JIm Rogers: United States estroying Savings class

Riversider. The point about farmers is well taken. Even though rents are moving up, they are doing so at a slow pace. But have you noticed that costs at supermarkets have skyrocketed in the past few months? Cereal, milk, lettuce, fruit, eggs -- everything is not only up it is up in a way that someone like me who does not have children and is usually in such a hurry that I don't check prices is stunned. At first I thought it was just Manhattan and that prices must be reflecting higher rents. But in Miami I ended up paying $4 for a single grapefruit --in Florida!!-- because I didn't check prices. Something is going on. The pricey health cereal I buy for my husband just went up 30%. 30%!!! in a month. Seems like inflation might be about to smack us upside the head.

I have apt23. And it annoys me to no end. The managers at fairway assure me it's not them but the producers. I just purchased noticed that o.j. went up another 0.20 a half gallon.

http://www.ft.com/cms/s/0/b4f12cca-aa31-11df-9367-00144feabdc0.html

The forthcoming orange crop in Florida, the world’s second-largest producing region, will be more than 10 per cent larger than last season, according to two closely watched private sector forecasts.

Brazil’s citrus crop is seeing its worst harvest in seven years because of bad weather and disease, according to Cutrale of Brazil, the world’s largest orange juice producer.

apt23. Food is definitely going up. and Oil & Gas too(despite the economic slowdown). What do you think will happen to the price of oil and gas if the economy becomes o.k.?

ok, just don't consume orange juice, big deal!

Coffee too! Should we all skip breakfast? or just consume Ho Hos?

wheat is also going up cause of very bad weather in rusia and ukraine... so expect wheat related prices to go up at your grocery too. checking prices and planning meals accordingly is not rocket science, right? easier than getting angry... ok, not everybody has the time though.

Liar.

Coffee has not gone up.

Quite the opposite.

lol Riversider, a little less caffeine will benefit you imho

I'm addicted to my morning mug,I can't give it up. I gave up starbucks several years ago, but I must have the morning brew.... but what's this non-sense about coffee prices not going up?
---------------------------------------------------------------------

Coffee rose in New York, extending a rally to a 13-year high, on speculation that supplies will lag behind demand. Raw sugar dropped, and cocoa gained.

Coffee has surged 54 percent in the past year amid slumping inventories and concern that too much rain would damage South American crops. Colombia’s harvest may decline in 2011 after wet weather caused the worst outbreak of a plant-damaging fungus in a quarter-century, a grower in Antioquia, the leading provincial producer, said last week.

http://www.bloomberg.com/news/2010-09-08/coffee-rises-to-13-year-high-in-new-york-on-supply-concern-sugar-climbs.html

Riversider, for you: one banana (they are on sale as we speak) while commuting... if on the subway, while reading the newspaper. 3 in 4 men are short of potassium anyway (which makes high blood pressure much less heart attack risky). what's not to like?

notadmin: it is not just oj. it is everything. it is crazy. organic milk is thru the roof. I can't imagine what mothers who don't want hormones in their children's bodies are going to do. it will be interesting to see what the next PPI will be. If it is flat, then it is more BS than most economists believe it to be.

I am reporting from two states so I wonder about the rest of the country. But it is bad in florida and between economy, the depressed RE market, the state deficit, the runaway unemployment, these added food costs will break the backs of a lot of people. I have a feeling we will start seeing this inflation reported in the press soon.

Ok...let's start with shit bucks. Have they raised their price? Nope.

Here's the deal. Business is in the crapper. Some businesses are raising prices. Some people like you like to complain. Other people find other businesses with better prices.

lol! I switched to Kosar's Bialys from H&H bagels. I can afford the O.J., but it doesn't mean I have like the higher prices.

> I have a feeling we will start seeing this inflation reported in the press soon.

what's the weight that food has on the CPI and what's the weight of imputed rents (housing costs!?)

housing price declines are going to begin to be reported from next week on imho from CoreLogic, the data that the FED uses... and that the CPI uses i think... so don't be shocked if there's deflation... in the typical household food is not even a top 3 spending item, housing is (then taxes followed by healthcare).

apt23,
Our government has managed to construct inflation indices to exclude anything that goes up. The more I learn about it, the more I'm amazed. I would not count on it showing up in the CPI or the PPI. I like Bison, and it seems to be up around one dollar per pound in the past year. Fish is up too.

i don't disagree with all that's said here. probably those that will take it in the chin are actually restaurants, that have to deal with higher input costs plus less traffic.

people in NYC still have the ability to cut food costs by not eating out as much and then by cooking from scratch at home (instead of using so many processed/prepackaged items)

cc: ok, starbucks has got like what, 50-70% margins. They can hold on for coffee prices but milk is going up. I will bet they won;t raise their prices till McDonalds does -- they are depending on their stock price to remain stable.

uh oh, family disagreement?

So..then can we agree that coffee prices have not gone up?

notadmin, the papers are focusing more on asset prices an not staple prices. Staples are part of the CPI. Assets such as the price of a home are not. The funny thing is when real estate prices were rising double digit, we were told to ignore the rise in real estate(asset prices).

The price of coffee beans has certainly gone up on the whole sale commodity level and at the retail supermarket level. Maybe the 70% margin starbucks is down, but I'd hardly call over two dollar per cup burned coffee a subsitute for Fresh ground coffee which is up around one dollar a pound this past year.

