# Finally, meat prices are falling



## cainvest (May 1, 2013)

Judging by the prices I saw at Costco yesterday, looks like the price hike for meats is nearly over. Of course the regular supermarkets are likely still in the outrageous zone, just shook my head when I checked them out a week back.


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## Beaver101 (Nov 14, 2011)

OTOH ... the veggies' prices are rising now that the cold snap has arrived. $1.29 for a bunch of green onions - whoa! :eek2:


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## Nemo2 (Mar 1, 2012)

Beaver101 said:


> OTOH ... the veggies' prices are rising now that the cold snap has arrived. $1.29 for a bunch of green onions - whoa! :eek2:


Must be a big bunch........we paid 79¢ today at Freshco.


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## steve41 (Apr 18, 2009)

I hear that Bill Clinton just fell off the wagon (the vegan wagon). Maybe he saw the grocery prices and decided to go paleo.


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## Just a Guy (Mar 27, 2012)

This is the end of the buying season for the year...so, by the supply and demand rule, we're at the high supply stage.


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## Plugging Along (Jan 3, 2011)

It depends on the meat. I have been watching beef prices for year, it's actually cheaper in Nov and mar then goes up again. Pork usually happens at the end of spring. There is a cyclical nature to meats and produce. Kind of like stocks


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## cainvest (May 1, 2013)

Plugging Along said:


> It depends on the meat. I have been watching beef prices for year, it's actually cheaper in Nov and mar then goes up again. Pork usually happens at the end of spring. There is a cyclical nature to meats and produce. Kind of like stocks


The price fall was for beef, chicken and pork with pork falling the most, two weeks in a row. It was just a general observation, not sure about the seasonal/supply price changes but happy to see it come down none the less and hopefully it keeps falling.


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## Plugging Along (Jan 3, 2011)

I knew about the beef, pork has been on sale too, didn't check the chicken to be honest. For some reason, haven't figured out the chicken cycle yet.

Just curious what kind of prices you are noticing and which region you are in.


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## cainvest (May 1, 2013)

Pork has dropped about 2.50/kg, steak and chicken around 1.50/kg, Ground beef about 1.00/kg ... might be a little off on the chicken as I didn't watch those prices as much. This is at Costco in Winnipeg.


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## Rusty O'Toole (Feb 1, 2012)

There was some kind of epidemic in the pig barns early in the year, that sent prices up. I guess they have it under control, bacon was on sale at No Frills this week.


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## HaroldCrump (Jun 10, 2009)

Just keep repeating to yourself..._inflation is 2%...inflation is 2%_


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## Beaver101 (Nov 14, 2011)

HaroldCrump said:


> Just keep repeating to yourself..._inflation is 2%...inflation is 2%_


 ... :hypnotysed:


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## cainvest (May 1, 2013)

Rusty O'Toole said:


> There was some kind of epidemic in the pig barns early in the year, that sent prices up. I guess they have it under control, bacon was on sale at No Frills this week.


There's also the Russian boycott on our pork, not sure how that factored into the prices.


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## gardner (Feb 13, 2014)

I have a hard time reckoning any macro-economic forces on the grocery store price of meat. It always seems all over the map. Prices vary by a factor of three over the course of a week, and the cut that's on sale for $9/kg might be a better cut than one they still have for $23/kg. The floor price on meat still seems to be $8.80/kg on beef and $3.50/kg on pork. I haven't seen that change in a few years. I always amazes be to see a nice sirloin steak on sale at $9/kg and beside it stewing beef at $18/kg. And folks actually buy the stew-beef, like they don't know how to cut up a steak.

Chicken's a weird one. When there is no special sale, there will still be whole chickens priced at between $6.50/kg and $12/kg, depending on brand names and growing conditions etc. The cheapest is almost always the Halal one which beats the generic unbranded one by $1 per kilo. It makes no sense to me.

I believe that the majority of meat sales must not be price sensitive in any way. The conventional home-ec wisdom is to plan your meals ahead and go buy what you need, but if you're not a flyer reader this approach tends to have you buying one of the 80% of items/cuts that is not on sale, 80% of the time. I always take the approach of looking at what is on sale and figuring out some plan around that. It makes my wife crazy.


