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Joined: Sep 2005
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Pooh-Bah
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Pooh-Bah
Joined: Sep 2005
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On the subject of deflation. I must confess that I am surprised that there has been little evidence of any serious drop in prices thus far. History seem to show that deflation follows behind increasing unemployment, but the most obvious measures... food and necessities, have shown few signs of pricing stress. Rather than confusing deflation with dropping prices, I will simply say that the price of food in stores where real people do real shopping has declined significantly -- at least in my area (which, by the way is currently doing better than the general economy). Whereas it used to be that a loss leader of one type or another would be run weekly, I now routinely purchase chicken (skinless breast, whole chicken, chicken quarters, etc.) at 1/2 to 2/3 off the regular price. Pork and beef is routinely available for 1/3 to 1/2 off (though I rarely use either of those two). Frozen vegetables are also routinely discounted with 2 for 1 sales or even 10 for ten dollar sales. What is also different about the current pricing is that rather than a few items being discounted at any given time, many of the items are now concurrently discounted at any given time. Vehicles and other durable goods are also being seriously discounted, and some vehicles are even having a large element of the financing risk removed in the event of a job loss. For many items there is less demand because there are fewer people with jobs, excess production, and over-capicity in manufacturing which is having the expected effect on pricing. Yours, Issodhos
"When all has been said that can be said, and all has been done that can be done, there will be poetry";-) -- Issodhos
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Joined: Mar 2007
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Joined: Mar 2007
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...
Vehicles and other durable goods are also being seriously discounted, and some vehicles are even having a large element of the financing risk removed in the event of a job loss.
For many items there is less demand because there are fewer people with jobs, excess production, and over-capicity in manufacturing which is having the expected effect on pricing. Issodhos, you and I are obviously both  brilliant and prescient , as we discussed this deep-discounting on vehicles something like 18 months ago on this forum as well as that other one we both frequent. I believe that you commented that the dealers were already beginning to feel the weight on the hen-house roof of all of the chickens coming home to roost, and that the whole industry was in trouble and that there would be more panic to come.
Life should be led like a cavalry charge - Theodore Roosevelt
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Joined: Sep 2005
Posts: 12,581
Pooh-Bah
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Pooh-Bah
Joined: Sep 2005
Posts: 12,581 |
...
Vehicles and other durable goods are also being seriously discounted, and some vehicles are even having a large element of the financing risk removed in the event of a job loss.
For many items there is less demand because there are fewer people with jobs, excess production, and over-capicity in manufacturing which is having the expected effect on pricing. Issodhos, you and I are obviously both brilliant and prescient , as we discussed this deep-discounting on vehicles something like 18 months ago on this forum as well as that other one we both frequent. I believe that you commented that the dealers were already beginning to feel the weight on the hen-house roof of all of the chickens coming home to roost, and that the whole industry was in trouble and that there would be more panic to come. I think I do remember that discussion, Ron. If I recall correctly you were able to take advantage of the situation after you vehicle was so rudely trashed while innocently sitting in the parking lot minding its own business. Hope that fellow has recovered.:-) Yours, Issodhos
"When all has been said that can be said, and all has been done that can be done, there will be poetry";-) -- Issodhos
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Joined: Jan 2003
Posts: 6,428 Likes: 1
old hand
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OP
old hand
Joined: Jan 2003
Posts: 6,428 Likes: 1 |
Iss... I'm happy for you: Rather than confusing deflation with dropping prices, I will simply say that the price of food in stores where real people do real shopping has declined significantly -- at least in my area (which, by the way is currently doing better than the general economy). Whereas it used to be that a loss leader of one type or another would be run weekly, I now routinely purchase chicken (skinless breast, whole chicken, chicken quarters, etc.) at 1/2 to 2/3 off the regular price. Pork and beef is routinely available for 1/3 to 1/2 off (though I rarely use either of those two). Frozen vegetables are also routinely discounted with 2 for 1 sales or even 10 for ten dollar sales. What is also different about the current pricing is that rather than a few items being discounted at any given time, many of the items are now concurrently discounted at any given time. Your experience does not reflect our local prices... Our "Majors" are Winn Dixie and Publix... and while they do have the buy 1 get one free, and the half off pricing... the so called "original prices" (a loosey goosey term here in Florida) are out of sight. Fer instance... half price T-bone sells for $7.49... and the 1/2 price skinless boneless chicken breast is $2.99/lb... All of the grains, beans, and dried "basics are either 25% higher than a year ago, or the packaging has changed. 