A Skeptical Survivalist

For now, Ingham said, the increases in inflation shouldn’t be enough to cause a severe drop in economic activity. However, if inflation rises to more than 3 percent there will be a detectable decrease in the economy, he explained.

“An inflation spike that is a short-term phenomenon is not terribly damaging to the economy,” he said. “If it stays that way, then, yes (it’s damaging).”

BEIJING (Dow Jones)—Selling U.S. Treasury bonds is a “natural move” for China to control risks, the China Daily on Thursday quoted Zhang Monan, a researcher at a state-run think tank, as saying.

A loose U.S. monetary policy will dilute the value of the dollar and China’s dollar assets in the long term, the report cited Zhang, a researcher at the State Information Center, a think tank under the National Development and Reform Commission, as saying.

China should exchange some of its Treasury bond holdings for shares in infrastructure construction programs in the U.S., the report cited Zhang as saying. China could also use its foreign exchange reserves to support the overseas expansion of Chinese enterprises or supplement domestic pension programs, he said.

Pan American Silver Corp., the world’s fourth-largest silver producer, said it’s shifting its currency holdings into Canadian dollars, betting the U.S. dollar may fall further.

The world’s reserve currencies are struggling to maintain their value amid “ridiculous” debt levels, Chief Executive Officer Geoffrey Burns said today on a conference call with analysts. Gold and silver look “extremely appealing” as alternative long-term investments, he said.

“We diversified some of our currency holdings into Canadian dollars away from U.S. dollars to provide more stability in the event we do see continued weakness in the U.S. dollar,” Burns said. “It’s not just the U.S. dollar — the euro, the Japanese yen are going to have extreme difficulty hanging onto their long-term values as a commodity of trade.”

A South Carolina state politician wants the state to develop its own gold and silver-based currency in case theFederal Reserve collapses and hyper-inflation ensues.

“If folks lose faith in the dollar, we need to have some kind of backup,” State Sen. Lee Bright told the Spartanburg Herald Journal’s Stephen Largen. His bill asks a committee to look into the development of a state currency, citing the Constitution and Supreme Court precedents to prove the bill’s legality.

Slate’s Annie Lowrey tracks down similar bills in Georgia and Virginia, and points out that the legislation reflects a larger trend of state politicians wading into monetary policy. A bill in Georgia would require all debts to the state be paid in pre-1965 gold and silver coins. The Virginia proposal would let the state print its own money. Meanwhile, one politician in Utah wants to cut out the middleman entirely and allow the state’s residents to run their very own mints.

Last year, 3.9 million Americans ran out of unemployment insurance benefits, according to a new analysis provided to HuffPost by the National Employment Law Project.

Those 3.9 million are not necessarily still unemployed, and not all of them are necessarily “99ers” — people who exhausted the maximum 99 weeks of benefits currently available in 25 states — but the number offers a dramatic reminder that the longest-ever unemployment lifeline is still not long enough for some Americans to climb out of the deepest jobs hole since the Great Depression.

Ron Paul constantly reminds us that money is created out of thin air, which is to say it’s an illusion. Therefore, the debt must be an illusion too, correct? Yet, fiscal conservatives still use the debt as a tool of fear to make budget cuts that they selectively deem expendable.

Sure, they may think these cuts make them look “responsible,” but ultimately it is still collectivism — just more on their terms.  Make no mistake; budget cuts in our corrupt system are just another form of wealth redistribution. After all, that money is being eliminated to pay off the debt, right? Thus, that money is removed from programs that employ people to pay off the issuers of credit (banks).

Additionally, the costs of the national debt, bank bailouts, war costs, and unfunded liabilities are fundamentally impossible to pay off.  So, the notion that cutting a “historical” $100 billion will have any positive affect on the long-term economy is absolute fiction.  And although many conservative lawmakers feel like it’s the right thing to do, they know it will have no measurable affect on the debt. It’s a scam, and if the history of modern lawmaking is any indicator, the establishment will surely stick it to the poor and middle classes with these cuts while the oligarchs continue to flourish.

THE head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, has called for a new economic paradigm for the world. The IMF has warned that another financial crisis is a matter of when and not if, and has called for better preparation for the crisis.

So, after following this for some time, I’ve seen a pattern emerge that is detailed here:

Various groups of one political persuasion or another place the blame for the rising cost of food and the resulting shortages primarily on one cause. Some say it’s QE1/QE2 and printing money, others say it’s commodities boom speculation stemming from the deregulation of futures trading in 2000, some blame it on increased demand in developing countries like China and India, and still others say it’s the freakish weather inhibiting production. 

WHY CAN’T IT BE THE PREFECT STORM CLUSTER FUCK OF ALL THESE FACTORS?

No one wants their pet belief system and political agendas to be faulted or questioned. Everyone has an interpretation and you might as well be trying to split hairs with the fundies. The isn’t a single “right” answer. Pick a perspective and it makes sense when you look at it from that point of view. Everyone wants to be able to pin the blame on others and base the solutions on their primary cause. It’s not that simple. It will take an attack from multiple angles if a resolution is to be found.

Think critically. Dig deeper. Question assumptions.

Food security and rising basic commodity prices are becoming a prime concern for governments around the world, and not just in the Arab region. Old enemies seemingly come together over the issue of food security, as evidenced by the Indian prime minister’s authorization of emergency onion imports from Pakistan, after the domestic price of Indian onion trebled in just one month.

Rising Indian onion prices are no joke - as at least two Indian governments have been felled by the rising price of onions.

Other countries have scrambled to contain rising domestic prices, with South Korea releasing emergency supplies of cabbage, and mackerel, and the Indonesian government encouraging people to grow their own chilies, as price of this commodity has quadrupled in barely a year.

Food inflation, as headline figures from China now illustrate, are making an awkward situation also worse for governments that wish to pursue high economic growth, while controlling domestic inflation at the same time.

The recent massive floods in Australia and Brazil are also putting pressure on food prices, with forecasts of at least a 30% rise in food prices for Australia in the coming months.

This will have a knock on effect on Australian export prices to Asia and the Middle East for products such as wheat, other grains, sugar cane, as well as fruit and vegetables.

Adding to these woes, the recent Russian drought and fire in the wheat heartland has forced Russia to move closer to being a wheat importing nation.

So, here’s the US Right/conservative interpretation….  See my take on the causes

Mr. Bernanke said that the rapid growth of developing economies was behind the increase in food prices, rather than the Fed’s decision to embark on a second, $600bn (£371bn) round of printing money. “Clearly what’s happening is not a dollar effect, it’s a growth effect,” Mr. Bernanke said in a rare question and answer session with journalists at the National Press Club in Washington on Thursday

Well, how do you like that? It’s growth that it driving food prices to records. Not money printing.

But wait…hold on…is the emerging world growing faster now than it was two or three years ago? Nope. Hmmm… Is the growth a big surprise? Did something happen to make investors and traders suddenly realize that…well…hey…the world is growing!

Nope.

Then, how come prices are shooting up now? Why didn’t they shoot up 4 years ago? Or 2 years ago? Or last year? What has changed?

Well… How about the $1.5 trillion of brand spanking new money that the Fed put into the world’s money supply in 2009-2010? And how about the $600 billion more it’s pumping in now?

That’s new, isn’t it? So, here’s a wild and crazy idea. Maybe…just maybe…the fundamentals of supply and demand really do work. Maybe…just maybe…if you increase the world’s hot money supply (hot money does not come from an increase in real wealth or consumer demand…but from central banks’ low interest rates and money printing)…well, maybe prices on global, auction-priced goods – such as food – go up.