Food inflation

[LadyOnArooftop]

Ambrosia rice pudding in Tesco has gone up to £1.50 a tin. Before Covid... Brexit!... the war... they were sold in packs of 3 for £1.50. I refused to buy it, but instead bought a tin of Stockwell rice pudding priced at 25p! If people keep buying they'll keep upping the price. Shop around, look for alternatives...

 

[Cirdan]

Ambrosia rice pudding in Tesco has gone up to £1.50 a tin. Before Covid... Brexit!... the war... they were sold in packs of 3 for £1.50. I refused to buy it, but instead bought a tin of Stockwell rice pudding priced at 25p! If people keep buying they'll keep upping the price. Shop around, look for alternatives...

Tinned stuff in particular really seems to have shot up in price. I'm saving heaps by getting Aldi equivalents rather than going for the name brands on my usual Tesco delivery.

 

[Moriarty]

Ambrosia rice pudding in Tesco has gone up to £1.50 a tin. Before Covid... Brexit!... the war... they were sold in packs of 3 for £1.50. I refused to buy it, but instead bought a tin of Stockwell rice pudding priced at 25p! If people keep buying they'll keep upping the price. Shop around, look for alternatives...

When government increases the currency in society, prices rise.
People have been used to getting pay rises of 3 or 4 percent for a long time, because the economy has been doing well.
Inflation has been pegged at 2 percent for decades.
Eventually this has to balance out.
When there is more currency in the system, prices have to rise due to loss of currency value.
If an egg under the barter system was worth a loaf of bread, when you double the number of eggs, a loaf has to become worth 2 eggs.
It's not rocket science, its basic economics.

Currency is nothing more than a barter system of belief in availability, if it increased in volume it decreases in value, just like eggs lol.
Not a great example, but the principle is the same.

People dont understand the difference between money and currency.
Money is the actual worth of an object, currency is a state sanctioned variable which determines what the ratio of Money to Currency is.

So money is the Egg, whereas currency is the pretend value a note or coin has to represent that egg.

Like I said, not a great example.

However, the big problem comes with interest on a loan.
If I have 10 chickens which produce 10 eggs, I have real money.
If I want to borrow enough "Currency" to buy another 10 hens, with a 10% interest rate, then I would need to buy 10 hens that would produce 11 eggs.

Hence Currency "loans" with interest, simply create debt which "Money" cannot repay.

 

[Dropship]

Incidentally, what causes inflation anyway and makes the price of everything keep going up over the years?
I've asked before in other net forums but nobody can give a simple straight answer.

 

[Moriarty]

Incidentally, what causes inflation anyway and makes the price of everything keep going up over the years?
I've asked before in other net forums but nobody can give a simple straight answer.

Government borrowing.
They can never balance the budget, but try to keep it managable.
Its the rule of 70.

Hence a rise of 2% means a doubling of prices is 35 years.
At 5% its about 14 years.
At 10 percent its 7 years.

However, that includes the belief of constant growth to match.
If growth matches inflation then there is no problem.

Which is why western economies tend to be failing, we have gone from production industries to service industries.
If there is a rise in inflation, people tend to not spend on services, netflix is a prime example.

Hence we spend less on services, import more goods from abroad, thus exchanging uk currency for external currency and the value of the pound drops because our economy is weak.

Which means companies have to borrow more, government has to pay more and there are less taxes from the population.
Exacerbated by minimum wages laws.
Add to that the massive growth of public sector employment.

So, as an example, government finds itself having to pay out more in benefits for people who cant find jobs, so they increase the workforce in government to process those claims.

Which means government spending increases because they need more people in the job centers and DHSS to process claims.
The people who work there are government employee's, which means they are a net loss on the economy as the government pays them.

Its complex yes, but basic economics.

 

[Kev45]

 

[Dropship]

Government borrowing.
They can never balance the budget, but try to keep it managable.
Its the rule of 70.

Hence a rise of 2% means a doubling of prices is 35 years.
At 5% its about 14 years.
At 10 percent its 7 years.

