I am SO CREEPED OUT! I just heard last night’s ABC piece on rising food prices and they blamed it on the weather, population, and speculators!
I told everyone when TARP, and all the government spending occurred, food and energy prices would rise because of inflation. I was right.
Weather? Every year has weather! Just saw a study showing this year’s weather is no different from any others. But the values of the dollar is going down.. IT’S INFLATION!
Population? More people means there’s more people FARMING! Population didn’t explode in the last two years, government spending did! The value of the dollar is going down. IT’S INFLATION!
Speculators keep prices LOW when a crisis occurs. They SELL when the price gets high, lowering the overall price in the market. And speculators are just as likely to speculate that prices are going to fall. Why aren’t they? Probably because like me, the see IT’S INFLATION!
When you print money, the supply goes up, so the value goes down (supply and demand). Then dollars are less valuable, it takes more of them to buy the same product (prices rise). If you play poker and everyone get’s 10 chips, how will everyone bet? If everyone get’s 1000 chips, now how will they bet? Increased supply of currency causes prices to rise. Simple.
And the reason we are seeing this overseas so much first, is because Americans buy so much stuff overseas with Dollars. We are exporting our inflation. But other countries are getting sick of our weakening dollar and are in the process of changing the currency they trade in to something else. That means the balance will shift. Not only will the dollar be going down because we are printing so much (supply) but it will also go down because the rest of the world doesn’t want it anymore (demand).
The problem stems from a currency that is not backed by a commodity. When a currency is backed by a commodity, governments and Fed chiefs can’t print money. Such money is very stable and actually helps an economy.