kinda fun to do with kids and you can augment them for extra flavour. You can even batch prepare them in advance as long as they're not in contact with air. Many of those are the same. Pizza dough : once a month take 30 minutes preparing 10 rolls and in the freezer. And as a bonus, less chemicals in your system.
- hkt 4y agoYet another sector where investment is low and prices are high. Over winter tomatoes were in short supply, not because we couldn't grow them, but because the methods of heating greenhouses were too expensive. CO2 heaters use gas in largely uninsulated greenhouses. A bit of creativity (solar thermal with storage supplying radiators) or just modernity (air source heat pumps) would have solved this problem. Alas, there is little guidance and support. The economic case for fossil fuels continues to weaken and the government does absolutely nothing to support a transition to cleaner sources of fuel which provide shelter from the volatility of energy markets. So we pay instead. What absolute rot.
- dukeyukey 4y agoThe UK has some of the cheapest food in the developed world, I'm surprised to hear anyone say they're high.
- dazc 4y agoIt is all relative I guess? I lived in Spain for a while and noticed how out of season produce was very expensive and there was very little of it. In the UK we expect to be able to buy everything all year round and cheap. Nobody stops to think how that was possible but that doesn't prevent them moaning when Sainsbury's only have 12 varieties of tomato on the shelves in December.
- algoatecorn 4y agoGreenhouses are a tiny sliver of overall food production. The rest of agriculture is heavily biased toward the energy density of fossil fuel, particularly nat gas and diesel. The innovation required to move away from the actual energy problem in agriculture is much greater than a bit of creativity
- hkt 4y agoMoving away from these kinds of farming methods is really not as hard as people suppose. For a start, composting food waste would produce a carbon neutral source of fertiliser that would cover fairly large amounts of domestic need. Measures like these are really not hard. There's a glut of alternatives available, government simply does nothing to aid in the transition.
- pc_edwin 4y agoIt's perplexing how some are quick to place all blame on "greedy price gouging capitalists" while you have a massive elephant in the room. As a society, we pride ourselves on being logical yet we ignore the predictable consequences of injecting trillions into the economy amidst heavily damaged supply chains? I'm not even referring to the downstream consequences such as the extreme fragility leading to blow ups like SVB. Just consider what might happen when you have trillions in new money competing for fewer goods.
- pjc50 4y agoConventional economic policy lets you balance inflation with both monetary and fiscal policy. But there's no will to tax the money out of the economy again. The money printing delayed a lot of economic collapse that would otherwise have happened during the pandemic.
- pc_edwin 4y agoWith all due respect, I'm of the opinion that this idea of maintaining an equilibrium through "easing" and "tightening" is a logical fallacy. In practice, this theory has been shown to be deeply flawed with grave consequence. Each iteration of this easing/tightening cycle seems to make the entire system more fragile at an exponential rate. In essence, with each iteration, the extent of easing or intervention needed is increasing exponentially. Simultaneously, the system's capacity to withstand tightening or normalization is decreasing exponentially, requiring further interventions sooner and with greater severity. I believe this is the basis for prognoses such as Balaji's on the US economic hegemony. When examining the exponential increase of these factors, it becomes evident that there is little space left before hyperinflation sets in. While I do not think the collapse will occur in 90 days, it may transpire in 900 or even 3000 days.
- throwawaysleep 4y agoGiven that most people are fat, reducing food purchasing by 20% is actually pretty realistic if needed.
- tibbon 4y agoI'm sure a 3% COLA will fix that right up!
- samhuk 4y agoAs a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation. A sad thought I have about inflation is the fact that it is, wittingly or not, a weapon wielded by the rich against the middle and lower classes. In an inflationary economy, the winners are rich who have valuable assets whose value skyrocket - think real estate, businesses, etc. The lower classes rely on A) proportionately much more on fiat, i.e. monthly paycheck going into current and savings account, and B) a blue-collar job, the wage of which always lags further behind inflation than white-collar jobs. Those two factors combined means that the lower classes get absolutely battered, while the rich just sit gleefully as their asset values balloon and pass down wholesale price increases, etc. It's the dark, sinister side of inflation, and I think we are all beginning to see the societal tensions that it is breeding, e.g. endless blue-collar UK worker union strikes, riots, protests, etc. Not saying that it is only one class that is affected, but let's face reality here - the lower class suffers by far the most in this situation.
