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Thread: Wholesale prices up 1.6 pct. on steep rise in food

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    Wholesale prices up 1.6 pct. on steep rise in food

    WASHINGTON (AP) -- Wholesale prices jumped last month by the most in nearly two years due to higher energy costs and the steepest rise in food prices in 36 years. Excluding those volatile categories, inflation was tame.

    The Labor Department said Wednesday that the Producer Price Index rose a seasonally adjusted 1.6 percent in February -- double the 0.8 percent rise in the previous month. Outside of food and energy costs, the core index ticked up 0.2 percent, less than January's 0.5 percent rise.

    Food prices soared 3.9 percent last month, the biggest gain since November 1974. Most of that increase was due to a sharp rise in vegetable costs, which increased nearly 50 percent. That was the most in almost a year. Meat and dairy products also rose.

    Energy prices rose 3.3 percent last month, led by a 3.7 percent increase in gasoline costs.

    Wholesale prices up 1.6 pct. on steep rise in food - Yahoo! Finance

    Related, lets jump in the way back machine all the way back to 8 weeks ago....

    January 26, 2011

    Obama Fails to Address Inflation in State of the Union

    President Obama's State of the Union address last night did not make one single mention of inflation, when it is the belief of NIA that massive price inflation (especially food inflation) will become America's top crisis by the end of this calendar year. Obama's speech also failed to mention the Federal Reserve, the Federal Funds Rate being held near 0% for over two years, and the Fed's latest round of $600 billion in quantitative easing. Unless Obama addresses our nation's fiat currency system, nothing else he says has any meaning at all.

    After the U.S. lost 8.36 million jobs over a two year period from December of 2007 through December of 2009, our economy has recovered 1.12 million jobs as a result of the Federal Reserve and U.S. government spending $4.6 trillion on bailouts and stimulus programs. That is over $4 million spent for each job created. Instead of bailing out Wall Street and allowing non-productive bankers to receive record bonuses, the U.S. could have sent a check for $550,000 to each middle-class American who lost their job.

    National Inflation Association

    Who does this amateur Obama think he is fooling?

    j-mac
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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    There's not a whole lot that Obama can do about the price of oil. It is what it is.

    The US government does have some leverage over the global price of foodstuffs though. Obama should work with Congress to immediately end ethanol subsidies, and gradually phase out all other agricultural subsidies. But that seems unlikely to happen unless, of course, they can manage to sneak the cuts into the annual budget. Too many rural congresspeople love the pork money for their districts.

    Anyway, these things aren't true measures of inflation, because they have nothing to do with the monetary supply. Raising the federal funds rate or "addressing our fiat currency system" (is this writer seriously advocating a return to the gold standard?) won't do anything to change the basic supply and demand functions of oil, corn, or whatever else. Actual inflation will most likely be very low for the rest of this year, and so Obama doesn't need to worry too much about it...yet.
    Last edited by Kandahar; 03-16-11 at 03:10 PM.
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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    Quote Originally Posted by Kandahar View Post
    There's not a whole lot that Obama can do about the price of oil. It is what it is.

    The US government does have some leverage over the global price of foodstuffs though. Obama should work with Congress to immediately end ethanol subsidies, and gradually phase out all other agricultural subsidies. But that seems unlikely to happen unless, of course, they can manage to sneak the cuts into the annual budget. Too many rural congresspeople love the pork money for their districts.

    Anyway, these things aren't true measures of inflation, because they have nothing to do with the monetary supply. Raising the federal funds rate or "addressing our fiat currency system" (is this writer seriously advocating a return to the gold standard?) won't do anything to change the basic supply and demand functions of oil, corn, or whatever else. Actual inflation will most likely be very low for the rest of this year, and so Obama doesn't need to worry too much about it...yet.

    Sure there is.

    j-mac
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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    I have been warning about this for almost a year and this is only the beginning.

    If Obama doesn't end his plans to cause energy prices to go through the roof and California does not stop it's version of Cap and Trade it we are going see much worse prices not just on food but on everything sold and all services.

