Good article in the WSJ (click on header) that outlines the problem with energy prices and why they aren't likely to come down anytime soon. So why are prices so high, not just for energy but for just about everything?Well for one thing, inflation. All that "quantitative easing" nonsense just increases the money supply, and the absolute definition of inflation is too much money chasing too few goods. Of course you won't be told this fact because Bill Clinton changed the way inflation is calculated, so the gov't. doesn't report a useful number (oh if Jimmy Carter had been so lucky), and a compliant media has no interest in reporting a real number from private sources. So we're left to gauge inflation on our own. How has your inflation meter been doing lately?
"But Hammer, things are getting better, just look at the stock market?" you say. Not so I say. Stocks prices are susceptible to inflation too. All things being equal, if a stock trades for 10 bucks a share and inflation is at 10%, then the stock price will rise 10% accordingly. Another reason stocks have risen is cheap money. The administration wants to re-inflate the real estate bubble and control interest expense for all that deficit spending, so the Fed (packed with Obama lackeys) have kept interest rates near zero. Well, as a consequence speculators borrow for almost nothing and bid up commodities and stocks. For example Apple has gone from less than $200 a share to over $500 simoleons in less than two years (no idea what real apples are doing). So now we have bubbles bubbles everywhere, and as always, a day of reckoning is coming.
Obama's immediate problem is keeping all birds in the air until after the election. He can't reduce borrowing and run the chance of upsetting the apple cart (it would), so until then it's spend spend spend. Then, if he wins, he'll deal with it (or not), and if he loses the Republicans will be blamed mercilessly. But as always, you and I dear friends, the folks in the middle, will be hurt the most.
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3 comments:
"Then, if he wins, he'll deal with it (or not)"
Piven-Cloward says not only will he NOT deal with it--he'll rejoice in it. It is the capitalism ashes to socialism phoenix that the Progressives want more than anything...so long as they, the enlightened, civil, self-appointed parents of the rest of us can be the ones deciding how and when to dole out the commandeered remnants of wealth to their adopted wards of the state.
The stock market is up 67% since BHO took office - inflation isn't nearly as bad.
Of course it is, Anon. He's not ready to peak yet.
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