Facts about prices, potassium iodide edition

by on March 16, 2011 at 7:50 am in Economics | Permalink

David Tufte reports:

Last Thursday morning, you could buy a packet of potassium iodide tablets for $10. Tuesday morning it would have cost you $540.

That is a 5,300% increase in the space of 5 days.

Annualized, that is 3 x 10126%.

Yes, that’s scientific notation.

Here’s the rate written out: 2, 915, 710, 944, 820, 310, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000%.

Is this the highest inflation rate ever?

Believe it or not, it is only the penultimate inflation rate.

It’s more digestible to convert this into a daily inflation rate, which would be 122%.

That rate is higher than that in Zimbabwe a few years ago, but it still falls short of Hungary in 1946.

p.s. Maybe QEII is at fault!

1 nitpicker March 16, 2011 at 7:52 am

That’s not inflation. that’s a price increase. inflation is a general rise in prices, not a specific increase.

2 Andrew March 16, 2011 at 8:10 am

Isn’t this the real reason to donate charity to Japan? They have a legitimate need for price gouging and donations support that.

3 Rahul March 16, 2011 at 8:37 am

A lot of price increases look like that early on. The point is the derivative levels off.

4 dearieme March 16, 2011 at 8:53 am

Let me guess: a month ago the rate of blog posts pointing out the hazards of needlessly taking the iodide pills was zero per day. Now the rate is umpty-um per day. That’s an infinite rate of inflation. If you don’t like the example, replace it by the rate of blog posts urging people to buy iodide pills, or boasting of already having bought some.

5 david March 16, 2011 at 8:56 am

I buy a small coffee everyday at the university bookstore on the way into my office. It used to cost 95 cents. They recently changed the price to $1.05. (The excuse was that they switched to more environmentally friendly cups instead of styrofoam.)

One morning at 8am I bought a coffe for 95 cents; when I bought another coffee at 11am I paid $1.05.

That’s 10.53% in 3 hours.Annualized it’s (8 x 10^128)%.. That’s even faster than inflation on potassium iodide.

It’s a good thing I didn’t take my mid-morning coffee at 10:30. Then the inflation would have been even more astronomical.

6 msgkings March 16, 2011 at 12:10 pm

This post wins the thread.

7 mdb March 16, 2011 at 9:04 am

Penultimate is the next to last, and I believe you mean second.

8 Orange14 March 16, 2011 at 9:11 am

More years ago than I care to count, I was working as a research biochemist in a lab where there was frequent use of radioactive iodine. Those who used the isotope to tag proteins would simply prepare a supersaturated solution of potassium iodide (KI) and place one drop on their tongue. This was enough to block the thyroid from any uptake of the radioactive isotope. This is a much cheaper alternative but it also has to be taken prior to the time of exposure and has no effect if there is prior exposure. I remember the public health authorities in central Pennsylvania asking if they should distribute KI after the Three Mile Island incident and the response was “…if there was a release, it’s too late.”

9 Jay March 16, 2011 at 9:24 am

Please do not feed the Krugnuts. They get enough disinformation from Paulie already. That is not inflation. It is a shift in the demand curve.

10 Dave Tufte March 16, 2011 at 9:37 am

Nitpicker and Jay are right. I had an earlier post that made this point.

But then I decided that readers might think these numbers interesting, and I wrote a stripped down quickie second post that neglected the finer points.

11 Neal March 16, 2011 at 9:48 am

I bet most of the people responsible for this increase in demand don’t live anywhere near the Fukushima plants. “Rational” consumers, indeed.

12 mbt footwear March 16, 2011 at 10:54 am

first aid, how to do? If medical treatment or medical insurance, not themselves to pay medical expenses, the right will also) different. Thus, patient cannot simply be consumers, the patient’s rights to safeguard, also cannot simply rely on protection of consumers’ rights law, it also need other laws.

13 Dan Weber March 16, 2011 at 11:31 am

This is a much cheaper alternative but it also has to be taken prior to the time of exposure and has no effect if there is prior exposure

More information, please. If I had radioactive iodine in my body, wouldn’t supersaturating my body with iodine cause some of it to be flushed from my body?

14 Orange14 March 16, 2011 at 11:42 am

No it would not. Iodine binds tightly to a protein made in the thyroid gland. Once it’s there it’s there and you cannot flush it but must wait for it to be naturally cleared from the body. The binding kinetics cannot be overcome by just ingesting more iodine.

15 Rahul March 16, 2011 at 2:15 pm

Taking one drop of supersaturated solution of potassium iodide (KI) won’t supersaturate your body. Saturation is sustained so long as volume remains the same. The water in the body will probably dilute the supersaturation 1000 times.

16 Orange14 March 16, 2011 at 4:33 pm

No, it has to do with the binding kinetics of free iodide. It’s the same with circulating hormones in the body. It’s the binding to the receptor rather than the free concentration (as long as the concentration is not zero) that is the key issue. Classical physical chemistry.

