BBC: Food inflation at 8.3%

ray123

The news is at least six month old ( however, it is an excellent post!!!). I noticed this fact a long time ago...
That was also before the price of oil and petrol peaked, so I'm sure the prices will continue to increase!
There is also a shortage of certain meats in the shops (joints of meat), another great way to raise and prices - supply and demand!

WTF?_2

A lot of the spikes are down to inflation.

They are known as asset class bubbles.

The way it works is quite simple - too much money has been created relative to the amounts of goods and services in the economy (that is the financial definition of inflation).

Therefore, anything that is essential and in-demand sees a steadily rising price as people are chasing the item with the extra cash.

Then the big boys of the financial world spot the sharp rise and figure that it would be a good home for their billions of investment cash - and start buying up the commodity as well as futures.

This causes the price to rise even faster - making the commodity even more attractive to investors - meaning even more investors money going in.

Bingo! An asset class bubble.

It happened with oil earlier this year, it has been happening with various foodstuffs too. Even though the oil bubble has come off the boil, the full inflationary effects will be feeding through to us for quite some time. As with food.

And as long as there's too much money (relative to production) in the system these bubbles will continue to happen - pushing up prices of the essentials for the general public.

That's why we can have 'stagflation'. Even if the economy gets bad we still need various essentials and if the central banks keep 'injecting liquidity' (ie. giving the big boys billions of dollars of funny money and making money cheap for them to borrow through low interest rates) they will seek profitable returns through creating an endless series off bubbles which they profit from and we pay for.

This was the stated policy of Alan Greenspan. After the dotcom bubble burst, he deliberately flooded the markets with cheap money to create a new bubble in lending/property.

beecher

Glad I'm vegetarian! It is very noticeable that prices have increased - am amazed at the comment from the poster who hasn't noticed!

ray123

!!!!!!? - have you seen a documentary call Zeitgeist...
I am sure you will agree with some of the arguments within it. For example, how this world is being controlled by a false economy!

lostinrates

Dan: wrote: »

People who have a lot of equity/own ourtight have very low/no mortgage payments to worry about - so I doubt an extra few quid a week will break the bank.

I care.

many people have fixed outgoings regardless of their small rent/mortgage payments. Some even like to save , OO, renters, whatever. A few quid a week? For some yes, for some it works out more.

In fact, isn't a few quid a week (per person) breaking some banks right now?

MrMonkey

I just bought ten pounds of beef mince and 1.1kg of beef shin for £16 from my local butcher. Its all better quality than Tesco as well. If you shop around, you can still get bargains, and get better food as a consequence.

Vote with your wallet. Support local, better value traders and don't complain about the price if you refuse to shop around.

Dan:_4

vigesimal wrote: »

Ask your mum if she has seen a difference in the shopping bill. She will have.

She buys an awful amount of crap and unnecessary items. My shopping list is almost identical every week.

steadysaver

Maybe we should get over to the saving and investing board, as they seem to know something about inflation that we don't

http://forums.moneysavingexpert.com/showpost.html?p=13907243&postcount=7

rearrange these words into a popular sentance, buired sand in head the.

justpurchased

I think what they have have said the three main causes of this inflation.
Oil, Wheat and fertaliser are now falling back from there highs, so we should see some easing back soon.
Also there as been a good worldwide weat crop this year so that is good news for next year.

steadysaver

Gosh, croissants up 47.4%

I bought 2 croissants for 20p the other day from the co-op. But 30p will probably tip my finances into oblivion