Devaluing of the Dollar Making Gas & Food Prices Skyrocket
Posted By Vicki McClure Davidson on April 25, 2011
The federal government continues to print money, devaluing the dollar and causing gas prices and food prices to skyrocket. The policies coming from the Oval Office are adding to the imminent economic disaster.
From CNBC, Don’t Like a Weak Dollar? Might as Well Get Used to It:
Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market.
The greenback is approaching pre-financial crisis lows and threatening to smash through its all-time low when measured against the world’s predominant national currencies.
A combination of factors accounts for the weakness, with the Federal Reserve’s easy-money policies, huge national debts and deficits and the consequential possibility of a debt downgrade because of the financial mess in Washington leading the way.
In short, as trader Dennis Gartman noted Thursday, “the rout of the US dollar” is in full effect.
“Panic dollar selling is setting in,” Gartman, a hedge fund manager and author of “The Gartman Letter,” wrote in his daily commentary. “This may carry farther than any of us dream of or, worse, have nightmares of.”
From LA Times:
U.S. crude oil prices, which ended the week at $112.29 a barrel, just under a 2 1/2-year high, have been driven up this year largely by the unrest sweeping the Middle East and North Africa. But because oil and other raw materials are traded in dollars, as the buck slides commodities get cheaper for investors whose own currencies are rising. It’s an invitation to speculation, which in turn feeds inflation in hard assets, including energy and food.
[...]
Global investors have another dollar-related incentive to pile into commodities: If they expect that the U.S. won’t rein in its record budget deficits and that Treasury borrowing will continue to mushroom, hard assets become a potential hedge against U.S. fiscal calamity that could drive interest rates sky high.
From Ace of Spades HQ: Obama’s Own Policies Are Driving The Very Speculators He’s Railing Against In Regard To Fuel Prices [CDR M]:
I assume one would have to believe gas prices are rising because of the turmoil in the Middle East in order to fall for this. But gas prices have risen almost a $1 from a year ago and are up over 100% since Obama was inaugurated. This hasn’t been a short term problem and Obama’s policies are making it worse.
As the dollar gets weaker, oil goes higher. Now what’s making the dollar weaker right now? Ah, QE2 is a major culprit. Since Bernanke works for the President, I think we can assume that the Prez has endorsed QE2.
[...]
Do note that every time President Bush faced rising gas costs, the media and Democrats never acknowledged that there was nothing that could be done in the short term. Not once. You’d always see them calling for investigations (like Obama), or calling to release the strategic reserve (Obama talked about it back in December, but nary a peep on this since therefore it must’ve been a half baked idea in the first place and every time Democrats called for it in previous years.), or calling for a windfall tax on oil companies (Obama hasn’t yet but I’m sure that’s coming).
Let’s not kid ourselves though. We all know Obama WANTS gas prices to rise. He said so back in 2008. He wants you to have to buy a new Chevy Volt. He wants us to go green and by causing a crisis, he’s hoping he can push his agenda through in regard to green energy, regardless of whether or not it’ll work, or save money or actually save the planet. And you can count on the MSM to carry his water. Just like it’s doing now.
This can’t be good — hyperinflation will slam us if this happens… reported by Zero Hedge:
China has decided to serve the world another surprise. Following last week’s announcement by PBoC Governor Zhou (Where’s Waldo) Xiaochuan that the country’s excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the “buy US debt” Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that “end of QE” again?
Doug Ross has more on this… China floats the idea of selling two-thirds of its US debt. Say, I wonder what will happen to gas and food prices when that happens?
Gas prices have hit a new record in Barack’s old stomping grounds, Chicago… reported by CBS Chicago, Gasoline Prices In Chicago Are Highest In Nation:
CHICAGO (CBS) — The price for a gallon of gasoline in Chicago is now the highest in the nation.
According to the Lundberg survey, the average price for a gallon of unleaded regular gasoline in Chicago now stands at $4.27–a 12 cent increase in the past two weeks. And that’s just the average. Several stations in Chicago were selling gasoline for between $4.60 and $4.70 a gallon, according to chicagogasprices.com.
From Doug Powers @ Michelle Malkin, Obama: No ‘Silver Bullet’ to Bring Down the Price of Gas:
There are several “silver bullets” to help bring down the price of gas, but none of those pieces of silver create gold for the “green” sector or keep the tax stream flowing to government, so motorists will keep being in the red for the foreseeable future:
President Barack Obama reiterated his plan to stabilize soaring gas prices, telling Americans in his weekly address on Saturday that “instead of subsidizing yesterday’s energy sources, we need to invest in tomorrow’s.”
