Overall, the Fed’s total balance sheet has expanded from $896 billion in Aug. 2007 when its latest round of quantitative easing began, to over $2.5 trillion today, a 187 percent increase.
Now, prices are following suit. After a huge surge in oil in 2008, which saw the price of a barrel of oil peak at nearly $150 in July 2008, right before the financial crisis of September, it is now mounting a comeback. It has risen from a low of $33 in Jan. 2009 to nearly $100 a barrel today, a 200 percent increase. Gold has risen from a low of about $820 an ounce at that time to over $1,400 now, a 70 percent increase.
The Food and Agricultural Organization (FAO) price index too has risen, from its Feb. 2009 low 141.2 to an all-time high of 230.7 in FAO’s latest release, a 63 percent increase. Its previous high came in Jul. 2008 when it hit 220.8. Then, the high costs of food had sparked food riots throughout the Third World.
Today, high food prices have toppled the governments of Tunisia and Egypt — both revolutions started in part as food price protests — and have set off a wave of civil unrest throughout the Arab world.
CNBC host Larry Kudlow explains the problem: “Commodities are priced in dollars, and the Federal Reserve has been overproducing dollars for more than two years. Consequently, emerging markets throughout the world — and the food sector in particular — are suffering from rising inflation.”
The Wall Street Journal, too, lays rising energy inflation at Ben Bernanke’s doorstep: “The Fed absolves itself of any responsibility for rising oil prices, attributing them to rising demand from a recovering global economy. Demand has been rising, but not enough to explain what has been a nearly across-the-board spike in prices for dollar-traded commodities.”
The Journal continues, “A spike in one or two commodities can be explained by a change in relative demand. A uniform price spike suggests at least in part a monetary explanation. The Fed will use the Libya turmoil as another alibi, but there’s no doubt in our mind[s] that oil prices include a substantial Ben Bernanke premium.” Indeed.
Clearly, with broad-based, substantial price increases across food, energy, and metals, inflation has regained considerable momentum. It’s even showing up in the Producer Price Index (PPI), which measures the cost of raw materials to our nation’s private sector job creators. All three groupings, Finished Goods, Intermediate Materials, and Crude Materials have risen from 170.1, 169.8, and 160.3 respectively in Feb. 2009 to 184.4, 190.1, and 234.1 today.
With prices rising this fast, is it any wonder that unemployment remains persistently high? Every single day, the cost of doing business is going up. That’s going to hurt job creation and squeeze profit margins, and if it continues unabated this year, will stall the entire recovery — as was readily predicted over two years ago to anyone who would listen.
Of course, the price increases are all by design. It’s what Keynesian deficit-spending and expansive money printing is supposed to achieve. But now it is risking another economic slowdown or even a recession if oil prices get too high again.
The only question now is if Washington, D.C. will do just a little self-examination, see the direct correlation between government policies and inflation, and for the first time in a generation make a much-needed adjustment. We need to stop spending, stop printing money, and stabilize the dollar once and for all — before it is too late and the economy goes off the rails again.
— As it is being coaxed to do.
Obama is a community organizer. He thrives on confrontation and bullying — and for that, he needs to divide Americans into “classes” and then pit them against one another. He needs to separate out the right-wing haters from the left, who love them the working man.
It’s a transparent gambit. And you’d think Americans would be on to him by now.
And yet, with unemployment soaring, no economic recovery to speak of, and the coming disaster of inflation, we have prominent GOP strategists telling us that Obama is still a slight favorite to win re-election.
It’s a mad house. A mad house!
All that’s missing are those cool gorillas on horseback.
Ah, fake money. Is there nothing it cannot do?
In the service of consolidating power where it really, really counts, I mean.
“Wow, the Federal Gov’t really is one big Ponzi scheme, isn’t it.”
– Bernie Madoff
Rising food prices are the result of the flooding and droughts caused by Climate Change. Inflating our money supply and mandating that people turn perfectly edible corn into Ethanol have nothing to do with it.
</LLL>
you’re sounding beckish
On the one hand, we have 18 months to get the message out, and to open people’s eyes to the horrible reality that’s sitting in front of them. On the other hand, we have 18 months to wait before we can get to work reversing the damage being done daily by our current Administration and its lapdogs in the media and the Senate.
We have all the time in the world; it’s already too late. My head hurts.
you need some gold ads
Yes, and it’s rather clear why this is. Because they’ll then pivot and say that only this preferred candidate or that strategy can win. That’s politics, I suppose. But they’re acting against our collective interests by doing anything but pointing out Obama’s incredibly long list of political liabilities. The widespread notion of political strength is… political strength. And they’re just giving it away.
Given this administration’s actions, we should be able to win on gas prices alone even if we were running a convicted horse rapist.
He’s a one-term, failed President. Only by pretending otherwise will it be otherwise.
He is a one termer. He is so done. Fuck these stupid polls. Fuck the spin.
