Fortune reports that in 1995, a single sheet of Scott toilet paper measured 4.5 inches by 4.5 inches. With the most recent downsizing, which occurred in August, it now measures 4.1 inches by 3.7 inches. Fortune correctly points out that companies often hide price increases:
...they often use a different tactic to offset things such as...the rising cost of raw materials: cutting quantity while maintaining price. Yet it may not be obvious that your ice cream or OJ containers have shrunk. Manufacturers must note new specs on packaging, but the changes don't have to be advertised (ever seen a now smaller! label?). Here's a look at one of the most recent examples.
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Bottom (no pun intended) line: Inflation is starting to heat up at the consumer level. Maybe when it takes Bernanke a couple more swipes, he'll actually notice the impact of his money printing. Alternatively, maybe he is printing so much money as a replacement for standard toilet paper. Once he gets done printing that's all the dollar may be good for.
Two weeks ago, a 16 oz bag of pistachios, my favorite, cost approximately $5.50. Two days ago, a 12 oz bag cost the same $5.50; a haircut of 20% in little under two weeks. There's certainly some seasonality at work here, but normally I see that take place on the price, say $6.00 for 16 0z as opposed to $5.50.
ReplyDeleteThe fact that the container is now 12 oz is a clue to me that there's more at work here. I've seen meat and other groceries rise as well, but mainly on the price end not necessarily the volume... yet.
As strange as it sounds, I'm waiting for the fast food companies to make their move. Once those $1 menus become $1.25, $1.50, etc. menus, I fully expect price inflation to be headline news shortly thereafter. Whether or not anyone makes the connection between rising food prices and Uncle Ben's magic money machine remains to be seen, but at least the topic will be out in the open.
As for public reaction, what are the odds we start hearing calls for price controls?
Hi,
ReplyDeleteAs a young austrian economic follower, i found this post very funny!
But I was wondering if the shrinking of the toilet paper can be cause by maximizing the profit of the business or an increase in the workers salary cause by union ? Is it sure that the shrinking is due to inflation ?