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## Money We Have (Mar 20, 2014)

This might be a seasonal thing but I noticed Cauliflower is up to $3.99 around me (Toronto). I swear I paid $1.99 in the summer


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## HaroldCrump (Jun 10, 2009)

Cauliflowers are indeed seasonal.
But then in Canada, "seasonal" means about 2 months, give or take.


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## Beaver101 (Nov 14, 2011)

Money We Have said:


> This might be a seasonal thing but I noticed Cauliflower is up to $3.99 around me (Toronto). I swear I paid $1.99 in the summer


 ... and oranges at .99 a pound seems cheap ... soon to be $1.49 per pound or $1.50 an orange and this is not coming from California nor Florida either, home of the citrus. Well, at least less ding on the meat-eaters' pocket.


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## HaroldCrump (Jun 10, 2009)

Just keep telling yourself inflation is 1.2%...inflation is 1.2%....inflation is 1.2%....

_*Business Report: Food & gas prices*_


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## andrewf (Mar 1, 2010)

Consumer basket is more than food and fuel.


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## Beaver101 (Nov 14, 2011)

HaroldCrump said:


> Just keep telling yourself inflation is 1.2%...inflation is 1.2%....inflation is 1.2%....
> 
> _*Business Report: Food & gas prices*_


 ... :hypnotysed: :hypnotysed:

:sleeping:


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## carverman (Nov 8, 2010)

Avian flue has been reported at some BC Turkey farms, that now have been quarantined, with Asian countries banning any of those meat products.

Media is saying higher prices on a lot of produce from the US.... maybe we have.cheaper oil/gas (for now) but the exchange rate is now very significant.

That will affect anything that is imported like fresh produce sometime in January as supply contracts are renewed.


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## cainvest (May 1, 2013)

HaroldCrump said:


> Just keep telling yourself inflation is 1.2%...inflation is 1.2%....inflation is 1.2%....
> 
> _*Business Report: Food & gas prices*_


They appear to be way out of date, pork and beef prices have already fallen greater than the 12% rise they say it went up this year. And of course, given the season, fresh veggie prices are up. 

Gas prices here are hitting levels not seen since 2008, 91.9 here today. 

So yes, 1.2% seems very high!


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## HaroldCrump (Jun 10, 2009)

cainvest said:


> They appear to be way out of date, pork and beef prices have already fallen greater than the 12% rise they say it went up this year. And of course, given the season, fresh veggie prices are up.


Food prices are still up significantly YoY.
I am also shocked at the prices of dry fruits & nuts, such as almonds, Brazil nuts, hazelnuts, and macadamias.

Keep in mind that there is lots of shrinkflation and substitution effect going on by the manufacturers, retailers, and consumers.

Manufacturers are mixing lower quality ingredients with higher quality ones to reduce overall cost base.
In the case of mixed nuts, you will find cheaper quality peanuts and corn nuts, replacing higher quality almonds, hazelnuts, and macadamias.

Further, retailers are reducing the quantity but keeping the packages & prices the same (shrinkflation).

Consumers, for their part, are practicing substitution effect by purchasing lower quality products, cheaper cuts of meats, unbranded products, etc.



> Gas prices here are hitting levels not seen since 2008, 91.9 here today.


No idea where you live, but here in Southern Ontario, gasoline prices are still at or above 2008 levels.
Average gas prices are still above $1.10 give or take.
In the summer of 2008 when oil was $148, gas prices were about $1.30.



> So yes, 1.2% seems very high!


Ha, cute.
You clearly aren't the weekly shopper in your household.


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## sags (May 15, 2010)

Depends Harold...........Just this week.......

We bought some new things for the house that were 75% off at a local furniture store we like.

We bought a new Christmas table centre piece and home decorations at Michaels for 75% off the purchase price.

Today, we were at the ReMark grocery store and bought all the "day old" buns they had reduced in price. 

We stock up with on sale items. Freeze bread, cakes and meat. 

If a person learns to eat what is on sale.............they can cut costs.

I am looking at a Duncan Phyfe coffee table in Kijiji on Saturday. The table looks to be in mint condition for $60.

We always shop bargains to keep "our" cost of living down as much as possible.

Everything in the basement office area, except for the computer was picked up for free by the side of the road and carted home.......fixed up, painted up and ready to go.

Inflation is high............if people aren't shopping for bargains.

