Food Prices So Much More Than Advertised

April 30, 2008 at 10:37 pm (Food)

worthless rubles

Anyone diligently track their grocery expenses?  The Economist magazine did their recurring price comparison between now and April 2007 of, among other things, food.  The percentage increase in food bills they came up with year-over-last was an astounding 69%.

I say again, 69%!  Here is James Turk’s opinion on that

Meanwhile, the Federal Reserve, along with “official” economists and commentators debate whether the inflation number is 2% or 3%.  Some even dare to say 4%.  What a joke.  I guess it’s true that prices of skis and leather chaps haven’t probably climbed much.  And hey, I’ll bet it’s just as cheap to gain admission to theme parks as it was last year.  Good thing that sort of item is included in the overall inflation numbers because that’s what people really need in difficult times.  Oh, and cheaper cell phones.

Not that doctoring the official inflation numbers (that are used as the basis for peoples’ social security checks and pension) is a local phenomenon.  The UK gets in on the fun too.

The government would disagree with The Economist, I’m sure.  The official food price increases are supposedly between 4% and 5% annually.  But as any careful shopper or receipt-saver will tell you, that’s just not true.  The Consumer Price Index is misleading because it doesn’t track the actual increases per good.  It follows a “substitution logic,” meaning the government assumes that if rice is too pricy, people will switch to lentils.  And if avocados are too pricy, people will use… well… mayonnaise.  Or something.  That way they can say the prices aren’t increasing too much (as long as you do the proper food substitution).  I’m not kidding, that’s really the way it’s calculated.  Take out your receipts.  Pick up any old newspaper ads from six months ago.  And be prepared to get upset.

Today’s article of doom: Bushonomics.


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