Posted on 09/18/2010 2:53:02 PM PDT by blam
Why Ben Bernanke Should Completely Ignore The Commodity Inflation All Around Him
Joe Weisenthal
Sep. 18, 2010, 5:10 PM
There's no doubt that commodity inflation is happening all around the world, as our colleague Henry Blodget noted earlier.
Soft commodities, hard commodities, and precious metals have made impressive moves in recent months, helped in large part -- it's believed -- by ongoing robust demand in much of the semi-developed world (China, the rest of Asia, India, Brazil), and of course the "growth" in US and Europe.
So when the FOMC meets in the coming week, it should take into account this inflation, right?
Absolutely not.
What Bernanke and the rest of the FOMC should be concerned with is domestic inflation -- inflation that was the result of there being a lack of slack in the US economy. So, for example,ic domestic if rents, wages, and home prices were back on the march higher, then there's a good chance that added monetary stimulus would merely serve to push prices higher, rather than help stimulate demand.
Sure, added US demand would also have a further inflationary effect on global commodity markets, but that's a separate issue from the one facing the FOMC.
Commodity inflation is confusing, but it's not a monetary phenomenon, and it's not one that need to distract the FOMC.
[snip]
The inflation gauge that actually matters in the US -- for all its faults, the CPI -- indicates that there really is none out there (and the CPI is probably overstating the inflation, since the full extent of the housing plunge isn't being captured).
[snip]
(Excerpt) Read more at businessinsider.com ...
And packages are getting smaller.
Not Mine! :-)
But American businesses need those commodities to fuel their Asian manufacturing. Contrary to the opinions shouted for about three years now, China hasn’t croaked, yet. Manufacturing there continues to increase. ;-)
Inflation panic folks have been wrong for quite some time. If they stick with it long enough they’ll be right someday. That’s not a very impressive prediction record unfortunately. The secret to investing is to be right at the right time.
BTW, new shorters are now being actively recruited by some investment advisors for the purpose of driving the markets, and subsequently, oil down again. If they’re successful, it may be December, 2007 again. ...more orchestrated layoffs and all of that. I’m going to take cover.
The chart said that 2008 was in a recession that ended in Joly of 2009. The east coast establishment’s been having a good time making that stuff up and ignoring the fact that the GDP grew in 2008 and shrank in 2009.
Bernanke is a crook following orders from his corrupt banking cartel buddies. Obama is just another crooked pawn following orders from the NWO Banking Cartel. Our phony 'two party' political system is broken just like our economy. Everything is corrupt especially our political leaders. We live in a fascist society. Welcome to the New World Order . . .
Crisis -- Global Austerity USA System Breakdown 2011 !
HORRIFIC, INDEED.
THX THX.
and Wall Street:
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