The problem I see is more.............that people don't have any money to spend stocking up when they can save..........and end up spending much more.


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## cainvest (May 1, 2013)

HaroldCrump said:


> Food prices are still up significantly YoY.
> I am also shocked at the prices of dry fruits & nuts, such as almonds, Brazil nuts, hazelnuts, and macadamias.
> 
> Keep in mind that there is lots of shrinkflation and substitution effect going on by the manufacturers, retailers, and consumers.
> ...


Actually I am the only shopper in the household and am always watching for sales on for regular items, then I stock up when possible. I don't buy much processed food as they normally contain to much of what I don't need (high salt, high fat content, etc) plus their prices are higher. I don't eat dried fruit or nuts (maybe the rare granola type bar) so I can't comment there but I do watch the quantity of the items I do buy and I'm not personally seeing any "shrinkflation". Could there be some substitution ... maybe, but for the basic foods I buy I'm not seeing an impact. 

If I look at the following items that make up 90% of what I consume: coffee, rice, pasta, beef, pork, ham, some fish, bread, cheese, frozen veggies, bananas, leafy greens and milk not much has really changed for pricing. Yes, I do see seasonal price differences on some items and meat was higher over the late summer but not anymore. So given my basket above I see no evidence of this "shrinkflation" or "substitution" and just a little bit of inflation over the years.


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## HaroldCrump (Jun 10, 2009)

@sags, what you are describing are normal, rational responses to high inflation.
You economize, re-use, recycle, cut coupons, buy what's on sale, etc.
Those are all reactions _in response to high inflation_.

I didn't say that it is not possible to change one's behavior to offset part of the inflation - it indeed is.
We do the same in our household.

But changing one's behavior does not refute that there is no inflation...quite the opposite.

There are other ways to offset the worst affects of inflation, such as:
- Minimize use of car. Use subsidized public transit. In fact, better to go car-free to avoid maintenance and insurance costs (another source of massive inflation, esp. in Ontario)
- Rent, not own, to avoid property tax inflation and hydro inflation (latter being the highest source of inflation - up over 50% since 2009)
- Eat mostly packaged foods like microwave dinners, and avoid fresh fruits and vegetables
- Minimize hydro usage. In fact, best to rent an apartment that includes hydro

...and so on.

Regarding your furniture deals, they sound great !
But how often are you going to buy Christmas tables?
Are you buying them every year? Every month? Every week?
No, right?

Our dining table is about 8 years old, and kitchen dinette is 10 years old.
Sofas are about 5 years old.
All of them are in excellent condition.

So, which price matters to you most - the stuff that you buy every week & every month, or the stuff you will buy once every 10 years?
If the price of the latter is down 50% in 5 years, but the price of the former is up 50% in 5 years, are you better off or worse off?


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## HaroldCrump (Jun 10, 2009)

cainvest said:


> If I look at the following items that make up 90% of what I consume: coffee, rice, pasta, beef, pork, ham, some fish, bread, cheese, frozen veggies, bananas, leafy greens and milk not much has really changed for pricing.


Price of milk, bread, eggs, and cheese haven't changed much?
This is _recency bias_.

I won't go into the quality, quantity, and pricing of each of these items, but just one note - you may not have practiced substitution effect, but your manufacturer/retailer certainly has.

In recent years, the vast majority of cheeses are made from reconstituted milk ingredients frozen and imported from Asia (mostly China).
Pretty much any Mozzarella, parmesan, cheddar, etc. that you buy at regular grocery stores are made from freeze-dried imported ingredients.
Brands like Kraft, Black Diamond, etc. are basically the food equivalent version of Ikea or Wal-Mart.
Fresh cheeses made from real milk from Quebec and Ontario are very expensive.
Replacing higher quality ingredients with lower quality ingredients is also inflation because you are worse off.

This was a sidebar...the base price of these fresh dairy products has gone up a lot in last 5 - 6 years.


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## cainvest (May 1, 2013)

HaroldCrump said:


> Price of milk, bread, eggs, and cheese haven't changed much?
> This is _recency bias_.
> 
> I won't go into the quality, quantity, and pricing of each of these items, but just one note - you may not have practiced substitution effect, but your manufacturer/retailer certainly has.
> ...


I'm not saying inflation isn't present, of course it is, both prices and wages rise over time. 

