Here comes inflation

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In our book “Revolt!,” we warn that inflation may well be the dominant legacy of the Obama presidency. While he had George W. Bush’s help in creating high unemployment, he has driven us into inflation all on his own.

The latest data indicates that prices soared in March at an annual rate of 6.5 percent, by far the highest increase in decades. Half of the increase was in energy prices and one half point in higher food costs. While the Federal Reserve Board focuses on the “core” inflation rate, that excludes these volatile items, American consumers dip into the same pocketbook to pay for food and fuel that they use to pay other prices.

And there is little likelihood of any leveling off of the prices of either food or fuel. The former is driven by the use of food for energy, diverting corn and other food crops from nutritional use. The later is animated by the instability in the Middle East and North Africa, an international crisis that is likely to worsen in the coming year. Indeed, should the disease that has brought down regimes in Egypt, Tunisia and Yemen, and is fighting to topple them in Bahrain, Syria and Libya, spreads further into Saudi Arabia, we could face huge increases in energy costs.

And don’t forget the likely upward pressure on interest rates. The Fed is likely to end its QE2 (quantitative easing 2) program in June. No longer will it buy mortgage-backed and Treasury securities from banks in order to pump more money into the system. Once the printing press stops, the Treasury will have to start borrowing real money from real lenders and pay real interest. It will no longer be able to borrow back the money the Fed prints at nominal interest rates. With Washington needing to borrow $40 billion a week to finance its deficit, the upward pressure on interest rates will be severe.

Then there’s health insurance costs. With the onset of the requirements of Obamacare, the increase in premiums has averaged 20 percent, further raising costs of business.

Faced with these increases in fixed costs, businesses will have to raise prices. But nobody will be able to pay them because the economy is terrible. That will trigger a loss of customers and ever-higher prices to make up the gap. This stagflation cycle is now upon us and will wipe out any gains that the so-called recovery may offer.

Annual inflation of 6.5 percent is just the beginning, just like $5 gas is just the beginning. The inflationary forces Obama has unleashed by his record deficits and his virtual tripling of the money supply will batter the economy with a violence that will make his re-election impossible.

The storm is just starting.

[Dick Morris, former political consultant and pollster, writes a nationally syndicated political column and provides commentary for Fox News.] COPYRIGHT 2011 DICK MORRIS AND EILEEN MCGANN; DISTRIBUTED BY CREATORS.COM

Georgia Patriot
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Inflation

Was Lenin right, are we now just a nation of "useful idiots" being led by criminals? It is intellectually dishonest to exclude food and energy from the consumer price index, this is a slap in the face to the populace, hiding the evil created by fiat currency and corrupt policies. America should wake up and question with boldness! -GP

PTC Observer
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Inflation? Bacon

Bacon is interested in predicting inflation, but of course it's only inflation measured by the government, not by your pocketbook.

Want to change your prediction Bacon? It's not halfway through the year yet, but of course you make the rules, right?

Chris P. Bacon
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Inflation
PTC Observer wrote:

Bacon is interested in predicting inflation, but of course it's only inflation measured by the government, not by your pocketbook.

Want to change your prediction Bacon? It's not halfway through the year yet, but of course you make the rules, right?

Good morning, Petey C! A 6.5% annual inflation rate would be truly skeery....if the rate of inflation continued at such a pace throughout the year. I don't think it will. I'm not a Republican, so I won't change the rules of the game midway through just because I'm behind. If the contest ended today, Hutch866 would be the winner, but there were four people very close to Hutch's number, and I'm one of them.

I'd ask you if YOU would like to change your prediction, but that wouldn't be possible as you, Observerofu and Spyglass lacked the intestinal fortitude to put your prediction in writing without caveats. Too late now!

Observerofu wrote:

I mean it was just a few scants months ago I was called everything but a child of God for predicting the coming inflationary cycle. Even one of our own berated me for the prediction. Uncontrolled Inflation just wasn't going to happen.

Everybody laughed at you because you claimed that massive inflation had already occurred in 2010, when the exact opposite was true. Several people pointed this out to you, and true to form, you tried to bluster your way through your lies instead of being a man and taking responsibility.

PTC Observer
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Bacon - Questions today

Inflation defined: too much money chasing too few goods.
Deflation is just the opposite.
Deflation is nearly always followed by inflation.

Now here are questions for today:

1. QE1 and QE2 drove how much cash flow into the economy and when will QE2 run out? What has this easiing done to interest rates, and why does the FED try to keep them so low?

2. What has happened to production capacity of most manufactured goods in the last 24 months globally? Why?

Answer these two sets of questions and I will ask you one final question. Hint: it deals with the first economic observations from above.

Good luck trying to figure this out Bacon..... ;-)

Observerofu
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Nah... PTCO nothing to see here move along.

