BigGovernment.com
Posted Feb 22nd 2011 at 5:33 pm
The Federal Reserve’s QE2 stimulus has stoked a fire storm of global of inflation. What began in the Middle East and North Africa as a rebellion against rising food and basic essentials for some of the poorest people on earth has now spread to supposed success stories, like China. Over the weekend, rioting broke out in Beijing, Shanghai and 11 other major cities to the chant of “We want food, we want work, we want housing, we want fairness”. As inflation moves on from food to rising fuel costs and then mounting raw material imports; the U.S. is about to be hammered by the combination of higher prices squeezing consumer discretionary spending and higher material costs hurting business profits. Americans need to be prepared this fall for the economy’s ugliest witch’s brew: STAGFLATION.
Chinese police deployed in large numbers this weekend to quash what is being called the “Jasmine Revolution”. China’s authoritarian Communist leadership is trying to short-circuit dissent before it spins into the type of popular uprisings seen in Egypt, Tunisia, Bahrain, Yemen, Algeria and Libya; where over 500 people have died. Although Chinese law enforcement tried to crack down on Internet communications, cell phone pictures and videos of protestor’s resentment and desperation is leaking out.
Americans should not be fooled that these protests are someone else’s problems. We may only spend about 10% of our income on food, but much of the rest of the world spends 1/2 their income on food. When people who have little or nothing see what little they have evaporating, there is no downside to violent confrontation with the establishment.
As Federal Reserve Chairman Ben Bernanke is caught in the headlights of world anger over the inflationary ravages from his flooding the world with cheap dollars; he lashed out at investors for fanning inflation.
No comments:
Post a Comment