Sure bread has gone up, I pay 2.00-2.29 a loaf now, up about 0.20-0.30 a few years ago along with the prices for milk and cheese but certainly not by an amount that would be alarming don't you think?

Can't comment on the cheese substitutions but "it appears" to be the same product to me. Are those freeze dried imported ingredients really worse than "fresh" and when did they start using them?


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## sags (May 15, 2010)

You are right Harold.............there is inflation, both hidden and understated, which you describe perfectly

We save on purchases when on sale...............so we have the extra money to pay for inflation beyond our control.

It may not help in the long run anyways...........we may just last a little longer than the next guy.


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## cainvest (May 1, 2013)

HaroldCrump said:


> This is _recency bias_.
> 
> This was a sidebar...the base price of these fresh dairy products has gone up a lot in last 5 - 6 years.


In order to properly understand the real price increases over the years is there a place that has the actual prices?
Without real data this discussion could go on forever. And yes, I understand there are still other points like substitution ...


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## fraser (May 15, 2010)

DW just came back from Superstore. She says meat prices are up. Who knew?

Any food imported to Canada will be up if only because of our sinking dollar.


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## cainvest (May 1, 2013)

fraser said:


> DW just came back from Superstore. She says meat prices are up. Who knew?


And yet, as of last night at Costco, meat prices remained the same ... go figure. Wonder if the difference is in how they buy their meat or are they just playing pricing games?


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## HaroldCrump (Jun 10, 2009)

cainvest said:


> And yet, as of last night at Costco, meat prices remained the same ... go figure. Wonder if the difference is in how they buy their meat or are they just playing pricing games?


There will be variances from store to store, and week to week.
But the trend is up...and significantly up.
Almost everyone we know is playing games trying to adjust their consumption and behavior to adapt to the inflation.

Notice that oil prices have fallen nearly 50% since the summer high of about $110, yet the prices at the pumps are down only about 17% give or take (from $1.30 to 1.12).
Hydro rates have pretty much doubled since 2008, including the HST and TOU
Auto insurance rates have increased and benefits have been reduced (this is basically "shrinkflation", of which you see no evidence)

There are examples galore, and most people are aware of this...some consciously and some subconsciously as they continuously modify their behavior and lifestyle to adapt to the inflation.


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## HaroldCrump (Jun 10, 2009)

cainvest said:


> In order to properly understand the real price increases over the years is there a place that has the actual prices?
> Without real data this discussion could go on forever. And yes, I understand there are still other points like substitution ...


There are shadow stats, but most of it pertains to the US.
You can check out the shadow stats website...they explain the methodology, and the changes made to the calculations in the last 2 - 3 decades, all of which pretty much guarantee under-reporting of inflation.
I believe shadow stats current quote about 8% - 9%.

Some others like Peter Schiff have attempted calculating current inflation using older methodology and came up with numbers in the 9%+ range as well.

But all of these alternative methodologies pertain to the US.
Similar techniques can be applied to Canada, but I am not aware of any official shadow stats for Canada.

There are serious problems in using the CPI as a measure of household inflation.
CPI is used by the central bank to set monetary policy...and they want to suppress interest rates and push down bond yields...I get that, I totally understand what they are doing, and why.

All I am saying is that the CPI is _not _a measure of household inflation i.e. cost of living.
There are many fundamental issues in trying to use the CPI as a measure of consumer cost of living.

The CPI is a quasi-political tool used to ensure over-accommodative & docile monetary policy, and it performs fantastically well at that.


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## cainvest (May 1, 2013)

HaroldCrump said:


> There will be variances from store to store, and week to week.
> But the trend is up...and significantly up.
> Almost everyone we know is playing games trying to adjust their consumption and behavior to adapt to the inflation.


That's why I stopped buying meats at regular grocery stores, their ground beef was $4 higher per kg which is crazy.



HaroldCrump said:


> Notice that oil prices have fallen nearly 50% since the summer high of about $110, yet the prices at the pumps are down only about 17% give or take (from $1.30 to 1.12).


Crude oil (WTI futures price) to current gasoline prices are a little more complicated to compare don't you think?



HaroldCrump said:


> There are examples galore, and most people are aware of this...some consciously and some subconsciously as they continuously modify their behavior and lifestyle to adapt to the inflation.


