While inflation remains the hot topic, the signs of deflation are everywhere. No one can ignore the steep drop in home prices, but how about the future "downsizing" of America.
Manufacturers scaling back product portions
Here are some examples of product size reductions.
• Breyer's ice cream: 1.75 quarts to 1.5 quarts
• Shedd's Country Crock butter substitute: 3 pounds to 2 pounds 13 ounces
• Dial for Men soap: 4.5 ounces to 4 ounces
• Scott 1000 toilet tissue: Sheet size increased in thickness but reduced from 4 inches to 3.7 inches, making the roll shorter
• Hellmann's Real Mayonnaise: 32 ounces to 30 ounces
• General Mills told investors about its new "Right Size, Right Price" program in which prices of cereals like Cheerios, Wheaties and Total went up while portion size went down 1.5 ounces.
• Wrigley recently announced that in next year it will gradually replace current gum with reformulated Doublemint, Juicy Fruit and other flavors in packages that will contain 15 instead of 17 sticks.
• Coca-cola, Pepsico , Shamrock Farms and Fry's Food Stores' parent the Kroger Co. have plans to start packaging soda in 16-ounce bottles and milk in three-quarter gallon jugs. Prices for these products will be lower than 20-ounce sodas and full gallons of milk.
Other manufacturers have shrunk products with no price reduction -- or publicity. Examples include dog chow, bathroom tissue, mayonnaise and ice cream.
"Some of the downsizing is sneaky," Dworsky said. "Manufacturers always tout it when they give you a bonus. But when they downsize they rarely mention it."
I long for the days of "supersize me" and ginormous boxes and bottles of food. Other than the fact that prices will remain the same, the "downsizing" of America is probably a good thing. We waste and consume far too much as it is.
Just another sign of the ongoing and future decrease in the standard of living of the US of A.
Thursday, May 29, 2008
Guaranteed 20% return on investment
Here comes a great investment opportunity, but it will only be available for limited time.
Dow Jacks Prices, Blames Washington
Dow Chemical says the government is forcing it to raise prices and push the cost of energy onto its customers. (Dow) announced it would raise product prices across the board by up to 20.0% to offset the rising costs of energy, raw materials and transportation.
This won't take affect until June 1st, so there is still time to load up and hoard as many Dow products as you can...and trust me, you use Dow products. I never thought the average citizen would see a guaranteed 20% investment opportunity, but here it is. Don't tell me I didn't warn you when everything else starts going through the roof as well. Stock your basement to the ceiling and laugh at all your friends when they see their hard earned cash worth 80 cents to your $1.
The clock is ticking.
Dow Jacks Prices, Blames Washington
Dow Chemical says the government is forcing it to raise prices and push the cost of energy onto its customers. (Dow) announced it would raise product prices across the board by up to 20.0% to offset the rising costs of energy, raw materials and transportation.
This won't take affect until June 1st, so there is still time to load up and hoard as many Dow products as you can...and trust me, you use Dow products. I never thought the average citizen would see a guaranteed 20% investment opportunity, but here it is. Don't tell me I didn't warn you when everything else starts going through the roof as well. Stock your basement to the ceiling and laugh at all your friends when they see their hard earned cash worth 80 cents to your $1.
The clock is ticking.
Wednesday, May 28, 2008
The Fading of the Mirage Economy
Steven Pearlstein of the Washington Post discusses the fading economy. His point being one that I have stressed for the past year. The US is about to face a long and painful decline in the standard of living that everyone has grown accustomed to. The signs leading up to this have been there for a long time, but the realization of the changes that will need to be made are just starting to gain popular attention.
The Fading of the Mirage Economy
The Fading of the Mirage Economy
The Road Warrior
From the classic...
But most of all, I remember The Road Warrior. The man we called "Max". To understand who he was, you have to go back to another time. When the world was powered by the black fuel. And the desert sprouted great cities of pipe and steel. Gone now, swept away. For reasons long forgotten, two mighty warrior tribes went to war and touched off a blaze which engulfed them all. Without fuel, they were nothing. They built a house of straw. The thundering machines sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men. On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed. Men like Max.
And now...
Drilling for Gas -- In Tanks
While gas station drive-offs and siphoning are far more common methods of stealing gas, reports of tank and line puncturing are starting to trickle into police departments and repair shops across the country.
There are those who refer to the economy and economic policies these days as "Mad Max Economics". The effects of these policies are now being seen clearly across the country.
But most of all, I remember The Road Warrior. The man we called "Max". To understand who he was, you have to go back to another time. When the world was powered by the black fuel. And the desert sprouted great cities of pipe and steel. Gone now, swept away. For reasons long forgotten, two mighty warrior tribes went to war and touched off a blaze which engulfed them all. Without fuel, they were nothing. They built a house of straw. The thundering machines sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men. On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed. Men like Max.
And now...
Drilling for Gas -- In Tanks
While gas station drive-offs and siphoning are far more common methods of stealing gas, reports of tank and line puncturing are starting to trickle into police departments and repair shops across the country.
There are those who refer to the economy and economic policies these days as "Mad Max Economics". The effects of these policies are now being seen clearly across the country.
Friday, May 23, 2008
Wiping with dollars
Looks like pretty soon it may make sense to start wiping my ass with US dollars.
Kimberly-Clark plans to raise prices - again
...prices will be 6% to 8% higher on Kleenex facial tissue, Cottonelle and Scott bathroom tissue, Viva paper towels, Huggies diapers and Pull-Ups training pants.
