Posted on 05/06/2021 3:02:19 PM PDT by Roman_War_Criminal
Did you know that the price of corn has risen 142 percent in the last 12 months? Of course, corn is used in hundreds of different products we buy at the grocery store, and so everyone is going to feel the pain of this price increase. But it isn’t just the price of corn that is going crazy.
We are seeing food prices shoot up dramatically all across the industry, and experts are warning that this is just the very beginning. So if you think that food prices are bad now, just wait, because they are going to get a whole lot worse. Typically, Americans spend approximately 10 percent of their disposable personal incomes on food.
The following comes directly from the USDA website… In 2019, Americans spent an average of 9.5 percent of their disposable personal incomes on food—divided between food at home (4.9 percent) and food away from home (4.6 percent). Between 1960 and 1998, the average share of disposable personal income spent on total food by Americans, on average, fell from 17.0 to 10.1 percent, driven by a declining share of income spent on food at home. Needless to say, the poorest Americans spend more of their incomes on food than the richest Americans.
According to the USDA, the poorest households spent an average of 36 percent of their disposable personal incomes on food in 2019… As their incomes rise, households spend more money on food, but it represents a smaller overall budget share. In 2019, households in the lowest income quintile spent an average of $4,400 on food (representing 36.0 percent of income), while households in the highest income quintile spent an average of $13,987 on food (representing 8.0 percent of income).
Needless to say, the final numbers for 2020 will be quite a bit higher, and many believe that eventually, the percentage of disposable personal income that the average U.S. household spends on food will reach 40 percent. That would mean that many poor households would end up spending well over 50 percent of their personal disposable incomes just on food. At one time that would have been unimaginable, but now everything is changing.
As I noted above, the price of corn has increased 142 percent since this time last year… Corn prices have jumped roughly 142% over the past year to $7.56 per bushel, the highest price seen in eight years for the crop. A drought in Brazil and increased demand in China have put pressure on global suppliers.
In other areas, we are seeing more moderate inflation, but overall we just witnessed the largest increase in food inflation “in almost nine years”… The average prices in March of 2021 for pork chops and chicken breasts are both up more than 10% compared to March of 2020. Eggs and cheddar cheese are both up 6%. Looking at all consumer goods as a whole, the latest inflation data in the Consumer Price Index from the U.S. Bureau of Labor Statistics shows the largest month-to-month increase in almost nine years.
Meanwhile, the price of lumber just continues to shoot even higher. In New Jersey, one man says that the total cost of lumber used in building his new home will reach $70,000… Tom McCarthy can’t finish building a home in Bergen County, New Jersey because of the lumber shortage. “There are pieces of wood that we can’t find,” said McCarthy, a real estate broker with the Chen Agency who also builds homes with his father on the side.
McCarthy estimates the cost of lumber for the home will hit $70,000, nearly double the cost of building the exact same home in a nearby town just eight months ago. Isn’t that nuts? Instead of building a new home, you could try buying an existing one instead, but real estate prices in many areas have gotten completely insane. In northern California, one house recently sold for more than a million dollars over listing price…
When a house in Berkeley sold for more than $1 million over its list price in late March 2021, it was covered in media outlets across the Bay Area, including this one. While the Berkeley sale was particularly sensational — it sold for double its list price and received 29 offers — these individual stories are becoming more common in today’s real estate market, according to recent data and anecdotes from real estate professionals. I never imagined that I would see such a thing happen. But one real estate agent says that such wild bidding wars are becoming increasingly common.
And that’s especially true in the East Bay. “People are not surprised when a home goes $1 million over,” said Josh Dickinson, the founder of real estate agency Zip Code East Bay. “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley.”
This is what the beginning stages of hyperinflation look like, but Federal Reserve officials insist that we have nothing to be concerned about.
In fact, Eric Rosengren just told the press that the crazy inflation we are seeing now “is likely to prove temporary”…
Boston Federal Reserve President Eric Rosengren in an interview with MarketWatch on Wednesday dismissed talk of scaling back asset purchases as premature, and said temporary factors pushing up inflation this spring won’t last.
“My view is that this acceleration in the rate of price increases is likely to prove temporary,” Rosengren said Wednesday.
Do you believe him?
I don’t.
