Thursday, February 4, 2016

Canadians Are Panicking Over Food Costs After Currency Collapse.........

Canadians Are Panicking Over Food Costs After Currency Collapse

It's no secret that America has a serious inflation problem. Though the Federal Reserve insists that our inflation rate is only at around .5%, we've all seen the price of food, rent, healthcare, and energy skyrocket over the past 10-20 years. However, this has been a gradual shift. Canada on the other hand, has just seen the price of every day goods rise precipitously over a very short period of time.

The crash in oil prices has crippled their economic growth, and led to the decline of the Canadian dollar, as well as a predictable increase in the cost of imports like food. For those of us living in the US, this provides a really good example of what life may be like should the dollar take a plunge in the near future. 

We got confirmation that all Canadians, not just those in the deep north, are indeed suffering under double-digit inflation at the supermarket when Statistics Canada said the price of fresh fruit has skyrocketed by 12.4% since the end of 2014 while fresh vegetables are up a staggering 14.4%. A bag of grapefruit now costs nearly $15. In November, the retail cost of tomatoes on the vine was $1.99 a pound. Now the same box costs $3.99 pound.

Prices for food purchased from stores were up 4.1% year over year in December, following a 3.7% increase the previous month.

Canadians took to twitter this week to share their collective horror over the rising cost of food. Cucumbers are $3 each. A head of cauliflower is $8. A large container of pepper cost $19 and some Canadians are paying $16 for a single bell pepper. A container of laundry detergent is $32.

Here's what our northern neighbors have been dealing with:

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As a reminder, this all comes courtesy of falling crude prices and the attendant death of the Canadian oil patch. The plunging loonie has added to the woes of a populace already coping with a sharply decelerating economy that, in the hardest hit areas like Alberta, has cause violent crime to spike, suicide rates to soar, and food bank usage to climb by more than a third. 


This gives us a pretty good idea what would happen in the US, even if there was a minor shock to the value of the dollar. Despite the rising cost of goods and services, our currency has been doing really well on the global stage for the past two years. I shudder to think of what will happen when our economy runs into another recession, which we are way overdue for.

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