- Mountain_Skies 4y ago[flagged]
- foldr 4y agoI think you've got the wrong end of the stick. We're in this mess because of Thatcher, Reagan and TINA. Almost everyone now believes in capitalism in the same way that medieval peasants believed in the feudal system. That is, while they don't necessarily like it, they see no viable alternative.
- martinald 4y agoAssets are deflating at the moment though. S&P500 is down, property prices are down, etc. Asset prices are highly inversely correlated to interest rates, so for a 'rich' person you are actually much better off without inflation, as interest rates are lower and asset prices rise faster.
- nemo44x 4y agoTime to start importing USA chicken and other foods.
- hawthornio 4y agoP R I C E C O N T R O L S
- heisenbit 4y agoGlancing at the exchange rates the pound fell year over year 5% from a local max vs Euro so this is on top of the certainly high inflation on Europe. Also it is said that UK supermarkets lock in prices long term with domestic producers. But goods are somewhat mobile so the shelfs in the UK empty. And while it is just an anecdotal bit - our local Aldi here in Germany was selling British scones and shortbread. While the exchange rates over the past decade mostly move sideways and the effect yoy should be one-off the current moves in the financial markets have potential for further disruption and the UK being more isolated will see her Pound fluctuating more with more immediate impact on people and business.
- dukeyukey 4y agoGermany has higher food inflation than the UK right now so it's definitely not a UK thing.
- odood 4y agoSweden hit 22% recently, it's definitely painful for many.
- sumitkumar 4y agoWould it not make sense to have a crypto solution to the inflation problem? Can't governments initiate a crypto currency which can be only used for a basket of goods and the providers of these goods can then exchange this currency for input goods or fiat money after verifying. This crypto coin can be distributed to everyone every month/week and with a expiry date. What I understand is that inflation in high price goods gets passed on to the essential goods as a lifting tide lifts every boat but these can be decoupled.
- alangibson 4y agoYou just invented food stamps. This another great example of why there are no compelling crypto use cases besides criming.
- dragonwriter 4y ago> Would it not make sense to have a crypto solution to the inflation problem? No. > This crypto coin can be distributed to everyone every month/week and with a expiry date. So, you are reinventing ration cards, but with a lot of extra complication? It... doesn't solve, or even address, inflation. It does create a black/gray market, though, with the usual attendant crime around such markets.
- deleted 4y ago[deleted]
- mftrhu 4y agoWe already have food stamps.
- censor_me 4y ago[dead]
- shafoshaf 4y agoThere is no such thing as decoupling when there is a cash equivalent. For example, in the US a lot of welfare funds are handed out in the form of food stamps. This has created a secondary market in food stamps where people sell them to get cash. Also, the mere fact of having the food stamps frees up funds for other things where the consumer can spend more on "non-essential" goods carrying the inflation with it.
- elevenoh4 4y agoSolution: Opt out of centralized monetary policy
- random_upvoter 4y agoThere seems to be a widely accepted and unchallenged consensus that political power is unable to address inflation. Maybe it ain't necessarily so? In 1971 Nixon froze prices and wages by executive order. But these days the political world seems oddly submissive to whatever the market wants to do. https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock
- deleted 4y ago[deleted]
- costco 4y agoThe current scandals surrounding Ticketmaster, sneakers, and GPUs are all you need to know that price controls would not work today.
- epups 4y agoNixon's economic measures were a disaster that led to inflation and crisis. You can see that directly in your link btw.
- random_upvoter 4y agoThat was not my point, but thanks for pointing out a paragraph in the source that I provided. I do notice a few 'citations needed' in the relevant clauses. Even so, if Nixon's policies resulted in failure that's not a reason for politicians today to just throw their hands in the air and declare that nothing can be done politically because "market dictates".
- epups 4y agoWell, if the one measure you point out as what the government could do today led to worse outcomes, then I do think they should abstain from that kind of interference in the future. I don't think price controls have worked anywhere.