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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    Quote Originally Posted by j-mac View Post
    Related, lets jump in the way back machine all the way back to 8 weeks ago....




    Who does this amateur Obama think he is fooling?

    j-mac
    You mean other than drilling for oil here and lifting the gulf restrictions?? You mean other than taxing the piss out of gasoline?

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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    Quote Originally Posted by Councilman View Post
    I have been warning about this for almost a year and this is only the beginning.

    If Obama doesn't end his plans to cause energy prices to go through the roof and California does not stop it's version of Cap and Trade it we are going see much worse prices not just on food but on everything sold and all services.
    The question is....does Obama want to do something about this, or is this the kind of government dependency and oil problem he envisions as good for the country in the long run?

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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    Quote Originally Posted by Kandahar View Post
    There's not a whole lot that Obama can do about the price of oil. It is what it is... Anyway, these things aren't true measures of inflation, because they have nothing to do with the monetary supply.
    While there is not much President Obama can do immediately about energy-driven inflation, the absence of a credible energy policy has contributed to sharper price shocks than would otherwise have been the case. A lack of energy supply diversity means less ability to address disruptions concerning a single source of energy. Of course, the national failure to develop a credible energy policy has been longstanding. It is not unique to the Obama Administration. Past energy shocks have quickly been forgotten once the price returned to lower levels.

    On the other point, even as the energy price shock is not a monetary phenomenon per se, the Fed can still tighten, if necessary, and have some impact. By tightening, the Fed would slow the economy. Slower economic growth would translate into reduced growth in energy consumption. I don't believe we're at the point where the Fed should immediately tighten, but if crude oil prices remain elevated into the summer, I do believe that the Fed should tighten. During the 1970s, the Fed erred too much on the side of accommodation, especially in the wake of the 1973-75 recession. As a result, inflation expectations became unanchored and the Fed ultimately had to raise interest rates to extremely high levels to finally break the back of inflation. Two economic contractions, including the severe 1981-82 recession followed in rapid succession.
    Last edited by donsutherland1; 03-16-11 at 05:00 PM.

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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    Quote Originally Posted by donsutherland1 View Post
    While there is not much President Obama can do immediately about energy-driven inflation, the absence of a credible energy policy has contributed to sharper price shocks than would otherwise have been the case. A lack of energy supply diversity means less ability to address disruptions concerning a single source of energy. Of course, the national failure to develop a credible energy policy has been longstanding. It is not unique to the Obama Administration. Past energy shocks have quickly been forgotten once the price returned to lower levels.

    On the other point, even as the energy price shock is not a monetary phenomenon per se, the Fed can still tighten, if necessary, and have some impact. By tightening, the Fed would slow the economy. Slower economic growth would translate into reduced growth in energy consumption. I don't believe we're at the point where the Fed should immediately tighten, but if crude oil prices remain elevated into the summer, I do believe that the Fed should tighten. During the 1970s, the Fed erred too much on the side of accommodation, especially in the wake of the 1973-75 recession. As a result, inflation expectations became unanchored and the Fed ultimately had to raise interest rates to extremely high levels to finally break the back of inflation. Two economic contractions, including the severe 1981-82 recession followed in rapid succession.
    It's not about energy diversity. It's about drilling the damn energy under our feet.

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    Re: Wholesale prices up 1.6 pct. on steep rise in food

    Quote Originally Posted by Erod View Post
    It's not about energy diversity. It's about drilling the damn energy under our feet.
    Energy supply diversity is about sources of energy resources and types of energy production. Increased domestic oil production would contribute to greater supply diversity. Increased nuclear power would do so, as well, though there is real risk that an almost hysterical reaction by some in the wake of Japan's earthquake, e.g., those purchasing potassium iodide pills in the U.S., which faces no risk whatsoever at present from Japan's nuclear problems, could further undermine support for that option.

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    Re: Wholesale prices up 1.6 pct. on steep rise in food


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