Blog On
June 22, 2008
This is a new blog. We are finally getting readers, but few responses. If you like what you are reading here, please feel free to comment and critique to accellerate the flow of words and ideas. Next week we will begin looking into the disaster of hyperinflation as it was experienced in Germany in the 1920’s, and Brazil, Argentina and Bolivia in 70’s and 80’s.
The thought for today is that inflation signals the complete corruption of the political governance of a nation, and theft by those profiting from inflation. It is not a pretty picture. Illusions about inflation leads only to disaster.
M
Going back over 35 years politicians of both parties have fudge the statistics that reveal the health/illness of the American economy. There is a blog site that fills in some improtant blanks, published by John Williams. Tune into his blog address for lots of interesting insights into the earth shaking realities.
mailto:johnwilliams@shadowstats.com
N.
MIdwest Floods May Drive Food Prices Even Higher
June 20, 2008
The Midwest floods are raising the inflationary tide rippling through the nation’s supermarkets and restaurants-and meat prices may soon start rising along with prices for bread, eggs, and breakfast cereals.
Economists are again raising their forcasts of how much food prices will climb, and for how long, because heavy rains have washed out millions of acres of prime farmland at a time when soaring demand is draining U.S. grain supplies to low levels. . .(U.S. food prices are set) to climb between 7% and 9% this year.
‘The consumer hasn’t felt it yet on the protein side. But it is coming,’ said Richard Bond, chief executive and president of Tyson Foods, Inc.
Scott Kilman, “Midwest Floods May Drive Food Prices Even Higher”, Wall Street Journal, June 17, 2009, pA4
Saudis Plan to Grow Crops Overseas
June 19, 2008
“Saudi Arabia has unveiled plans to develope large scale overseas agricultural projects to secure food supplies, revealing that Riyadh is in discussions with Ukraine, Pakistan, Sudan, Turkey and Egypt. . .(The Saudis are) planning to set up projects of at least 100,00 hectares in several countries to grow crops such as wheat, corn, rice, soyabeans, alfalfa, a feed for livestock. . .The move, which is also aimed at building up strategic reserves, comes as food prices have doubled over the past two years and a series of trade restrictions by exporting countries have limited the oil-rich kingdom’s ability to secure supplies. . .The massive rise in food prices, particularly wheat and rice, have caused a number of Arab countries to look to develop schemes in other nations. Food costs have also been a significant contributor to the double-digit inflation that is causing mounting concern in the Middle East.
Andrew England, “Saudis Plan to Grow Crops Overseas,” Financial Times, June 13, 2008, p 3
The Weak-Dollar Threat to World Order
June 18, 2008
“When the U.S. turns a blind eye to the consequences of diluting the value (of the dollar) its monetary unit, when we abuse the privelege of supplying the global reserve currency by resorting to sleight-of-hand monetary policy to address our own economic problems-inflating our away out of the housing crisis, pushing taxpayers into higher brackets through stealth-it sends a disturbing messatge to the world.
Why would the nation that espouses Adam Smith and the wisdom of the invisible hand permit its currency to confound the validity of price signals in the global marketplace? How can Americans champion the cause of free trade and exhort other nations to rid themselves of protectionist measures such as tarriffs and subsidies-and then smugly claim that U.S. exports are becoming “more competitive” as the dollar sinks?
Imagine how Americans would feel if we suddenly realized that our most trusted trade partners have been slowly but inexorably imposing a tariff against U.S. goods since 2002-a tariff now in excess of 50%. . .How disillusioning to discover that the leading proponents (the U.S.) of open global trade-the ones who insist on a ‘level playing field’-think nothing of adopting policies that render our products overly expensive for their consumers, even as they profer their goods around the world at inordinately discounted prices.”
Judy Shelton, “The Weak-Dollar Threat to World Order,” Wall Street Journal, June 9, 2008, p A17
IMAGINARY ECONOMY DESCRIBED BY IMAGINARY STATISTICS
June 11, 2008
(Four decades ago, federal policy makers in the Kennedy Administration, began to hollow out the basic statistics. This bad habit continued from Johnson, to Nixon, to Carter, to Reagan, to Bush [1], to Clinton, to Bush [2]. This includes the rate of inflation, the Consumer Price Index, The Gross Domestic Product, and the unemployment rate. It turns out that these key indexes are used to set federal policy, tie social security payments for millions of retirees, and set key indicators such as the rate of interest, and the sluffing off of federal expenditures into federal indebtedness around the globe.)
Undermeasurement of inflation, in particular, hangs over our head like a guillotine. To acknowledge it would send interest rates climbing, and thereby would endanger the viability of the massive buildup of public and private debt (from less than $11 trillion in 1987 to $49 trillion last year) that props up the American economy. Moreover, the rising cost of pensions, benefits, borrowing, and interest payments–all indexed or elated to inflation–could join with the cost of financial bailouts to overwhelm the federal budget. As inflation and interest rates have been kept artificially suppressed, the United States has been indentured to its volatile financial sector, with its predilection for leverage and risky buccaneering. . .
The credit markets are fearful, and the financial markets are nervous. If gloom continues, our humbugged nation may truly regret loosing sight of history, risk, and common sense.
Kevin Phhillips, “Numbers Racket,” Harper’s Magazine, May 2008, p 43.
The Weak-Dollar Threat to World Order
June 10, 2008
Maintaining a stable currency is a moral responsibility and a strategic imperative. . .When the U.S. turns a blind eye to the consequences of diluting the value of its monetary unite, when we abuse the privilege of supplying the global reserve currency by resorting to sleight-of-hand monetary policy to address our own economic problems–inflating our way out of the housing crises, pushing taxpayers into higher brackets through stealth–it sends a disturbing message to the world. . .Honest money is the bedrock of democratic capitalism.
Judy Shelton, Wall Street Journal, June 9, 2008, p A17.
