Grandma Yellen, Federal Reserve Presidents, Wall Street bankers, CNBC talking heads and Ivy League economists are terribly worried about falling prices. Are you?
Meat, fruit, milk and butter prices skyrocket
New Yorkers are bringing home the bacon — but can’t afford the beef.
The prices of supermarket staples such as meat, milk and butter are skyrocketing.
US Labor Department data show the bill for butter surged 23.7 percent over the last 12 months. Meat rose 13 percent in the last year, with beef jumping 17.8 percent — the biggest boost since January 2004.
Meanwhile, fresh fruits other than apples, bananas and oranges increased 9.5 percent and whole milk rose 8.7 percent.
“Our paychecks stay the same, but the food prices keep going up,” fumed Jody O’Toole as she shopped at the Associated Supermarket at Eighth Avenue and 14th Street. “You still gotta feed your family, but meat and milk are too much.”
Colleen Vincent, who lives with her mother in Brooklyn, said she’s avoiding meat and sticking to canned goods and cabbage, which she turned into three meals last week.
“I don’t do big grocery shopping trips anymore,” said Vincent, 37. “I have to buy something that gives me more bang for my buck.
“We used to buy beef — now it’s a special treat,” she added. “There are other things I want out of life. I don’t want to spend everything on food.”
Steve Gould, 68, was picking up seltzer water, bananas and yogurt and said he refuses to buy anything unless it’s on sale.
“I want people to stick their heads out the windows like they did in the movie ‘Network,’ and say, ‘I’m mad as hell and not going it take it anymore,’ ” Gould said.
At Associated, a gallon of whole milk was going for $3.99, an eight-ounce package of Breakstone butter was $3.39 and ground beef was $4.19 a pound.
In Chelsea, the Gristedes on 26th Street and Eighth Avenue sold milk for $4.99 a gallon, eight ounces of Breakstone butter went for $3.49 and ground beef was $8.49 a pound.
The US consumes more meat per capita than any other nation (save for Luxembourg, which really isn’t a country).
I have said many, many times that the US is no longer going to be “special” – its economic status is going to fall back toward the overall mean. That means that people are going to find food more expensive, and its citizens will have to make do with less. That includes both in income and goods.
The Admin posted another little factoid yesterday – that over half of the wage-earners in the US earn less than $30k per year. It is going to be increasingly hard to afford high dollar items on those type salaries in the long-run (read meat as a high dollar item). Also include processed food in that category.
Check out the map below: it is the future. The US will steadily fall toward the standard of living in Western Europe – probably a third below where the US currently sits. Nothing – and I mean nothing – will stop it. It is a done deal.
The US (5 % of the world’s population) cannot continue to consume a quarter of the world’s resources. Those days are rapidly coming to an end.
[img]http://cdn3.chartsbin.com/chartimages/l_12730_e68f23369835a5394ce533eff1a0cf83[/img]
People it S*&t loads of meat (and fish in New Zealand), it is cheaper than the U.S. and all the beef is non CAFO and grass feed (some is grain finished but not CAFO) . Same with dairy cows and butter – less than half that price for the weight. milk is more expensive though but tastes a lot better!
Ll: I just got back from Europe(Germany, Austria and Hungary) and beefsteak was about 35 Euros or 50FRNs. It was sold by the gram and you didn’t get much for your $50. Lots of sausages, pork, and chicken, all of which were fresh and excellent. Burgers averaged 15 Euros or about $20. The locals, especially in Hungary, didn’t seem to have much but they were happy and very pleasant.
Food prices in Alaska are ridiculous, pay is a little more than the lower 48 but it hardly covers the difference in the cost of living. To answer the question in the post title, no I am not worried about deflation, Janet, because THERE ISN’T ANY DEFLATION!!!
There will be a monetary deflation in your future. The timing is bitch because before we deflate, we must inflate until confidence in “money” is lost.
When it finally goes, those holding physical silver as well as gold will allow those who live through the transition to survive – if they’ve lucky.
Take the so called “value” of gold versus the “value of silver”. The gold/silver price ratio has been kicked around for years now and silver, per ounce, has the potential for much greater appreciation versus gold and how you value gold depends upon whether you can obtain it at any price.
The little article below helps to understand the historic gold/silver ration and why silver will sitting in the driver’s seat real soon now..
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The Gold/Silver ratio is currently just under 58:1. Many have cited that the Gold/Silver ratio should be roughly 16:1. This was an historic level that existed largely prior to 1900 during periods when both gold and silver were routinely fixed prices. The ratio as a result was largely fixed as well. That was then but this is now. Since 1900, the Gold/Silver ratio has been far more volatile ranging as high as 100 to as low as 16/17 at the time of both gold and silver’s peak in January 1980. The ratio peaked once again over 100 in 1991 and since then has been on a downward trajectory hitting a low of 32 at the time of silver’s peak at $49.50 in late April 2011.
Charts created using Omega TradeStation 2000i. Chart data supplied by Dial Data
There are numerous arguments in the gold/silver community as to where the ratio should be. There are those that believe that ratio should go back to its historical level near 16. At today’s prices with gold at $1,400 silver would need to be about $90. According to studies silver is almost 19 times more abundant then gold. That would still put silver’s price close to $75. Finally, there are studies showing that the occurrence of silver in the ground is estimated at nine ounces of silver to one ounce of gold implying a silver price of $155. All of that gives off quite a range.