At a time when the economy is struggling to rebound and many people are still searching for jobs, a $4 per gallon price tag is “just another burden when things were already pretty tough,” Obama said.
Echoing a criticism he has made frequently in the past, the president condemned politicians who “score a few points” by offering quick-fix solutions whenever there is a spike in gas prices. “The truth is, there’s no silver bullet that can bring down gas prices right away,” Obama said.
So far Obama’s only real solution for strapped consumers has been to tell them to trade in their gas guzzlers for kumquat-powered golf carts and to mock “drill baby drill,” and yet the oil market seems unimpressed.
About the author
You write: Also, loving God, my family, and my country. Be wise, be frugal. God bless America!
I agree with one exception, God bless America and the rest of the World, too. I was born in America, but I sure hope God bless all his children and not only those in America.
Obviously, you’ve not read many of my posts. I’ve offered prayers often to the tortured, devalued Muslim women in Afghanistan and other Islamic countries, to the devastation of those in living in Japan, Haiti, Pakistan, and New Zealand and many other countries following natural disasters, of the carnage in the streets in Libya and Egypt, of the hopelessness and poverty in Mexico and economic tragedy in Greece, to Russians who were killed last year in a Muslim bombing attack, of the oppression of Cubans under the tyrannical dictatorship of Castro, and many other events and people outside of this country. I also did not mention my deep appreciation and love of strong coffee and sushi, of word games, of classic Hollywood, of Ogden Nash, and of “Burn Notice” in that brief bio… so don’t hold THAT against me, LOL. Listing everything I love in a paragraph is just plain silly – read my posts and you’ll be far better informed about my myriad compassions and prayers for God’s blessings than from what a short paragraph can convey.
Thanks for popping in – hope to see you again.
Sorry! I guess I hear and see so much, “God Bless America” and not so much “God Bless the World”. I work so many hours on my regular job, spend too little with my family, and God. My priorities are somewhat backwards, I think. If our government(s) had not devalued our money so much, we all might have more time for the most important things in life. I’m getting up there in the years and never did find my God given purpose in life, but I know He has richly blessed me. My wife does not work outside the house, but instead takes care of the house, children, and organic garden. My mother always said, “A woman’s work is never finished.” We live in drought stricken Texas and have had no more than one inch of rain in the past 10 months. Our water bill might exceed our electric bill this summer. We are part time beekeepers and without rain we won’t have flowers for the bees to collect nectar and pollen. From what I’ve read, our bumblebees have largely disappeared and honey bees are suffering from colony collapse disorder, or maybe God is trying to get our attention. People may have to start pollinate their own crops without the help from bees.
America and the world might be in for some really tough times. Most of us may not be able to afford the cost of food, or with flooding or droughts, there may not be much food to purchase. Maybe there is a purpose behind all of this, such as bringing us closer together and closer to God.
I better bookmark your website and read more. Just found your website today. I think my wife will enjoy reading here. She is from the Philippines and has known years of hunger when her and her family were thankful to have one cup of rice and one sardine per day each. Their family honeybee business was wiped out by bee mites, not because they did not know about them, but because they could not find a source for the treatment to protect their bees from the mites. The family is back on their feet now.
Thanks for your reply and what you contribute!
If I posted twice by mistake, sorry.
No worries – I removed the second post that was a duplicate.
On the subject of wise and frugal; I wanted to purchase health insurance for my family since Obama supposedly improved our ability to buy insurance. I checked with two insurance companies and for my family, the monthly premium was over $1000.00, for in network coverage of 60% and the family deductible was over $20,000.00 per year. I don’t see how the average working family can afford health insurance. We don’t have health insurance and try our best to maintain our health. Although socialized health care is no answer, I wonder if there is any possible answer. Americans on average look a bit overweight as compared to most people in third world countries so maybe some Americans that eat a little too much and eat unhealthy diets are creating a health care system that takes advantage of or sees this is an opportunity. By wise and frugal eating and thinking we might help our health care system and each other.
On the subject of energy consumption; American homes seem to be getting larger with smaller families. This seems backwards. I heard a young mother complaining that her house of 1200 square feet was just too small for her family of 5. She said it was her grandmother’s house and her grandmother raised 12 children in this tiny house. Hmmm, I wonder what’s wrong here.
Most American homes are built with “non frugal” outdated building methods, especially insulation. Fiberglass insulation is one of the poorest insulating materials. Polystyrene and polyurethane are far and away much better. A smart built home with modern insulation and other building materials would reduce energy consumption enormously. Building homes just large enough and not too big would help, too.
Some thought-provoking points made.