I mean it was just a few scants months ago I was called everything but a child of God for predicting the coming inflationary cycle. Even one of our own berated me for the prediction. Uncontrolled Inflation just wasn't going to happen.

S&P's recent downgrading to Negative the US outlook is but just the beginning.

We are one disaster away from a complete collapse. With have only an 18 day grain supply. 18 DAYS. Our DOA has already said we will have to have a PERFECT growing season AND have a record crop of corn and still we will fall behind. Why well we have to burn our food for fuel. Save the World and all that you know.
We are starving the World but hey don't worry be happy. Obama is going to win a second term and oh boy things are going to be great then.

July is going to be anything but independence month.

PTC Observer
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Observerofu - If

you calculate the eatable corn grain taken out of production to provide us bio-fuel for compliance to the Clean Air Act, it is enough to feed 100 million people for one year worldwide.

To put it another way, we are depriving people food in order to drive our cars under the Clean Air Act. The cost of one gallon of corn fed Bio-fuel is about $9 per gallon and takes 1,300 gallons of fresh water to produce. The fuel is draining our aquifers in the Midwest which will end all production of food crops when we run out of water there.

One reason gasoline goes up in price in the Spring and Summer months is because of EPA mandated urban uses of bio-fuel to reduce pollution levels.

Just another way government is helping you live your life, enjoy.

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PTCO I do find it amusing that folk like Bacon

continue to deny the rising cost of food as being part of inflation. Any Fool can see the prices in the Grocery store has risen and risen dramatically.

But sadly our bacon isn't just "any" fool he is a special kind of one. A Progressive one.

"One of the areas expected to be hardest-hit is meat, in part because feed prices surged last year. According to the USDA’s index, beef and pork prices were actually slightly down in December. However, beef prices were up 6.1% in December 2010 compared with a year earlier, while pork prices jumped 11.2% last month compared with December 2009."USDA

Hmm Bacon said there was no inflation in 2010 has he looked at the price of bacon lately?

Bacons argument in an expensive Nutshell:

Observerofu wrote:

Like the saying goes never let facts stand in the way of a good story.

I believe my prediction was for 4% inflation at the end of this year and next year. Now if you think that is "Massive" then I can see why Ms. Bacon is disappointed.

But why quarrel over anything as trivial as the truth.

Observerofu wrote:

First Hope you have a safe and happy Thanksgiving and remember what it really means.

Second you have to suspend all intelligence to ignore the evidence from across the Country as well as the commodity indexes.

I gave you absolute proof of same but you choose to ignore it. So to excoriate others for doing what you yourself do, well is a little hypocritical don't you think?

Chris P. Bacon wrote:

I invite you to prove my data wrong...sadly, your personal opinion, like that of your lying spineless brethren Observer, doesn't pass muster with regards to being verifiable.

Well Ok.

Here are your facts:

"In 2010, the Consumer Price Index (CPI) for all food is projected to increase 0.5 to 1.5 percent--the lowest annual food inflation rate since 1992. Food-at-home (grocery store) prices are also forecast to increase 0.5 to 1.5 percent, while food- away-from-home (restaurant) prices are forecast to increase 1 to 2 percent."

But here is what you conveniently leave out:

"Although inflation has been relatively weak for most of 2009 and 2010, higher food commodity and energy prices are now exerting pressure on wholesale and retail food prices. Hence, food inflation is predicted to accelerate during the final months of 2010 and the first half of 2011, leading to a forecast of 2 to 3 percent food price inflation in 2011."
"The CPI for all food increased 0.2 percent from September to October 2010, increased 0.3 percent from August to September 2010, and is now 1.4 percent above the October 2009 level. "

http://www.bloomberg.com/news/2010-11-24/usda-retail-food-inflation-fore...

Cherry picking information to fit your facts is dishonest bacon. Some (you) would call it LYING.

And again here:

Observerofu wrote:

your vaulted secondary education is showing bacon. Is that the best you got?

Again you attempt to misdirect. Show me where I have said that food prices have ALREADY gone up 4%. I believe I have said and SHOWN where it is going (present tense)up. Reuters whom apparently is too right winged for you stated that food has already risen by 4% and you have as of yet not dis-proven that fact.

This is what I said:
"Inflation is already up past the 2% mark Benberyankme wanted." (MY STATEMENT)

"Have you been grocery shopping lately? Foods prices are already up 4-5% and rising."(Reuters Story)

http://www.reuters.com/article/idUSTRE62F3UC20100316

Now clearly linking to the Reuters story and their article clearly outlined the 4% mark I believe that infers my statement was both true and factual and an accurate reflection of the story.

Your claim was inflation has been (past tense) lowest since 97 and that is correct. I stated as much. However you left out info that clearly showed food prices has risen and is still rising through out the rest of this year and next.

