Inflation
Inflation is funny, as you can see in the graph from Argentina, which now has inflation of 100%. In 10 years, they went from 0.6% inflation to 100% inflation, and we in Australia are not immune.
This morning I read an article in the mainstream news. I know… it is sad. MSM is not about news anymore. It is about clickbait. So when I saw the heading
Argentina cost of living crisis worst in 30 years as inflation soars above 100%
I had to have a look, as their grammar and spelling is worse than mine. I wrote a little article about “running out of food” in September 2022. I think the situation in Argentina is more related to other things than what the MSM is trying to condition us for.
ARGENTINA
Climate Change
Blame climate change. Weather and Climate is always good to scare the wits out of people, saying economic drama is caused by climate change.
For food to grow, you need at least two things. Looking at the average rainfall and temperature in Argentina (2013-2022), rain and temperature average rainfall and temperature in Argentina (2013-2022), does not strike me as a crisis, yet a major drought was mentioned in the article. If a country cannot safeguard itself for one year of bad weather, then there is something wrong.
| Year | Average rainfall (mm) | Average temperature (°C) |
|---|---|---|
| 2013 | 823 | 17.9 |
| 2014 | 952 | 17.8 |
| 2015 | 946 | 18.0 |
| 2016 | 825 | 17.3 |
| 2017 | 955 | 18.1 |
| 2018 | 907 | 17.8 |
| 2019 | 831 | 17.5 |
| 2020 | 857 | 17.7 |
| 2021 | 862 | 17.6 |
| 2022 | 949 | 17.9 |
Source: National Meteorological Service of Argentina, 2022
Data points were obtained from the National Meteorological Service of Argentina. Here is the reference link where you can find the original data source:
https://www.smn.gob.ar/descarga-de-datos
On this page, you can download historical climate data for various locations in Argentina, including rainfall and temperature data. The data for Table 2 was taken from the “Estaciones meteorológicas convencionales – Datos diarios” section, which provides daily data for weather stations throughout the country.
So here we have a country of 45 Million people, which is about 0.57% of the world’s population, going hungry. (Argentina has about 75% more people than Australia). If you look at Argentina only, remember this is mainstream media, so it is not news or reporting. It is click-baiting. Still, on occasion, you can see some “warning signs”.
I always thought Argentina had plenty of agricultural resources and could generally feed its population with what it grows and produces. Like all countries, challenges can affect food security in the country, such as droughts, floods, and economic factors that impact production and distribution.
Take a quick look at Watchers.news a site that keeps track of most weather events and is a key tool for those who like to keep watch on the weather globally. I can’t find anything that goes OOPS. So it is not climate change.
- So what is it?
Back in July 2022, Martin Armstrong from Armstrong economics stated that Argentina’s Economy Collapses.
Harry Lorenzo, chief finance officer of Income Based Research, told The Epoch Times, that the government’s constant spending has exacerbated the problem ten-fold. “The Argentine government has been grappling with a collapsing economy for some time now. The main reason for this is the government’s unsustainable spending, which has been funded in part by generous welfare programs,” Lorenzo stated. This is the same issue we see in the US, Canada, Europe, and elsewhere when governments spend without the intention of ever paying off their deb
Therein lies the problem. Australia is going in the same direction as Argentina. Just give it a little bit of time. We see, in the news, building companies collapsing at a grand scale. Transport companies are either not continuing or collapsing. We all can appreciate the snowball effect that will have. In case you need help understanding it, here are some points to start your thinking process.
- Building companies hire tradies, lots of them it is a beehive of interactions and money flows. That has stopped.
- Unfinished projects either commercial or domestic, leave a footprint on the landscape that needs to be cleaned up or completed. Someone has to pay for that, I think the Government (oops, we taxpayers) will pick up the bill for that.
- Insurance will have to pay out some for sure. Insurance companies are not Government so the cost of their payouts will reflect in your premiums.
- Transport companies, and trucks make AU tick. No trucks no food on the shelves. (Yes, grow your own)
The only advantage might be that you now can actually get a trade to come out and quote on our project, but that is really it. The cascading effect will be massive, it takes one or two economical cycles to see th impact but it will be massive.
Going down the drain due to bad management.
Argentina has enough capability to provide food for its people. Argentina is one of the world’s largest producers and exporters of agricultural products, including grains, meat, and dairy. The country is often called the “breadbasket of the world” due to its ability to produce large quantities of food. They export a lot of cereal.
