- Sep 24, 2012
- Reaction score
- Sacramento, CA, USA
- Political Leaning
- Libertarian - Left
If we assume that there are two types of inflation--cost push and demand pull--the situation you describe would obviously have to fall under demand pull, but when I consider that demand-pull inflation would have to be preceded by either increased consumption or decreased production, I can't see any way that that can be the case. There could be a third type of inflation, if you want to consider that food prices could be an asset bubble, but I want to reject this thought with every fiber of my moral being.I agree with you, other than the inflation.
Being that inflation is happening, as evidenced by even just the basic costs of groceries, clothing and fuel. Those that like to grab out the charts and graphs, note, large goods have remained stationary or even dropped in price, because no one's buying them. The cost of basic living has inflated, causing additional ripples across the economy, and as those who live hand-to-mouth well know, the dollar has devalued across the board, causing the effects of the initial inflation to be felt even harder among the lower income groups.
The inflation I generally see in food is that fresh fruits and vegetables are kinda crazy expensive now. Is it really demand pull inflation though? If so, is it that we don't produce enough produce (which seems unlikely to me), or that people are buying more and more (which is even more unlikely)?