FOOD COSTS RISE ALONGSIDE USE OF FOOD STAMPS

"April 22, 2010

U.S. Food Inflation Spiraling Out of Control

The Bureau of Labor Statistics (BLS) today released their Producer Price Index (PPI) report for March 2010 and the latest numbers are shocking. Food prices for the month rose by 2.4%, its sixth consecutive monthly increase and the largest jump in over 26 years. NIA believes that a major breakout in food inflation could be imminent, similar to what is currently being experienced in India.

Some of the startling food price increases on a year-over-year basis include, fresh and dry vegetables up 56.1%, fresh fruits and melons up 28.8%, eggs for fresh use up 33.6%, pork up 19.1%, beef and veal up 10.7% and dairy products up 9.7%. On October 30th, 2009, NIA predicted that inflation would appear next in food and agriculture, but we never anticipated that it would spiral so far out of control this quickly.

The PPI foreshadows price increases that will later occur in the retail sector. With U-6 unemployment rising last month to 16.9%, many retailers are currently reluctant to pass along rising prices to consumers, but they will soon be forced to do so if they want to avoid reporting huge losses to shareholders.

Food stamp usage in the U.S. has now increased for 14 consecutive months. There are now 39.4 million Americans on food stamps, up 22.4% from one year ago. The U.S. government is now paying out more to Americans in benefits than it collects in taxes. As food inflation continues to surge, our country will soon have no choice but to cut back on food stamps and other entitlement programs.

Most financial experts in the mainstream media are proclaiming that the recession is over and inflation is not a problem in the U.S. Unfortunately, they fail to realize that rising food and gasoline prices accounted for 58% of February's year-over-year 3.85% rise in retail sales. NIA believes price inflation is beginning to accelerate in many areas of the economy besides food and energy, and all increases in U.S. retail sales this year will be entirely due to inflation."
National Inflation Association

RUSSIA DRILLS IN THE GULF

"The Obama administration is poised to ban offshore oil drilling on the outer continental shelf until 2012 or beyond. Meanwhile, Russia is making a bold strategic leap to begin drilling for oil in the Gulf of Mexico. While the United States attempts to shift gears to alternative fuels to battle the purported evils of carbon emissions, Russia will erect oil derricks off the Cuban coast.

Offshore oil production makes economic sense. It creates jobs and helps fulfill America's vast energy needs. It contributes to the gross domestic product and does not increase the trade deficit. Higher oil supply helps keep a lid on rising prices, and greater American production gives the United States more influence over the global market."
Washington Times

Why? Why won't we drill for oil? I think alternative energy sources need to be found. I think we should be using nuclear as much as possible. If solar or wind or some other fantasy energy source can be made workable, do it. However, right now we need oil. And lots of it.

The only way to get to better sources of energy is to survive to create them. Without oil we won't survive. We won't be able to do anything. Our economy will grind to a halt.

Maybe that's the idea. Never let a good crisis go to waste.

ENERGY COSTS BEGIN THEIR UPWARD MARCH

It doesn't take a Nobel Laureate to figure this out. If those of us that aren't making the kind of money we used to have to spend more on energy, what do you think is going to happen to all of our other spending?

This could be the final nail in the coffin if they can keep the prices up. With low demand on the transportation side it would seem that a free market would cause prices to fall. Makes you wonder just how "free" the market is.

Peak Oil in action. We don't have to run out of energy; pricing us out of the market has the same effect.