Anyone else notice that the statists are eager to explain the rise in food prices with anything but inflation? So far I’ve ran into ‘the Chinese are eating more meat’ (how does meat consumption jump in one year?). Then there is the biofuel debacle (don’t know how much of the crops are being turned to biofuel, but I doubt it enough to cause price increases). And then you have the crowning achievement in nonsense: blame the speculators. Most people don’t even know what a speculators does, but it sounds awfully capitalistic and we all know capitalism is the source of all the evil in the world.
I’ll bet 10 of my government issued paper strips that we’ll start seeing calls for legislation to curb rampant speculation…
Inflation (in the classical sense, of course) is never the cause for anything. That is the official party line. For example I always have a lot of troubles explaining the difference between classic inflation and “adjusted” inflation, which is really a manipulated CPI. I have to explain the ethimology of the word “inflation” just to get started. But when we get to question of easy money it’s a losing battle from the start: how “more money” and “cheap credit” are supposed to be bad? “But thanks to those I can afford my brand new BMW and industries can purchase new equipment… it must be good for the economy”. It’s like banging your head against a massive brick wall.
You also have not considered a thing about foostuff prices: direct goverment intervention. I do not know how it works precisely in the US or Japan but the European Union’s Politique Agricole Commune has been designed to keep prices aritificially high. Thanks to a system of quotas each year millions of tons of foodstuff are simply destroyed to drive prices upward: Danish milk, Spanish oranges, Sicilian lemons… you name it. Also under the cover of “enviromental protection” each year a growing number of farmers and fishermen are paid cash for not working. And let’s not speak about import restrictions, made to drive prices upwards and allow some good mates of the EU bureaucracy (Kenya, Ecuador etc) to make more money by selling their agricultural products in a competition-free market.
Of course when people start complaining about high prices what do our enlightened rulers do? “We are on the look-out for speculation”, of course but they also purchase milk, flour etc at their current, artificially inflated prices and resell them at “socially acceptable” prices.
The wonders of Socialdemocracy, you cannot beat them.
I just read an article yesterday proposing that very idea, now the fashionable argument is the Enron market manipulation potential that must be guarded against.
Well, Congress or one of the presidential candidates were proposing the idea, don’t exactly remember but it sounds like one of Hillary’s brilliant schemes.