Food prices rising faster than at any time since 1990 with no clear end in sight
Food prices jumped 11.3% last year and economists appear unsure when they’ll stop rising steeply.
The jump in food prices in December, compared to December last year, was the biggest annual increase since April 1990, when food prices increased by 11.4%.
There was also no sign of price rises letting up towards the end of the year, with prices rising 1.1% in the month of December alone.
ASB senior economist Mark Smith said December food prices were slightly stronger than expected, with about 60% of items rising in price, and consumers were looking at ways to cut down their food bill.
Food inflation now at 11.4%!!!!
I think we are in a unique crisis of Capitalism.
I think the $25Trillion Central Banks printed to fend of the 2008 Global Financial Recession (thanks to the naked greed of Transnational Banks) didn’t become inflationary because Transnational Corporations moved their Just-In-Time supply chains to China and that lowered the base cost of manufacturing.
The problem is that Covid shut down those supply chains forcing Corporations to move to Just-In-Case Supply chains which import inflation.
The recent drop in US inflation was in part driven by Biden tapping the US Strategic Petroleum Reserve (SPR) by 15 million barrels at a time when the SPR is at its lowest reserves of 450million barrels. If Russia suspends their oilbecause of the attempt by America and the EU to cap the cost of a Russian barrel of oil to $60 by refusing insurance on any tanker carrying Russian oil, that would see a removal of up to 700 000 barrels a day.
If America gets hits by a bad Hurricane season and are forced to use the SPR at a time when Russia is cutting their supply, that inflation rate is going to jump again.
This is why Putin is considering lifting taxes because he’s preparing for a hit on oil when he goes through with his threat in March to suspend Russian oil sales.
While inflation is slowing in the US, thanks to decreasing petrol prices, the core inflation for food is still going up. Inflation has been slowed, it certainly hasn’t been tamed but it has been slowed by oil levers that are not without intense vulnerability.
In NZ, the Government has the exact same problem with their $25cent reduction on the petrol tax.
Orr has no choice but to use a 100 post rise in February, despite the intense depression and Armageddon level reading of this weeks mood of the economy…
‘Worst of all worlds’: Why business confidence survey suggests recession ‘faster, deeper’
The latest quarterly survey of business opinion from the New Zealand Institute of Economic Research is “the worst of all worlds”, BNZ says.
It suggested profits were “collapsing” and hiring intentions were down, but that costs pressures for businesses remained extremely elevated, the difficulty in finding labour is extreme and their expectations of price rises are as high as ever, the bank said in a research note.
“It’s all starting to look like stagflation on steroids.
“There is no sign inflation is abating in any meaningful way, yet the survey adds more weight to our long-held argument that the economy is headed for recession. Moreover, that recession could come faster, and be much deeper, than many care to believe.”
…inflation has not been tamed, there are intense geopolitical shockwaves hitting us that could exacerbate things dangerously and the ever threatening extreme climate events are going to unravel things even further.
50% of those on a floating mortgage in NZ will be walking off 3.5% into 7% rates. That’s an extra $400 PER WEEK that first time home owners will need to find.
I don’t think that level of distortion to peoples take home pay is sustainable and the real possibility (as I have been pointing out) is stagflation.
All we’ve done is pacify inflation for a quarter, at any point in can erupt back into life meaning all the capital Reserve Bank Governors have burnt to get this level of credibility with the market will be wasted.
The millisecond Orr blinks the Market will exploit him.
If Orr comes in with a 100 point rise, the Market have to believe him, while the 125 000 people he’s about to sacrifice on the altar of Economic Theology will want to know why an unelected Technocrat is fucking up their lives.
The black swans aren’t just circling, they’re in an Uber on the way.
This recession will quickly start feeling like a crisis.
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He’s painted into a corner. If the loans start defaulting en masse, there will be a banking crisis, and the entire economy grinds to a halt.
But if he lets inflation run too hot, the currency collapses, and then the economy still falls over.
Nobody is willing to come up with a scheme to write off the bad debts. The only option left is to walk a tightrope: have high inflation to inflate away the debt, but not high enough that everybody loses faith in the dollar and dumps the currency.
Re-appointed by Labour, and he will do what he must. But its all good, only the poor and the almost poor will pay the bill for past excesses.
re:………’This is why Putin is considering lifting taxes because he’s preparing for a hit on oil when he goes through with his threat in March to suspend Russian oil sales’
……..The wests illegal and immoral sanctions are having almost ZERO effect in Russia. The main parties loosing are the west; talk about shooting yourself in your foot’.
India, China, Iran, etc etc etc, i.e. 60+% of the world, THANK the west for their kind act of not competing with them for Russian energy, which is slightly cheaper for them, and they don’t have to use mafia money (think US$ etc) to solve their big problem, that now ONLY the west has; getting reliable, fairly priced energy.
American LPG (the supposed solution) is about three-four times more expensive than Russian gas. There are many many more risks with delivery issues and MORE equipment and investment is needed.
A REALLY dumb act of self sabotage by the west. The Americans LOVE it and are laughing all the way to bank..
No worries, Labour’s Supermarket Pricing Inquiry fixed this right? Oh wait, no…