- random_upvoter 4y ago
- jmyeet 4y agoThis is really a perfect storm of poor planning and adverse events: 1. Russia's invasion of Ukraine hit energy prices. Europe-wide Ukraine has been a bit of a scapegoat however as Europe is in an energy crisis in large part due to poor planning. That is, complete dependence on Russian natural gas when for almost 10 years the US saw this coming and begged Europe to build LNG ports; 2. Ukraine produces a significant amount of wheat. The war has disrupted that supply and had a large effect on wheat prices. These are pretty much back down to pre-invasion levels but this brings us to; 3. Corporate profiteering. The solution to this is windfall profits taxation. Remember when people can't afford to heat their homes and have enough to eat, that's not an inevitability to just throw your hands up at. It's a choice. The government could raises money through taxes and subsidize energy costs as a short-to-medium term measure if they wanted to. The worst part of this is how many just throw their hands up and say there's nothing we can do other than raise interest rates.
- peresthe 4y agoIt is truly strange to see so many comments on Hacker News -- a message board owned by YCombinator, a startup accelerator whose actual mission is to launch wildly profitable companies -- talking conspiratorially about the wealthy being "parasites", lambasting "capitalism", pointing to increased profits as evidence of unscrupulous behavior.
- rcarr 4y agoBecause the startups are (hopefully) adding value whereas the people we're talking about are robbing the UK blind whilst offering little of value in return. One is competence, the other is extortion.
- kentrado 4y agoEuropeans are more aware of class struggle than people from the United States. They didn't have a McCarthyism red scare. Since this news is about an European country, it is no so strange that people complain about the system that brought this into being.
- t43562 4y agoThe class struggle is the favorite argument for every form of ill in the UK. It's a culture war if you like. Once someone gets to the point of blaming something on the evil rich or the feckless layabouts then you cannot get any further in working out what's actually going wrong. It is a horrendously boring argument which immigrants like me "cannot understand" because somehow or other we don't feel like we belong on either "side".
- deleted 4y ago[deleted]
- lordfrito 4y agoAgreed... Sometimes it feels like the site is being astroturfed with progressive / class warfare type messages. Othertimes I feel it's just the same old "eternal september" problem but with techies, a bunch of young idealistic kids fresh out of college who tend to think in black and white terms of "us" vs "them". I remember being this way as a teenager, not quite sure when I grew out of it. I remember listening to punk rock and advocating for "anarchy" etc (I'm sure I got the idea listening to too much Sex Pistols)... SMH... We all took ourselves and our political views sooooo seriously at that age.... Thank god no one was listening to me back then. The difference between then and now is that my conversations were in person and shared amongst a few high school kids, now they're broadcast to the world, commented on, and amplified. The more I think about it, I'm hoping its just kids being kids.
- jawadch93 4y ago[dead]
- FredPret 4y agoI know this doesn't fit the European worldview, but if only they had Costco. They make 0-1% margin [0] on their groceries - which by the way is very high in quality. Essentially all their profit is from their annual membership fee. You have to buy massive quantities of everything though. This works well if you live in a huge North American house and have an SUV to transport your month's (year's?) groceries. [0] I saw a newsletter from Ryan Reeves and confirmed it by checking their financial statements
- pjc50 4y agoWe do have costco. That doesn't make any difference. https://www.costco.co.uk/ https://www.costco.co.uk/ (Practically, Aldi/Lidl are where one goes for cheap UK groceries, or Farmfoods if you want frozen/nonperishables)
- ocodia 4y agoWe have Costco in the UK.
- FredPret 4y agoPerhaps but it doesn’t seem like the default option to the same extent. The model doesn’t fit Europe as well for the reasons I mentioned. It wasn’t meant as a snide remark, only an observation about buying cheap food
- jdcarr 4y agoThere are about 30 Costcos in the UK. You’re right that they aren’t particularly useful for weekly grocery shopping unless you have a car and a large fridge.
- deleted 4y ago[deleted]
- paulpauper 4y agoThis is just further evidence that whatever problems the US has, things consistently keep being worse elsewhere, whether it's inflation (like in the UK or Germany, such as food and energy prices), unrest (like the protests in France), natural disasters (Turkey earthquake), etc. As much as both sides lament about the decline of freedoms and overreach of 'the state', in EL Salvador tens of thousands of people have been rounded up and arrested--due process be damned. America continues to occupy a privileged position in the world of stability and prosperity despite always feeling on the precipice of civil war, unrest, or crisis--but that never quite gets there. What could have been a major banking crisis 2 weeks ago was averted by more coordination between policy makers, and of course, lot's of liquidity. How long will it last? I don't know, but I don't want to bet against it either.
