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Old 02-21-2011, 05:55 PM
 
Location: Fredericktown,Ohio
6,523 posts, read 4,157,200 times
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Awhile back I posted a remark by Barnanke that even though he saw a rise in commodities he did not think the corporations would pass it along to consumers. Well he was wrong again :
Quote:
While the 0.7 percent rise in the cost of food at home last month was not as dire as an 18 percent surge in food prices that helped send people into the streets in Egypt and other Middle Eastern countries, it poses a growing burden for U.S. consumers who are already contending with the highest gasoline prices ever seen at this time of year.
“The surge in commodity prices is starting to feed through to the consumer,” said Harm Bandholz, an economist at Unicredit Markets. He predicted that prices will keep accelerating in coming months and nearly double the inflation rate to 2.75 percent by the middle of the year on the rising tide of commodity inflation.
Sorry I forgot that Uncle Ben never drives a car or goes grocery shopping so he does not know. Here is another profound statement for the archives :
Quote:
Mr Bandholz said he was surprised at how quickly this prompted U.S. businesses to start passing on their costs to consumers.
Of course they were going to respond, they see what is taking place in the market. Did he expect them to sit on the sidelines and be Mr Nice Guy and suffer decreased profit? That is 3rd grade economics when you have increased production/material cost you will have to increase your sell price.
Inflation makes comeback as prices rise for food, fuel - Washington Times
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Old 02-21-2011, 07:37 PM
 
Location: Great State of Texas
86,093 posts, read 69,929,185 times
Reputation: 27520
Bernanke has been wrong on a lot of turns.
Just like his predecessor who thought the banks could self-police.

The green shoots have turned into gangrene.
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Old 02-21-2011, 07:51 PM
 
1,168 posts, read 1,002,945 times
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Bernanke is either really stupid and should be institutionalized or he is intentionally wrecking the economy and should be imprisoned
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Old 02-21-2011, 08:07 PM
 
Location: Ohio
18,047 posts, read 13,258,699 times
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Quote:
Originally Posted by EuroTrashed View Post
Bernanke is either really stupid and should be institutionalized or he is intentionally wrecking the economy and should be imprisoned
It isn't Bernanke's fault that iron production has declined, or that cotton and certain food commodities crops suffered poor harvests, and that weather has been bad to severe in many regions of the world, or that demand continues to increase in spite of poor harvests.

I guess next you'll blame Bernanke for causing the earthquake in New Zealand.
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Old 02-21-2011, 08:17 PM
 
1,168 posts, read 1,002,945 times
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Quote:
Originally Posted by Mircea View Post
It isn't Bernanke's fault that iron production has declined, or that cotton and certain food commodities crops suffered poor harvests, and that weather has been bad to severe in many regions of the world, or that demand continues to increase in spite of poor harvests.
And why wouldn't business pass these costs along to consumers?
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Old 02-22-2011, 08:04 AM
 
Location: Fredericktown,Ohio
6,523 posts, read 4,157,200 times
Reputation: 2568
Quote:
Originally Posted by Mircea View Post
It isn't Bernanke's fault that iron production has declined, or that cotton and certain food commodities crops suffered poor harvests, and that weather has been bad to severe in many regions of the world, or that demand continues to increase in spite of poor harvests.

I guess next you'll blame Bernanke for causing the earthquake in New Zealand.
Here is the quote from Barnanke :
Quote:
Bernanke said he expected inflation to be quite low despite a recent increase in commodities prices, such as oil and gasoline. The Fed has said that it believes competitive pressures will prevent companies from passing along all of these higher costs by significantly boosting prices to consumers.
No one is saying that it is his fault but he has been a willing contributer with the printing of money. What baffles some of us is Barnanke can see what is going on around him but comes to the wrong conclusion.
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Old 02-22-2011, 09:47 AM
 
Location: Houston, Tx
3,644 posts, read 5,410,857 times
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Does the Fed even look at food and energy prices when making policy decisions? They always talk about the "core rate" of inflation, which excludes food and energy. Some newscasters have even started joking about it saying, "...so if you don't need to eat or use electricity you'll be fine". You'd think that enough people making dark humor jokes like that would make the Fed take a second look at the way they calculate inflation and realize how out of touch it is with the average American's monetary decisions.
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Old 02-22-2011, 09:51 AM
 
14,253 posts, read 14,752,548 times
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Because they want to keep interest rates low so they cannot admit to inflation. But inflation is coming. Just ask any of the wealth management guys on Wall St. They are all busy readjusting portfolios to deal with it.
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Old 02-22-2011, 09:52 AM
 
Location: Tower of Heaven
4,023 posts, read 6,268,769 times
Reputation: 1438
Who is Barnanke ?
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