;)
Posted on 06/23/2011 5:11:51 AM PDT by 2ndDivisionVet
On June 15, the Bureau of Labor Statistics released the inflation data for May. If you didn't hear about the new data, you are not alone -- the mainstream media buried the story. Why? Inflation hit 3.6% in May, even though gasoline prices actually fell that month. Inflation has been rising since November, as shown in the graph below:
(CHART AT LINK)
These rising prices were largely caused by Federal Reserve Chairman Ben Bernanke's rapid expansion of the U.S. money supply, known as QE2 (Quantitative Easing 2). But inflation wasn't supposed to get this high. Back in November, Bernanke told his fellow central bankers that the Federal Reserve's Open Market Committee (FOMC) was aiming for an inflation rate no higher than 2%. Specifically, he said:
This policy tool will be used in a manner that is measured and responsive to economic conditions. In particular, the Committee stated that it would review its asset-purchase program regularly in light of incoming information and would adjust the program as needed to meet its objectives. Importantly, the Committee remains unwaveringly committed to price stability and does not seek inflation above the level of 2 percent or a bit less that most FOMC participants see as consistent with the Federal Reserve's mandate.
Bernanke is like a driver who steps on the brakes, then floors the gas pedal, then steps on the brakes again, then floors the gas pedal again. His tenure at the Federal Reserve has been marked by the erratic swings in the U.S. money supply, shown in the graph below:
(GRAPH AT LINK)
From May 2010 to May 2011, Bernanke had his pedal to the metal. He grew M1 (the amount of money in cash and in checking accounts) at a 13.4% rate. Due to lag time, this didn't get inflation climbing rapidly until February. Now that inflation has gotten started, it may be hard to stop because it can get a momentum of its own.
Back in November, Governor Palin took on QE2 and President Obama's defense of it. Her predictions have turned out to be correct. When making her case against QE2, she argued that it could cause inflation, but would not much help U.S. net exports and business investment, the two factors needed to grow the U.S. economy.
Indeed, worsening net exports (exports minus imports) have been keeping the United States stuck in its current economic stagnation. When imports go up relative to exports, Americans get more debt and lose jobs, whereas when exports go up, relative to imports, Americans get more income and gain jobs. The decline in net exports may be slowing or preventing the U.S. economic recovery.
Bernanke hoped that QE2 would weaken the dollar which would turn U.S. net exports around. But Palin predicted that any positive effects would be temporary. In November she wrote:
Will driving the dollar down in this way do anything to boost U.S. exports? The short answer is not really. A weaker dollar will temporarily boost exports by making our goods cheaper to sell; but inevitably other countries will respond in kind, triggering the kind of currency wars economists are warning us about.
Indeed, so far Palin has been correct. QE2's effect upon net exports appears to have been temporary. Although U.S. net exports worsened more slowly in November and December, they resumed their economy-sapping slide in February, as shown in the graph below.
(GRAPH AT LINK)
Business investment is another key to economic growth, it combines the money spent by businesses on new tools and structures, such as when businesses develop new energy resources or build new factories. When businesses spend money on tools and structures, they put Americans to work making the tools and building the structures. Later, the improved tools and structures give American workers more productive work, resulting in higher wages. Bernanke had hoped that QE2 would stimulate business investment. But, in November, Palin predicted that QE2 would have little effect upon business investment. She wrote:
Will QE2 then at least boost domestic investment? No, again. As I explained in my speech in Phoenix, the reason banks aren't lending and businesses aren't investing isn't because of insufficient access to credit. There's plenty of money around, it's just that no one's willing to spend it. Big businesses especially have been hoarding cash. They're not expanding or adding to their workforce because there's just too much uncertainty created by a lot of big government experiments that aren't working. It's the President's own policies that are creating this uncertainty.
Indeed, as the graph below shows, the rate of growth in real fixed investment slowed in the fourth quarter of 2010 and the first quarter of 2011, despite QE2:
(GRAPH AT LINK)
Palin argued that QE2 was a dangerous experiment that risked inflation. She urged Obama to instead balance budgets, cut taxes and reduce burdensome business regulation. In November, she concluded:
If the President was serious about getting the economy moving again, he'd stop supporting the Fed's dangerous experiments with our currency and focus instead on what actually works: reducing government spending and boosting business investment through good old fashioned supply side reforms (cutting taxes and reducing overly burdensome regulations). Simply running the printing presses in order to avoid paying off your debts is no way for a great nation to behave.
In May, she added balanced trade to her recipe for economic recovery. After meeting with Donald Trump, she said:
"What do we have in common? Our love for this country, a desire to see our economy put back on the right track," Palin told reporters. "To have a balanced trade arrangement with other countries across this world so Americans can have our jobs, our industries, our manufacturing again. And exploiting responsibly our natural resources. We can do that again if we make good decisions."
