Central bank liquidity is gushing everywhere, leading to protests over high prices in India, Ukraine and China, the Financial Times reports.
Stefan Wagstyl and Jonathan Wheatley write, “The main driver of inflation in the past 18 months has been the soaring rise in oil, food, and raw materials prices, powered by growing demand from China, India and other emerging countries.”
Of course the price increases are the result of money printing and not the “main driver of inflation.”
Prices are rising at a 25% clip in Argentina, while the that government claims the number to be 10%.
Some Chinese employers are having to hike wages 20% to 40% and Brazil’s minimum wage is set to increase 6% this year and possibly 14% next.
And while the public always accuse merchants of gouging them with higher prices, the F-T piece points out, “higher costs are squeezing industry’s margins.”
Meanwhile the IMF claims core inflation is up 2-3.75% and Ben Bernanke contends the rise in commodity prices is “transitory.”
{ 9 comments }
Can we stop pretending that anything Ben Bernanke says has any validity at all, ever?
Since money is no longer a store of value, the international money traders and the commodities market can keep the world in balance. The big problem for the working class is that union contracts will always be a year or so behind the inflation.
Do you seriously try to be this wrong or is it some sort of gift you have?
I’d be more lenient but you don’t even reject central banking, so you DESERVE everything you receive from “bankers”
Re: billwald,
There’s no connection between “the middle class” and unions, so whatever unions do with their contracts is irrelevant.
The idea that the so-called “middle class” came into existence thanks only to unions is a myth perpetuated by the unions and the unionphilic, a very clumsy myth at that.
Re: billwald,
Money was never a store of value.
“Money was never a store of value”
Then why did people from the ancient times up until the 1913 Fed Reserve Act flock to a unique element that is not merely fungible (ie suitable for exchange) but also one that does not corrode over time, is not easily inflated and is not easily imitated?
Isn’t he making the differentiation between currency and money?
Because money-status is not predicated on being a store of value, but on universality of acceptance. It’s separate conceptually.
The brazilian official inflation index, the IPCA (Broad Consumer Price Index), has increased 214% since 1994 (when the 80′s hyperinflation ended). While the official index says this, everybody in any place can remember that prices in 1995 were kinda 5x times cheaper.
For the same period, the GDP Deflator has increased 542% and the minimun wage 500%. Which shows us that these are much better indexes for the “price inflation”. And look where we are now.
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