The Price Of Oil Is Going Up, The Price Of Food Is Going Up And Now Here Comes Quantitative Easing

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Millions of American families are about to be broadsided by rising gas and food prices and most of them don’t even realize it.  You see, most Americans stop listening when terms such as “quantitative easing” and “agricultural commodities” are brought up, but when millions more Americans are faced with a choice of either feeding their families or heating their homes this winter, maybe then they will start listening.  Even before the Federal Reserve announced the latest round of quantitative easing, the price of oil has been going up and the price of food has been going up.  Now that the Federal Reserve has announced plans to flood the economy with hundreds of billions more dollars, the inflation monster is going to get even hungrier.  The household budgets of scores of American families are going to be stretched beyond the breaking point as prices rise.  Meanwhile, the vast majority of U.S. employers will not be giving their workers raises to keep up with inflation.  After all, why should they?  If someone wants to quit there are hordes of unemployed Americans out there who would just love to take that job in a second.


Quantitative easing is being heralded as the solution to America’s economic problems, but for hard working middle class Americans it is only going to make things worse.  Inflation is going to soar while wages are going to stagnate at best.  This will mean a lower standard of living for average Americans.

The kind of “trickle down” economics that the Federal Reserve is trying to play does not work in 2010.  The advocates of quantitative easing believe that by flooding the financial system with massive amounts of new money, banks will eventually start lending it out to average Americans and that will spark an increase in economic activity.

But that is not the way the game is played in 2010.  What happened with the bailouts and what happened with the last round of quantitative easing is that the big financial institutions took most of that cash and used it to pump up speculative bubbles all over the globe.

For example, Brazil’s stock market has more than doubled since the beginning of 2009.  Needless to say, it was foreign speculation that drove most of that activity.

Another place where we are seeing bubbles develop is in the commodities markets.

On Thursday, the price of oil topped 86 dollars a barrel.  In fact, the price of oil has gained more than 6 percent just this week.

Unfortunately, there are a lot of people that believe that the price of oil is going to go a lot higher.

Lawrence Eagles, a top analyst at JP Morgan, recently caused waves when he speculated that oil could hit 100 dollars a barrel “much sooner than we expect”.

OPEC Secretary General Abdullah al-Badri recently said that oil at $90 a barrel would not be a bad thing for the world economy.

Libya’s National Oil Corporation chairman Shokri Ghanem recently declared that his nation “would love to see $100 a barrel”.  In fact, there are quite a few OPEC officials that are publicly discussing the possibility of 100 dollar oil.

As the price of oil goes up, the price of thousands of other products will also go up.


Well, anything that must be transported is affected by the price of oil.  So a significant rise in the price of oil will have a cascading impact throughout the economy.

But it is not just oil that is moving up in price.  As the dollar has declined in 2010, prices for many important agricultural commodities have soared into the stratosphere.

A recent article on the Forbes website noted just a few of the key agricultural commodities that have absolutely skyrocketed this year….

Here’s what’s happened to some key farm commodities so far in 2010…

•Corn: Up 63%
•Wheat: Up 84%
•Soybeans: Up 24%
•Sugar: Up 55%

Anyone who believes that these commodity price increases are not going to be passed on to U.S. consumers is delusional.  Literally thousands of food products are about to go up in price.

The rapid rise of some of these commodities has been nothing less than shocking.  For example, the price of wheat soared from 158 dollars per ton in June to 271 dollars per ton in September.

That was a 71 percent increase in just a couple of months.

Just think about how many food products contain wheat.

This is quickly becoming very serious.

Now the Federal Reserve is going to be swamping the economy with hundreds of billions of dollars of new money.

So how much of that money do you think is going to end up in your hands?

When new dollars are introduced into the financial system, the value of all existing dollars goes down.

Soon your dollars are not going to go nearly as far as they did before.

Already we are starting to see some very troubling signs of inflation in the economy.  For example, UPS has just announced that they are raising shipping rates by 4.9 percent.

