Will the real rate of inflation please stand up?

ILW

Nobody is forced to buy from a supermarket. For most it is just easier.

Thrugelmir

Generali wrote: »

However, the farm gate price of most foods and other commodities has been rising quickly and that trend might continue as increasing numbers of previously extremely poor people find they are better off selling their labour to a factory and buying food than they are trying to grow their own.

The oil price affects the price of fertiliser. In the past year significant rise in price.

At 15th March 2011.

Bagged 20:10:10 blends are £76/tonne (30.4%) higher than in March 2010.
The average price of bagged 25:5:5 blends is £77/tonne (32.6%) higher than in March 2010.

nicko33

julieq wrote: »

Actually there aren't that many suppliers of baked beans anyway. It's probably low single figures.

I assumed ILW meant places you can buy baked beans from (including corner shops etc.) if it's meant to be compared to the number of different people you could buy a house from.
Maybe.

ILW

I was just trying to figure out what Hamish's definition of profiteering was. Still don't seem to have one.

Really2

ILW wrote: »

I was just trying to figure out what Hamish's definition of profiteering was. Still don't seem to have one.

Climbing up a mountain of cash.

StevieJ

Mr_Mumble wrote: »

So, when you exclude a bunch of stuff from the basket (and use the dodgy CPI basket in the first place) we've still got above, the everything-included, target inflation! Staggering!

PS. LBMA silver fix at another high today. Wonder why gold and silver are going to the moon?

I would exclude 'one off' tax increases, just the same as I would exclude extraordinary items from a set of accounts, for clarity. Oh sorry, I just noticed you were a gold bug

Generali

via FT-Alphaville

http://longorshortcapital.com/announcing-the-cpi-f-flat.htm

There is great opportunity for the Govt to reduce CPI by excluding more items. In fact, this looks eerily reminiscent of another highly successful endeavor in metrics improvement: LoS’s change from GAAP to SAAP (Seldom Accepted Accounting Principles). By changing our standard, we could change our metrics, and by changing our metrics from EBITDA to EBE (Earnings before Everything aka “supercore earnings”), we greatly improved our profitability.


As visionaries in the SAAP space and masters in specious metrics, LoS would like to be included in the “some” who are suggesting alternatives ways to measure CPI. Considering that the evolved goal of the CPI is to show a slight and consistent level of inflation, we propose that the CPI no longer include any components that are increasing in price level more than 1.5%. These items will be increasing as a percentage of the index, thus throwing off its accuracy. Similarly, items that are increasing in price level less than 1.5% or even decreasing should also be excluded since a) we are not interested in deflation and b) the accuracy of the model depends on items maintaining a consistent (rather than falling) proportion of the total index. It’s important to note that any price changes greater or less than 1.5% could skew the whole thing we are trying to measure and render the CPI not just unreliable, but practically useless.


This new CPI, CPI-F (flat), will provide data on all changes in the prices paid by urban consumers for a representative basket of goods and services whose prices demonstrated a slight and consistent level of inflation. We expect it to have the most consistent and consistently low inflation readings of all the CPI measures. Its current reading is 1.5%. In the future, the monthly CPI-F level will be reported on the 5th of the following month, unless there is no change to the index, in which case you can continue to use the prior month’s reading. Here is a pro forma chart that demonstrates what inflation would look like as measured by CPI-F since 1900.

Thrugelmir

StevieJ wrote: »

It appears that if we exclude Tory tax

Correspondingly another of Labours announced annually in advance direct stealth taxes (EES NIC) has no effect on inflation but reduces disposable income.

StevieJ

Thrugelmir wrote: »

Correspondingly another of Labours announced annually in advance direct stealth taxes (EES NIC) has no effect on inflation but reduces disposable income.

Exactly my point (don't get bogged down in politics:)) two sides of the same coin. Maybe we should create a new index that includes both CPI/RPI and disposable income.

HAMISH_MCTAVISH

ILW wrote: »

I was just trying to figure out what Hamish's definition of profiteering was. Still don't seem to have one.

Here you go.....

Food prices in British supermarkets are rising much faster than in other leading nations as retailers cash in with hefty mark-ups, a report shows.

Commodity price inflation over the past few months would justify a 3 to 3.5 per cent increase in processed food prices, but stores have increased prices by 6 to 6.5 per cent.

The UK fared the worst in six out of ten categories for price rises – including bread and cereals, fish, and oil and fats – when compared with the six major economies, says the report by investment bank UBS.

http://www.dailymail.co.uk/news/article-1361756/Food-price-rise-hits-UK-families-hardest.html#ixzz1JbdHc115

Using the excuse of rising inflation on import costs to raise your margin by far more at retail.

Sounds like profiteering to me.