- pmarreck 4y agoDoes anyone know what is powering worldwide price inflation? And how the US Fed raising interest rates will somehow combat a global phenomenon? Is it due to the Unjust War on the Breadbasket?
- xwdv 4y agoGiven that there’s an obesity epidemic in the United States, we would benefit long term from such high food inflation IMO. It will force people to reach for cheaper, healthier options, or simply go without food and use up their fat stores. The poorest are often the most obese here.
- danso 4y agoHuh? Isn't cheaper food often the unhealthiest food? In Chicago, using the McDonalds app [0] I can get a large latte and 2 bacon and egg biscuits for just $5. That's a ready-to-eat meal with a ton of calories. You could match that value in healthy foods by buying in bulk, but then you'd have to include costs of freezer space and time for prep. [0] $4 for a bacon & egg biscuit, $1 more for buy-1-get-1-free, and the McCafe drink of any size comes free for an order of $3+
- xwdv 4y agoI could build that meal for a little over $2 without all the crap and preservatives McDonalds pumps into their food. Cheap food isn’t unhealthy. Rice, vegetables, chicken, it’s all cheap. People just aren’t used to calculating these costs.
- enlyth 4y agoImagine being so avoidant to having self control that you would rather have higher food prices, I cannot even comprehend this It's not hard not being obese, just eat less. Yes, that means having a degree of control over your actions, taking responsibility and not stuffing yourself with dopamine inducing fried food all day
- brightball 4y agoI sincerely hope to never hear “post scarcity” used in a sentence again.
- alerter 4y agoI'm living in the UK (Edinburgh) and I definitely feel like everything has gotten worse. The facts - on waiting times, strike days, inflation, wage stagnation, inequality etc. - speak for themselves. But there is also just a general feeling of malaise and decay. I will say that the large population of increasingly Facebook-addled Boomers really don't help. These are people who've paid off their mortgage, can collect rental income, are becoming pensioners, and generally vote against immigration, against public spending, and for lower tax rates. They're also massive consumers of NHS resources. We're going to be supporting these people with our taxes for decades to come. Meanwhile the Government has consistently failed to support productivity growth or infrastructure investment, and our whole economy is oriented around the service sector in London and a handful of other cities. The only alternative prospectus (Corbyn's "Green New Deal") was trashed by the established media, and his successor is now delivering bromides about national unity and being "tough on crime". He's also put EU integration completely off the menu. Nobody in power seems to grasp the scale of the economic and demographic crisis we're facing. It's not great.
- dukeofdoom 4y agoHow long before they start colonizing countries again.
- z3t4 4y agoEverything is mass produced. The prices are inflated because lack of competition. In a monopoly the seller sets the prices. That said, food is cheap, and consumers don't care what something costs. And if you are poor you usually have to buy from the most expensive shop, people with free time can afford to buy where its cheapest.
- miguelazo 4y agoWho would have thought empire came with a price? Even when you're just a junior partner to the madness, albeit much more enthusiastic than the rest of NATO.
- notShabu 4y agoA good if overly simplistic model of inflation & recession etc... is building a rocket in the game Factorio The rocket isn't necessarily intrinsically useful for everyone but is important because it is the thing that pulls forward all the demand for the all the commodities and all the intermediate production. Without the rocket there would be no factories, no jobs, no meaning. The factory MUST run to keep everyone's livelihoods going even though the rocket isn't relevant day to day. It also incentivizes things like innovation, efficiency, etc... However, building TWO rockets at the same time puts such a resource demand that there start to be shortages and breakdowns. Parts of the factory start shutting down. People are left jobless. One of the most serious is if the factory breakdown cascades to the power system (e.g. money) which causes the entire factory to breakdown. It's a tough job to figure out how to restart the factory incrementally. Meanwhile everyone is left jobless while this is being debugged. So there's a balance between how many rockets have to be simultaneously built. If there's too little demand, the factories are idle. Capital rots and there are less jobs. If there's too much demand, then shortages and price spikes will cause an even more serious breakdown. What gold/bitcoin/austrian philosophers understand is that the price of money HAS to reflect market reality. E.g. in a Factorio game all bottlenecks are important to production but if you mess up the energy bottleneck, then the whole thing breaks down. Having a hack like "manually move a few tons a coal every hour" and forgetting it once is catastrophic. The market conditions have been manipulated with buffer. The Fed & other central banks are usually concerned primarily with the layers of production that affect the most people. E.g. food and gas are critical. However when the "power supply" is threatened they need to start doing things like bailing out banks even if it seems insane to be focusing on this when people can't afford food.