I am aware of climate change in the weather patterns as we roll into a Grand Solar Minimum. The planet is cooling, and growing food is becoming an issue, a worldwide issue. What we see in Argentina is just bad management on a grand scale. It is not the first time. The question now is.
Will Australia be next?
I have no real confidence in the Australian Government to ensure we all have food in our bellies and a roof over our heads.
AUSTRALIA
How does Australia stack up?
I am not an economist, just an old dude that looks at the world. I am a homesteader and try to be self-sufficient. I am trying to grow food at my Struggling Homestead, looking at all this from a farmer’s viewpoint. Needless to say, my jaw dropped to the floor when I went shopping. ($4 for lettuce? WTF)
Food will be key as the world goes on and we see a change in the climate. We will see the start of countries struggling and perhaps failing of civilisation in those countries. It happened before.
We here in AUS go, “she be right, mate” what is happening in Argentina will never happen here in Australia. We are, after all, a strong and first-world country.
Argentina versus Australia inflation
| Year | Argentina Inflation Rate (%) | Argentina YoY Inflation Increase (%) | Australia Inflation Rate (%) | Australia YoY Inflation Increase (%) |
|---|---|---|---|---|
| 2013 | 10.5 | N/A | 2.4 | N/A |
| 2014 | 38.0 | 261.9 | 3.0 | 25.0 |
| 2015 | 26.9 | -29.7 | 1.5 | -50.0 |
| 2016 | 40.9 | 51.9 | 1.3 | -13.3 |
| 2017 | 24.8 | -39.4 | 1.9 | 46.2 |
| 2018 | 47.6 | 91.9 | 1.8 | -5.3 |
| 2019 | 53.8 | 13.1 | 1.8 | 0 |
| 2020 | 42.8 | -20.4 | 0.9 | -50.0 |
| 2021 | 51.4 (as of August) | N/A | 3.8 (as of June) | 322.2 |
Do you see that big number 322.2 increase in inflation? Still have the impression of “she is right, mate”.
Canberra we have a problem!
Most of you are just happily cruising along, not a worry in the world. All is good and happy. WAKE UP.
The graph shows the inflation rate taken from the RBA chart pack, 2021 June showed an inflation rate of 3.8, and 2022 shows an inflation rate of nearly 8%, and that is the CPI.
The Consumer Price Index (CPI) in Australia is calculated by the Australian Bureau of Statistics (ABS). The ABS surveys household expenditure to determine the basket of goods and services used to calculate the CPI. The basket is reviewed and updated periodically to reflect consumer spending patterns accurately.
The ABS uses a weighted average method to calculate the CPI, which considers the relative importance of each item in the basket of goods and services. The weights are based on the proportion of total household expenditure spent on each item.
The formula used to calculate the CPI in Australia is as follows:
CPI = (Total cost of the basket of goods and services in the current period / Total cost of the basket in the base period) x 100
The base period for the CPI in Australia is 2011-12, which means that the cost of the basket of goods and services is used as a reference point for calculating price changes over time.
The calculation formula for the CPI in Australia has mostly stayed the same in recent years. However, the ABS reviews and updates the basket of goods and services and the weights assigned to each item periodically to ensure that the CPI remains an accurate measure of inflation.
CONCLUSION
The numbers tell a story, sure the Government can start throwing money at the problem, which they most likely will do. Just remember the article from Martin Armstrong I quoted before.
If you believe all will be ok, then that is fine. I do not think all will be ok. I think we will be facing food shortages which will result in supply chain management issues. The struggle of growing food is not solely man-made. It is a combination of ancient weather patterns and cycles. In particular, the solar cycles that are well explained and scientifically proven.
It is one of the reasons why we at the Trade Shack started to promote Postcode Communities, we have seen the “writing on the wall” (well telegram really). Now is the time to start growing your own food. It is not about trade only it is about growing and eating first.
There are thousands of websites and initiatives sprouting up, setting up exchanges introducing another type of currency or trade commodity. All good intentions, but the reality is you need to grow food first. As the confidence in money either crypto or the plastic that the AU government hands out, is fading or even collapses, you have to ask yourselves the question.
Do I want a potato to eat or something that someone promises to be there in the future?
Just join a Postcode Community, and start growing food either in your backyard or food scaping. Focus on what you can touch, see and eat instead of something virtual and cryptical. But more on that later for now, get out there poking around in the soil and wear the best garden gloves you can find if you need to but please start thinking about self-sufficiency.