Maybe the federal government can help out on this end as well...
Court rules U.S. paper money discriminates against blind people
If the US mint could just redesign the money so that it is blind friendly AND double-ply and fluffy, we could make everyone happy. Maybe there is a bright side to all this I've failed to see.
Kimberly-Clark plans to raise prices - again
...prices will be 6% to 8% higher on Kleenex facial tissue, Cottonelle and Scott bathroom tissue, Viva paper towels, Huggies diapers and Pull-Ups training pants.
Maybe the federal government can help out on this end as well...
Court rules U.S. paper money discriminates against blind people
If the US mint could just redesign the money so that it is blind friendly AND double-ply and fluffy, we could make everyone happy. Maybe there is a bright side to all this I've failed to see.
Ground and pound
No, I'm not talking about the mixed martial arts style. I'm referring to our nation's airlines in the context of $120+ oil. Shit...even at $100+ oil, the airlines CANNOT stay solvent. It's a mathematical impossibility. Airlines will need to GROUND planes and POUND out new agreements with labor unions or they WILL go bankrupt.
Risk of airlines' default climbs
Think the federal government can bail out these guys too? Think again. There is NO fin'g money in the federal government to bail anyone out. Here's the list of things that require "bailing out" as they are woefully unfunded or are facing insolvency (bankruptcy). Some sooner than others.
Banks and Investment Firms
Local banks
Airlines
Auto manufacturers
Scoial Security
Medicare
Medicaid
Local and State Pensions
Local and State Governments
Federal Pensions
We're talking trillions and trillions of dollars of unfunded obligations and future bailouts. This country cannot support the actual list of obligations and it certainly can't support any future obligations in the form of private company bailouts. There are serious problems in this country and there isn't even a remote whiff of a chance that any current or future politician will deal with these issues effectively...unless "we the little people" wake the fuck up.
Risk of airlines' default climbs
Think the federal government can bail out these guys too? Think again. There is NO fin'g money in the federal government to bail anyone out. Here's the list of things that require "bailing out" as they are woefully unfunded or are facing insolvency (bankruptcy). Some sooner than others.
Banks and Investment Firms
Local banks
Airlines
Auto manufacturers
Scoial Security
Medicare
Medicaid
Local and State Pensions
Local and State Governments
Federal Pensions
We're talking trillions and trillions of dollars of unfunded obligations and future bailouts. This country cannot support the actual list of obligations and it certainly can't support any future obligations in the form of private company bailouts. There are serious problems in this country and there isn't even a remote whiff of a chance that any current or future politician will deal with these issues effectively...unless "we the little people" wake the fuck up.
Thursday, May 22, 2008
Decline of US...moral hazard links
I've ranted about the decline in the standard of living in the US for years to come. There are a number of reasons why I believe this. One major reason I haven't touched on recently is the increasing problem of the deteriorating infrastructure of the US. There is a long laundry list of infrastructure issues that are WAY overdue on the honey-do list for the US.
* Roads and Bridges
* Dams and Levees
* Water and Sewage
* Electrical Grid
* Mass Transportation
There are a number of reasons why the list above are in serious disrepair and are catastrophes waiting to happen. One reason that never gets mentioned is moral hazard. How does this play out you say? Take for example an article in today's CNN.com: Report: Money fears might have led to bridge collapse
For example, instead of a $40,000 ground-penetrating radar survey of the bridge deck in 2006, engineers dragged a chain across the span to listen for unsound concrete. The radar test, an internal e-mail notes, "was not completed due to lack of funding."
Lack of funding, budget deficits, more pressing priorities...these are the excuses given to continually push off inspections, reviews, upgrades and modernization of infrastructure. The consequences, as was seen with the bridge in Minnesota and the levess during Katrina. But, if the federal government will step in when there is a catastrophe (taxpayers that is) and there is a plausible defense as to why the lapse occurred, why should states pay to fix these problems? This is a moral hazard and it exists anytime there is the possibility of tax payer bailouts. You see this in the finance industry now. What is it going to take for these infrastructure issues to be dealt with in a fiscally resposnible and proactive fashion? If history repeats itself, it will take bloodshed and tax payer bailouts before any real action occurs. Pretty soon, with massive failures in critical structures, we'll have that bloodshed.
* Roads and Bridges
* Dams and Levees
* Water and Sewage
* Electrical Grid
* Mass Transportation
There are a number of reasons why the list above are in serious disrepair and are catastrophes waiting to happen. One reason that never gets mentioned is moral hazard. How does this play out you say? Take for example an article in today's CNN.com: Report: Money fears might have led to bridge collapse
For example, instead of a $40,000 ground-penetrating radar survey of the bridge deck in 2006, engineers dragged a chain across the span to listen for unsound concrete. The radar test, an internal e-mail notes, "was not completed due to lack of funding."
Lack of funding, budget deficits, more pressing priorities...these are the excuses given to continually push off inspections, reviews, upgrades and modernization of infrastructure. The consequences, as was seen with the bridge in Minnesota and the levess during Katrina. But, if the federal government will step in when there is a catastrophe (taxpayers that is) and there is a plausible defense as to why the lapse occurred, why should states pay to fix these problems? This is a moral hazard and it exists anytime there is the possibility of tax payer bailouts. You see this in the finance industry now. What is it going to take for these infrastructure issues to be dealt with in a fiscally resposnible and proactive fashion? If history repeats itself, it will take bloodshed and tax payer bailouts before any real action occurs. Pretty soon, with massive failures in critical structures, we'll have that bloodshed.
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