- chillbill 4y agoSweden is at 22% rise. Thanks Economists!
- j45 4y agoI wonder if this will give rise to more gardening, and specifically indoor gardening, or a 4 climate greenhouse? Society has really quickly lost touch with one’s food sources in a few generations. One way to stick it back is to set a slow running cron job.
- hnburnsy 4y agoAnyone who watched Clarkson's Farms would get the impression that overburdensome government regulations on farming have contributed tremendously to increase food costs in the UK. Clarkson himself during the series mentions that Brexit has had an impact too.
- century19 4y ago(Serious) Food inflation started within the last 2 years. Has there been increased regulation in that time?
- uptownfunk 4y agoThe nasty move is when they reduce the weight of the package but keep the price the same. Meanwhile everyone on PPP loan cash out built their own custom made mansion. And we’re more concerned with paying out millions in reparations. The country deserves to fail if this is how we prioritize our concerns
- samstave 4y agoInflation is super high in California, but I track it mentally on a per product basis for things I buy regularly. Juice is up 33% - lots of things are 18%, 25%, etc. I dont care what they state national inflation is - Its important by food category.
- fsckboy 4y agothe way inflation is measured I think is accurate for a certain type of economic measurements, but it's not the intuition that consumers have about inflation. It's a moving average to ask "prices this month are what percent over what they were this month a year ago?" because if prices shot up 20% last July, and then stopped going up August and onward, the measure is going to say that inflation this month is still at 20% over last year, but consumers have already got used to the new price level in the shops. At the same time, Joe Average is likely to be ready to grumble about prices all the time, so hearing that inflation is still at 20% will reinforce a sense that isn't really accurate. I'm not saying economists are not measuring the right things, I'm saying that the way the stories are played in the press requires some digging or interpretation.
- dmtroyer 4y agohaven't food price changes historically been under inflation for a long time?
- m_stone_code 4y agoLiving in the UK, yes food prices are rising. But I work for an NGO whose main focus is in East Africa and I've been tracking food inflation there and seeing 200-400% jumps over the past three years. Perfect storm of the lack of available fertilizer, wheat shortage and poor growing seasons over the past five years is hitting everyone. I don't see it geetting better until the world adjusts; swapping to alternative crops and producing nitrogen fertilizer at country level.
- robocat 4y agoI agree, the problem is fairly global. So UK specific explanations are unlikely to have much validity. Some punters myopically only considering UK features (such as brexit) is misleading. https://tradingeconomics.com/country-list/food-inflation https://tradingeconomics.com/country-list/food-inflation (Click on World Tab, and click on the inflation heading to sort - I needed to tap and slide to get it to sort descending).
- smarnach 4y agoInflation (in general, not food inflation specifically) in the UK is worse than in, say, Germany and France. The reasons for that are specific to the UK, and they do include Brexit. I think it's not myopic to point that out. We shouldn't give a free pass to people who have wreaked economic havoc to the UK just because there are some geopolitical factors that happen to wreak even worse havoc at the same time.
- dukeyukey 4y agoAbsolutely not. But Belgium, Sweden, Denmark, Czechia, all have comparable or worse inflation. Brexit was and continues to be a shit show, but the UK isn't uniquely in trouble here.
- pharmakom 4y agoQuestion isn’t how Brexit UK compares to other countries, question is how it compared to hypothetical UK without Brexit. The government is spending a lot of money keeping inflation down through the energy price cap.
- xkcd1963 4y agoArgentinians be like: Oh yes, 18%, that is horrible.."
- CM30 4y agoInterestingly, it seems like even those products seemingly not affected by price inflation have taken a hit over here in the UK. In addition to that, we've also seen: 1. Products offering far smaller portion sizes than before, likely to an even more ridiculous degree than what was happening with things like crisps and chocolate already. 2. The taste and quality of a lot of food items getting worse (probably because the original ingredients got more expensive/became uneconomical to use). So even products that stayed the same price seem to have suffered recently.
- lucidguppy 4y agoIn the US - once cheaper foods are spiraling out of control - and certain cheap foods are just missing.
- JL-Akrasia 4y agoThere was 11+ Trillion injected into the economy, most of that did not got to the poor. Lets pay more attention to this cause
- moffkalast 4y agoAre we talking worldwide there? How is that number even possible, that's like half the US's GDP and almost four times UK's.
