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[Mictlantecuhtli]

An increase that big probably does partially reflect inflation partially but is probably also random fluctuation as well.

What. When's the last time food increased 16% in one month and it wasn't inflation.

You also figured out why it's not included in CPI measures, because it would show that normal people are actually being hurt alot more by inflation than the numbers dare to say. Since food price raises outpace inflation =/= it's not related to inflation.

[smjjames]

Edit to mtcls edit: I suppose that's what Gazprom gets for becoming too specialized and not diverstifying

That's actually a good summary of the entirety of Russia's current issue. They didn't diversify during their growth period. I don't know what kind of advisors medvedev and Putin have,  but someone was telling them 6-10% growth was the norm and the central government didn't retool it's economy to not focus on three main streams of revenue so that growth can actually continue if one or two of their revenue streams begins to wane. Now that the energy growth is systemically gone, Russia will have *nothing* to show for the growth period the last ten years. Nothing. Except a ruble that's now at an all time low in value.

If one of the streams of revnue is energy (gas, coal, oil) and the other is agriculture, then what's the third?

Russia has huge amounts of forest (granted most of it is remote) and if managed well, could be sustainable and theres probably lots of untapped mineral resources that are untapped because nobody bothered to look.

[Mictlantecuhtli]

They rely far too heavily on oil and natural resources, which includes that timber. Agriculture is another which is currently being over farmed and is under producing compared to national history, likely thanks to said overfarming decreasing output and causing desertification. Financial services wrought from greedy Europeans is a good source of income for banks as well. The problem is Russia has focused on their main GDP producers, instead of expanding the sectors that diversify and give your economy a chance to thrive and survive in a non-energy favorable world environment. Russia's government has assumed it'll just be an oil bonanza until forever, and if that falls apart oh well!

Here's a good example of what I mean.
http://www.themoscowtimes.com/business/article/3-rising-russian-innovations-in-robotics-and-biomedicine/509835.html

Now they scramble to promote and finance biomedical companies. Should see results in the next decade, right..

[mainiac]

You also figured out why it's not included in CPI measures, because it would show that normal people are actually being hurt alot more by inflation than the numbers dare to say. Since food price raises outpace inflation =/= it's not related to inflation.

Food prices go down as well as up, y'know.  In the US food prices were down 2.6% in September compared to August.

[Mictlantecuhtli]

So it's unreasonable to average out that number for twelve months, got it. Or you could just say 'CPI would be too high if we took food and energy cost inflation into account in the main indexing' and be honest.

[Ukrainian Ranger]

Russia is suffering from the Dutch Decease  combined with huge corruption, sanctions, low intensity war, ineffective management and population that believes that everything is good and need no fixing.  Nice combination to ruin economy

[smjjames]

I did say sustainable timber. That and mineral non-energy resources could be used as a somewhat stable base.

And yeah, the countries in the middle east will be forced to diverstify when oil runs out or is no longer profitable to rely on solely for revnue.

[Erkki]

More news on Russia:

http://yle.fi/uutiset/venalainen_sotilasasiantuntija_jos_suomi_liittyy_natoon_teista_tulee_vihollisemme/7542219

starring Colonel Viktor Baranets, translation of a translation by Erkki:

On Russia's recent military activity in the Baltic area(the recent Swedish sub chase is also referred to, and he makes ridicule of it asking for the sub captain's name): "Only nutcases think that Russia would want to control the Baltic. It is only propaganda. We want the Baltic to remain the sea of peace as before."

On the possibility of Sweden and Finland joining the NATO: "Then Finland and Sweden will become our enemies. Then every city, base and strategic target will become under attack by the Russian Federation"

It seems that this same person has before also commented on Ukraine and Crimea several times, and has been some kind of a political commentator for the Komsomolskaya Pravda since 2009 at least.

edit: If this man was mirroring the thoughts of the actual Russian leadership to any degree or what they'd want their people to think they think(not quite sure about that myself), and if I had the power, I'd see the entire Nordic in the NATO by tomorrow.

[smjjames]

Russia is suffering from the Dutch Decease  combined with huge corruption, sanctions, low intensity war, ineffective management and population that believes that everything is good and need no fixing.  Nice combination to ruin economy

You mean the one where tulips became all the rage and then (as happens to markets) prices crashed and everybodys stocks became near worthless?

@erkki: Doesn't seem like Russia wants friends do they?

[LordSlowpoke]

sweden joining nato

well that's something i didn't expect to hear

who's next, the swiss?

[smjjames]

Nah, the Swiss have their neutrality to uphold.

[Erkki]

@erkki: Doesn't seem like Russia wants friends do they?

Dunno. I hope it doesn't get out of hand, or doesnt before I get back from my upcoming trip to St. Petersburg in March. 

[mainiac]

So it's unreasonable to average out that number for twelve months, got it. Or you could just say 'CPI would be too high if we took food and energy cost inflation into account in the main indexing' and be honest.

Yes it is unreasonable.  Food prices change more in a non-exceptional month then most prices do in a year.  And they go up and down very rapidly unlike inflation which follows trends.

Most inflation is controlled by long term changes in technology, money supply, labor supply, etc.  Food prices are mostly controlled by weather and biological events that are very, very unpredictable.  The long term trend is controlled by those same things but the short term trend is much more erratic.

Economists are perfectly honest about why we exclude food prices from the core inflation rates we really care about.  Very few inflation trends wont show up in core inflation more clearly.  With some high tech items its more difficult and complicated but not with food.

[Sheb]

Also, that jump in price also include the cost from switching sources, etc etc. Unless the sanction get stronger, they'll probably fall in the next few months as supply line reorganize.

I'm interested to hear what our Russians have to say about this Colonel Viktor Baranets.

Also, the Swiss have half of Nato between them and Russia.

[Mictlantecuhtli]

So it's unreasonable to average out that number for twelve months, got it. Or you could just say 'CPI would be too high if we took food and energy cost inflation into account in the main indexing' and be honest.

Yes it is unreasonable.  Food prices change more in a non-exceptional month then most prices do in a year.  And they go up and down very rapidly unlike inflation which follows trends.

Most inflation is controlled by long term changes in technology, money supply, labor supply, etc.  Food prices are mostly controlled by weather and biological events that are very, very unpredictable.  The long term trend is controlled by those same things but the short term trend is much more erratic.

Economists are perfectly honest about why we exclude food prices from the core inflation rates we really care about.  Very few inflation trends wont show up in core inflation more clearly.  With some high tech items its more difficult and complicated but not with food.

"The price is volatile" doesn't give any creedence to leaving out ~20% of a person's spending in a number that claims to track their buying power over time. That is why it's an index. It can go up and down. Why should the inflation index be limited to numbers that are artificially picked and chosen for their low rate of inflation, and how does that help anyone besides people who are lying about actual underlying price cost increases?

Food prices have risen nearly double [or more..] since the early 00's. Why isn't this relevant to consumers? You're saying that getting half the food in a product you buy than you did ten years ago isn't a significant factor to consumer buying practices? Or?