As Simon Black has pointed out, the federal government is just going to continue to borrow and spend trillions upon trillions of dollars…
This is the big one. The US federal government is hoping to spend a whopping $11 TRILLION this year, between the regular budget, COVID stimulus already passed, and all the new legislation they’re proposing.
And it’s only May.
Obviously Uncle Sam doesn’t have the money. So they have to borrow it.
Almost everybody loved it when the federal government started sending out big, fat stimulus checks.
But you aren’t going to love it when a cart of food costs you $400 at the grocery store.
Whenever the government hands out “free money”, someone has got to pay for it, and one way we are paying for it is through higher prices.
If you do not believe that this is a major national crisis yet, you will soon, because it won’t be too long before most of the country is loudly complaining about how nightmarish inflation has become.
I hear that!
I am the ‘whitest’ Yankee Girl you’d ever want to meet - and I would eat Mexican cooking every DAY if I could. :)
I wouldn’t be surprised if we (someday) find that Trump DID win at least 49 states, in the stolen 2020 election.
I am hoping you are right on, about 2024.
That’s the problem, you think everyone else is responsible for you but they are not.
Again, another flat out lie, by you.
High horse, and all.
I don’t know about you but I nearly choked when Trump called for $3T for pandemic relief. Economists have been saying for decades that we were way too far into debt but it but the collapse never happened. Still, after all those years of gloom and doom, I was conditioned to think that we were on the brink of financial ruin, so I reflexly pret near panicked when Trump called for increasing it so drastically.
And it won’t happen as long as the world economies are pegged to the US dollar. I know China wants to change it that so that the yuan is the dominant currency. I just don’t see that happening for the foreseeable future.
Biden’s keystone pipeline nix raised gas some 80 cents here.
These liberal/socialist/commie policies will soon have us 30 trillion in debt.
This keeps me up at nights.
I have a weekly budget for myself of about $35 and I can buy what I need for the entire week. Chicken or fish, fresh veggies and some fruit. No sugary foods.
The communists in the USA will win every election post 2020 (they cheat). Their undoing will be ...
I paid 17.00 for two small boneless ribeye the other day, that is my treat for myself.
Yeah but is it frankenstein corn with so much DNA changed its just a corn colored and shaped man made molecule?
Kill two birds with one stone.
Isn’t it poisonous?
nothing like a good ribeye....
Well, if beans are on the menu, then people ought to stock up on Bean-O.
“My view is that this acceleration in the rate of price increases is likely to prove temporary,” Rosengren said Wednesday.
Do you believe him? I don’t. “
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No I don’t believe him. I remember a time when the first class stamp cost 3 cents. I remember when gas for the car was 33 cents per gallon. I remember when hamburger cost 33 cents per lb.
The question is not will there be inflation - that’s a resounding yes. The question is will it be galloping double digit-such as we had during Carter and Early Reagan years, or something worse-like we have seen in Venezuela?
I have considered buying food for long term storage as an investment that is just as important a part of a balanced portfolio as any other asset.
And by the way - lumber prices - We purchased a big supply to build a shed less than a year ago. Two by Fours are now priced at 3 times what we paid then. - That’s 300% in less than a year (for those of you living in Rio Linda).
“...for those of you living in Rio Linda.”
LOL! First chuckle of the day. Thanks! :)
Agree and he better get moving. We need social media platforms to communicate since twitter and facebook bans continue for Trump
👍🤣😎One of my favorite sayings I picked up from the golden AIB microphone guy. Ha.
All the above is a good approach if you have the resources. The standard prepping items to start, food, water or secure source, medical items, guns and ammo(may be challenging now if you have to start). Food inflation is going to continue so buy a little extra if possible each time you shop. Booze can be used for barter, all of this is in a fecal material hitting the fan scenario, in addition I have recently been adding silver as insurance for the above situation. I am not counting on making any money on it(very manipulated market), it is there just in case.
Real estate is good, I have been in the markets for a while but have not been adding recently. I like crypto, it has a lot of volatility, but good potential upside and not controlled by central bankers who would monetize the currency. They would have to shut down the internet to kill it, which they will try to do as this takes away power from them and governments.
I see us in the beginnings of very difficult times, I have a general idea of the direction we are going, but very unclear about how we get there.
This is basically planning for possible contingencies, some more likely than others
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