Bullshit

there's been studies about how much of the fall in imputed rents caused the fall of inflation. google it.

energy and food ARE going to go up, just cause of population growth. nobody here is disputing that. you guys didn't see anything yet. if you build skills to be able to handle them, there's no unneeded stress.

on a broader scheme of things... sure, the FED should care A LOT about asset price bubbles. at the very least they should be concerned instead of happy when home prices go up as these higher prices reduce discretionary spending of the young that are the most exposed to them.

truly stupid bunch of morons we have at the FED and Treasury. a couple of them have been profs of mine, and to my surprise, never lied when they were saying "is there a bubble!? i don't see it!!! they too bought their houses at the peak of the bubble with a smile. bunch of morons? of course! no argument there...

ok, no more illy espresso fine grind for admin!

So... let's send the message that they cannot pass along higher food costs, that way shareholders get the hit, not consumers.

Gas will go up. It should. So far, though, we are way under where we were two yrs ago. Makes no sense.

so true, gas going up is a certainty imho. it will kill rural and ex-burbs though.

The Fed believed sub prime lending was positive, increased home ownership and enabled more people access to Credit. They didn't get it, and never understood that the loans targeted minorities and that the higher rate was not so much a risk premium was a YSP which was just something a little extra to pay brokers.

I agree notadmin, it's population growth, but it's also more than that. Emerging market countries want to eat more meat which costs more in terms of resources. Add to that that the geniuses in our government have been promoting agricultural based fuels which competes with Food.

I believe it will get worse before it gets better. China has been under-purchasing phosphates which will hurt their agricultural yields. We need to promote more GMO food and other innovative ways to feed the world more cheaply.

More to the point. It will kill low income people.

Wow, CC, that's the first thing you said, I agree with. Food makes up a higher percentage of low income household budgets.

And how happy are you now?

Notadmin, Was just listening to a year old broadcast. The guest was commenting hat oil was $70 a barrel in a weak environment. It's higher today. What do you think happens when the economy recovers. We don't have an oil shortgage, but we do have a shortage of OIL that can be recovered from the ground at low prices.

Middle Eastern countries are using more oil and shale oil from Canada & the U.S. requires higher world prices to be economic. And I haven't even discussed the Gulf of Mexico...

yep, 2 or the top 3 oil exporters to USA (mexico and venezuela) are passed their production peak. it's gonna get interesting.

and countries like india, where more than a third of incomes goes to food (instead of less than 10% like in USA) will have to heavily subsidize food or really work towards improving local yields (paltry in india by the way)

Is this all because corn has shot up so high. Would explain the milk but what about fruit?

well food is like oil,gold etc is a commodity item, where speculators and whole buyers determine the prices.
There are limited good investment opportunities that they are flocking now to those high yield,fast and fairly save moving items.
This is one of many reasons why the economy does not pick up: reduced spending power in a consumer oriented economy.To start we have to cut our oil bill, forcing the supplier to accept new reality.With that food prices will go lower as well since they seem to go up and down in tandem.

Real assets are not a hedge against inflation.

http://globaleconomicanalysis.blogspot.com/2007/12/how-does-one-invest-for-inflation-and.html

Investment Themes For Hyperinflation

In hyperinflation the last place one wants to be is in cash.
Commodities in general are a standout.
Gold is a standout.
Precious metals are a standout.

Property is a winner.
Equities are a winner.
Treasuries are distinct losers if not an outright short.
Foreign currencies
Energy

So now we have hyper inflation? That was quick.

Riversider, not so sure about that point about "cash". If cash includes short term rolling investments then real rates may actually turn out to be ok; maybe , maybe not. But in some countries with high inflation short term treasuries have been very attractive, eg..turkey and brazil in the past, especially for for foreigners when then currency didnt deval at the rate implied by the yield differentials.

"So now we have hyper inflation? That was quick." Genius!!!!

Cash typically does worst in periods of rising prices. The rate of change in the inflation rate probably matters too(accelerating or decelerating). By the way, I agree with those that say real havy inflation is probably something we won't see until the middle of the decade. Right now, I just see inflation above government CPI numbers.

Just for the record, year-over-year consumer price inflation has been +1.2%. (Source: Bloomberg)

Yes, some prices have gone up. But have you checked the prices of a 52-inch flatscreen TV lately?

Everyone who points to lower prices always claims electronics. Well electronics do decline year after year, but how many tv sets does the typical american family actually buy in a year. It's a bogus argument.

> Everyone who points to lower prices always claims electronics. Well electronics do decline year after year, but how many tv sets does the typical american family actually buy in a year. It's a bogus argument.

the typical youngster does spend a significant amount on technology. and thanks god the sector exists! unlike housing, the aging tsunami, health care and education... technology keeps on delivering at ever affordable prices. thanks silicon valley!

So did anyone notice the 64 ounce container of orange juice is now 59 ounces?

So basically orange juice is over 10% YOY

even a broken clock is right two times a day? I used to watch Jim on tv twenty years ago and he said the same things he's saying now. Like a broken record. Just can't learn any new patter. Yes, he made a lot of money back in the day, yadda yadda, and maybe one day his crystal ball predictions will come true. But year after year, interview after interview, he rails against the same things over and over again. Of course some will eventually come to pass. They have to, if you wait around long enough because everything does come to pass. But to try and formulate a rational plan to protect against his bogeymen is hopeless and akin to chicken little. besides that, what is this thread doing on a real estate forum? He sold his Riverside Dr. place a long time ago and left the country. is that the message? Jim has left the building! Jim has left the building!!!!!