I'd have to diagree with this, most people can't even manage their own finances enough to stay out of debt (mortgages aside) let alone think about inflation numbers.


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## cainvest (May 1, 2013)

HaroldCrump said:


> All I am saying is that the CPI is _not _a measure of household inflation i.e. cost of living.
> There are many fundamental issues in trying to use the CPI as a measure of consumer cost of living.
> 
> The CPI is a quasi-political tool used to ensure over-accommodative & docile monetary policy, and it performs fantastically well at that.


I agree that CPI is not an exact measure but it appears to be the best (only?) one we have. You'd figure in today's digital world they'd have an actual household inflation numbers, even just for basic food requirements.


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## HaroldCrump (Jun 10, 2009)

cainvest said:


> Crude oil (WTI futures price) to current gasoline prices are a little more complicated to compare don't you think?


Oh I know _that_ - I meant consumers generally suffer from recency bias and perceptions.
i.e. oil prices are falling (all over the news), so gas prices must be falling (they are - somewhat), and ergo there is little/no inflation.
Never mind the fact that retail gas are significantly higher than 2008, when crude oil was well north of $100.
Accounting for the 8% tax grab introduced in 2009 as well.



> I'd have to diagree with this, most people can't even manage their own finances enough to stay out of debt (mortgages aside) let alone think about inflation numbers.


People may not be aware of "inflation" from an academic perspective (i.e. how it is calculated, how govt. policy influences inflation, forex markets, etc.) but people do make subconscious choices that reflect their sensitiveness to inflation at a deeper level.
The most common form is substitution.



cainvest said:


> I agree that CPI is not an exact measure but it appears to be the best (only?) one we have. You'd figure in today's digital world they'd have an actual household inflation numbers, even just for basic food requirements.


I don't think the technology is the problem i.e. lack of data, or lack of data crunching ability.
The issue is how CPI is defined and calculated.
Even the terminology is backwards...core inflation _eliminates_ everything that is in fact _core _- food & energy.
The way adjustments are made for housing costs is wrong, too.
BOC does not adjust for defense spending, but the US does - although, apparently, the Dept. of Commerce frequently "forgets" to adjust for defense spending...esp. when mid-term elections are coming up ;o)

All the data is there, all the computers are there for calculating it any way we want.

I think we need to break the synonymy between CPI & inflation.
We need a _cost of living index_ that actually reflects the cost of living.
The BOC & the govt. should also come clean and say that they will not allow the cost of living to influence monetary policy...in fact, the monetary policy is precisely to _create_ inflation, not reduce it.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> @sags, Regarding your furniture deals, they sound great! But *how often are you going to buy Christmas tables? Are you buying them every year? Every month? Every week?*


LOL! Sags is just getting a lil excited...'tis the season, you know. 

Btw *sags*, Michaels' 75% sale is actually more like 25% off [don't forget they first inflate the prices quite a bit in Canada comparing to prices in the US - try finding an item in the store that displays both the CDN and US price].


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## fraser (May 15, 2010)

We pay no attention to sales...50 or 75 percent off. Retailers know that shoppers expect a discount and price accordingly. 

List price and discounts are meaningless to us. The only price that counts is the price we pay.


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## cainvest (May 1, 2013)

HaroldCrump said:


> Oh I know _that_ - I meant consumers generally suffer from recency bias and perceptions.
> i.e. oil prices are falling (all over the news), so gas prices must be falling (they are - somewhat), and ergo there is little/no inflation.
> Never mind the fact that retail gas are significantly higher than 2008, when crude oil was well north of $100.
> Accounting for the 8% tax grab introduced in 2009 as well.


Actually, gas prices were higher in most of 2008 and only lower at the very end of the year, crude had a big run up and down in 2008. We're just hitting the high 80's now in gas prices here and my guess is it'll likely go a bit lower yet.




HaroldCrump said:


> People may not be aware of "inflation" from an academic perspective (i.e. how it is calculated, how govt. policy influences inflation, forex markets, etc.) but people do make subconscious choices that reflect their sensitiveness to inflation at a deeper level.
> The most common form is substitution.


I agree that people who are at least somewhat financially responsible will be aware at some level, many others whom carry moderate to heavy debt loads are likely not.



