We have heard the word inflation being bandied about a lot recently, but what does it really mean to the average Barbadian in real terms?
I sent BU a menu which was posted on the the 4.4% growth NTSH blog – see menu. This showed what a popular beach restaurant in St Michael was charging for their offerings in 1975. At this time there is no clearer example of inflation I can think of than what this menu brings to light. The question then when we look at this menu and compare it to today’s prices, has to be, are we better off today than in 1975? As numbers don’t lie let us now turn to them and compare 1975 to now. In other words has our personal GDP kept pace with inflation over the period or are we poorer in real terms?
Coke large 25 cents 1975 cost $2.75 in 2023, 11 times more
Salad large $1.50 in 1975 cost $15.00 in 2023, 10 times more
Steak & chips $4.75 in 1975 cost 38.00 in 2023, 8 times more
Ice cream lg 40 cents in 1975 cost $9.00 in 2023, 20 times more
Cheese burger 75 cents in 1975 cost $9.00 in 2023, 12 times more
So the average factor of increase over 48 years on the above is 12.2 times higher prices.
The softwood industry is continuing to cut back production, while the prices of those products it produces domestically continue to rise to levels not seen in many years. The Pandemic has stopped production of soft wood products, then started up again only to shrink a once massive industry. Multiple producers are limiting production while the demand for soft wood products continue to grow throughout the world.
Claims that market uncertainty is the driver of this curtailing of production in Canada and the USA. In British Columbia this decline in production amounts to over $100 million. Further reasons this decline is happening maybe the high cost of fiber (raw tree’s). What once cost $125.00 has doubled and tripled in cost. The forests these raw materials are found in have become grounds of displaced uncertainty. Weather patterns and events have become more pronounced due to the effects of climate change. Labor hour losses in the harvesting of said product, have increased to unrealistic levels making some harvesting unprofitable. So the industry claims.
Reproduced from Whistle Blower on request from Zoe
The signs are everywhere: In the midst of a brutal recession, with Americans already burdened by sky-high unemployment, foreclosures and bankruptcies, shoppers are noticing disturbingly higher food prices. Indeed, a survey of Wal-Mart stores analyzing price movements in 86 products widely used by Americans reveals price inflation to be twice the government’s “official” rate.
But that’s just for starters. Indeed, much of the current price inflation in commodities, including food – like wheat up 50 percent and cotton up a staggering 100 percent over last year, not to mention oil, beef, soybeans, coffee, cocoa and more, all way up – is due largely to international factors out of our control: flooding in Pakistan decimating cotton crops, the diversion of corn for ethanol driving up corn prices, China’s exponentially growing consumption rates, and so on.
But when it comes to explaining precious metals prices – gold and silver are up five-fold over the last decade – all eyes turn to government and its maniacal, indeed incomprehensible level of deficit spending, borrowing, money creation and regulation, all leading inexorably to the debasement of the U.S. dollar. This has led many, not just in the U.S. but worldwide, to seek refuge and stability in the time-honored monetary metals.
With oil prices recently declining below the $110 level, it is not all that surprising to find that gasoline prices are following suit. Over the past two months, the average US price for a gallon of unleaded has declined over 40 cents per gallon. While this is welcome news, gasoline prices are still higher in inflation-adjusted terms than at any point prior to 2008 - Source - U.S. Energy Information Administration
Barbadians have started to breathe a deep sigh of relief at the news that world oil prices have tumbled from the $150.00 per barrel to $100.00 in recent days. Several reasons have been given by the market analysts but at the top of the list is a weakened demand caused by slowing down in global economies. Whatever the reasons are the Thompson government would be urging the agency responsible for importing oil into Barbados to button as many future contracts as resources would allow. The objective would be to create a buffer to the external shocks created by volatile oil prices. This would have the affect of giving the government time to do its work.
The last eight months has been a rough initiation!
The Thompson government should not celebrate too quickly because there is news surfacing that OPEC, the oil cartel responsible for producing 40% of the world’s oil maybe about to make a decision to cut back production to stop the price of a barrel of oil falling below $100.00. This comes against the background of oil producing countries and the oil refiners having earned billions of dollars in recent months. The greed is enough to make anybody sick.
Lord come for your world!
The Thompson government has been saying the right things about the need to create a viable energy policy, so far we have not had the feeling based on what we have seen that any major initiative is underway. BU appreciates that there is enormous research required to support a decision to wean Barbados away from the tentacles of fossil fuels and the several interest groups that feed from it. But doesn’t commonsense dictate that we must and soon?
While Barbadians revert to old lifestyles caused by falling oil prices, some of us will continue to offer our concerns about the reluctance of Barbados to fully engage a renewable energy policy. Having said that we find the following article which appeared in the London mail very interesting.Continue reading →