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