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Ice Tea
Joined: 23 Nov 2008
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 Posted: Sat Feb 12, 2011 9:52 pm Post subject: Inflation |
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Anyone else notice there's been a lot of inflation this year?
Restaurants in my area have all increased their prices, even Pizza school!
Milk went up by 100 won, Campbell's soup increased by 50 won. Beef got more expensive. Taxis and rent have been increasing for a while now.
Do you think this is a result of Korea's "weak won" policy? Will the won rebalance at a new inflated equilibrium? |
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chellovek
Joined: 29 Feb 2008
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| Posted: Sat Feb 12, 2011 9:54 pm Post subject: |
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Well yes, there have been news stories about this type of thing globally for a while now.
Something to do with poor harvests and the summer fires in Russia, or morbidly obese people gobbling up all the spare food, can't remember which.
You can balance your budget by eating less, like me. |
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jst
Joined: 14 Feb 2010
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| Posted: Sat Feb 12, 2011 9:57 pm Post subject: |
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| chellovek wrote: |
Well yes, there have been news stories about this type of thing globally for a while now.
Something to do with poor harvests and the summer fires in Russia, or morbidly obese people gobbling up all the spare food, can't remember which.
You can balance your budget by eating less, like me. |
Or perhaps part of it is due to more farmland being used to grow vegetables for biofuels instead of for human consumption.
Also, it seems that fewer and fewer companies/corporations are controlling a greater amount of resources. It's not about getting more resources, it's about getting more money for the resources. |
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chellovek
Joined: 29 Feb 2008
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| Posted: Sat Feb 12, 2011 10:00 pm Post subject: |
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| jst wrote: |
| chellovek wrote: |
Well yes, there have been news stories about this type of thing globally for a while now.
Something to do with poor harvests and the summer fires in Russia, or morbidly obese people gobbling up all the spare food, can't remember which.
You can balance your budget by eating less, like me. |
Or perhaps part of it is due to more farmland being used to grow vegetables for biofuels instead of for human consumption. |
Good catch, I recall that being said back during the riots in 2008 just before the recession as well. |
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jst
Joined: 14 Feb 2010
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| Posted: Sat Feb 12, 2011 10:21 pm Post subject: |
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| chellovek wrote: |
| jst wrote: |
| chellovek wrote: |
Well yes, there have been news stories about this type of thing globally for a while now.
Something to do with poor harvests and the summer fires in Russia, or morbidly obese people gobbling up all the spare food, can't remember which.
You can balance your budget by eating less, like me. |
Or perhaps part of it is due to more farmland being used to grow vegetables for biofuels instead of for human consumption. |
Good catch, I recall that being said back during the riots in 2008 just before the recession as well. |
Riots have occurred in the past due to companies like Monsanto pushing genetically modified seeds on farmers. These seeds make the farmers more dependent on Monsanto (Monsanto produces terminator seeds, which forces the farmer to buy seeds every year. Farmers also have to buy Roundup from Monsanto to spray on the seeds.) Monsanto's PR machine claims that their seeds produce a bigger yield than conventional seeds, but that doesn't seem to be the case.
So, more farmers using Monsanto seeds means less yield, which means the same, or greater, demand for less produce. This results in higher costs for the consumer.
"USAID [United States Agency for International Development] and Monsanto's poison pill for Haiti is designed to the make the island nation into a slave colony once again, except this time they won't be slaves for France, but rather for Monsanto and corporate agribusiness."
Source: http://www.huffingtonpost.com/ronnie-cummins/monsantos-poison-pills-fo_b_587340.html
"Under most conditions extensive evidence shows that RR [Roundup Ready] soybeans produce lower yields than possible if farmers planted comparable but non-engineered varieties."
Source: http://www.mindfully.org/GE/RRS-Yield-Drag.htm
"Almost half of all corn grown in the US is genetically engineered and for soybeans it is 80%.
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"What we've seen with the herbicide tolerant soybeans overall, is a 5-10% lower yield with the Round-up Ready soybeans - that's the herbicide tolerant soybean sold by Monsanto," he [Bill Freese at the Centre for Food Safety] says."