Given lower historical ratios it does seem baffling that the gold/silver ratio is today around 58 which is nowhere near the 9 to 19 range as suggested historically and in nature. The historical lower ratio suggests that buying silver today should be favoured over buying gold assuming a reversion to the mean.
Surprisingly investment grade silver is rarer than gold. If investment demand were to rise for silver it could imply that the price of silver could soar compared to gold. Historically both gold and silver have not only intrinsic value but currency value as well. When investors flee to safety as was suggested with a potential for a military strike on Syria it is gold that is mentioned in the media and rarely silver. Silver, unlike gold seems to not be considered as a safe haven as is gold. Silver has considerable more industrial uses and unlike gold silver is used up whereas the supplies of gold remains largely above ground.
In 2011, global gold production was 2,618 tonnes. Global silver production was 23,688 tonnes. This fits nicely with the 9 to 1 silver to gold ratio that supposedly occurs in nature. Central banks, however, prefer to hold gold to silver. Annual demand supply deficits can vary but in 2011, silver had a demand supply deficit of 8,678 tonnes vs. 1,668 tonnes for gold. That is a ratio of 5 to 1. However, there is little to imply that the gold/silver ratio should be dependent on demand supply levels.
Debt growth and quantitative easing (QE) have become a consistent characteristic of the western economies – Japan, the US and the Euro Zone. Japan has a government public debt to GDP ratio of 212, the US has a public debt to GDP ratio of 74 while the Euro zone’s public debt to GDP ratio is 90 (all 2012 estimates). For the US all Federal government debt to GDP ratio is now around 102. Debt to GDP ratios at, near or over 100 subtract at least 1% annual GDP growth. Japan’s debt is so unsustainable that a rise in interest rates to 3% could cause the interest alone on the Japanese debt to consume 100% of their budget.
The US’s Federal Reserve is purchasing $85 billion a month or $1.02 trillion annually for its QE program. Japan is purchasing $1.4 trillion of bonds annually as a part of its QE program. As a percentage of Japan’s economy it is large when compared to the US. Annual production of gold and silver at $1,400 and $22 respectively totals only about $135 billion. Two major western economies are pumping roughly 17 times more fiat currency into the market every year then is produced in gold and silver.
The US monetary base continues to grow. The US monetary base has now grown to $3.4 trillion from $875 billion just prior to the financial crisis meltdown of 2008. No wonder there is talk of the “taper” as this growth is not only unsustainable the longer it is allowed to go on the higher the potential for another financial crisis. This dilemma fits well the “damned if they do” and “damned if they don’t” when it comes to continuing the current QE program.
Against this background it was naturally baffling the sell-off for both gold and silver from April to June 2013. The claim was that gold and silver were both overvalued. Against the backdrop of global monetary and debt growth the argument should be that instead they are quite undervalued.
Citibank has come out with a forecast of $3,500 for gold over the next few years. They believe that gold’s price rise should be driven by the ongoing easy monetary policies of the western economies of the US, Japan and the Euro zone. That and the growing mountain of debt in those countries coupled with strong demand for both gold and silver especially from the East (Asia).
Against this background, silver should outperform gold. If silver prices were to revert to their long-term potential of roughly 16 to 1 then with gold at $3,500 silver could rise to $220. That’s a long way from today’s price of $24 for silver.
Source: Measuring Worth – based on annual averages of the daily London PM fix from Kitco – http://www.kitco.com. Also seen at Seeking Alpha http://www.seekingalpha.com 324 Years of the Gold Silver Ratio and $195 Silver.
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Just don’t store it in a bank. WTSHTF the precedence already been set in the 1930’s by Roosevelt for a gold confiscation and doing the same thing for coins with silver content is just as easy to do.
The whole process of more inflation before deflation, market failure due to nothing available to honestly assess price assets, The Big Crunch and chaos is coming – we just don’t have a time line for it. You can roughly figure out where we are by watching the hysterical flopping around of governments as they try to maintain the status quo with ever more dangerous maneuvers.
Just watch the countries that finally fail (i.e Argentina, Greece, the EU (falling fast, et al)), judging our own predicament by theirs and soon, one of the weaker countries will pull the ladder out from beneath the rotten financial/fiscal system resting atop it and that will drop everyone off a roof — likely fought by a concerted effort by TBP to flood the markets with liquidity (and here comes inflation) a little bit of that and everyone, everywhere will try to flee from “money” itself, buying anything at any price just to get ride of the “money” today, knowing it will loss 20% of its’ value by the end of the week.
Then comes the deflation. The USA and its’ citizens have a lot of assets that will hold things together for a time with swap markets, barter and such will pop up everywhere.
We live in interesting times and it promises to rapidly become even more interesting (and dangerous) as time marches on.
MA
Hi everyone! It looks like ‘The Great Floatation’ has a little while left to run. We certainly have been given a glimpse of coming attractions, most notably via the price action in oil and gold. The gold charts are showing potential for a short, sharp deflationary episode, followed by a mad scramble to reflate. Who knows how long before it starts? It’s almost 2015 — back in 2008, nobody would have predicted it could be put off this long…
“ARE YOU WORRIED ABOUT DEFLATION?”
Yes, I’m not getting those 4 hour erections from my Viagra.