- engineer_22 4y agoI think parent is talking about the US COVID bills that provided liquidity to the stock market and checks to households. Did UK also do something like that? We are also still seeing supply chain problems here that started during COVID. Consumption didn't cease during COVID, but production did, so there is a massive backlog. Not speaking retail consumption, but industrial and government orgs also consume resources like equipment, machines, etc. And those assets are seeing persistent backlogs, especially domestic production as US is fully employed and no room to increase production.
- moffkalast 4y agoI'm not sure how much of a point there is in treating this inflation as region-specific when the economy is clearly globalized to the point where anything affects everything and most countries are also seeing it. The UK made its own relief checks, as did all EU countries afaik, but to a much smaller degree than the US. Some only to students or as free meal/vacation vouchers.
- kwere 4y agoChina also did a lot of its QE with chinese characteristics. If i remember correctly north to a trillion $ in 2022.
- Tycho 4y agoThe interesting thing about food is that most people in the country probably spend 10x on food than what they really need to (including eating/drinking out). We pay for convenience and luxury, but if push comes to shove there’s a lot of economising to be had.
- tigerlily 4y agoThere's a lot of arguments about the mechanisms of inflation, and its various symptoms, but surely the root cause of inflation is elevated energy prices? I mean energy underpins the price of everything else in an economy, especially production and transportation, which in turn affects the price of groceries. I guess as far as groceries go there's also a significant labor component, but still, it must surely be the cost of energy as the principal driver of inflation? Edit: typos
- Kailhus 4y agoThanks for raising this. Totally. I think most of the user base here is US centric but from what I can see from the side of the pond is that the biggest worry is that increasing interest rates will do shit all because the deep root of the problem is energy, brexit and all kinds of terrible policies that the Torry governement has been inflicting on the country to become ‘self sufficient’ which had such deep and brand new ramifications our economy that we are actually just making shit up hoping it works. Economists can’t rely on previous data anymore as we’re basically starting ‘brand new’.
- beefield 4y agoI'm more than a bit irritated that the inflation news push out just the annual number and do not show how the acrual CPI index has developed. As an example, euro area headline inflation has been practically zero since october [1], and yet only thing you see in the news and ECB commentaries is the YoY number scaremongering. [1] https://tradingeconomics.com/euro-area/consumer-price-index-cpi https://tradingeconomics.com/euro-area/consumer-price-index-...
- withinboredom 4y agoAt this point, I feel like people are rising prices because everyone else is rising prices because “inflation.” Literally my wife raised her prices for haircuts simply because everyone else was and she was getting comments that she was too inexpensive.
- reducesuffering 4y agoYes, there's absolutely a well-established phenomena that expected inflation will cause realized inflation. That's why the Fed (and likely other central banks) have to "break" inflation by showing they will get it back to 2% no matter what. If people believe inflation will be 2% the next couple years, it will help cause inflation be 2% the next couple years due to not causing the treadmill of price increases.
- rpmason 4y agoI believe that we can make a small dent on this problem if we improve the technology that runs greenhouses. (My bias: I work for a startup that is working on this and I'm kind of obsessed with the industry.) Here is what current greenhouse tech looks like: a human (called a grower) uses their intuition to adjust hundreds of settings that parameterise what the actuators should do in different circumstances. For example, 20 settings might parameterise a 'ventilation setpoint line', which determines what air temperature the vents should start opening at given a measurement of the solar radiation intensity from a weather station. All the different actuators (heating pipes, vents, screens, misting systems, irrigation systems) have their own set of heuristics that need to be adjusted by hand..then beneath that a low-level control layer (e.g., PI control) manipulating individual motors/valves. It's crazy but the grower has to manually adjust the settings as the weather, energy prices and crop state changes. With better software/automation we can improve the control of the environment within the greenhouse and thereby increase yields [kg/m^2] and minimise energy costs. If the farmers are producing more tomatoes per m^2 for the same input costs they can afford to sell them to consumers (via supermarkets) at lower prices and still make money. It won't solve all the problems but would be a step in the right direction.