The bulk of the U.S. trade deficit (i.e., of our negative net exports) is with China. When Trump was testing the waters for a possible presidential run, he made President Obama's incompetent negotiations with China a cornerstone of his campaign. With Chinese aggregate demand growing rapidly and U.S. aggregate demand stagnant, economists would normally expect the Chinese trade surplus with the United States to be shrinking. But President Obama has let the Chinese government reduce U.S. net exports to China month after month, as shown by the new 12-month lows reached in recent months in the graph below:
(GRAPH AT LINK)
Obama negotiates with China from a position of weakness. He goes into each meeting ruling out the possibility of the U.S. putting tariffs upon Chinese products, even though the Chinese government has already placed high tariff and other barriers upon U.S. products. The U.S. need not negotiate from a position of weakness. Under world trade rules, it is entitled to impose trade balancing tariffs whenever it is running chronic trade deficits. Our proposal for scaled tariffs would let the United States (and any other country harmed by large chronic trade deficits) achieve higher net exports with or without the cooperation of its trading partners.
The mainstream media pretend that Palin is stupid. But she is actually blessed with a very rare commodity these days - economic common sense. She is the only potential presidential candidate currently advocating the three basic principles that would restore economic stability and long-term growth to the American economy: (1) balanced monetary growth, (2) balanced budgets, and (3) balanced trade.
I must remind myself to NEVER, EVER post on ANY thread with the name Palin in the title.
Please excuse me for violating my own rule.
Oh, but she’s just some dumb Caribou Barbie biotch from Alaska she doesn’t know what she’s talking about!/sarc
Please show me exactly what in post #10 hurt your feelings, if you would.
When I got my Jury Duty summianze I had to call every night and wait to see if my name(number got called) about a week later my number got called and I had to report in person at the county court. I got dismissed. They even payed me 40 for a half a day.
What! Palin was laughed at by the media when she said that inflation was coming, they ignored what she was saying because they first of all, don’t follow the industry much and second of all they are Obama worshippers where nothing can go wrong with him as captain of the ship!
She was the only one of the potentials to talk about QE2, coming inflation and condemned Bernanke publicly for his policies last year in a major speech not Mitt, not Pawlenty, not Hunstman, not Bachmann, not Santorum, not Gingrich not anyone else saved for Ron Paul who always have been railing on the Feds in general.
How can this backfire on Palin? if you notice that in the article she talked to reporters on the subject openly! so she wasn’t hiding behind a copy and paste operation on the subject and in fact on the Judge Napolotano show on Fox News Business earlier this year, she was in studio with him and talked about QE2 and inflation with him with ease, we have that interview here on FR
So the only copy and paste operation we have is you railing all the time against her and making yourself look silly because she is right and your precious narratives that you cling to dear life against her has diminish! Lol!
You have to cut the Phycho a little slack. He is too busy running the whole Alaska oil production system to be bothered with the little details you just presented. Hahaha!
Polk county is probably different than the other 98 counties.
(I promised JR I'd try not and post to him...)
Please provide a link where Bachmann was talking about QE2 and Bernanke last year - I’ll be waiting on this thread all while going to work. I’ll stand corrected if you provide a link to her being quoted on this but I’m sure that there is none! I’m waiting
I’m sure Rep Bachmann was too busy performing that little reelection calculation thing that all representatives do (which is why they (almost) NEVER advance directly to the presidency from the House).
No what it is is your post is just another in a series that shows that though it is obvious you do not like her, why, I don’t care, you cannot stay away from any thread that says anything positive about her.
Yes others may have mentioned it before her, but no other potential presidential candidate did and frankly she reaches more of the general public than most if not all of the others who are said to have written on the subject before her. She brought it to the fore.
The only thing laughable is your continued attack on this fine American.
Many of us saw this coming when the fed put the twin turbos on the printing press, shifted the transmission into overdrive and was printing money like mad. Government spending is sinking the economy and the only thing we can do is to get zero and his team into the unemployment line.
Every locality has its own rules. Here in Montgomery County (People's Republic of Maryland), the rule is "one day or one trial" -- I don't recall how often they can summon you, but here's the way it works:
;)
You're gonna get me in trouble. :)
Tack on food and feul costs and it’s Carter levels.
Anyone who buys gas or groceries or just about anything else already knows this.
Yeah Pyscho is a troll, earlier this year he kept pushing polls saying that Obama was unbeatable and commenting that nobody wad going to stop him, now a few months later Obama had fallen dramatically and Pyscho doesn’t post favorable polling data for Obama anymore
When Obama announced he wanted the stimulus, I asked my homeschooled teens what it would do. My kids knew it and all his spending would cause inflation and the devaluing of the dollar. My kids are even smarter than Obama.
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