[Trading With Larry Benedict]( Managing Editor’s Note: We hope you enjoy this special guest essay from Daily Cut editor Kris Sayce. Inflation has been a common theme in the news for years now. But outright price increases are only one piece of the picture. So today, Kris shares how shrinkflation is playing an important – and misunderstood – role… The Truth About So-Called âShrinkflationâ By Kris Sayce, editor, The Daily Cut In general, politicians are dumb. Arguably, it’s why they go into politics. They don’t have the skills to succeed in the private sector. So they opt for their only remaining career path. It’s either politics… or a life of crime. For some, it’s both. But if there’s a group of folks who are even dumber than politicians, it is, of course, business journalists. And, boy, has the news media excelled with its complete lack of understanding of inflation. Recommended Link [Could Elon Muskâs New Device Save Us from AI Apocalypse?]( [image]( A strange new era for mankind is upon us… And it’s all thanks to Elon Musk’s latest creation. So he invented this strange new device to protect us against that AI threat. [Click here to see this strange device you could be wearing some day.](
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The Mainstream Haven’t a Clue Inflation – or its identical twin, “shrinkflation” – only just now seems to have caught the attention of the mainstream. Somehow or another, the fact that chocolate bars, drinks cans, packaged foods, serving sizes, and more have fallen in size for decades has blissfully passed by the mainstream. Of course, it's rare for the food company to outright announce the change. Typically, they’ll introduce different sizes to run in parallel to the most well-known size. They’ll introduce a “mini” or “fun size” or “jumbo” or “extra” version all of the same product. Depending on the uptake of those other products, they’ll determine whether to change the size of the original product. The pricing of those products will have a direct relationship to the original product. For instance, a “jumbo” version may be 40% larger but costs 45% more to the customer. The customer may not necessarily notice that. They buy the bigger version because they like the product. It costs more, which means more margin for the company. And so on. But here’s the thing. According to politicians and the press, the shrinkflation story is entirely the fault of businesses. The real fault, as anyone with even a few brain cells knows, is with the politicians and the central bankers… and their program of pro-inflationary policies going back at least 50 years. Arguably, longer. Because shrinkflation is the twin of price inflation. They are the same thing. Price inflation means increasing the price for the same quantity of goods. Shrinkflation means maintaining the price but decreasing the quantity. Do businesses try to capitalize on and exploit it? Of course. But businesses are equal victims of inflation due to their higher input costs. Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career â at zero cost to you. Just [click here]( to check it out. But the politicians will naturally try to divert attention away from the problems they’ve caused and point the fault in the direction of “big bad business.” And it shouldn’t surprise anyone either that businesses are turning against other businesses. In France, the largest supermarket chain, Carrefour, has posted big signs next to products to alert customers that the manufacturer has changed the packaging size. Perhaps they thought it would be a good bit of PR with their customers… encouraging them to buy store-brand goods rather than premium brands. But maybe that’s backfired on them. As the New York Times reports: On Friday, the French government took steps to require every food retailer in the country to follow suit. By July 1, stores will have to plaster warnings in front of all products that have been reduced in size without a corresponding price cut, in a bid to combat the consumer scourge known as shrinkflation. The report goes on to quote French finance minister Bruce Le Maire. He said, “The practice of shrinkflation is a scam. We are putting an end to it.” Haha. We guess it takes a scammer to know a scammer. But nowhere in the story is an explanation of the real causes of inflation. Nothing critical of governments and central banks printing trillions of dollars… wasting trillions on government vanity products… sending hundreds of billions to corrupt foreign regimes… And allow the constant debasement of the currency so that the value of an individual’s savings and income becomes ever less valuable over time. Nope. According to the media (and your elected politicians), it’s all the fault of big business… and so you must trust the government to fix it. Cheers, [signature] Kris Sayce
Editor, The Daily Cut [The Opportunistic Trader]( The Opportunistic Trader
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