Today’s post is from the Mogambo Guru, who expresses his frustration at the inflation we’re seeing in basic food products. Although Bernanke has said that inflation might become a concern, the Federal Reserve is still maintaining its stance that core inflation is contained. (Just like how the subprime lending problems was contained to about $250 Billion USD and how it might potentionally disrupt the entire global economey!!!!)
BEING FED BIGGER BREAD PRICES
by The Mogambo Guru
Peter Schiff of Euro Pacific Capital writes, “In current theory, the excess cash piling up around the world is like manna from heaven. Don’t believe the hype. Liquidity is merely a euphemism for inflation. Asset prices, including stocks, are simply rising to reflect the diminished value of the currencies in which they are traded. Wealth is not being created, merely re-priced.”
Well, I don’t know where Mr. Schiff lives, but around here, it’s not wealth that is being re-priced, but poverty. As the inflation in the prices of everything continues to outstrip “income after taxes and deductions”, standards of living are being eroded because people can’t buy as much stuff as they used to; their relatively static stream of discretionary income has lost buying power against rapidly rising prices.
For example, from the Financial Times we read that inflation is finally affecting food, and that Hovis bread said it was “preparing to raise bread prices for the second time in six months. The pending increase – which the company attributed to rising wheat costs – is merely the latest in a series of price increases food and drink companies have been trying to pass on to consumers this year. The series has seen costs of making bread, beer, yoghurt and chocolate as well as dozens of others packaged food products become increasingly expensive.”
I know what you are thinking. You are thinking, “Who cares about bread? I don’t need no stinkin’ bread! I can eat pizza!”, which is wrong, whereas you would have been correct if you had instead thought “I don’t need no stinkin’ bread! I can eat the bodies of dead animals that I find alongside the highway!”
And indeed you could, as the current market price of road kill is still a very economical zero, which may explain why it is not included in the Lehman Brothers’ ingredients cost index, which “covers cocoa, coffee, oats, tea, soyabeans and milk, among other commodities and which is based on spot rates.” This index, in case you were wondering, “rose 14.9% in the first half of the year”, which “follows a 16.5% increase in the second half of 2006.” Yikes! Prices of foodstuffs are up over 30% in twelve months? Yow!
And what is the biggest gainer? “The biggest increase has occurred in powdered milk prices. These have nearly doubled compared with the same period a year ago. Barley prices have also shot up 53%, while corn prices are up 68%.”
So it is no wonder that people are complaining about prices! And you may be interested to learn the surprising fact that these afflicted people are, paradoxically, not the least bit interested in, or appreciative of, being educated that their inflation problems are all self-inflicted, as they are the same drooling morons that elected the Congressional morons that have spent us into the Hell Of Crushing Debt (HOCD) and allowed the Federal Reserve to create wildly excessive amounts of money and credit to make that grotesque orgy of spending possible!
To prove it to yourself, the next time somebody says that prices are going up and that they are having a hard time making ends meet, carefully observe their reaction when you politely and respectfully go up to them and, by way of education for their benefit, say, “Shut your damned stupid mouth, you ugly little troll! Your problems are all self-inflicted, as you are the same drooling ‘I Love Big Government Creating Perpetual Entitlements’ moron that elected the Congressional morons that have spent
us into the Hell Of Crushing Debt (HOCD) and who conveniently looked the other way while the damnable Federal Reserve created the money and credit to make that stupid, bankrupting spending possible! It’s your own fault, you ignorant little commie creep! You committed economic suicide, and in doing so have economically murdered the rest of us, you filthy piece of stupid, greedy, Leftist crap!”
He’s always good for a laugh!