However, that includes the belief of constant growth to match.
If growth matches inflation then there is no problem.

Which is why western economies tend to be failing, we have gone from production industries to service industries.
If there is a rise in inflation, people tend to not spend on services, netflix is a prime example.

Hence we spend less on services, import more goods from abroad, thus exchanging uk currency for external currency and the value of the pound drops because our economy is weak.

Which means companies have to borrow more, government has to pay more and there are less taxes from the population.
Exacerbated by minimum wages laws.
Add to that the massive growth of public sector employment.

So, as an example, government finds itself having to pay out more in benefits for people who cant find jobs, so they increase the workforce in government to process those claims.

Which means government spending increases because they need more people in the job centers and DHSS to process claims.
The people who work there are government employee's, which means they are a net loss on the economy as the government pays them.

Its complex yes, but basic economics.

Thanks but I still don't get it.
You said inflation is caused by govt borrowing. Who do they borrow from, and why?

Regarding the big picture, here's what i don't get-
Suppose there was an island that had a population of 1 million people all paying taxes and everybody was happy and well fed and the economy was stable.
How would inflation get in there?

 

[Moriarty]

Thanks but I still don't get it.
You said inflation is caused by govt borrowing. Who do they borrow from, and why?

Regarding the big picture, here's what i don't get-
Suppose there was an island that had a population of 1 million people all paying taxes and everybody was happy and well fed and the economy was stable.
How would inflation get in there?

Those million people have needs and wants.
Perhaps they cannot produce enough food to support themselves.
Perhaps they dont have Smart TV's because that needs rare earth minerals which cannot be produced locally, so they have to import.
Once public desire gets introduced to the free market it does not go back.

So, on your island of a million people, how many of them work for the government?
They are a net GDP loss, as tax payers are funding thier jobs.
How many want access to external markets for goods produced overseas, they also are a net loss as thier money heads outside of the magic kingdom.
Importing good for consumers leads to companies taking loans to increase thier profitability, however they also incur an interest payment on those loans.
When banks, who's interest rates are governed by a central banks interest rate changes, create money, they also create interest, or usury.
So, central banks have to be able to create new money to pay off that interest.
It is not a zero sum game.
If I lend you a tenner but ask for £11 back, you have to take that money from somewhere else, but that one pound has no real value, it is simply a demand from me because I loaned it to you.

As an example, recently, the US government is now paying more in interest payments on its loans from the Fed than the entire US "Defence industry".

Yeah they are paying back thier credit card debt at a higher rate than they spend on thier entire military.

Government is the biggest borrower as it wants to seem to be doing something, be that about poverty, the enviroment, policing, social services, the biggy, the NHS.
Yet all they are doing is getting the country more and more in debt, last time I checked the UK government debt was at about £45,000 per person or £78,000 per taxpayer and rising.

Thats tax kicked down the road to ones kids and grandkids.

 

[Dropship]

So, on your island of a million people, how many of them work for the government?
How many want access to external markets for goods produced overseas..

Whoa, let's suppose its the only island on the planet and there are no other countries anywhere.
The islanders are well fed, well-clothed well off and happy, so how could inflation and national debt creep in?

 

[Moriarty]

Whoa, let's suppose its the only island on the planet and there are no other countries anywhere.
The islanders are well fed, well-clothed well off and happy, so how could inflation and national debt creep in?

A socialist utopia?
With Anschluss, self dependence.

Well one would have to control birth rates to ensure there are enough tax payers to balance pensions.
Assuming there is no war, that cuts defence budgets to zero.
Assuming there is no crime that cuts policing to zero.
Assuming theres no unemployment, thats cuts benefits to zero.
Assuming health is relativly good, they are no drugs, drink, or other detrimental substances, that cuts health care down a lot.
Assuming all energy development is renewable, that means no research into energy demands.
One would have to carefully control the population, to ensure old people dont become to much of a burden.
They are the ones who cant work and take up most of the health care costs.
Perhaps a mandatory euthansia age?

Lmao

I could go on lol