NOVANEWS
Runaway Inflation Just around the Corner
by Jeff Davis
During the First Great Depression, the prolific liar FDR frequently told the American public that “prosperity is just around the corner”. Modern day liberals have been recycling that lie although they’re replacing “prosperity” with “the recovery”.
As it turned out, the stock market did not regain its 1929 values until 1954, 25 years later. Today, we’ve got a real unemployment rate of about 20 percent, and Obama’s failed policies have spent trillions of dollars in his first 15 months, which must ultimately lead to runaway inflation.
A recent news article reports reports: “Wholesale prices rose more than expected last month as food prices surged by the most in 26 years…Food prices jumped by 2.4 percent in March, the most since January 1984. Vegetable prices soared by more than 49 percent, the most in 15 years. A cold snap wiped out much of Florida’s tomato and other vegetable crops at the beginning of this year.
Gasoline prices rose 2.1 percent, the department said, the fifth rise in six months. In the past year, wholesale prices are up 6 percent, with much of that increase driven by higher oil and other commodity prices. But the core index, which excludes food and energy, rose only 0.9 percent. Consumers are facing smaller price increases, as many companies are reluctant to pass on higher costs.”
The only reason more businesses are not jacking up prices -so far- is that we’re in a Depression, and higher prices will drive away consumers who are increasingly becoming penny-pinchers.
The article notes “Several economists noted that the wholesale price report showed increasing costs at earlier stages of production. That could pressure companies to raise prices later this year. Crude goods prices, excluding food and energy, rose 6 percent in the last 12 months, the department said. But with unemployment high and credit tight, consumers’ spending power is crimped, limiting the ability of retailers and other firms to pass on the higher costs.”
This is the beginning of runaway inflation. Ben Bernanke “printed up” huge amounts of new currency to deal with the financial carnage caused by the minority subprime mortgage disaster. But the thing is, as Ben Bernanke would know if he ever studied Economics 101, when you print endless amounts of money, you create sky-high inflation. Maybe that’s the plan. Maybe Bernanke does know what happens when you fire up the printing presses, and he just doesn’t give a damn.
In any event, for about the first year, the banks bounced all this new money around among themselves like a badminton bird, paying off each other’s bad paper. But now that new money is affecting the economy, and inflation is starting to hit, at the first place it always hits–wholesale prices. The inflated costs then get passed on to the consumer, everybody demands more and more money to buy the same amount of goods and services, and eventually we’ll turn into Zimbabwe. We’re definitely headed in that direction.