HaroldCrump said:


> I don't think the technology is the problem i.e. lack of data, or lack of data crunching ability.
> The issue is how CPI is defined and calculated.
> Even the terminology is backwards...core inflation _eliminates_ everything that is in fact _core _- food & energy.
> The way adjustments are made for housing costs is wrong, too.
> ...


No doubt core CPI isn't what people should be looking at unless they want to see inflation numbers related only to the core items.

So the questions are, 
- Does the full CPI basket come close enough for the average comsumer to use it as an "indicator"? 
- Would a "Cost of Living" index really be useful to the average consumer?


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## HaroldCrump (Jun 10, 2009)

cainvest said:


> Actually, gas prices were higher in most of 2008


Yeah...with oil at $148 



> We're just hitting the high 80's now in gas prices here and my guess is it'll likely go a bit lower yet.


Not sure where you are, but we are still above the $1 handle.

Hydro rates in Ontario have also increased _significantly_ since 2008, and another 10% increase coming up in 2015.

We are being told all these low interest rates & Q/E is to "fight" deflation - it's all poppycock of course.
The goal is to engineer massive inflation and it is working !



> - Does the full CPI basket come close enough for the average comsumer to use it as an "indicator"?


It is not just the basket itself, but the relative weighs as well.
The weights do not reflect YoY household expenditures.
As the prices of "non-core" (sic) items increase, the relative weighting of "core" items should be reduced.
But that's not the case.



> - Would a "Cost of Living" index really be useful to the average consumer?


Yes, it will show the true nature of inflation.
Also, if that metric is used as guidance for fiscal programs such as OAS, GIS, and TFSA adjustments, the effect will be very significant.
Which is precisely why inflation is under-reported.


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## sags (May 15, 2010)

Toronto.gal said:


> LOL! Sags is just getting a lil excited...'tis the season, you know.
> 
> Btw *sags*, Michaels' 75% sale is actually more like 25% off [don't forget they first inflate the prices quite a bit in Canada comparing to prices in the US - try finding an item in the store that displays both the CDN and US price].


True enough T.Gal........

My wife says I am done buying "bargains" for now......LOL.......


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## cainvest (May 1, 2013)

HaroldCrump said:


> It is not just the basket itself, but the relative weighs as well.
> The weights do not reflect YoY household expenditures.
> As the prices of "non-core" (sic) items increase, the relative weighting of "core" items should be reduced.
> But that's not the case.
> ...


Tough to get into the statistics with seeing the full picture, as in, all of statcan's data ... that would be a full time job. One problem I see is how wide a variance there is per household which I would guess is a fair bit. One household's rate would vary significantly from anothers especially across income brackets. For me the CPI is a good indicator, which is all I really need. If you personally want a more acurrate value you'll likely need to track it yourself, in which case, it'll be dead on. 

BTW, do you track your own inflation rate?

As to the OAS, GIS, etc ... even if you used a different inflation value they'll just "adjust it" down the line with other calculations to lower it like a typical gov. does or raise taxes to compensate for the increase. Now this might benefit some parties but overall it'll be a wash.


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## HaroldCrump (Jun 10, 2009)

cainvest said:


> Tough to get into the statistics with seeing the full picture, as in, all of statcan's data ... that would be a full time job.


All the data is there, and all the methodology explained.
They are not fudging data or falsifying anything...I didn't mean to imply that.
It is just that I disagree with the methodology, the weights, and the various adjustments/deflators used.

I am not the only one, though.
There are more than enough "folks" (with varying degrees of credibility and credentials) that dispute the official CPI calculation methodologies.
Most of the information you will find online though are related to the US Dept. of Commerce methodology or the UK BOC (they use RPI).



> One problem I see is how wide a variance there is per household which I would guess is a fair bit. One household's rate would vary significantly from anothers especially across income brackets.


Well, yes, it varies...but maybe not as much as you think.
The core essentials for most households are the same - the biggest expenses are taxes, housing, energy, and food.
The order may change slightly from region to region and family to family, but these 4 categories comprise the bulk of the monthly expenses for any household.

These 4 categories deserve the bulk of the weights in the CPI, which is not the case.
Energy and food are completely eliminated from the "core" CPI.
Housing costs are calculated incorrectly.
Only retail taxes are included in products basket.

