Inflation Could Become New Number 1 Enemy: Reuters

Inflation Could Become New Number 1 Enemy: Reuters

uk.reuters.com

LONDON (Reuters) - Inflation threatens to supersede the credit crisis as investors' biggest enemy later this year as fears of a deep economic downturn recede and commodity prices show no signs of easing.

(visit the link for the full news article)

Indeed it will be...And here we have the idiotic fed getting ready to drop rates AGAIN! The stag-flation coupled with the near-obliteration of the dollar should literally cripple our ability to survive in no time flat. Way to go fed! Keep up the great job!

Many central banks, faced with the twin problem of the credit crisis and rising prices, have cut interest rates to ease the flow of credit, leaving inflation issues for tomorrow.

However, the relentless surge in resource prices from oil to rice and the resilience of emerging economies risks are turning inflation into the bigger worry for policymakers and asset markets.

"If the global economy has struggled out of the frying pan of the credit crunch, it seems destined to fall into the fire of high inflation ... High inflation is cruel to the owner of financial assets," said Tim Bond, head of global asset allocation at Barclays Capital.

uk.reuters.com
(visit the link for the full news article)

The 'credit crisis' is far from over. Hundreds of Trillions in OTC Derivatives are on everyones books. The Deflation of Real Estate will continue to cause these financial WMD's to be written off. The FED will then print money to cover the Banks losses. Which will in turn make Inflation much worse.

JP Morgan alone holds 90 Trillion in OTC Derivatives. As one of the Federal Reserve Banks it will not be allowed to fail. Keep in mind that 90 Trillion is almost TWICE GDP for planet Earth. Greed brought on this insane amount of leverage and we will pay for it.

reply to post by DimensionalDetective

How bad could inflation be, really? I mean -- I'm getting a nice check from the government as part of this brilliant economic stimulus plan.

Won't that make up for inflation? Doesn't that always work? Isn't that going to make inflation better?

Reuters is clearly wrong. Nothing strange going on here. This type of stuff happens all the time.

What are we worried about? According to Fox news, inflation numbers are down. According to Bush, we aren't in a recession. And according to the Fed, can't we just print more money if things cost more?

Nothing to worry about folks, we are in good hands.

reply to post by Karlhungis

You are right right right. We should just outlaw all the other news services, because they are so wrong wrong wrong. Fox is the only news source we can rely on. They are 100% right. And fair. And balanced.

And we should keep Bush as president also. Four more years.

Finally, someone making sense here.

No worries.

In the end, the FED will have no choice but to increase interest rates. Mark my word on that... It just wont happen until the blood spills in the foreign markets, as well. You can mark my words on that too...

Then, only the strongest of the strong will be left standing...and the rest will be living in the ashes for years to come.

I have some serious questions. (I was feeling kind of giddy during my previous posts to this thread, but suddenly I'm feeling a bit depressed and sober, reading some of the other threads on the economy being updated here.)

#1. Where is the money for this "economic stimulus" check coming from?

#2. Is this a highly obvious indicator that we are ready for all-out mega-inflation?

#3. Has this idea of handing money out to everyone -- has this ever happened before in the history of the USA?

#4. Are we going to start receiving these types of checks regularly, as gas hits $10 - $20 - $100 per gallon?

It seems like a pretty dark future. Any answers or comments will be appreciated.

reply to post by Buck Division


Here's the funny thing...in many ways this entire situation was sooooo predictable.

Think of it this way...

First there was the Savings and Loan cesspool, then the money hopped on the tech bandwagon. When that .com mania ended, the speculators moved their money to the realty markets. That's now blown up, and the pigeons moved their money to the commodities market.

See, for example:

AGRICULTURE: What is Really Causing ‘Agflation’?

The so-called "financialisation" of commodities markets, that is, the influx of investment funds seeking safer and more lucrative assets, has intensified the trend and "at the moment impinges more than the law of supply and demand," said analyst Fernando Muraro of AgRural, a consultancy firm in Brazil.

There is no way to measure the influence of speculative forces on "agflation," the new term coined to describe inflation provoked by the agricultural sector, he said.

But the role of speculation is undeniable, as commodities funds are involved in 40 percent of the futures and option contracts at the Chicago Stock Exchange, the highest proportion ever. Ten million tons of soybeans were bought in March 2007, compared to 21 million tons last month, Muraro pointed out to IPS.

More...

Interesting read, no?

reply to post by loam

As you say, very interesting, and enlightening. I'm getting the picture. Pretty ugly picture tool. I was joking before earlier on this thread. I'm thinking it isn't funny, certainly not going to be funny in the near future.

I appreciate the response, Loam. Good info.

reply to post by Buck Division


This thread had me looking at the bubble point I made earlier, and I was surprised to find this outstanding article by Harpers.

Read it.

It will blow your mind, and accurately predicts (at least, I think so) what comes next?

...and get this... I posted it in the Fragile Earth forum.