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September 17, 2014
Monday, January 27, 2014

Inflation: bang goes chocolate on my biscuit

Rise in prices gets personal as the struggle to make ends meet leads to bargaining, frugality

It is one thing to say we are suffering alarming rates of inflation which, in recent days, has been officially confirmed by the direct reference of panic action, and it is another to feel it. We all say, at some point how terrible this is, and have a variety of expert statements on the effect of rising prices and costs.

For the first time in about 10 years we have to deal, again, with serious levels of devaluation which in turn prompt worrying levels in the cost of living. Governments normally deny that anything is amiss until the roof falls in. Such was the case in 2001 when, from February to the run on banks in November of that year, the Central Bank recorded steady and rising volumes of hard currency transfers out of the country. We have been through that before and the government has steadfastly refused to acknowledge any mismanagement.

So how do people simply “know” that governments are not quite telling the truth?

You feel it on the street. Even without a published percentage of creeping, crawling, running, runaway or galloping (the classic and over-used but still apt adjectives) inflation, the oncoming crisis is felt in the manner of a much threatened storm following a January heat wave.

The people who see their wages shrinking feel it. And they are not reading The Economist for the signals of the Big Mac index. We have the Nac&Pop index, which really should be instituted as part of the administrative model so that it can be considered in all its brutal transmission of knowledge. Well, perhaps that sort of awareness is not the kind most desired.

The volume of minced meat in your call-out, or call-in, “delivery” order of empanadas shows reductions which the corner empanada manufacturer will deny. He is using the meat spoon with different levels. Or the goods unsold have been held in the fridge for longer and were not replaced. Or it all tastes slightly older. My empanada is no longer as full of meat as it was and it no longer tastes like that special fancy I was looking for.

We generate our own indices, which change daily, and report them with indignation and adjustable expostulations. My café con leche and croissants, or medialunas, have crept up blatantly in the last four months in an unreturning escalation (sounds impressive) from 16 pesos two months ago, then to 18 in mid-January, and this last week the “special offer” in the window tempted me with coffee and three nibbles at 20 pesos.

“No, sir, I don’t think it is inflation. It is just that all prices are going up.” I wish I was.

The newspaper cover price (yes, the Herald also), for those of us who cherish newsprint and who still buy a printed rag daily, goes up with an alarming and foolishly denied regularity, with a rebuke from the newsvendor who says he didn’t notice.

There is no chocolate on the biscuits that come with the coffee at the chain of shops famous for their alfajores. In fear of loss, you demand something fantasized as a better deal. For example, in the heat wave of January I felt compelled to ask for a large glass of water, rejecting those tiny tumblers intended only as sufficient to rinse out the front teeth.

The tiny 10c and 5c coinage now look Lilliputian, unusable, they do not make a respectable tip. For sure, they have not shrunk in size, they just look smaller as each day passes, no reason for this but perhaps especially if you compare them with a two-peso piece. (Thank goodness we no longer have the 1c coins which Domingo Felipe Cavallo, the bald guy who used to tell the one-peso-one-dollar joke, introduced in the early nineties as the symbol of a new age of monetary stability. Hell, I believed the guy. Well, if you have any of those slivers of metal, keep them, you probably can sell them to somebody in a few months’ time, not by value, of course, but by weight if there are enough.)

Penny pinching is recommended and it is important to watch how other people do it. It might not be attractive and will probably look Scroogian, but necessary. This means that you follow the housewives and old age pensioners around your neighbourhood to see what they buy, and how.

Don’t believe the television, whether from the Sabbatella cattle wagon or from the so-called corporate opposition, who only oppose what might cut them out of some cash. Penny pinching is sometimes quite humiliating, which is an intrinsic part of the social effect of inflation. You find yourself haggling (it happened to me last week) over some juice oranges which looked more cragged and shrunken than an OAP. (I got them for four pesos a kilo and they gave very good juice, so there!)

Friendly grocers become targets for more forceful bargaining for “old” heads of garlic, onions (a serious risk, often rotten just beyond the outer peel), oranges, as mentioned, or red peppers which are often more wrinkled than the average granddad. That’s going to be one — out of many — effects of inflation.

Forget The Economist, at this rate we won’t even be able to buy a Big Mac, so stuff the index.

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