The weights and adjustments is weighed heavily in favor of items whose prices fall naturally over a period of time, such as computers, electronics, furniture, etc.
If a standard computer with certain configurations (say 480 Ghz CPU, 1 GB RAM, 80 GB disk, etc.) cost $1,000 in 2004 and now a standard computer has twice the features and the same cost, that functions as a deflator.
Nevermind the fact that both pieces of equipment are functionally equivalent i.e. they are each performing the same function for same productivity.
Computer programmers are not working 20 hrs. a week now vs. 40 hrs. a week in 2004 just because their computers are 2X times faster.



> For me the CPI is a good indicator, which is all I really need.


Are you sure? How do you know?



> If you personally want a more acurrate value you'll likely need to track it yourself, in which case, it'll be dead on.
> BTW, do you track your own inflation rate?


Absolutely, I do !
I have personal expenses data going back over 10 years.

For instance, I still have my hydro bills from 2004, which show how much I was consuming, what rate I was paying, what my total bill was.
I can easily compare against same numbers now and easily see that hydro costs have risen 50% just since 2009.

I also have gasoline numbers from 2004.



> As to the OAS, GIS, etc ... even if you used a different inflation value they'll just "adjust it" down the line with other calculations to lower it like a typical gov. does or raise taxes to compensate for the increase. Now this might benefit some parties but overall it'll be a wash.


No it won't be a wash.
Many govt. welfare programs are indexed to the CPI, incl. CPP and govt. public sector pensions.
Once the tax payers are compelled to pay 15% higher taxes every year just to keep up the welfare programs, it will raise awareness about the expense of these programs.

Even if it's a wash, that is not a reason to under-report or over-report something.


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## cainvest (May 1, 2013)

HaroldCrump said:


> All the data is there, and all the methodology explained.
> They are not fudging data or falsifying anything...I didn't mean to imply that.
> It is just that I disagree with the methodology, the weights, and the various adjustments/deflators used.
> 
> ...


Shelter, transportation and food are the three major components in the CPI, about 60% of it ... seems reasonable from my 5000ft view.
While these numbers may not reflect your exact spending habits, or mine for that matter, does it not respesent the average consumer?
As for variance, I think it's pretty significant difference depending on where one is. My spending habits are way off to the side of the bell curve so a different average household inflation number would likely tell me no more than it does now.



HaroldCrump said:


> The weights and adjustments is weighed heavily in favor of items whose prices fall naturally over a period of time, such as computers, electronics, furniture, etc.
> If a standard computer with certain configurations (say 480 Ghz CPU, 1 GB RAM, 80 GB disk, etc.) cost $1,000 in 2004 and now a standard computer has twice the features and the same cost, that functions as a deflator.
> Nevermind the fact that both pieces of equipment are functionally equivalent i.e. they are each performing the same function for same productivity.
> Computer programmers are not working 20 hrs. a week now vs. 40 hrs. a week in 2004 just because their computers are 2X times faster.


Yes, somethings do more (or the same) and cost less over time and inflation should adjust for that, no mystery there. I have 6 operational computers at home that I use (doesn't includng portable computers) so this value would be low for me. 



HaroldCrump said:


> Are you sure? How do you know?


Because I use it as an indicator, as in, are overall prices are rising by a normal amount, then "ok, good to know". Other than for retirement planning I don't use inflation numbers to budget, what I don't spend, I save. While it's as simple as that for me others may need to react to price changes, I can understand that if they are using a budget system but knowing the inflation number won't help them any, will it?



HaroldCrump said:


> Absolutely, I do !
> I have personal expenses data going back over 10 years.
> 
> For instance, I still have my hydro bills from 2004, which show how much I was consuming, what rate I was paying, what my total bill was.
> ...


Seriously, that's great, so you have no use for CPI as you track your actual inflation and, I gather, can plan future budgets from that number. I have the most of data as well but don't do anything with it other than look at total yearly expenses.



HaroldCrump said:


> No it won't be a wash.
> Many govt. welfare programs are indexed to the CPI, incl. CPP and govt. public sector pensions.
> Once the tax payers are compelled to pay 15% higher taxes every year just to keep up the welfare programs, it will raise awareness about the expense of these programs.
> 
> Even if it's a wash, that is not a reason to under-report or over-report something.


The gov always has ways to wash these things away, the average person from what I've seen does not care about awareness on issues like this.


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