When even an arch-moron like Mr. Halfsmart thinks something's wrong, you know we're in deep trouble.
From Lancasteronline:
by GIL SMART
A few months back, in discussing something moderately intelligent that actually came out of Sarah Palin's mouth, I noted that food inflation up to that point had not been significantly higher than the average. Which is to say that through the first nine months of 2010, according to Sudeep Reddy at The Wall Street Journal, the overall consumer price index in September 2010 was up 1.1 percent over September 2009. An increase, to be sure — but "the slowest annual inflation rate for September since the early 1960s."
The assertion that inflation had not been a big deal at that time prompted several readers to call or e-mail and ask: Are you nuts?
"Do you ever go to the grocery store?" asked one reader, obviously elderly — and, probably, harder hit by prices that had since begun to rise. And the answer was yes — I do go to the grocery store, and had noticed higher prices on some items — but lower prices on others. Dairy was up; soda and Cheerios (with three kids I might as well buy Cheerios by the ton) were about the same as they had been.
That was November. And a whole lot has changed since then.
On the front page of our newspaper Thursday was an Associated Press story: "Higher food prices loom." U.S. supplies of corn, the AP reported, are at their lowest point in 15 years; as a result, corn futures soared, joining wheat, coffee, soybeans and other food staples/food commodities in the stratosphere.
The story identified ethanol production as a major factor in the decline of stocks and the rise in prices; the industry's corn orders rose 8 percent in the past year, according to the U.S. Department of Agriculture. And since corn and its byproducts are used in so much of the food we eat — it feeds livestock, it's in the chips and cereals on your shelf, corn syrup sweetens those sodas and more — food prices are destined to surge, or surge more, at your local supermarket any day now.
Inflation might have been relatively tame in November. That is clearly not the case now.
But once again, the AP's report omits what is undoubtedly a major cause of this inflation, which is speculation triggered by U.S. fiscal policy. [Emphasis mine. F.G.] The AP tells us that low reserves and higher demand are the main culprits. There's little doubt they are culprits; but what of the fact that Quantitative Easing I and II have led to a lot of "hot" money sloshing around the financial system, looking for a sure thing — and food commodities look about as sure as you can get?
Of course, ol' Gilly is a bourgeois totalitarian leftist, so he can't bear to admit that Emperor Haile Unlikely [America's first mulatto Jimmy Carter] is turning the USA into Weimar Germany on purpose by spending like a vote-buying Democrass.
It's impossible to say what prices would look like without QE and the speculation that must result from it; undoubtedly they'd still be up. But consider the double-edged sword that QE represents:
BTW, did you notice his use of the word "speculation"? That has often been used as code for "those evil Jew bastards control everything". And we all know what happened to the Jews after Weimar, don't we kiddies?
And we all know who helped Mr. Hilter get elected in the first place.
As noted last week, the whole idea of QE was to boost asset prices, which was supposed to make Americans feel more financially secure. QE has also boosted stocks, meaning your 401(k) looks a lot healthier than it did a year or two ago, and this is supposed to trigger the "wealth effect" — you feel as if you're worth more, so you spend more, and that gets the economy moving again.
It's a fine theory, except it isn't working because home prices remain depressed, and so do wages. In other words, we've got the worst of both worlds, a combination of depression and inflation known as biflation. Or as one reader put it last week, inflation in the things you need (like food), deflation in the things you want.
That's a terrible combination, one likely to intensify political discontent. I don't expect Americans would take to the streets, like the Egyptians, but that discontent is guaranteed to be reflected at the ballot box — and in the level of demagoguery on the airwaves and in our politics.
So start hoarding now, kiddies, and buy a wheelbarrow. You'll need it to hold all the dollar bills required to buy a loaf of bread.
Just imagine what ol' Jugears will be like in his second term when he doesn't have to worry about reelection...
Sieg Heil, baby...