Instead why don't you man up and realize you cherry picked info to back up your point of view and when I corrected you with facts you can't handle it.

Now Bacon why don't you jump to another topic claim victory misstate me again. It is after all what you do best. Leave the facts to others more qualified.

PTC Observer
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Meat prices - Observer

Want to guess why meat prices are up?

1. Corn feed prices are up because:

a) Biofuel production taking out feed stock production.
b) Weak Dollar caused by EQ2, etc.
c) Under production caused by deflation last year. Rational farmers seeking higher prices for their crops, ref item a)

All three caused by government intervention in the marketplace. Social engineering at its worse.

Cyclist
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Guv intrusion gone wild

Boeing and the IAM have been at odds over pay and benefits for some time. A few years back the IAM went on strike against Boeing which they are allowed to do under current labor rules. Boeing, in response, built another manufacturing facility in South Carolina - a right to work state - which as a private company they are allowed to do; right?

Well according to the National Labor Relations Board (NLRB)- which is dominated by Democratic appointees - Boeing cannot establish this second manufacturing line because.......well because it's "illegal" since Boeing is essentially trying to punish the IAM for past strikes and work actions.

Anyways, the complaint has been filed and if not settled it will be heard by an administrative judge in Seattle this coming June. It will be most interesting to see what the outcome is.

Oh and BTW, to remedy the situation, the NLRB wants Boeing to build another very expensive production line in the Seattle area.

grizz
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Government Intrusion

This is much more than government intrusion. This is the Chicago Mob mentality of the Obama administration gone wild. Just take a look at what they lengths they are going to in order to extort votes out of government contractors that don't vote for Democrats.

PTC Observer
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Chicago Mob - Grizz

If only it were this simmple but sadly it's not, its democracy at its worse.

Republicans/Democrats all hope that they can get re-elected by robbery.

PTC Observer
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duplicate

.

Cyclist
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grizz

Hopefully this madness will end soon before the damage becomes permanent. But if this ruling by the NLRB prevails especially against Boeing the ramifications are huge. That noise in the far distance that sounds like a Chinese celebration with cymbals and drums will become louder and louder until........

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Happy Belated Earth Day everyone

In 1970, the year that 'Earth Day' was founded Newsweek published an article entitled "A new Ice Age" which stated that our world would be "eleven degrees colder by the year 2000"

Life Magazine published an article that stated that by 1985 there would be enough air pollution to reduce the amount of sunlight reaching earth by one half.

Earth Day founder Gaylord Nelson stated by 1995 between 75 and 85 percent of all species to be extinct.

Earth Day 'Community Organizer' Denis Hayes claimed that there would be mass starvation by now.

Thank you, thank you, Earth Day! If those 20 million hippies hadn't taken the day off work to begin Earth Day back in 1970, we'd all be dead by now!

AtHomeGym
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Earth Day Founder

must not have been TOO smart--do blv he's serving a life sentence for murdering his girl friend and stuffing her in a chest in his closet, along with some styrofoam and air freshners! Downstairs neighbors eventually complained, the apartment searched and prosecution/conviction ensued.

Observerofu
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Food to fuel what fools

each and every one of us are. We have allowed our Government to actually do a thing which at it's very root is causng unrest World wide. We are so arrogant (World View) that we will take our food and burn it to surport our life style. This is being spun horrendously World Wide against us by Countries where their population is starving.

It's the 70's all over again. The fear that we are out of oil caused massive fuel shortages and outright panic. Today it's the grip of the whacko left environmentalist that have this need to commune with Mother Earth and help put out her fever. Global Warming has become their religon and us the infidels.

Davids mom
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oou
Quote:

Today it's the grip of the whacko left environmentalist that have this need to commune with Mother Earth and help put out her fever. Global Warming has become their religon and us the infidels.

Let"s don't forget the 'oil men' that Eisenhower warned us about! They're laughing all the way to the bank as we panic - yet pay the higher price for gas out of 'fear' of what? Burning 'food' has supplied many a farmer with surplus 'cash' from the government - thanks for reminding us of that. Another lobbyist succeeding at his job - eh?
Where are we missing the boat in expressing our principled Christian values? (Love your neighbor, do unto others - etc., etc., etc.?)

Ninja Guy
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Well, You Can Lead A

shopper to the supermarket, but you can't make them buy meat! Simple solution to higher prices--stop buying it or buy something cheaper! Higher gas prices, don't drive so much or car pool. Higher jet fuel prices, don't fly. Higher hamburger prices, eat noodles. Higher food prices in general, loose weight! Prices are a function of supply and demand, not the cost of inputs. You are close to latching on to the labor theory of prices, straight from the communist manifesto! The market is self correcting--have faith PTCO. Don't fall for the socialist rhetoric now, you were so close to salvation!

Go Hawks--you have a real chance to take charge of the series tonight!

