Oil rent removal continues apace... economorons at Fed probably think they will have to go negative.
Eggs are becoming especially inexpensive as food prices keep falling https://t.co/McOJjVmAWR pic.twitter.com/xvnPDERAKr
— Bloomberg Economics (@economics) September 27, 2016
Best I can tell, prices in the stores aren't falling much. Consumers aren't getting lower grocery bills so once again the only ones receiving the "benefit" of this price fall are the guys who can get a larger margin of profit and then stuff it in their pockets.
ReplyDeleteAnd if prices fall off a cliff all that will happen is production will dry up and people will starve as producers can no longer sell for a profit.
Falling commodity prices will not help the average guy
Actually, the most a risk-free deposit should return is 0% otherwise we have welfare proportional to wealth.
ReplyDeleteThat said, individual citizen accounts at the central bank, when we are finally allowed to have them, should be negative interest free up to, say, $250,000 US.
I agree about the negative rates too. Probably within next 6 months.
ReplyDeleteBTW did either of you see Mike Sankowskis post over at Monetary Realism about the future of money? I thought it was pretty good. He says it will be about cancellation and control. Seems about right to me. Fascist/authoritarian CBers will lower the boom soon. Should be interesting
Greg I see lower prices in stores for sure...
ReplyDeleteNo you would have interest income proportional to savings....
ReplyDelete@Matt
ReplyDeleteReally? Ill take your word for it cuz although I do some of our shopping and I havent noticed much of a change in what WE buy, groceries are a small part of my monthly budget, fortunately for me, and I dont track it closely.
Restaurant prices aren't coming down.
My impression is this...shitty food is cheap (and has been for the most part) but the stuff that is good for you is expensive.
Risk-free savings, beyond legitimate liquidity needs, are money hoarding.
ReplyDeleteBut progress requires taking risks, not money hoarding. Thus positive interest on sovereign debt is anti-progress.
Greg yes it is the less prepared foods that I see coming down...
ReplyDeleteFood sector with less labor component and more energy (oil) component...
"progress requires taking risks"
ReplyDeleteNo it doesn't ...
Never give up your rent willingly. I believe that is taught by all the major business schools.
ReplyDeleteRight, you worked hard to put yourself in a position to extract it.
ReplyDelete"Restaurant prices aren't coming down. "
ReplyDeleteSome are maybe just starting ... Keep an eye out...
Saw Buffalo Wild Wings and Olive Garden doing some big discounting ...
No change in Walmart's "Great Savings" brand, which is quite popular where I live.
ReplyDeleteBWW leveraged to poultry (way down) and Olive Garden leveraged to wheat, eggs, and cheese (all down)...
ReplyDeleteloonie still stuck at 1.30 Bob
ReplyDeleteYou guys have to get your oil prices back up in USD terms so the loonie will go back up... then you might see some deals on some things...
Right, you worked hard to put yourself in a position to extract it. Tom
ReplyDeleteRent is one thing, government welfare proportional to wealth is quite another.