Looking at the commodity markets every day, am I the only one who thinks inflation is about to get totally out of control in the not too distant future? The Fed has always been behind the curve, especially when it comes to inflation throughout history. With the coming surge in inflation, I don't see how the masses won't revolt unless they get their food stamps and I'm sure the government will find a way to make gas stamps and all kinds of other socialistic ways to placate the poor. The Fed has just pumped out too many dollars and it is coming home to roost when people realize that oil/gold/platinum are the only real stores of value. With extreme negative real interest rates, people are idiots for buying bonds or holding cash.
I was looking at wheat last week and thinking the same thing. People are upset about food prices already, wheat goes into a lot of stuff, stuff thats cheaper to eat than meat (ie ppl might substitute grains for meat cause they are cheaper). I don't see how people don't get REALLY angry when the new pricing hits. Of course, this is timely for the elections as well. Will we see proposals from the Dems of price controls?
I'll go on record as saying inflation is 10x the risk going forward as deflation.We're headed toward the same fate as Argentina.
I think that's correct. Bernanke has expressed the notion, "... if you print ENOUGH money, deflation can be turned to inflation..." With the deflationary effect of softening housing prices, look for Bennie to mash the money-pump gas even harder. (Hard to imagine he could... latest M3 stats show 18% annual growth already.)
Oil is now back above $98/barrel. Corn is pushing $5.30/bushel. Beans are over $14. Wheat over $10. Platinum over $2100/oz. Gold well over $900/oz. Sugar is back above .14. Coffee over $1.50 etc. etc. There is no way there is not going to be a lot of inflation. The Chinese will pass on these higher raw material costs on their imports to the States immediately. Add to that the Ben money printing madness and you have rampant inflation on your hands.
Waiting to be wasted on other things Old man Getty made a famous quote many years ago. He was attacked for paying little or no taxes in the UK where he lived because of favourable tax laws for non0Uk citizens. He said something like (and this was in the 1970s) 'do you really think if I paid $1billion in taxes this year to the British Government it would make a difference, no it would just be swallowed up and wasted as usual'. PS. I actually don't think he said 'British Government' as they might have set the wolves on him. Rather he said 'Governments'
The real inflation rate in the UK is most probably 8% - 10% at present. Government says it's 4.2% and the Bank of England still thinks its target of 3% can be met I'd assume 8% or thereabouts is most probably the rate in the US as well.
The problem with central banks is they are still of the mind that in order for the economy to function properly, tons of liquidity is needed. The problem is that the rate of commodity/finished goods production is not keeping up with the rate of production of money. The end result is inflation, as more dollars are chasing a similar amount of goods. It is horrible policy for the poor and the retired, who rely on fixed incomes and that scam CPI reading based increases to try to protect themselves against inflation. The disaster is just beginning, its not necessarily that bad for the stock market, just the livelihood of ordinary people. Quality of life goes down even if the stock market doesn't.