Expect hordes of companies to announce price increases over the coming months.  But with millions of Americans still unemployed, don’t expect wage increases to follow. In fact, total wages, median wages, and average wages all declined in the United States in 2009.

We are entering a time that is going to be very difficult on most American families.  Many are going to really have to tighten their belts to make it through this.  Many others are simply not going to make it and will need our help.

The “good times” that we have been experiencing in America for decades are about to come to an end.  All of the debt and all of the greed are catching up with us.  A devastating financial collapse is coming and you had better get ready.

  • mondobeyondo

    Is there still time to move what’s left of my financial assets to Zimbabwe??

  • Jennifer

    Why am I not surprised? This trend of inflation vs minimum wage has been occurring for some time. Not just recently. After moving from my parents house to my own place, I realized that right off. Too bad there’s not a thing we can do about it except prepare by stocking up now. That’s if you have a place to put it, since a roomier home costs more. Let alone adequate space and proper storage area to store food for a long period of time. Our house has no pantry. Its an old house with a small kitchen. As is things sit on the counter. We just don’t have the storage space for such items. Get ready to lick boots and booty to keep a head up.

  • xander cross

    Indeed. Get ready. But then again, most people will listen to lady gaga and watch SNL.

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  • mondobeyondo

    Oil is used obviously for transportation.
    Oil is used to make fertilizer, which is used to grow corn, wheat, cotton, etc.
    People in India and China are beginning to like pork and beef products.
    Cows and hogs have to eat (preferably corn, etc).
    People have to wear stuff too. (hint: buy cotton clothing now – while you still can!!)

    Not to mention, there are more dollars floating around, thanks to the Fed’s QE2 debacle.

    Bottom line: EVERYTHING is going to go up.
    And up, and up, and up. And up.
    Gold, silver, commodities, food, lumber – etc.
    (Well, not everything. The dollar’s gonna plunge like a rock.)

    P.S. You’re welcome! And Happy New Year to you, too!

  • zack

    I guess Ben Bernanke doesn’t think we’re paying enough at the grocery store or the gas pump yet. This guy lives off the Federal Reserve’s expense account, so he has no idea what we have to deal with.

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  • Prices are going up, the economy is in a tailspin, what we need is to lower taxes and bring our economy back! Check out my book at for more information.

  • Frank

    My name is Frank and I live In Belgium,Europe.
    I read The comments with great interest and I think it is a shame that such a great nation can go down so fast.I am a mechanic for detroit diesel engines(25 years)and I love the United States.I wish You all hope and strenght in these difficult times.
    God bless America.

  • Bead StallCup

    Yes, you are right, the price of everything is about to take a “quantitative jump”, thanks almost exclusively to the greed of the politicians in Washington DC and “quantitative deceiving”, by Benny “the Bagman” Bernanke and his deliberately inflationary policy of dumping 100s of billions of dollars into the economy. But he’s doing it not so the working people of America will have a break, hardly. He’s doing it so the parasites in Washington DC will have more loot to piss off on luxuries, vacations, fat retirements and foreign military adventures. Wake up America, wake up, you are being screwed to the wall by US politicians, republican AND democrat. In fact, these politicians in DC are trying to put you into a position of financial helplessness so they can have their way with those segments of American society they want to exploit and eliminate, such as the middle class, where there is still a great deal of wealth to be plundered by these politicians.

  • Copperhead

    Frank, I didnt think there were any in Europe that still liked the U.S. Thanks for the good wishes as we aregoing to need them. I’m afraid that we are in for some bad times that will make the Great Depression look like a birthday party.

  • America has been in one great depression, I’m pretty sure we will make it through another.

    People will have to learn to cut down on spending as I see individuals buying IPhones and other expensive items and I ask myself, how bad is the economy if people still buy what they don’t need or believe what they need.

    We are controlled ants watched by our own government by millions of cameras. Pigs will continue to fight for oil.