There are 3 major reasons rampant inflation is headed our way
The only real question is how far down the road are we going to get before it happens. Words: 1096
So says an article* posted at theeconomiccollapseblog.com which Lorimer Wilson, editor of www.munKNEE.com, has reformatted into edited […] excerpts below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article reposting to avoid copyright infringement.) The article goes on to say:
The U.S. monetary base has absolutely exploded over the last couple of years, and all that money is starting to filter through into the hands of consumers. Commodity prices are absolutely skyrocketing, and it is inevitable that those price increases will show up in our stores at some point soon. The U.S. dollar has already been slipping substantially, and now there is every indication that the Fed is hungry to start printing even more money. All of these things are going to cause a rise in inflation.
Early Signs of Inflation
We are already seeing inflation in many sectors of the economy.
a) Airline fares for the holiday season are up 20 to 30 percent above last year’s rates.
b) Double-digit increases in health insurance premiums are being reported from coast to coast.
c) The price of food has been quietly sneaking up even at places like Wal-Mart.
Meanwhile the U.S. government insists that the rate of inflation is close to zero. Anyone who actually believes the government inflation numbers is living in a fantasy world. The U.S. government has been openly manipulating official inflation numbers for several decades now – but we really haven’t seen anything yet. As increasingly larger amounts of paper money are dumped into the economy, we are eventually going to see the worst inflation in American history.
3 Reasons Rampant Inflation is Coming
Inflation Reason #1: Expanding Monetary Base
Up to this point this dramatic expansion of the U.S. monetary base has not caused that much inflation because U.S. government borrowing has soaked most of it up and U.S. banks have been hoarding cash and have been building up their reserves. However, this situation will not last forever. Eventually all this cash will make its way through the food chain and into the hands of U.S. consumers.
Inflation Reason #2: Rising Commodity Prices
What is even more troubling is the dramatic spike in commodity prices that we have seen in 2010…In his recent column entitled “An Inflationary Cocktail In The Making”, Richard Benson listed many of the commodities that have seen extraordinary price increases over the past year….
Agricultural Raw Materials: 24%; Industrial Inputs Index: 25%; Metals Price Index: 26%; Coffee: 45%; Barley: 32%; Oranges: 35%; Beef: 23%; Pork: 68%; Salmon: 30%; Sugar: 24%; Wool: 20%; Cotton: 40%; Palm Oil: 26%; Hides: 25%; Rubber: 62%; Iron Ore: 103%
Now, as those price increases enter the chain of production do you think that there is any chance that they will not cause inflation? Do you think there is any chance at all that producers and retailers will not pass those costs on to consumers? It is time to face facts. Those cost increases are going to filter all the way through the system and your paycheck is soon not going to stretch nearly as far. Inflation is coming.
Many savvy investors understand what is going on right now. That is one reason why gold and silver are absolutely soaring at the moment.
Inflation Reason #3: More Quantitative Easing
Meanwhile, there are even more rumblings that the Fed wants to print lots more money. The president of the Federal Reserve Bank of New York, William Dudley, stated recently that the high unemployment and the low inflation that the United States is experiencing right now are “wholly unacceptable….Further action is likely to be warranted unless the economic outlook evolves in such a way that makes me more confident that we will see better outcomes for both employment and inflation before long.” In recent weeks it is almost as if you can hear Fed officials salivate as they consider the prospect of flooding the economy with even more money.
Up to this point, very little has worked to stimulate the dying U.S. economy. The Federal Reserve and the Obama administration are getting nervous as the American people become increasingly frustrated about the economic situation so will flooding the economy with even more money and causing even more inflation do the trick?
Well, no, but what inflated GDP figures will do is enable Obama and the Fed to say: “Look the economy is growing again!” but if a flood of paper money causes the value of goods and services produced in the U.S. to go up by 5 percent but the real inflation rate is 10 percent, are we better off or are we worse off? It doesn’t take a genius to figure that one out so don’t get fooled by “economic growth” numbers. Just because more money is changing hands doesn’t mean that the U.S. economy is doing better.
What Inflation Means for The Average American
Many American families are going to be financially shredded by the coming inflation tsunami. Just think about it. How far will your paycheck go when a half gallon of milk is 10 dollars and a loaf of bread is 5 dollars? Already, it is incredibly difficult for the average American family of four to get by on $50,000 a year so how much money will we need when rampant inflation starts kicking in – and do you think that your employers will actually give you pay raises to keep up with all of this inflation? Not in these economic conditions.
Whatever wealth you and your family have been able to scrape together is going to continue to be whittled away month after month after month by the hidden tax of inflation.
Inflation is about to get a whole lot worse!
– The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
– Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.
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