Comments on: 5 Recent Examples of Consumer Food Price Inflation in Second Half of 2009

By: MoneyEnergy

MoneyEnergy — Fri, 05 Nov 2010 20:08:59 +0000

@Philip – yes, I wasn’t suggesting that the items in the first part of the post are those that would be the best or paradigmatic ones to include in a basket – those were just examples that I’d happened to notice at the time. By the way, that Earthbound organic lettuce box now costs me $3.99… I agree it makes sense to include your biggest expenses.

@Arron – thanks. Depends what you mean by “this subject” – inflation specifically? I’ve written about the coming inflation (see the article in my sidebar – it leads to others).

By: Philip Brewer

Philip Brewer — Fri, 05 Nov 2010 15:37:57 +0000

I think you need to be more careful than that about which items you pick.

For most people, a few items are going to dominate their spending. (In particular, taxes and your rent or mortgage will both figure large.) If you don’t include those items in your index, you’re not capturing some of your largest expenses. And yet, if you do include them, your index isn’t going to be very sensitive to the early signs of inflation, because expenses in those categories might change only once a year.

I very much agree, though, that you ought to roll your own cost of living index. I wrote about it here:

http://www.wisebread.com/roll-your-own-cost-of-living-index

But it’s not so simple. A big part of the post is talking about some of the issues.

By: Arron Stormo

Arron Stormo — Mon, 18 Oct 2010 04:02:05 +0000

been visiting your blog for several days. really enjoy your posts. by the way i am doing a research relating to this subject. do you know any good blogs or perhaps online forums in which I can get more info? thanks in advance.

By: MoneyEnergy

MoneyEnergy — Fri, 23 Oct 2009 02:00:14 +0000

@Joe – inflation doesn’t simply mean “increase,” though – it’s a technical economic term and refers to the money supply, as I’m sure you know, which is what ultimately causes price differentials. So while one can say that incomes are falling and prices are rising, it doesn’t mean that we’re experiencing both deflation and inflation, since both can’t be happening to the money supply at the same time. I admit I don’t help things in the article, though, when I call it “price inflation.” It’s simply price increase, strictly speaking.

By: Y

Thu, 22 Oct 2009 21:50:41 +0000

I bet the farmers aren’t getting paid any more.

By: Joe Morgan

Joe Morgan — Thu, 22 Oct 2009 16:49:05 +0000

Inflation vs. Deflation all depends on what you’re talking about..

The price of eggs and milk as well as the money supply are inflating, but wages/incomes and credit are deflating. I think that the most common and meaningful way to look at it, besides CPI, is income and in that sense we are in a deflationary mode.