-- Posted Sunday, 18 November 2007 | Digg This Article
| Source: GoldSeek.com
From the back page of the Business section of the St. Petersburg Times comes the chilling news that "Beer prices are likely to climb and ingredients are in short supply". A local brewmaster says that he estimates that beer prices will rise 10% in the next six weeks, "at a minimum."
Aubie Baltin asks, "Is there anyone out there who still believes that inflation is only 2%? I have recently been cleaning up my files and in throwing out my 1999 Income Tax Files, I started looking through my bills and I noticed that everything had at least doubled."
Doubled! Naturally, I think this is a perfect opportunity to show off my skills with calculating the inflation rate that it takes to double in seven years. So I am frantically scrambling to find my HP12C calculator on my desk, and I can't find it, and I figure that someone stole it (the thieving bastards!) and I am getting more and more agitated and angry about how everybody around here is always stealing my stuff, and how I have about had it up to freaking HERE with that thieving crap, and now that I think about it, retaliating by stealing their lunches and ruining their credit is no longer adequate compensation!
You can tell by the way the veins are bulging out in my neck where this heading, but an Unfortunate Mogambo Incident (UMI) was avoided when Mr. Baltin quickly volunteered that my calculations were appreciated, but unnecessary, as the calculate, "that is a 10% compounded annual Inflation Rate."
And the manufacturers are doing what they can to disguise inflation in prices, as revealed by JMR Dave E., who says that he is noticing some "sharp food price increases", like "For instance, just the other day at the grocery store, while daydreaming of a voluptuous lass, I grabbed a 'family size' box of cereal but suddenly I felt like I had grabbed a handful of supermodel. Immediately sensing something was wrong with the package, I inspected the weight, which was 19 ounces. When I got home I examined another 'family size' box of the same cereal that I had bought recently. Sure enough, it was 21 ounces."
Demonstrating that he has math skills far and away above the abilities of The Mogambo, he announces, "So just like that, they dropped the quantity by 10% while keeping the price the same."
My Feeble Mogambo Mind (FMM) jumps to overload at such terrifying inflation, and my eyes glaze over in confusion as I am thinking to myself "Is keeping the price the same, but getting 10% less, the equivalent of charging 10% more for the same amount?" And then the realist in me says, "You are too stupid to understand it even if someone told you the answer, doofus, so why don't you open up a new bag of Fritos, watch some TV and just forget about it?"
But even as I mindlessly stuff Fritos into my mouth and use the TV remote to surf the dial, the Zen-Master Mogambo (ZMM) reminds us of the existential nature of the universe with the immortal koan, "What is the sound of one hand clapping while the other hand reaches for a box of breakfast cereal and then having to pay more for it in dollars-per-ounce, which means having less money for everything else, including going to a bar and getting hammered, just pathetically trying to get away from cold, ugly reality of a soul-killing family, for a lousy couple of hours, which means I will be spending more nights at home, and then you begin to laugh morbidly 'Oh, Death, where is thy sting?'"
Then I had a thought! Suppose I ration the kids to a box of cereal a week! Then, if they run out of cereal before next week, then I can accuse them of being gluttonous pigs who could certainly stand to lose a few pounds in ugly weight, and lose a few tons in bad attitude, too! So sit down and shut up, Porky!
I decided I needed more data. Again I turn to JMR Dave, who says that it appears that, "The 'family size' box is 19 ounces, while the 'regular' size is 16 ounces." I'm suddenly thinking that this could work!
And it is not just inflation in stuff that we buy at the store, or the kids whining about being hungry, or about how we don't have any more Fritos, but inflation in prices. And thus we are not surprised to learn that inflation in the prices of raw materials has been around longer than the government says, too, as in Barron's this week, the Weekday Trader quotes the CEO of Whirlpool as saying that the company is paying a "fourth year of incredibly high raw-material inflation."
A shiver went up my spine at the thought of "incredibly high" inflation, and I remember that I sat down. I guess I went blank at the horror. I woke up here. That's all I know.
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Editor's Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications.
-- Posted Sunday, 18 November 2007 | Digg This Article | Source: GoldSeek.com