- supergirl 4y agohow much of the total cost of a tomato actually goes to the farmer? less than 10% wouldn’t surprise me
- rpmason 4y agoYes, if you mean how much profit does the farmer make I think you are spot on. Pricing fluctuates with the season, variety but from the data I've seen a farmer in the US might sell to the distributor at $2/kg, but after paying all their costs (packaging, labour, energy, supplies, depreciation) the pre-tax profit might be around $0.16/kg - so 8%, and that's probably a pretty good year! It's a low margin, high volume kind of business.
- antisthenes 4y agoHere's the thing: Plants don't really give a shit. Implementing a convoluted tech solution in greenhouses for an additional 5% efficiency will never pay back for itself. > (My bias: I work for a startup that is working on this and I'm kind of obsessed with the industry.) I suggest you actually learn more about growing plants than optimizing 20 different atmospheric and HVAC parameters. Many of these recent startups folded because they couldn't figure out that growing lettuce indoors hydroponically doesn't actually make anyone any money.
- switch007 4y agoNot just price rises but shrinkflation too. That too is out of control
- ihaveabeardnow 4y agohave consumers increased their exposure to rising costs by consuming fewer raw materials and more finished goods? instead of buying flour, eggs, butter, cocoa powder to make a chocolate cake - they just go buy the cake. and I recognize there's an entire spectrum of stages each raw material goes through to get to the final finished product. each of those stages though is an attack vector for cost increases (legit or malicious - doesn't matter) having the skills/knowledge to consume fewer finished products is insurance. and the only real price for that insurance is time.
- pclmulqdq 4y agoI think this is part of it. Anecdotally, I have heard from a few chefs that young people today know a lot less about how to cook than they used to, so it's harder to hire line cooks. The same goes for many other kinds of basic things, like repairing your house, sewing clothes, etc. At the same time, a lot of these basics are getting more difficult in the name of efficiency: think about repairing a linen shirt with a loose weave and no stretch vs repairing a spandex-poly shirt with a very tight weave and a ton of stretch.
- supernova87a 4y agoOn the topic of whether inflation hits the poor harder than the rich, I have been undecided/inconclusive in my mind about this. And would love some perspectives on it, along the lines of: Although day to day items that dominate the spending of a lower income person's paycheck are easily seen affected when inflation hits, for a wealthy person, whatever savings and money is accumulated eventually has to be spent on such things also -- whether directly by the owner, or through goods/services that have to pay such expenses. So in time, in having to spend their wealth, the rich get affected by shrinking buying power as well. (they just have the luxury to spend on more items that are not daily/monthly subsistence expenses) Is that reasonable to think? Why am I getting downvoted for such a legitimate economic question? Is this offensive against lower income people?
- pclmulqdq 4y agoInflation hits everybody, but it hits people with bad market timing a lot more than people with good market timing. That means the dumb rich are the biggest losers, the smart rich are the biggest winners, and the poor (who don't have the luxury of choosing how to time the market on most things) also generally lose.
- mxkopy 4y agoGoing from $30,000 to $0 is a much bigger loss than $3M to $100K...
- uptownfunk 4y agoThe summary is that productivity is down, money supply is way up. The value of money, in particular, the strength of the US Dollar is backed, fundamentally, by the strength of US and US productivity. The problem is that the money printed did not sufficiently go into factors that increased productivity (relative to the money printed) and instead contributed to an asset bubble and consumption (relative to investment in productive capacity). Unfortunately, the Fed has to raise rates to reduce the money supply (increase the cost of borrowing) which puts downward pressure on productivity. This is not a foregone conclusion but is the likely outcome, hence the need to "do more with less" mantra of tech. So while the money supply will decrease, the real question is will the money supply decrease relative to productivity. Otherwise, we are basically in for a stagflationary period unless technologies like LLMs produce a step-function increase in productivity and efficiency. The problem is there is also an inverse relationship between productivity gains due to technology and effort. Meaning technology makes life easier, so people work less, effectively resulting in the same overall output, unless economic conditions dictate otherwise. In which case, inflation may not be a bad thing in the very near short term, provided we can produce our way out of it, which may be possible if LLM technologies result in new industries and job opportunities. (However current thinking indicates the opposite, jobs will likely be eliminated as a result of LLM technologies.
- skocznymroczny 4y agoYou will own nothing and you will be happy.
- donatj 4y agoI hear the inflation numbers and I'm always like "are they living in the same world as me?" Pre-COVID I used to able to run and get lunch for under $5. Now I'm lucky to spend less than $15.