16 oz. is now 12 or 14 oz... Cereals are "up" from about a year ago buy about 20% to 30%, especially in the brands. Beverages have gone our of sight. the Cokes and Pepsi's have gone from 12 packs to 8 packs and the sale price per pack is more than it was a year ago. Beer (if that's a food...) is outta sight. The 12 pack of Busch Light, that was $5.59 last year is now $7.69. Vegetables have dropped about 10% since January, but we're still paying $1.49 for plain hothouse tomatoes, $3.99 for 5Lbs of russet potatoes. Oranges (which are free for us from our own trees), are selling for $.39 each... and that's Florida. Gawd... last year oranges at the farmers market were 5 lbs for $1. The frozen vegetables are about the same price as last year, but again.. the packaging is 20 to 25% less in those cases. Milk is the exception. Last year, at this time we were spending $4 gal. and the common sale price is now $2.49 to $2.69. The weird thing is that the major groceries have gone to glossy, coffee table book style advertising... We just shop the discounters, like "Aldi's" and "Save A Lot"... prices are steady, with fewer come-ons, but overall, we frugal ones figger to save about 30% overall. .................................... Am aware that grocery prices don't represent "deflation" so this is a little off topic, but I find it interesting to hear from those who feel that that in this area at least, there has been some price lowering. ................................ As far as other services go... We have a number of "Penny Saver" coupon and discount weeklies, for everything from restaurants, to tires, to legal and professional services. A quick comparison from one that we had from a year ago, to now, seems to show an increase in advertisers, with quoted prices similar to the current papers/books. Auto service and housing/lawn/handyman services seem to be lower by a little bit. ................................. One more general observation... in our more rural areas, many, many of the roadside small businesses, gas stations, and mom and pop stores and restaurants, are either for sale, or already vacant. In a recent short 15 mile trip on a semi-local road, we counted 26 closed businesses (since last year). Of course our malls (except for those near "The Villages"... are slowly fading away. Our local regional mall is now about 25% vacant (up from about 10% last year). The Villages... is a different story, and is booming!. Website Imagine a single senior community that covers three counties, has Three Super Walmarts, and has grown from 900 homes to 40,000 in about 20 years. 24 nine hole executive courses, and 8, 18 hole championship courses. Two polo fields, 20 softball/baseball fields, and about 18 swimming pools. Just a little , friendly "hometown"... like yours. 
Last edited by itstarted; 04/07/09 07:20 PM.
Life is Good!
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Joined: Jan 2003
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old hand
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OP
old hand
Joined: Jan 2003
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Back to deflation... Here's an update from the Motley Fool Deflation - full article I believe this bear rally will end sometime this month. As more and more earnings are released, there is no doubt that the market is going to fall. Just Alcoa alone took out around 150 points. I believe this fall is going to bring us to a new low, much lower than what we had last time. For those who think that the economic is recovering because the stock market is a leading indicator will have to think again. It has just begun. During the Great Depression, there was a bear rally as well. One so huge that many thought it is over, only to be hit hard in the face by a giant drop. The stock market will continue to fall for the net 1-2 years. There is a lot of fundamental errors in our economy and it is going to take a lot of time to fix it. I believe the market should bottom around late 2010-early 2011, S&P 500 around 390-400 is my rough estimation. Throughout 2011, the market will be trending sideways. At 2012, a new bull will be declared. (Those numbers are my extreme speculation and should not be taken seriously) a little more: I think the economy will ultimately be solved by a collapse. The government can only patch it up for so long. Eventually there will be a giant crash that will leave many jobless, shelterless, and foodless. I do not think there will be end of the world and etc, I do however believe there will be lots of crime and violence going on. Gerald Celente himself declared that when people lose everything and there's nothing else to lose, they lose it. This is exactly what will happen when an imminent crash come. People are going to be starving, homeless, and they will do anything to feed themselves.
Last edited by itstarted; 04/10/09 12:38 AM.
Life is Good!
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