I think this is the substitution effect, as dining out becomes more expensive, you substitute by cooking at home. Which I can totally see happening right now.
I’m not an economist, I think to be a true Giffen good you’d have to show that, cet par, a grocery store increasing prices causes people to buy more.
Median inflation-adjusted wages have risen.
Alao, this article has a chart with inflation laid on nominal wage growth. Basically they shot up together.
I like getting Dominos large 1-topping pizza specials for $7.99 once every so many months. That’s a dollar a slice if you’re willing to buy in bulk.
But I was talking about a slice of pizza, not a slice of Domino’s. 
I also remember there being a just-off-campus discount “pizza” place that had large Cheese pizzas for $3.99. I believe the place was “Grog’s”, which had a motto “Home of Chow” (nickname of the proprietor)…but “Chow” was written in such a way that if you rotated the box 180°, it read “mold”, which was a somewhat apt description of the pizza.
(Of course, being a poor college student, I couldn’t afford to be a pizza snob.)
I don’t think that buying more grocery store food depends on the price of restaurant food going up.
Let’s say that a meal prepped with groceries costs X and with restaurant food costs 5X. Restaurant food is the normal good (demand increases when income increases) and groceries are the inferior good (demand decreases when income increases).
Your weekly food budget is 48X and you need to eat 20 meals per week. You’re going to go to a restaurant 7 times and eat groceries 13 times. (7 + 13 = 20 and 5x7 + 13 = 48)
You could eat at home more but that’s the inferior good … you’d rather eat out so you’ll eat out as much as you can afford to. You can’t go out to eat more than 7 times or there won’t be money left over for groceries.
If the price of restaurant food stays the same and the price of groceries doubles, what happens?
You still have to have 20 meals a week. You can’t afford to keep going out 7 times a week because you won’t have enough left over for groceries.
Now you’re only going to go out for restaurant food 6 times a week and you’ll buy groceries 14 times. (6 + 14 = 20 and 6x5 + 14x2 = 48)
You bought more groceries simply because the price of groceries went up. Nothing else changed.
(In point of fact if the cost of food doubles the restaurant will ALSO raise their prices, but maybe it takes them a while to do so and this is the week they’re waiting for their new menus to come back from the printer.)
I have read the same results but those data driven articles ignore the psychology of it all.
When you go from $30k to $60k salary (as an example) there is an economic expectation that your standard of living will improve.
That has not been the case over the last four years as wage increases have barely kept up with the increases in costs (housing, food, cars etc) So you are earning a lot more in $$$ but are standing economically still for the most part as your standard of living has not materially improved.
Thats the problem in the US for a slice of the population (tend to be white, non-college degree educated). And unfortunately, they blame the incumbent for that (Biden).
Its crazy because Trump will make their situation much, much worse, but thats where most people go from “rational” to “irrational” as they are mostly looking for someone to blame (and Biden happens to be the easiest person to blame).
Sure. Was just explaining to one poster how the median person can still afford stuff.
Obviously most people can not read a graph, and do not understand economics.
This is happening in the UK as well.
Food and alcoholic drinks.
Many restaurants and pubs are going bankrupt because people just can’t afford the higher prices anymore, so they switch to eating & drinking at home.
Didn’t we just conclude this is more psychology than reality?
Sorry, should have been a bit more specific.
That’s true in the US. Not true in the UK.
Not sure how Canada compares but I am willing to bet the US is one of the few countries that have had real wages materially increase post-pandemic at the median wage level.
It doesn’t look too bad if you normalize the last 5 years. Probably lower than the US, but id guess there is the large psychological component there as well.
This article is a bit dated as real wages have improved even more for median workers since it was written.
There is usually a lag for wages to catch up after a period of higher inflation. Current inflation in Canada has dropped to 2% but current wage settlements reflect higher inflation. We also have higher levels of unionized workers in the private sector than the US and those settlements have been generous.
TD Bank has been one of my core stock holdings for well over 30 years and I have had my bank accounts and credit cards with them since they were a pension client of mine in the 1990s.
During that period they could do no wrong and I have been amply rewarded for holding them. HOWEVER, I should have dumped them about a year ago when stories started circulating about their lax attitude towards money-laundering in their US operations. They have now been hit with a $3 billion fine by the Department of Justice and many restrictions placed on their US operations.
The stock would have been about 40% higher than it is now if it had simply kept its nose clean and performed as well as its main Canadian competitor in that period. I have only invested in index funds for the past few decades but this has been a good lesson to keep a careful eye on some of these legacy investments.
It’s been a good run the last two months…
Maybe it’s overbought and time to trim back - even temporarily. Gold (and lots of stocks) like to take a breather when their RSI hits 70, to say nothing of 81.
Copy and paste from an article on the investment success some Canadians (but not me) have had with their TFSAs (our equivalent of a Roth IRA.) For context, TFSAs were only introduced in 2009 and the maximum contributions permitted to them since their introduction is $95,000.
One of the things that make tax-free savings accounts so popular is the promise of achieving massive investing success and paying no tax on the gains.
Twenty-nine people have TFSAs worth $5-million or more, according to Canada Revenue Agency numbers. Another 323 or so had TFSAs with a fair market value of $1-million to $4,999,999.
Don’t feel even a bit bad if your TFSA is not in this league. The CRA numbers tell us that 16,817,278 of a total 17,774,335 TFSA holders had a fair market value under $100,000, or 94.6 per cent. Another 921,525, or 5.2 per cent, were valued at $100,000 to $199,999.
You guys are lucky. In the UK we are stuck with a measly £20k/year into a stocks & shares ISA.
Are these funded with post-tax dollars (like a Roth IRA)?
It appears so
On the surface it just looks like a Roth IRA to me (even down to the contribution limits)
The only outstanding difference is that the infinite rollover of contribution limit if you don’t meet the max
Yes.
I figure these large balances have been possible through massive over contributions as well as investments like Nvidia. If you contribute more than the current allowable $7K per annum than the overcontribution is subject to a 1% per month penalty tax for as long as the money stays in the account. These investors have earned much more than the penalty tax.
We can only put C$7,000 per annum currently into a TFSA without incurring penalties. These investors must be massively overcontributing as per my response to Knoath.