PTC Observer
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LOL - Ninja

You're a trip, go back and watch your game. Something you're good at.

Ninja Guy
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Well, You Can Lead A

shopper to the supermarket, but you can't make them buy meat! Simple solution to higher prices--stop buying it or buy something cheaper! Higher gas prices, don't drive so much or car pool. Higher jet fuel prices, don't fly. Higher hamburger prices, eat noodles. Higher food prices in general, loose weight! Prices are a function of supply and demand, not the cost of inputs. You are close to latching on to the labor theory of prices, straight from the communist manifesto! The market is self correcting--have faith PTCO. Don't fall for the socialist rhetoric now, you were so close to salvation!

Go Hawks--you have a real chance to take charge of the series tonight!

roundabout
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Ninja: prices

As in many things where some people think short of the whole story, your solution is also not reasonable.

Your theory about less purchases reducing the costs can eventually lower the price of some goods and services.
The problem is that higher prices doesn't stop 60-70% of the population from continuing to buy what they want. They have a job--many make good money--and purchase enough for the high prices to continue or even go up further! (Note right now our high-priced fresh foods store here).

Now in that case what we have is a lot of people eating well and in most cases not even recognizing that many more can't buy the best food or even pay the rent.
The 10-20% of the poor sector are now totally at the mercy of what they can find or get from the government.

Have you seen many people lately during our current recession who are overly concerned about all the ones without jobs or are losing their houses?
These are the ones who will not buy as you described, but they are in the minority.

A store going out of business nearly due to a shortage of sales is not going to make it by raising his prices! Unless he caters to the high wage earners!

I know your solution to this----"tough."

Ninja Guy
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Roundy, You Are Totally

incorrect. I was not commenting on the social impact of higher prices at all. In any case, if you have no job, any price is too high! Do I say tough? No, that is not the Ninja way!

My main point was that PTCO was falling into a socialist mindset by saying that the reason prices are rising is the price of inputs! Econ 101 teaches that prices are determined by supply and demand! There is no 'raw materials' line on the chart! F for the semester, PTCO! Retake the class in summer school! Register yesterday!

Thank you for reading my stuff. It warms my heart to know that your eyes are caressing my letters for meaning and such!

I think William S. Burroughs said it best when he said,

“Desperation is the raw material of drastic change. Only those who can leave behind everything they have ever believed in can hope to escape.”

PTC Observer
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Wrong Ninja

The reason prices are up is because of government intervention in the market....socialism doesn't work Ninja, that's my point.

Supply and demand indeed works but not without freedom to choose.

I think you are a very confused person Ninja, a person with a little bit of knowledge is a dangerous thing.

Now go back to your game.

Ninja Guy
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PTCO, Well I Am Pretty Good

at exposing your ignorance of basic economics and delusional adherence to the Austrian school! Your mantra that the government is controlling our lives and distorting the supply and demand curves, FOR EVERYTHING, is bordering on the psychotic! BTW, you can get that chip they shoot in your head when you get your drivers licence picture taken removed in Auburn. If you pay extra, Lew himself will do the procedure!

Go Hawks!

PTC Observer
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Ninja - Hard

to take the truth isn't pal?

BTW, went to see Atlas Shrugged at Carmike in Newnan tonight. See I do get out every now and then. You should go and support the cause Ninja.

Ninja Guy
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PTCO, Yes I Plan To Take My KIds

to see Atlas Shrugged. Beautiful fairytale! I LOVED that book, when I was 14! I also traded a few e-mail with Nathaniel Branden back about 10+ years ago! I wish I had kept them. I can't even remember what they are even about now!

Go Hawks!

PTC Observer
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Enjoy - Ninja

It's not the story Ninja, it's the message, remember that.

BTW, Rand is not one of my favorite philosophers but her message is compelling and on the mark in many, many ways.

Have you read “We” by Yevgeny Zamyatin? It's also a message and an interesting parallel to Atlas Shrugged. Especially since Zamyatin was Russian and he wrote “We” before Rand wrote her magnum opus.

It makes one wonder.

Ninja Guy
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PTCO, No I Haven't Read

We. Don't plan too. The period of my life reading about oppression of the people by dictatorial leaders ended some years ago. I am more forward looking now. Been pondering the post-capitalist era. Peter Drucker has written a book on this, but I don't want to read it until I have thought it through on my own. I think I need another year or two. As I have said before, I am more into original ideas at this point in my life. I can understand your fascination with the loss of freedom under government control, but I have been there and done that for many years. Time to move no to something new.

Go Hawks--One more win!

Davids mom
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Unnecessary use of space

One doesn't need to reproduce the entire discussion. Just refer us back to it. Thanks.

Observerofu
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Oh yes one must

when dealing with bacon-if you allow a lie to stand it becomes truth.
But then you should already know that.

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