Source: http://news.bbc.co.uk/2/hi/business/7866687.stm
Last edited by jst on Sat Feb 12, 2011 10:37 pm; edited 2 times in total |
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willteachforfood
Joined: 24 Jan 2011
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| Posted: Sat Feb 12, 2011 10:32 pm Post subject: Re: Inflation |
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| Ice Tea wrote: |
Anyone else notice there's been a lot of inflation this year?
Restaurants in my area have all increased their prices, even Pizza school!
Milk went up by 100 won, Campbell's soup increased by 50 won. Beef got more expensive. Taxis and rent have been increasing for a while now.
Do you think this is a result of Korea's "weak won" policy? Will the won rebalance at a new inflated equilibrium? |
There is inflation every year.
Listen to what you just said...."milk went up by 100 won", this is a 9 cent increase.....9 cents. Say it again....9 cents. When a carton of milk runs 2,000 won to begin with, this is a whopping 4.5% increase...a normal, healthy inflation rate is around 3%.....clearly goods don't inflate 1 cent at a time, you hit a tipping point and then the price increases by a dime.
Restaurant prices are maybe 1,000 won higher than they were 5-6 years ago. Soju has been 3,000 won per bottle since only PatrickGHBusan knows when.
The won isn't that weak at the moment....it seems weak if you believe that 1000won/$1US is the equilibrium, but 1100won/$1US is a more natural rate.
South Korea's current inflation rate is 4.1%
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=KRW
The average job here provides a 100,000won/month wage increase each year...on a 2.2 million won salary this is a 4.5% increase....not to mention the fact that your housing is covered and housing is a large part of what causes inflation.
I am living one of the most frugal lifestyles of anyone I know, yet I have seen very few prices (for regular, staple goods) in Korea that would cause one to whine about. |
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matthews_world
Joined: 15 Feb 2003
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| Posted: Sat Feb 12, 2011 10:48 pm Post subject: |
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A lot of this comes from the harsh climate changes that we've experienced this winter.
Also, China plays a part. They are forecast to raise their interest rates even more this summer according to reports and this means higher prices and less dollar per won. It's on the internet for all to read.
I've heard the term "Chimerica" recently. Even though the economy is turning around, the U.S. is becoming more dependent on China to due to it's high debt threshold. |
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Globutron
Joined: 13 Feb 2010
Location: England/Anyang
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jst
Joined: 14 Feb 2010
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| Posted: Sun Feb 13, 2011 12:05 am Post subject: |
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| Globutron wrote: |
| http://twittface.net/wp-content/uploads/2010/12/zimbabwe_100_trillion_dollar_bill.jpg |
The rich get richer, and the poor get poorer.
"IN the rich and leafy northern Harare suburb of Borrowdale Brook, Gideon Gono, who as governor of the Reserve Bank of Zimbabwe is President Robert Mugabe�s right-hand man and financial adviser, is having the finishing touches put to a lavish mansion that he started building several years ago.
The castle-like house has 47 en suite bedrooms and a glass swimming pool with underlights, a gym bigger than many good houses in the Zimbabwean capital, a mini-theatre and landscaped gardens.
His house is one of the biggest in Harare - bigger, in fact, than Mugabe�s, which is nearby, hidden behind a high wall and guarded by soldiers.
No one except Gono knows for sure how much the mansion cost, but the architects originally said they expected it would reach more than $5m on completion. This is enough to build and equip at least four primary schools in Zimbabwe."
Source: http://www.timesonline.co.uk/tol/news/world/africa/article5375495.ece |
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Koreadays
Joined: 20 May 2008
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| Posted: Sun Feb 13, 2011 12:13 am Post subject: |
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plain and simple..
the answer is ..
GREED! |
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mmstyle
Joined: 17 Apr 2006
Location: wherever
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| Posted: Sun Feb 13, 2011 4:36 am Post subject: |
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I have found price increases of 15-20% for goods and services I use regularly in the last 3 months or so (bread, acupuncture, coffee, fruit, to name a few examples I use or buy). A lot of goods and services. Everything seems to be going up. A friend of mine recently said that K-govt has been pressuring businesses not to raise their prices beyond 3%, although their cost have increased much more than that. I do not have any links to quote, so cannot verify this govt policy.