17 Rahul March 16, 2011 at 4:42 pm

All I am saying is that if Dan Weber did “supersaturate his body with iodine” he’d probably not have to worry about radiation any more. Ingesting a drop of supersaturated whatever is not identical to supersaturating the body.

Nit-pick: It’s probably “saturating” and not “supersaturating” (unless your guts are scratch free and smooth as silk)

18 Gabe March 16, 2011 at 11:42 am

There is no inflation…people can now afford to eat more IPads than ever before.

19 mobile March 16, 2011 at 11:51 am

Potassium iodide tablets are only 25% of my personal consumption basket, so my CPI isn’t nearly so bad. In fact, the other 75% of my personal consumption basket is Japanese equities, so I’m still seeing stable prices!

20 Yancey Ward March 16, 2011 at 12:42 pm

Damn. When I still worked as a chemist, I had a 1 kg bottle of KI. I wonder how many of these bottles have vanished from labs over the last week?

21 Orange14 March 16, 2011 at 1:20 pm

ROFL, that would be enough to supply more than a village!!

22 Chris T March 16, 2011 at 1:11 pm

I wonder if any enterprising individuals managed to buy up some stocks before the price spike and are now selling them at a massive profit.

23 dirk March 16, 2011 at 1:30 pm

People are usually wrong when they argue that speculation is the main cause of rising prices, but the story here seems to be that online auctions are leading to lots of speculative buying driving up prices.

Could this be the clearest case yet where the free market is misallocating a resource? Or is it the other way around? Is it GOOD that the price has been driven so high so that only the most needy are likely to spend money on potassium iodine tablets? It seems to me the answer lies in whether the most needy are able to afford the tablets at these prices.

24 Dan Weber March 16, 2011 at 1:48 pm

A lot has been shipped to Japan for free.

Anyone buying it now is a sucker, and rightfully parted from their money before they can do more harm to themselves or others with it.

25 dirk March 16, 2011 at 2:05 pm

“A lot has been shipped to Japan for free.”

Somebody paid for it.

26 Sisyphus March 16, 2011 at 1:54 pm

What happened to considering close substitutes? There are other sources of significant amounts of dietary potassium iodide that aren’t chemically pure, but that would probably have some positive iodine-replacement/protective effects. Fortunately for the Japanese, the most common is certain kinds of kelp. They are almost certainly the foremost producers and consumers of various kelps, so many households already have supplies that could provide limited protection. You probably have to take multiple pills daily ahead of time, but that is not harmful over the short term.

Here in the U.S., Amazon still has in stock lots of kelp dietary supplements that you can buy for much, much less. And many supermarkets have some dried seaweed wrappers in their Asian food section that are high in iodine. At Asian grocery stores or fish markets, you might even have a choice of several different kinds.

And yes, my limited research into dietary iodine sources was driven by the already too high online prices for potassium iodide. The risk did not seem to warrant those prices, but at the price of dietary kelp pills, it seemed reasonable.

27 Orange14 March 16, 2011 at 4:40 pm

Adult dose of KI for blocking the thyroid is 130mg per day either as a pill or by solution. Kelp has 1/100 or so the amount that would be needed so you really would have to eat a tremendous amount. Dietary requirement for iodine which is an essential nutrient is in the neighborhood of 100 micrograms/day

28 Sisyphus March 17, 2011 at 1:34 pm

Sure, eating actual, unprocessed kelp in sufficient quantities is difficult in sufficient time. But processing it just to dry it (e.g. nori) significantly increases the density of iodine. And you can buy it in pill form (e.g. http://www.amazon.com/gp/product/B00012NFMW) that has higher iodine densities again, on the order of 225 mcg per pill. The recommended adult dosage is in just six pills – not ideal, but certainly not an outrageous amount of pills. And smaller amounts can still have some protective effect.

My overall point remains that there are relatively close substitutes for medical potassium iodide treatments that haven’t been sufficiently explored by enough panicked/concerned buyers, and once those become more widely known, the demand and price increase for medical potassium iodide will likely plummet.

29 Rahul March 16, 2011 at 4:48 pm

Kelp? ……only if you can tolerate eating approximately 5 kg of seaweed a day! I suspect the whole stock of “dried seaweed wrappers” at my friendly, local Asian store is less than that.

30 Rahul March 16, 2011 at 4:52 pm

Naive question: Why do Sodium Iodide or Magnesium Iodide not work? Why just the Potassium salt? Darn. should have paid more attention in those Chemistry classes.

31 Orange14 March 16, 2011 at 6:42 pm

It doesn’t matter which iodine salt it is, the key is getting enough iodide into the body, absorbed into the blood stream and into the thyroid.

32 Yancey Ward March 16, 2011 at 6:45 pm

As a source of iodide, they are probably just as good. The main advantage of KI over NaI is that KI is must less hygroscopic as a solid. As for MgI2, I would imagine one big drawback might be a more rapid oxidation of the iodide ions to molecular iodine since Mg forms a quite stable oxide.

33 mbt March 18, 2011 at 5:35 am

Here’s the rate written out: 2, 915, 710, 944, 820, 310, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000

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