And lo on Mon, 15 Sep 2008 10:30:59 +0100, Invisible <voi### [at] devnull> did  
spake, saying:

> My mum has just sent me an email saying that the price of cheese (my  
> favourite food) has gone up by 10% in the last week.

 From what I recall profit-wise Tesco operates at about 4%, Sainsbury's at  
3%, Asda at 2%, and Lidl etc. at 1%. That's overall of course some  
products are higher than others.

> Also, I was under the impression that *all* food prices have gone up. So  
> my mum's comment that "you'd better start eating something else" seems a  
> bit daft to me.

While at the same time some supermarkets are advertising that they're  
lowering prices. Which as I believe I've mentioned elsewhere doesn't  
engender a feeling of warmth from me more so a query of why they couldn't  
do that when everything was 'cheaper'?

> No doubt at some point somebody will blame all this on the credit crunch.

Which is only tangentially true. It's the cost of fuel throughout the  
entire production chain from simply harvesting them through to transport  
and then onto storage costs. Then you have the fact that certain countries  
(such as China) have been increasing their demand for both fuel and  
certain food and demand begins to outstrip supply. In such times the  
response is to start growing more food except to do so normally requires  
seed money (if you'll pardon the pun) to buy the land etc. That would  
normally be provided by a bank who at the present time doesn't want to  
lend out any money.

> Now, correct me if I'm wrong, but as I understand it, the "credit  
> crunch" exists exactly because... everybody says it exists. If the world  
> woke up tomorrow and everybody decided that the credit crunch was over  
> and they were just going to act normal... there wouldn't be a problem  
> any more.

Yes, kind of. To simplify things down it's about confidence or the lack  
thereof. Previously if banks got into a bit of a problem and couldn't get  
help elsewhere they could turn to the Bank of England as the lender of  
last resort, which is one of its main purposes. However since Northern  
Rock, turning to the BoE is now depicted as a sign of weakness amid cries  
of "the bank is failing" which rapidly becomes a self-fulfilling prophecy.  
Mix in a greater degree of scrutiny since NR, FannieMae and FreddieMac and  
all the banks are cleaning house and ensuring they have enough liquid  
assets to cover their own arses because they can't trust anyone to provide  
them with loans.

> If you think about it for a moment, it's quite amazing the power mankind  
> how has to screw itself just by thinking about it. It only takes one  
> news reporter to say "but don't panic-buy, there's plenty of fuel" and  
> within hours every filling station in the land has been denuded of fuel.  
> How powerful reverse psychology is! A crysis exists because somebody  
> says so.

Yes the recent fuel-tanker drivers strike demonstrates that nicely -  
petrol stations across the country had enough fuel to last it out until  
everyone decided to top up their tanks "just in case" and then acted smug  
when the stations did start to run out.

> I think Mr Adams said it right, when he wrote "In summary, people are a  
> problem."
>
> In a more or less unrelated thread... Which is healthier? A cheese  
> sandwich, or a packet of crisps?

As scott implies, this is a piece of string - too many variables.

-- 
Phil Cook

--
I once tried to be apathetic, but I just couldn't be bothered
http://flipc.blogspot.com

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