High Food Costs: Inflation or Manipulation?

Discussion in 'Trading' started by short&naked, May 21, 2009.

  1. Many commodities are depressed, yet I find that the grocery bills are as high as ever (if not higher). What is the root cause of this? Some assets and commodities are depressed whiles others are getting inflated...
  2. sjfan


    You do realize... that when grocery bills get lower when buying the same food, that means deflation, right? Given that deflation hasn't occured in some decades to say the least, there hasn't been a case in recent memory that your grocery bill got lower (aside from temporary sales).

    End consumer prices are not directly correlated with input commodities prices.
  3. Let the grocery stores profit. It's good for the shareholfers and the economy. Shop at Walmart if you're that price conscious.
  4. jprad


    Have you ever even shopped at a grocery store?

    S&N is spot on. Food started ticking higher ever since fuel and fertilizer costs starting going up.

    No reversion to the mean in sight.
  5. sjfan


    There seems to be a pretty common theme these days on ET. Posts that basically run,

    "I don't understand [xyz]. Is it manipulation? Must be!"
  6. sjfan


    Christ... if you actually read what I wrote... higher input prices results in higher end product price. lower input price doesn't equal to lower output price. Hence, not directly correlated.

    Price levels don't revert to means. Otherwise, we wouldn't have inflation.

  7. Price inelasticity of necessities/staples.
  8. AAA30


    Yes the prices become sticky when eveyone gets used to paying that much.
  9. Only sticky with respect to downside adjustments. I should have said that prices are very flexible/elastic to the upside, while sticky and inelastic to the downside.
  10. jprad


    Not only is that not what you wrote, you've now managed to contradict what you did write.

    If rising input costs contribute to higher food prices then there is a correlation, if only in one direction.
    #10     May 22, 2009