Horse rapist, cum-slut snow-billy, whatever, whomever. The presidency is for the taking.
The day to day stuff that we tend to get buried in is simply noise that eventually becomes extrapolated into an existing or new data point. Data points, all of which, point to massive fail. He may have been doomed by virtue of his position in economic and political history. It was always a tight rope to get to term two. He just sealed his fate and continues to on a weekly basis with his stupidity, inexperience and ideology. The $114/Bbl oil, losing Egypt and perhaps Bahrain is icing on the cake.
Done. Cooked.
Simply google opinion pages of selected foreign based, english language, newspapers. His nakedness is fully discounted over there. There hasn’t been a surer sign of a short, other than when Skilling abruptly resigned as CEO of Enron.
Given this administration’s actions, we should be able to win on gas prices alone even if we were running a convicted horse rapist.
This leads into the argument we’ve been having around here regarding candidates who are “good enough” versus candidates who can really do the job we need them to do.
On one hand (yes, I’m using the same hands as I did above), it doesn’t really matter who we run, because just about anyone will beat this guy. On the other hand, we’re not going to have another chance this good to elect a real reformer, so we need to get it right.
Education costs are going through the roof. I spent $.99 for a cucumber yesterday.
I spent $4 on a loaf of sourdough bread this weekend.
Yeah, but what can you teach the kiddies to do with … never mind. I don’t want to know what Arn would do with a sour loaf.
Veggie tales!
You people and your overpriced phallo-foods… but on the other hand, have you seen the price of oysters these days?
Is housing included in the inflation calculation?
From what I’ve read, the depressed housing market is almost singlehandedly responsible for the fiction of low inflation lasting as long as it has.
McG – I kind of put that one up on a tee for you ;-). The ongoing shitbag depressed housing market, exacerbated by Bumblefuck’s horrific economic policies, is saving from a real picture of the inflationary cycle we are entering.
inflation – its not just for blow up dolls anymore
Except, JD, those that bought houses a few years ago get to receive the double whammy of murderous price increases on everything else while their home loses about 30% of it’s market value … which may already take it’s value below the mortgage value. Not having a reserve value in the house while their expenses are climbing the walls make for a financial pudding that someone sets on fire.
Strangely, I work in the steel pipe business and my company (mainly, ahem. because of me) has just had the best 2 sales months in the company’s history. There is still some specialized production going on, fueled by government funds and pushed by inflationary increases on both raw materials and finished products. We operate in the surplus and used markets and business is a-boomin’!
Of course, none of that means doodely squat to CESMI (Chief Egotist Self-Marketing Ignoramus.)(Sez Me!) He simply cares about what hour of the day requires him to support something vapid that will allow him to shine to a certain group of factions.
I just saw the film Unknown and, apparently, a scientist and his Saudi benefactor want to give a new strain of drought resistant corn to the world … FOR FREE!!! But, nefarious big agriculture types are hellbent on stopping them. Damn you global warming. Damn you big business. I want my MTV!
I’m not all conspiracy theory on this, but I’m uncomfortable with lab produced strains of food crops. Seems to be too many possible unintended consequences that could bite us in the ass down the line.
Like disruption of the natural balance of honey bees for instance. Or the unintended sterilization of seed. There’s millions of others. Makes me nervous.
Having all your eggs in one basket is generally a bad idea. But, say, planting 1/3 of your crop land with this particular corn means that if there’s a problem with it, you still have 2/3 of your land in something else. And if you have a drought, you get to harvest something instead of Jack Schidt.
Unknown was a movie, not a documentary. Not a terrible flick, actually.
Yeah, but what if you plant 1/3 of your crop with an engineered corn that, surprise!, you unexpectedly learn is without the natural resistance to a rare fungus but through cross pollination takes down the resistance of the rest of your crop, and the neighbors out to about 3000 sections, and the whole shebang has to be burned before it takes out the next 10,000 sections. Or more.
Don’t know if it could happen, but then I’m not sure they know either. I’m just leery of messing with mother nature.
You fuck Mother Nature and you get crabs. Did you know that the demise of the Delta Smelt has fuck all to do with water or agriculture but is instead due to the introduction of Striped and largemouth bass which, shocka, eat small fishes?
Corn leads to corn syrup which leads to high fructose corn syrup which leads to poor people being fat which leads to having to ban tasty food because the poor dumb folks don’t know how to eat properly. Just send rice so we don’t wind up being responsible for an African obesity epidemic and having to fix it.
“Did you know that the demise of the Delta Smelt has fuck all to do with water or agriculture “
I know, I know…
so darwinism is to be blamed for the demise delta smelt?
He who Delta smelt it.
I don’t know how to tell you this, Bascom, but most American corn today is engineered. So far, the side effects have been greater yields with lower pesticide application.
Messing with Mother Nature is what we do. We wouldn’t even have the option of burning the bad crops if some meddler hadn’t literally played with fire ten thousand years ago.