On one hand we have the WSJ writing day after day that prices of food and energy products are not “really” rising. On the other hand we have empirical evidence that virtually every staple is already higher in price, or is being served in proportionally smaller portions.
One possible arbitration on the issues comes from the NIA, which even if biased, does provide an estimate of where prices of various key perishables will end up in a post-QE2 world. These are as follows: “$11.43 for one ear of corn, $23.05 for a 24 oz loaf of wheat bread, $62.21 for a 32 oz package of Domino Granulated Sugar, $24.31 for a 32 fl oz container of soy milk, $77.71 for a 11.30 oz container of Folgers Classic Roast Coffee, $45.71 for a 64 fl oz container of Minute Maid Orange Juice, and $15.50 for a Hershey’s Milk Chocolate 1.55 oz candy bar.” Granted these are likely somewhat whimsical, but even if they are partially correct, it would mean the bulk of US society, as we pointed out previously, is in for a long, cold, hungry winter.
Ireland’s financial troubles loomed large Wednesday as investors — betting that the country soon could join Greece in seeking a bailout from the European Union — drove the interest rate on the country’s 10-year borrowing to a new high.
The yield, or interest rate, on 10-year bonds rose above 8 percent for the first time since the launch of the euro, the European Union’s common currency, 11 years ago.
Bond traders increasingly believe that Ireland soon will be forced to tap Europe’s emergency fund for euro-zone nations facing a threat of bankruptcy.
The Federal Reserve is “self-destructing” through of its efforts to jump-start the US economy with more monetary easing, Rep. Ron Paul, (R-Texas), told CNBC Monday.
Paul said the Fed’s decision last Wednesday to spend an additional $600 billion in quantitative easing—buying Treasurys to lower interest rates—won’t work and will destroy the dollar’s value around the world.
“They (the Fed) can’t manage a dollar like this,” said Paul. “People are going to desert the dollar. I think the Chinese are hinting that already: They’re not wanting our dollars as much as they want raw materials and other things.”
Paul, a frequent critic of the Fed, is likely to become chairman of a subcommittee that oversees monetary policy when the new Congress takes over in January.
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