Sunday, April 18, 2010

Inflation Update: Sunday 4/18/10

Global resource grab continues
China continues to buy access to global energy supplies. Hoarding of resources is one of the most damaging aspects of inflation. Both individuals and countries can participate, in the anticipation that prices will rise in the future. The resulting shortages contribute to the inflationary impact of too much money chasing too few goods. Thanks to Ben Bernanke, this process is now in full effect. As America's currency weakens at the desire of our central bank and the Obama administration, Americans will find themselves outbid in this global race to procure commodities.

India contemplates raising interest rates for the 2nd time in a month
Once you get behind the curve, it is extremely tough to put the inflation genie back in the bottle. Bernanke thinks he has this solved by talking down inflation expectations, as if people won't notice when their paycheck loses purchasing power. Unfortunately, America can't tolerate rapidly rising rates to fight inflation and we have already lit the fuse.

Protectionism continues to perk along as EU threatens more tariffs against China
The Europeans can't print money, but they can drive up inflation through other means while keeping interest rates negative. There's more than one way to skin a cat.

Another base metal making two year highs
Nickel up 60% in the last two weeks, 100% over the last 12 months as world demand now outstrips supply (or maybe it's just the speculators). Time for Bernanke to reassure us about how our inflation expectations should remain low.

Canadian bank buys three failed Florida banks
That's' an idea. Maybe we can sell off our assets to strong currency countries. Any bidders for California?

EU wants in on the currency devaluation game
Bernanke sets the standard and the fiat rabble fall in line. Beggar-Thy-Neighbor 2.0 is just beginning.

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