No wonder they called it happy days

No Wonder They Called It Happy Days
By Lynn Carpenter
The best thing about investing… Well the money can be pretty nice… but the part I like most is how following an investment idea takes you into so many different worlds.
For instance, lately I was wondering how bad inflation really is… in a real-world historical sense. Which led to food costs, which led to grains and biofuels, which finally led to the $9 million giveaway. Shall we proceed?
The shocker in all this is the starting point… food costs.
Every time I go to the grocery store, I find prices are so outrageous I can’t help wondering what poor people do to feed themselves.
As it turns out, it’s not creeping old-fogeyism drawing over me. We have been enjoying a 60-year trend of low food prices that is crashing to an abrupt end this very year. Government statistics don’t begin to put the problem in its right perspective…
Nor does simply adjusting for inflation. The problem is affordability.
Here in the United States, as well as most of Europe, we are far from the food crises that have rocked Haiti, Pakistan, Mexico, Ivory Coast and a dozen other countries this year. But we are approaching a condition we had shed almost 60 years ago.
The government’s market basket-consumer price index figures always come up with numbers that never seem to reflect the price of groceries where I shop. And I don’t mean they aren’t buying their arugula at Whole Foods. I will even allow that I am likely to pick up the Pepperidge Farm bread and Boar’s Head bacon for my BLTs rather than the cheapest store brands. But still government numbers seem odd. Even with lower-quality choices, I can only conclude the shopper for the CPI numbers must be enjoying some kind of government discount. So I ran my own “market basket timeline.” You should know the results, because they are … no, I won’t use the word “shocking”. I’ll let you draw your own conclusions from the facts.
Here’s how I got my numbers. I made up my own market basket. Something a modest family might buy a hundred years ago that people still buy today. The basket consisted of a good weekend of meals, without fruits or vegetables: one loaf of bread, one pound of coffee, one dozen eggs, three pounds of mid-price beef, one box of Corn Flakes or Cheerios, five pounds of potatoes and one Hershey bar. All the sizes were adjusted to be consistent. Boy was that fun comparing the 1 3/8 ounce 1938 Hershey Bar to the many sizes that came after. I got the food prices from the extensive advertising archives of the Morristown, New Jersey Daily Record filled in with other city records where there were occasional gaps. That means the prices are good, low ones, not the highs. And the quality is mostly “store brand,” except for the cereal and candy.