Serial inflation or is it cereal inflation
There have been a few news report at times in the last year about the stealth inflation on our food shelves. That's products with the same labels and same look but with slightly smaller containers and less of the product being bought, at a price the same as previously.
Now that has hit home. One of the staples here, Post Selects Great Grains cereal, has just pulled off this switch in the last month. The boxes are marginally smaller but now contain 13oz of cereal as opposed to the prior 16oz. As added and maybe unwanted info, Uncle Sam whole wheat and flaxseed is the radical health food cereal that is the base of this breakfast ritual but then it is cut by the more mainstream Post Great Grains for a more palatable flavor. Walnuts and raisins are added. Not bad, but then those days when the sausage and eggs are a side dish...
There is a certain undeniable intuitive, maybe visceral, feeling held by many that the government statistics on inflation are blind. The easy starting point is excluding food and energy from the "core" number. Don't eat, drive, heat, cool, or turn on your lights and appliances and then there is almost no inflation. How reassuring is that.
This stealth inflation of what one gets for what they buy is a different and perhaps less tangible effect. We needed a new coffee grinder last year and went to the local chain kitchen products to purchase one. We chose what looked like a good one and my wife asked the salesperson how long it would last since the one we had just broke. She looked at me and asked how long we had owned that one and my memory retrieved the number 14 years. The salesperson replied, "Oh honey, nothing lasts that long anymore."
Small appliances like toaster ovens, microwaves, dehumidifiers, humidifiers etc. may look the same but their longevity and performance has changed. That was the case with almost all consumer electronics as well, same look, maybe more buttons, but less quality into the early 2000's. Then Apple took over the world and quality technology has changed much of that. One problem for the consumer though. Where the young teen of those earlier years had to have the latest Nike Michael Jordan's at the extravagent price of $100, now it's the lastest IPhone, IPad, or whatever cool gadget at a whopping cost difference to those sneakers.
As Bernanke tries to spur growth by robbing savers, the retired, and those on fixed incomes with his zero interest rate policy, it is still unclear to many that our cost of living is not going up. Bernanke's policy may be benefitting only those companies and individuals with the most stellar credit ratings while setting the stage for more visible inflation later. Ouch.
Now that has hit home. One of the staples here, Post Selects Great Grains cereal, has just pulled off this switch in the last month. The boxes are marginally smaller but now contain 13oz of cereal as opposed to the prior 16oz. As added and maybe unwanted info, Uncle Sam whole wheat and flaxseed is the radical health food cereal that is the base of this breakfast ritual but then it is cut by the more mainstream Post Great Grains for a more palatable flavor. Walnuts and raisins are added. Not bad, but then those days when the sausage and eggs are a side dish...
There is a certain undeniable intuitive, maybe visceral, feeling held by many that the government statistics on inflation are blind. The easy starting point is excluding food and energy from the "core" number. Don't eat, drive, heat, cool, or turn on your lights and appliances and then there is almost no inflation. How reassuring is that.
This stealth inflation of what one gets for what they buy is a different and perhaps less tangible effect. We needed a new coffee grinder last year and went to the local chain kitchen products to purchase one. We chose what looked like a good one and my wife asked the salesperson how long it would last since the one we had just broke. She looked at me and asked how long we had owned that one and my memory retrieved the number 14 years. The salesperson replied, "Oh honey, nothing lasts that long anymore."
Small appliances like toaster ovens, microwaves, dehumidifiers, humidifiers etc. may look the same but their longevity and performance has changed. That was the case with almost all consumer electronics as well, same look, maybe more buttons, but less quality into the early 2000's. Then Apple took over the world and quality technology has changed much of that. One problem for the consumer though. Where the young teen of those earlier years had to have the latest Nike Michael Jordan's at the extravagent price of $100, now it's the lastest IPhone, IPad, or whatever cool gadget at a whopping cost difference to those sneakers.
As Bernanke tries to spur growth by robbing savers, the retired, and those on fixed incomes with his zero interest rate policy, it is still unclear to many that our cost of living is not going up. Bernanke's policy may be benefitting only those companies and individuals with the most stellar credit ratings while setting the stage for more visible inflation later. Ouch.
1 Comments:
Serious mistake in this post corrected - if any reader didn't see it earlier, that's good.
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