Slipping into Stagflation


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The index for gasoline posted its ninth consecutive increase in March and has risen 14.4 percent over the last three months. Try telling Americans who have to empty their wallets to fill their gas tanks that inflation isn’t already here.   The index for food eaten at home continued to climb in March, rising 1.1 percent “as all six major grocery store food groups increased,” the CPI report said. The cost of food eaten at home is up 3.6 percent, with some items soaring way past that.

The Associated Press April 16 reported food prices at the wholesale level rose in March by the most in 36 years, forcing stores and restaurants to pay more for vegetables, lettuce, meat, and dairy products.

The household energy index crept up as well, with advances in fuel oil and electricity indexes more than offsetting a decline in the price of natural gas. The index for shelter—despite the continuing housing crisis—even rose slightly. Medical care was more costly. Several transportation indexes increased significantly, including new cars, used cars and trucks, and airline fares.

When core prices rose in February, the dollar weakened. Investors feared that inflation would continue to creep upward. This, in turn sent commodity prices higher. Silver and gold benefited. And cotton prices jumped on expectations of stronger global demand. Other agriculture products, from corn to soybeans, rose in price.

The poor economic record of the Carter years, especially the combination of high inflation—going over 13 percent one year—and high unemployment, led to his defeat in 1980. Stagflation could wipe out Obama’s hopes for reelection.

If increases in food, energy, and commodities persist, this could lead to an increase in inflation expectations, which occurred in Carter’s presidency. The expectations could become self-fulfilling. When businesses’ costs rise, they hike up prices. When workers feel they are falling behind, they seek more rewards. “Ultimately, that leads to an upward spiral, which central bankers might have to battle with higher interest rates,” The Wall Street Journal said in an April 16 story.

The Obama unemployment rate, although down from its high, still includes a labor participation rate at an all-time low. His policies have helped cause the loss of three million jobs in the nearly two and a half years of his reign. The recent job gains haven’t led many people, who stopped looking for work during the height of the recession, to start looking again. The real unemployment rate is undoubtedly much higher than 8.8 percent. The jobless rate for blacks and Hispanics continues to rise as well.

Barack Obama may well win the unwelcome award of being the worst president since Jimmy Carter. In fact, he may even top Carter’s abysmal record, particularly if stagflation sweeps over us.

 

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  • kafir4life

    BamO's not really worried about 2012. If it appears that he will lose, there will be an "event". An event that will require him to declare martial law, and suspend the elections for our own good (remember his comments about the 2010 mid-terms where he said "Part of the reason that our politics seems so tough right now, and facts and science and argument do not seem to be winning the day all the time, is because we’re hard-wired not to always think clearly when we’re scared, And the country is scared.”)
    BamO and his fellow extreme far left-wing flea-baggers want to protect us, and suspension of elections are just the ticket. 2008 may have been the last open general election this generation will see.

    • Andres de Alamaya

      That's the last thing that worries me. America's law enforcement, army reserves and, enlisted men who would revolt because they have a clear picture of this socialist and racist who has set American racial relations back fifty years. America went color blind to bring in a president who staffed up with folks who talk of "our people." He'd get support from some blacks but not that many. No, if we get into trouble it will be our own fault for not finding and running an effective candidate.

    • Andres de Alamaya

      That's the last thing that worries me. America's law enforcement, army reserves and, enlisted men would revolt because they have a clear picture of this socialist and racist who has set American racial relations back fifty years. America went color blind to bring in a president who staffed up with folks who talk of "our people." No, if we get into trouble it will be our own fault for not finding and running an effective candidate.

    • Bert

      For most people this prospect seems unimaginable. But most people are slow to catch up with the rapidly changing reality. I can definitely envision the possibility of Obama finding a pretext to remain in power even if he faces a loss in 2012. Notice how he keeps appointing his 'czars' that require no Senate approval and who report only to him. Notice also how he casually ignores those laws and regulation that he does not agree with. Step by step we are all being controlled more and more and lied to more and more. I really fear that by 2012 we will have only the illusion of freedom but not the substance. I hope I am wrong.

    • Jim_C

      First, all the lefties were saying the same thing about Bush in 2004 ("He's gonna allow another terrosit attack!" blah blah). No, he ran against a putz; and that's how it will play out with Obama.

      Second, will you give the "no more free elections" "martial law" thing a rest? Why is everything an apocalypse? How many dumb "predictions" won't come true beofre you guys admit they're baloney?

  • Andres de Alamaya

    Something in my benign text seems to trigger the automatic censor in this system to block me from free speech. No, Kafir4life, that's the last thing that worries me. America's law enforcement, army reserves and, enlisted men who would revolt because they have a clear picture of this socialist and racist. No, if we get into trouble it will be our own fault for not finding and running an effective candidate.

  • Andres de Alamaya

    O.K. Have it your way. Front Page Mag is now blocked from my mail box for good.

  • Josie

    He shouldn't even be the POTUS he's a Kenyan and should be removed from office. I've seen the video where he and Michele admitted he was born in Kenya. Our congress is betraying us big time!!!

  • 080

    Stagflation if we're lucky. We are about to take l.6 trillion dollars out of the private economy and dump it into the public sphere. In itself this will produce stagnation. That's because the government produces very little while hamstringing the private sector. It will probably continuewith the QE3s and QE4s because that'sf the easiest path to follow. Go back and read the newspapers from 1974-l983 to find out which investments paid off. Then go and do likewise.

  • Len Powser

    Any amount of suffering will be well worth if it lasts until 2012 and the Cursed One has been removed from office. For if he is not removed in 2012 then our suffering will never end.

  • Farrel

    Get real – the man will serve a full double term irrespective of any dubious first term policy decisions he makes while in office. His support from democrats, leftists, liberals, pro Palestinains, anti Zionists, anti-semites, feminists, anarchists, Jews, Christians, Muslims, blacks, whites, reds, yellows etc, etc will far outweigh anything a weak & specious Republican leadership can dish up as viable opposition. He is America's poster child & you can bet your house & home that nobody will beat him in 2012!

  • matt dickinson

    It seems like conservative websites didn't talk about the Fed printing money until more recently, after the semi-success of Ron Paul, Alex Jones, Peter Schiff and others. Did they really have an influence?

  • matt dickinson

    Anyway, I think it's fine that the Fed prints money. He should print some for Israel, or maybe we should consider that a fake new currency worked wonders for Brasil.

    Everybody wants us to move to gold or silver, but that's just a way for people who sell silver and gold to make money. Eventually the prices of these metals will go down, or the prices of goods that use silver will go up, or people like George Soros and Jim Rogers will sell their metals, and I read that Soros already is.

    Rogers said he'd sell when the "mania sets in." Has it set in? Are people going to lose their money now?

    I Hope so. Every gold-lover I've met on the internet seems to be a JERK.