Rising Food and Energy Costs – Coming to Your Neighborhood

Posted by Bill Bonner - The Daily Reckoning

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11/01/10 Baltimore, Maryland – “Retirement Disaster Ahead,” says The Wall Street Journal.

Yep. Too many retirees. Too little money.

They’re counting on Social Security. But as we see above, government is going to have a hard time honoring its commitments.

The other thing that is happening is that some basic costs – namely food and energy – are going up, even as the consumer price index stays flat.

Why are food and energy becoming more expensive? Because the foreigners are buying food and energy. And there are a lot of them. Foreigners, that is.

And why is that bad news? Where does that leave the typical US retiree? Without increases in the CPI the US government doesn’t adjust Social Security payments to the upside. Meanwhile, the real cost of being retired – food, fuel…along with everything else – goes up.

Most likely, the strain of trying to support so many retired people will destroy the modern welfare state model. As in Argentina, old folks will find that they don’t get from the government what they were promised. They’ll have to figure out how to make do on their own.

Our advice: don’t grow old. Don’t retire. Don’t get sick. Don’t trust the feds. And don’t sell your gold.


Bill Bonner
for The Daily Reckoning

Guess What’s Coming to Dinner: Inflation! (Part Two of Two)

11/01/10 London, England – We have suggested in past Amphora Reports that the Fed’s eagerness to expand its current program of POMO Treasury purchases–known in the contemporary financial jargon as QE2 for “quantitative easing round two”–is perhaps best explained by an ulterior motive, that is, to weaken the dollar, thereby facilitating the importation of inflation via higher import prices, including of course commodities but also other imported goods. Now the Fed would not and in fact legally cannot seek to devalue the dollar, as US currency policy resides with the Treasury, not the Fed. But of course Fed policies can have a huge impact on the dollar and, as long as the Treasury does not oppose them, then for all practical purposes, the Fed implements currency policy. In the current instance, if the Fed is indeed seeking a weaker dollar, then the US is rightly considered to have a “weak dollar policy”, in sharp contrast to the “strong dollar policy” which was explicitly followed by the Clinton administration in the 1990s.

…..read more HERE