0:00

I constantly hear about high food

0:02

prices, but I don't agree with it. I

0:05

don't believe food prices are high. I

0:09

think they're obscene.

0:10

And you know what the difference is? One

0:13

is a statement of fact. The other

0:15

disregards the obvious and goes right

0:18

for the throat. Now, what the hell are

0:21

you going to do about it? Hello, my name

0:24

is Ernest and today that's what we're

0:27

going to talk about. No, not what's

0:31

obvious, but what isn't. So, stick

The Obscene Reality of Food Prices

0:33

around. You might even have a good laugh

0:37

or cry. I'd like to tell you something

0:40

that many people don't stop to consider,

0:44

but really should.

0:46

Your ideas, your preconceived notions,

0:49

if you will, are largely based on your

0:52

life experience, and that affects every

0:55

interaction in your daytoday life.

0:59

And of course that even includes

1:01

something as ordinary and mundane as

Life Experience Shapes Grocery Perception

1:05

grocery shopping.

1:07

Now consider this.

1:09

For most of us when we go grocery

1:12

shopping, we know that there are

1:15

different stores that can have very

1:18

different price points even for

1:21

identical items.

1:23

You might, for example, know that a

1:25

bottle of ketchup, same brand, same

1:28

size, everything the same, can cost much

1:32

more at, say, a Whole Foods than at a

1:36

Walmart or some similar warehouse style

1:40

grocery. But the question remains, why?

Why the Same Ketchup Costs More at Whole Foods

1:44

Briefly before I continue, if you're

1:47

enjoying this episode and you haven't

1:49

already done so, please consider

1:51

subscribing and hit that notification

1:54

bell. By subscribing, you really do help

1:58

the Earnest Man Show continue to grow.

2:01

And if you leave a comment or question,

2:05

I actually read and respond to them all.

2:08

And I really do appreciate you reaching

2:10

out. Now, back to the episode.

2:16

Well, what might seem to be the obvious

2:18

answer, the same item costing more at

2:22

Whole Foods is because Whole Foods is a

2:26

much nicer shopping environment with

2:29

much more overhead and hence a higher

2:32

price. And on the surface, I can see how

2:35

that totally makes sense. And therefore,

2:39

a person really doesn't have to pursue

2:42

the question any further.

2:45

But what if I told you that's really not

2:48

the true reason at all?

Marketing = Manipulation = Theft

2:52

The truth is it is completely about one

2:55

of the cleverest theft manipulations

2:59

ever invented, principally by a fellow

3:02

named Edward Bernay going all the way

3:05

back to the: 1930

3:09

What Bernay understood about human

3:11

psychology was that selling something is

3:15

not so much an issue of price but of

3:18

perceived value. And ultimately what all

3:22

of this boils down to and unfortunately

3:26

what many people simply don't know is

3:30

that the simple non-threatening term

3:34

marketing is in reality a deceptive term

3:38

for manipulation and theft.

3:42

Now with that in mind, consider this.

The "Crooks Groceries" Thought Experiment

3:46

if a new grocery store was opened near

3:48

you and they were named Crooks Groceries

3:53

and they had a tagline like always

3:56

higher food prices because hey, we're

3:59

crooks,

4:01

would you go shopping there? I seriously

4:04

doubt most people would.

4:07

The simple truth is this. There are only

The Grocery Cartel Monopoly

4:10

around six grocery supply chain

4:13

companies currently in America. And all

4:17

the big major players in the grocery

4:19

store supermarket business pay the same

4:23

amount for the same product with very

4:26

little exception. But here's where the

4:29

huge marketing deception takes place.

4:32

And it may very much surprise you

4:36

because the entire con rest on you

4:39

believing that they are subject to

4:42

increased cost from suppliers and

4:46

consequently are forced to pass any food

4:50

cost price increases from suppliers to

4:54

you. But in actual truth, it's the exact

4:58

opposite. The incredibly large and

5:01

powerful supermarket and grocery chain

5:04

cartel dictates the price of any and all

5:07

groceries they are willing to pay to the

5:11

suppliers because they are obsessed with

5:15

increasing profit ratios.

The Price Dictatorship You’ve Never Heard About

5:18

Now, I totally understand how anyone in

5:21

the business would deny what I'm saying

5:24

is true. more than likely laughing and

5:28

being very dismissive that I have no

5:31

clue of what I'm talking about or that

5:34

I'm crazy or both. But I'm here to tell

5:38

you what I'm saying is true. And it is

5:41

imperative for them to keep the con

5:44

going by blaming anything and everything

5:48

for increasing food prices, which we've

5:51

all heard a million times before.

5:55

But in the simplest possible terms, the

5:58

primary reason for runaway food cost are

The Thin Margin Myth

6:02

the major grocery market chains

6:05

themselves.

6:07

So how can I make such a bold claim, you

6:10

might ask?

6:12

I'll tell you this because I am well

6:16

acquainted with how that system works. I

6:19

understand food commodities and perhaps

6:22

most importantly I not only have

6:25

knowledge of wholesale grocery commodity

6:28

cost but corresponding profit ratios

6:32

which is completely contradictory to the

6:35

supermarket grocery chain mega stores

6:39

propaganda claim that they run on razor

6:43

thin profit margins which is complete

6:47

nonsense.

6:49

Just think about this. If that were the

6:51

case, suppliers could charge whatever

6:54

they want and the grocery stores would

6:57

be forced to pay that amount. But it

7:01

doesn't work that way

7:03

because grocery items due to their

7:06

perishable nature must be sold

7:09

relatively quickly. So the suppliers are

7:12

forced to sell their products at the

7:15

price the mega grocery chains are

7:18

willing to pay. And that hierarchy was

7:21

wellestablished by the: 1950

Why Price Controls Are the Only Solution

7:26

So what does all this mean?

7:29

It means unless price controls are put

7:33

into place quickly, as they were in the

7:36

1970s under Nixon and the mega grocery

7:40

chains hated, you can expect grocery

7:43

prices and food cost in general to keep

7:48

spiraling upward because there's nothing

7:52

in place to stop their neverending

7:55

increasing profit ratios.

7:59

To finish this in the shortest possible

Final Thoughts – The Fox Guards the Henhouse

8:01

terms, we have allowed the fox to guard

8:04

the hen house. Now we are suffering the

8:08

consequence of the fox suffering no

8:12

consequences.

8:15

Until next time, this is Ernest and

8:17

that's all I've got for today.