19 March 2009

Costs Rise Most on Non-Discretionary Expenses

... or rather, on costs of food and housing, which for people living at the bottom of poverty well, amount to "discretionary" expenses. In other words, you cut down on food such that all you've left are grain products (which also have seen ballooning, sticky prices) and/or you leave your home for the streets.
Food prices increased 7.4 per cent during the 12-month period to February, following a 7.3 per cent increase in January. The main contributors to the overall jump in food costs were a 25.8 per cent hike in the price of fresh vegetables, a 9.7 per cent rise in the price of bakery and cereal products, and a 6.1 per cent increase in meat prices.

Shelter costs, the second-largest factor, increased 3.0 per cent, which was slightly less than the 3.3 per cent rise in January.

Given that the average price of heating fuel and new and resale residences have gone DOWN over the past several months, those increased shelter costs primarily reflect increases renters have had to pay. Landlords can merrily jack up their rents each year, regardless of recession, depression, whatever.

There IS something most people can do about the rising cost of food, however.

Jack Carr, an economist at the University of Toronto, notes that "Canadians buy food from all over the world and those foods are traded in U.S. dollars so when our dollar goes down, relative to the U.S. dollar, food costs more."

Solution: Follow the 100 mile diet. Buy local.

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