- rhacker 4y agoThis is my experience too. I don't know where the CPI ever gets its data. But Inflation is clearly over 100% for restaurants in California. Literally in the last 3 years.
- jq-r 4y agoI can also echo this. The prices of groceries that I'm buying doubled in price in the last year. Some even tripled. I'm not sure where are they pulling low double digits in my country, but that's just not my experience.
- zeroonetwothree 4y agoa) The CPI includes many more things than just restaurants. Unless you spend 100% of your income on restaurants, focusing on that specifically isn't very informative. b) There's no way that inflation is "over 100%" in restaurants in California. For example, a carnitas Chipotle burrito is currently $10. In 2018, five years ago, I ordered the same thing for $8 (I have all the records of my purchases). That is only 4.5% annual inflation over that time period (25% total). I don't feel like checking other restaurants, but I suspect if you actually look at data and not your intuition it will agree with this.
- standardUser 4y agoIs that in the UK? I live in NY and I feel like inflation is something happening to other people. I guess I don't watch prices very closely, but things seems just as annoyingly expensive as they did 3-4 years ago without any really noticeable difference.
- donatj 4y agoThis is in Minneapolis.
- cwkoss 4y agoI think summer 2023 is likely to have more protests than 2020: - Food prices are highly correlated with societal discontent. Need bread, circuses alone insufficient. - 2024 election cycle is starting to ramp up, society will be thinking more politically. - We're having a warm spring - could be a hot year. Tempers flare more easily in higher temperatures. - Looks like we're heading into a recession. As the fed fights inflation, peoples investment savings will drop in value, making the middle class feel less secure.
- slaymaker1907 4y agoAre you referring to the UK or to the US? I'm in Utah and it has been an incredibly cold spring.
- stuaxo 4y agoAt the same time as we are told any wage increases will drive inflation when all it would do is follow inflation that has already happened.
- fundad 4y agoBrexit has been a massive upward redistribution of wealth.
- recursivedoubts 4y agoTurns out that, in the long run, some of us aren't dead. Kenyes is though, so...
- cardosof 4y agoMost food packaging is made with aluminium. Aluminium is down 30% YoY but up 50% in the past 3 years. It's been a wild ride for manufacturers and they increased prices to handle this. Same with energy, the average cost is 50% up from ~3 years ago. Not just electricity that powers up the factories, but the oil for everything logistics. If you're Unilever/P&G/Nestlé, what do you do? You start cutting costs (less/worse materials - that's called skimpflation), total production volumes or less volume per product (shrinkflation). You also are not as inclined as before to give out promotions and benefits. The good old "pay 1 take 2" is now "pay 1 take half". Retailers get squeezed because they can't just pass the whole price raise down to the end customer, so they suck it up a little and get less profits. They also had more operational costs, so they get screwed (mostly the people working there). The smaller ones may shut down or get M&A'd, the big ones survive. To make matters worse, the world is simply unpredictable right now. Post-covid you would expect some categories would go up (deodorants, for example), but then you have a war in Ukraine and a global rise in interest rates. When managers can't predict they go with the worst-case scenarios in their pricing strategies, reinforcing all that's bad. Personally, I'm saving what I can, investing in inflation-indexed bonds and the occasional "buy the dip" for some select stocks, freezing cooked foods with a month in advance, and being very cautious with any job movements. I hope I'm wrong but I believe that will be the way to go for at least a year, if not more.
- NovaDudely 4y agoThere is a 2007 book by john Michael Greer - "The Long Descent: A User's Guide to the End of the Industrial Age". It was the first in 10 books on the subject of industrial decline over the course of a few centuries. I wish so badly that he was wrong about these things, but every day it looks a little more like he got an absolute home run on this topic. The only other advice I would give to people is, if there is something you need to buy now and you can - do it! Key word here is 'need'. I have been buying in bulk for years now and switching over to equipment that will last a long time. It doesn't mean you will be 100% fine but you can ride the dips as they come.
- Kailhus 4y agoDo you ‘need’ a house though?
- egberts1 4y agoFun graphic of inflation broken down to nearly the smallest thing in a typical US household. https://usafacts.org/projects/cpi/inflation-parts https://usafacts.org/projects/cpi/inflation-parts
- arrozconcosas 4y agoThis also does not include 'shrinkflation', which is rampant. They are slightly reducing the size of items while keeping price the same / higher.