Archive for the ‘Inflation’ Category

QE3: Ben Bernanke tells Congress he’s going to devalue the dollar some more by printing a lot more money

Get set for Carter-style inflation

Hey, isn’t Bernanke flipping us the bird in this photo?

CNBC: Federal Reserve Chairman Ben Bernanke told Congress Wednesday that a new stimulus program is in the works that will entail additional asset purchases, the clearest indication yet that the central bank is contemplating another round of monetary easing.

Bernanke said in prepared remarks that the economy is growing more slowly than expected, and should that continue the central bank stands at the ready with more accommodative measures.

“Once the temporary shocks that have been holding down economic activity pass, we expect to again see the effects of policy accommodation reflected in stronger economic activity and job creation,” he said

“However, given the range of uncertainties about the strength of the recovery and prospects for inflation over the medium term, the Federal Reserve remains prepared to respond should economic developments indicate that an adjustment in the stance of monetary policy would be appropriate.”

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Gold surges to record highs on news Bernanke plans to print more money

REUTERS: Gold futures rose to a record settlement above $1,585 on Wednesday, as the possibility of more Federal Reserve stimulus coupled with Europe’s deepening debt crisis fueled bullion’s longest winning streak in five years.

Spot gold [XAU= 1579.11 13.86 (+0.89%) ] last rose 1.2 percent to $1,584.39 an ounce.

U.S. gold futures [GCCV1 1585.40 23.10 (+1.48%) ] for August delivery rose $23.30 to settle at $1,585.50 an ounce .

Bullion prices added to early gains after Federal Reserve Chairman Ben Bernanke said the central bank is ready to ease monetary policy further if the economy weakens and inflation moves lower. Silver rallied nearly 6 percent, moving in tandem with commodities, U.S. stock markets and risk assets.

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Is Bernanke a lunatic, or just completely incompetent?

THE ECONOMIC COLLAPSE: Did you see Ben Bernanke’s testimony before the House Budget Committee on Wednesday?

It was quite a show. Bernanke seems to believe that if he just keeps on repeating the same mantras over and over that somehow they will become true.

Bernanke insists that the economy is getting much better, that quantitative easing will lower long-term interest rates, that all of this money printing by the Federal Reserve is not causing inflation and that the Fed knows exactly what needs to be done to dramatically reduce unemployment inside the United States.

So is anyone out there still actually buying what Bernanke is selling? Sure, a handful of people in the mainstream media still have complete faith in Bernanke. But for the rest of us, it is becoming increasingly clear that there is something really “off” about Bernanke. So just what is going on with him? Is he lying to all of us on purpose? Could he be insane? Is he just completely and totally incompetent?

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Video That Explains What Ben Bernanke and President Obama Are Doing To You in Layman’s Terms

French Prez Sarkozy warns of soaring commodity prices

AFP: French President Nicolas Sarkozy called Tuesday for tighter controls on the speculators he blames for soaring food and energy prices threatening global growth.

Saying the world had “worked extremely hard” to revive growth in the aftermath of the global financial crisis, Sarkozy said “one of the main threats to growth is the rising cost of commodities.”

The president has said he plans to use France’s chairmanship of the Group of 20 top economies to push for regulations to curb speculative trade in the commodities markets but this has met strong resistance from suppliers such as Brazil and Argentina who have benefited from high prices.

Sarkozy, speaking at the invitation of European Commission president Jose-Manuel Barroso, said “the G20 nations are the first concerned by this issue and it is up to them to install conditions for sustainable growth.”

The same rules applied to curb financial market speculation needed to be used to crack down on commodities prices which threaten inflation and social tensions.

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INFLATION! Your Memorial Day BBQ will cost you 29% more this year than last year

U.K DAILY MAIL: One sausage or two?

You may be lucky to get half at this weekend’s Memorial Day cookout, which is set to cost 29 per cent more than last year, thanks to inflation.

Those thinking of hosting a BBQ – even a modest one – can expect to fork out an extra $45 on food to serve a dozen guests.

The total cost comes to $199, or around 29 per cent more than last year… and that’s before soda and alcohol, according to the latest data for metro New York.

Lettuce has sky-rocketed 28 per cent since last year’s traditional BBQ, while an ear of sweet corn is now 50 cents, up from 20 cents last year.

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Dollar in graver danger than Euro

FINANCIAL TIMES: Imagine a country that spends and prints trillions to patch up any problem.

Now imagine another country where there is no central Treasury, meaning that bail-outs are less easy, and which has a central bank that has mopped up liquidity over the past year, rather than engage in quantitative easing.

Why does it surprise anyone that the latter, the eurozone, has a stronger currency than the former, the US?

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Real inflation is now 9.6 percent

Plus, in case you didn’t notice, the U.S. govt has changed the way it measures inflation to make it look not so bad.

Real inflation is now 9.6 percent if you use the older inflation measure as CPI was calculated before 1991, according to the highly respected Shadow Government Statistics newsletter. The method used now to calculate CPI consistently lowers the official inflation rate.  See the chart to the right.

The newer measure of CPI seeks to move the inflation measure away from what’s needed to maintain a constant standard of living toward what the government says is a broader measure. Of course, if we keep changing how things are measured, it makes the measurement near useless in terms of determining where we actually are.

We have no way of knowing whether or not Tom Brady is better than Johnny Unitas as a quarterback because the NFL keeps changing the rules to make it easier for quarterbacks to complete passes.

If Babe Ruth was playing in today’s much-smaller ballparks with juiced baseballs, would he have hit 300 home runs a year?

Maybe.

We just don’t know because it’s no longer the same game.

Interesting how when the government changes how its performance is measured, it’s always in the direction of making the government look better.

The new official monthly CPI number will be released on Friday. Many economists believe that number will show the annualized inflation rate running now in the 6 percent range.

And anyone who’s been the grocery store or filled up a tank of gas lately knows the real cost of living has increased more like 15 percent over the last 12 months — well, except for the cost of housing.

With 50 percent vacancy rates in some communities, your house is becoming near worthless.  Most of you probably owe the bank now more than your house is worth.  So no inflation there.

So that’s some more good news.

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