Canada Free Press: Obama's Inflation
June 13th, 2011
Canada Free Press
Dr. Ileana Johnson Paugh
I enjoy shopping at my neighborhood grocery store. The shelves are always well stocked, there is a wide variety of food to satisfy even the most finicky palates, and prices are reasonable. Unfortunately, prices have steadily risen with each trip in response to the current administration’s expanding fiscal and monetary policies. My well-grounded fear is that shelves will be empty in the near future.
Prices of corn, wheat, and rice have risen today sharply on the Chicago Board of Trade due to severe flooding and other natural disasters. Using corn unwisely as a bio-fuel further exacerbated the shortage of corn. Some countries experienced diminished corn and wheat crops due to severe water shortage.
Monetizing the budget deficit by the Federal Reserve System (the Fed), printing money non-stop without backing of goods and services, has the unpleasant side effect of ballooning prices, also known as inflation. In plain English, too much money is chasing too few goods, resulting in higher prices for commodities and services.
Because most goods, including food, are trucked or shipped via trains and airplanes from great distances, and are produced and harvested with equipment that requires Diesel or gas, the higher cost of fuel must be factored into the rising cost.
You could say, like the Democrats, that the Republicans are at fault because President Bush started two wars in the Middle East thus disrupting supply. You could also add the war in Libya started by President Obama four months ago. However, so many variables beside supply affect the price of oil and thus the price of everyday goods and services.
President Obama just gave new leases to British Petroleum and Petrobras of Brazil to drill in the Gulf of Mexico while imposing a moratorium of seven years on domestic drilling. You could say that there is a purposeful domestic disruption of supply by the Obama administration.
You could also say that it was President Obama’s plan from the beginning to drive up oil prices to European levels since he made a well-documented statement that under his administration gas prices will “necessarily skyrocket.” I am not sure what his intentions are, perhaps he is trying to save the planet from unnecessary pollution; I would like to believe that he is not trying to impoverish the nation on purpose. Europeans have been paying $4-8 per gallon of gas for years, depending on the country, and depending on how socialist the ruling government is.
You could also blame the high gas prices on greedy oil companies who increase their prices just to “take advantage of the little people.” Obama uses such platitudes but hides the fact that the margin of profit for oil companies is much lower than Apple’s, yet nobody complains about the greedy profiteers that make our electronic gadgets and iphones. Liberals hypocritically complain about pollution and big oil although some of them own shares in oil companies or have fortunes tied to the oil industry.
You could blame speculators on the Chicago Board of Trade for high crude prices as Democrats have done during the Bush administration. Price per barrel of oil reached $140 when gas was over $3 per gallon. Liberals were outraged when gas exceeded $3 a gallon, trashing Republicans. Under Obama, oil is over $100 per barrel of crude oil and almost $4 per gallon of gasoline, yet liberals are silent about it and making excuses why $4 a gallon is a positive development. Only a moronic progressive could spin the disastrous price of the commodity that drives the energy of our economy into a feel-good psychobabble excuse.
Obama is strangely detached from the expanded misery and class warfare that his policies have created for most Americans
Obama is strangely detached from the expanded misery and class warfare that his policies have created for most Americans. Talking in continuous campaign mode and eerily detached, he criticizes the very policies he has put in place that have failed.
He is condescendingly advising Americans to trade in gas guzzling SUVs for GM electric cars. Homes may catch fire while recharging simultaneously thousands of cars, blackouts may occur from power overload, but that is thinking too far ahead.
How is he going to generate all this electricity if he intends on bankrupting the coal industry and we do not have enough nuclear power or hydroelectric plants? How is wind and solar power going to generate enough energy to run the world’s largest economy?
The President is recommending that people get used to hard times
The President is recommending that people get used to hard times. He told an adoring crowd of young people in Palo Alto, CA, during a Facebook town hall that they should get used to a lower standard of living because the Republican proposal to cut spending will be so drastic, Social Security and welfare, including Food Stamps, will be destroyed. None of this is true; Paul Ryan’s proposal is trying to save Social Security and Medicare. Obama conveniently forgot to mention that his second Stimulus cut Medicare to seniors in half and Food Stamp programs in order to finance teacher union salaries and pensions in several blue states and funded Michelle Obama’s pet program, healthy school lunches.
He then launched into describing how his mother had to be on Food Stamps for a short period while studying for her Ph.D. We are not sure food stamps were available at that time since the program started in its current form in 1977. There is no evidence that his statement is true and he has never mentioned this story before in any of his books.
The indefinite and never-ending War on Poverty launched by President Johnson’s Great Society is today the fastest growing component of government spending. Forty million Americans received food stamps in 2010 and the U.S. Department of Agriculture projects it to be 43 million by 2011. As Wyoming U.S. Senator Alan Simpson, a member of Obama’s National Commission on Fiscal Responsibility and Reform, so aptly said, the Federal Government’s biggest social program is “a milk cow with 310 million t*ts.” In 2009, the Heritage Foundation determined that so far, $17.6 trillion in welfare have been dispersed to the so-called poor. America appears to have lost the War on Poverty.
Nobody is addressing the real culprit of high gas prices, the destruction of the U.S. dollar, the currency in which gasoline is priced
Nobody is addressing the real culprit of high gas prices, the destruction of the U.S. dollar, the currency in which gasoline is priced. The U.S. dollar is the Free World’s “reserve currency” as established by the Bretton Woods conference. Oil is purchased internationally using the U.S. dollar as the global medium of exchange.
There is an inverse relationship between the value of the U.S. dollar and the price of oil, the weaker the dollar, the higher the price of oil. A weak dollar also results in people wanting to hold more precious metals such as gold, silver, and platinum, resulting in higher prices of these commodities.
The first in line affected by the current inflation and high energy prices are the elderly because they live on fixed incomes. Since pensions may or may not be adjusted for inflation, the problem is compounded. Some pensions and Social Security give a Cost of Living Adjustment (COLA) of 3 percent. That is a very small number when compared to the doubling of prices on some goods and services that the elderly use on a daily basis.
Social Security checks were not adjusted for inflation last year and are not going to be adjusted this year either. I take issue with Social Security being considered an entitlement since many beneficiaries have actually paid into the non-existent Social Security Trust Fund for years.
The Obama administration does not seem concerned with addressing the dire issue of inflation caused by its overspending and out-of-control money printing. Furthermore, gas and food should be included in the CPI index when calculating the true value of current inflation.
The dollar value can go to zero, as the Germans learned in 1920s with their currency under the left-liberal Weimar Republic. Jens O. Parssons explains in the book, “Dying of Money: Lessons of the Great German and American Inflations,” how the debasing of currency destroys people and nations.
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