I am listening to the radio - a discussion about inflation. I’ve just read a BBC article including a list of inflation rates on numerous items. The only two items on the list of 58 with an inflation rate below 5% are sweet potatoes, at 3.4%, and wine, at 3.6%.
Does this mean we can help reduce inflation by restricting our diets to sweet potatoes and wine? Any good suggestions on what wines go well with sweet potatoes?
Wait till August. Wine won’t then be in a low inflation rate.
Yes, I’ve just transferred all my reserves (not many) to duty paid. A bit early but didn’t want to forget
I did exactly the same a week or so back
TWS needs to ask it’s suppliers to water down our wine in a similar manner to the brewers who have started watering down our beer.
I was going to say: Go Argentine with Malbec, Sweet potatoes and a huge BBQ’s steak. But then just checking their inflation rate which is at 125% !! thankfully I’m not an economist so have no idea what that means for UK consumers.
Usually combined with a plummeting currency, so it balances out. Argentina also have a more favourable black market/tourist FX rate which makes a huge difference vs the official rate.
Argentina is a warning sign on what happens if you let inflation get out of control, A basket case, in every sense of the word and a lesson in just how bad governance can be elsewhere. So sad because it should be rich, indeed was one of the richest countries in the world in the early part of the last century.
Their wines will continue to be (relatively) cheap because they desperately need hard currency and they know they are in competition with every other wine producing country. It’s a tough life there, at least for all those in the peso economy. The few in the dollar economy are nicely placed…
Argentina certainly but look at Weimar Germany after WW1. The UK had inflation in the late 1970s running up to about 17% and it took a monetarist approach to bring it down. No-one likes the medicine but the illness is far worse.
As a hedge against inflation I’m stocking up on wine vinified for longevity. Which happily brings us back to the better Argentinian Malbecs.
But not Bordeaux 2022’s, I refuse to buy a wine which has a decade of (forward) years of inflation already priced in.
It’s around 100% in Argentina. What I found most horrific is that because residents are pretty much barred from having dollar accounts, there is no point in saving, your money halves in a year. In fact the best approach is lapin rouge’s solution below, but on a more prosaic level. As soon as you get your cash, bulk buy anything not perishable. Hence the many multi buy deals in their supermarkets.
It also means that the country effectively does not have a savings sector which as any economist will tell you, is a recipe for disaster. I’ve no idea how they get out of the spiral…
100% p.a. is bad but Weimar saw nearly 21% per day in 1923 - prices doubled roughly every 3 or 4 days. Weimar inflation was driven partly by the WW1 reparations which led to printing money aka QE. But other countries have seen worse
inflation - Hungary after WW2 and more recently Zimbabwe, for example. Solving it is always painful.
There is one alternative to national currencies which inflate (and can deflate), and that is gold.
It can be bought as bullion in coin or bar format and has preserved wealth well since the collapse of the USD 35 per ounce post war fixed price.
Indeed it has been used as a store of wealth for a very long time hence so many gold sovereigns having been minted.
Chart of gold price, inflation adjusted, at
If you think this looks constant, go ahead, but Thatcher’s idea of a cupboard full of tins is probably at least as sensible.
I have admittedly bought a few extra cases of wine with a view to increased inflationary pressure.
However I’ve hit a buying low point / apathy
- my stock in storage/ reserves is doing ok for at least a decade
- possibly signs of a price peak. The burgeoning (particularly in Asia) 0.1% high net worth crowd requiring more and more exclusive wine at no sensitivity to cost ringing hollow as a narrative
- increased likelihood of not just short term cost saving vs 3-12 month purchase planning in an ever rising market, but the risk of massive asset (wine) revaluations
Anyways, I definitely no longer view stocking up on wine as “stocking up” before the inevitable future price rises
Sunlit Uplands investment question:
Having inherited several hectares of prime south facing Sussex (I haven’t). After a 20 year timeframe… would one be better off financially having planted (A) a vineyard & associated winery or (B) solar panels ?
Clearly there are masses of variables so lets assume planning consent is equally successful for both options, gov grants remain same as now, ignore ‘area of national beauty’ & NIMBY opposition, no technological or agricultural great leaps forward.
Totally hypothetical. Perhaps because they are totally unrelated fields I’ve never seen a side-by-side comparison. Thoughts anyone?
Sounds like a good ChatGPT prompt
I hadn’t checked on the latest indicators and I know this is not wine for actual drinking heaven forbid… But good to see it’s not immune from a decline too https://www.liv-ex.com/2023/06/liv-ex-1000-index-records-biggest-fall-far-year/ Rhone 100 down 6.3% in one month
The best way to make a small fortune in winemaking is to start with a large fortune.
Good point. Assume one is an Eccentric Billionaire.