I do not know what economy the poster is from that said it is turning around, but in the economy of my home country, housing is down yet again, seemingly headed for the dreaded double dip, and has stalled in my husband's home country (though I want it to drop there, preferably slowly, as it is currently at 6-7 times median income to buy a house in this, the most inflated housing economy among English speaking countries. This is, admittedly selfish on my part, but I believe, also sensible).
I am with the OP, in my experience, I have found that a lot of things have jumped significantly. With the massive loss of sugar crops in Aus with the recent floods and cyclone, a massive jump in the cost of cotton recently, and (I think it's called?) FMD in Korea resulting in a lot of animals killed and of course, milk and products which must be dumped, I am expecting prices for many things to increase in the near future. |
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willteachforfood
Joined: 24 Jan 2011
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| Posted: Sun Feb 13, 2011 5:25 am Post subject: |
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| mmstyle wrote: |
| I have found price increases of 15-20% for goods and services I use regularly in the last 3 months or so (bread, acupuncture, coffee, fruit, to name a few examples I use or buy). |
Fruit always goes up in the winter in Korea, this is not necessarily inflation...what bread are you talking about exactly? I buy bread and it is the same price as it has been for as long as I can remember.
Of all the things there are to complain about in Korea, I can't believe that folk are complaining about the price of basic goods....one poster complained about taxi rates....what, is it $4 for your ride instead of $3.50???
In general the people who complain about prices here just haven't been home in a while. |
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BoholDiver
Joined: 03 Oct 2009
Location: Canada
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| Posted: Sun Feb 13, 2011 5:36 am Post subject: |
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I expect goods to go up gradually, but it is the sudden increase of almost everything at the same time that has people worried.
I have also noticed. It is difficult to get any meal in my area for less than 4500 or even 5000 won these days. It is probably mostly b/c of FMD. |
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willteachforfood
Joined: 24 Jan 2011
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| Posted: Sun Feb 13, 2011 5:45 am Post subject: |
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| BoholDiver wrote: |
I expect goods to go up gradually, but it is the sudden increase of almost everything at the same time that has people worried.
I have also noticed. It is difficult to get any meal in my area for less than 4500 or even 5000 won these days. It is probably mostly b/c of FMD. |
People also need to realize that the way that Koreans price things makes a big difference.
In the US, not all prices are even...it's normal to see strange prices like $1.27 for a medium coke, or $5.35 for teriyaki chicken....but in Korea they tend to raise prices in 500W increments as a minimum. So generally businesses keep the price at the original price for as long as they can and then raise it 500W or 1000W....this isn't necessarily a sign of 20% inflation as the price didn't inflate for 7-8 years prior and won't go up again for 5 more.....look at gimbap...used to be 1,000, and now it's 1,500....this, in effect, is still a gradual increase in price, even though it was a 50% jump at one point...because 500W is the minimum that businesses tend to raise their prices (especially at restaurants), and consumers are used to this system.
One of these days soju will bump to 4,000W (and boy will the s*** hit the fan when it does), but this won't be due to 33% inflation...but instead due to inflationary pressures over a long period of time....I doubt that they will bother with a 3,500won price...margins will shrink and shrink until they reach the tipping point and the price will jump to 4,000....then the process will repeat, with high margins for a couple years and then steadily declining margins as time goes on.
We're not talking about crippling increases here....we're talking about a maximum of maybe 25,000 won per month for the average consumer's average bundle of monthly goods. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sun Feb 13, 2011 7:06 pm Post subject: |
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Maybe not crippling for you or me, but for the poor an increase in food prices can mean a change in diet, for the worse.
I've always found that most food in Korea is more expensive than in the U.S. And things that used to be quite affordable, such as chicken or pork, are no longer the bargains they used to be.
This is part of a global pattern of food becoming more expensive, but is exacerbated by specifically Korean problems like FMD. |
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