Traders Not Causing Higher Food Prices

From a story on Marketwatch.com today:

The latest report from the Commodity Futures Traders Commission about outstanding rice contracts shows that only about 19% of them are held by non-commercial investors, or companies that might be speculating as opposed to actually hedging against price moves.

He said effects such as production problems, demand increases, the increase in energy costs for producers, and even the decline in the value of the U.S. dollar have all played even bigger roles in contributing to the surge in prices. The dollar itself has contributed to about 25% of the price increases in agricultural commodities, especially in corn and wheat, he said.

"We had a bit of a perfect storm in a lot of these markets," over the past year, he said. "Commodities are very energy intensive to produce and transport."

Economic Stimulus: Are These People Insane?

The blowhards in Washington have now decided that since the economy is slowing down, it is their obligation to do something about it. And what's their answer? Send free money to everyone! They will now print -- or borrow -- more fiat money, so that they can send everyone some of that free money.

Sounds like a helicopter drop to me!

I have a better idea. Why don't they just print more money and send a check to every American each month, and we'll all just stop working and live off the "economic stimulus" checks each month? Then, we can all sit around watching TV and playing monopoly with the play money the government provides to each of us to live on. We'll just sit and get fat waiting for our monthly "economic stimulus". Absurd thought, isn't it? And yet the politicos make it sound soooo good when they couch such absurdities in talk of "packages", percent of GDP, timeliness, etc. It's still free money -- responsibility-free!

How long can we simply print more money, without any plan for earning it, and just give it away, without the chickens coming home to roost? Eventually, simply creating more and more paper money, and more and more debt, won't work any more, and the house of economic cards will collapse. When Americans begin to realize that all this money is just created from thin air, they will lose confidence in it, and hyperinflation will be the result. No one will want to accept it because it will be just paper. Heaven help us all when that day comes!

Note: while the graphic indicates when Ronald Reagan took office, it does not indicate that Reagan begged and pleaded for the Democrat-controlled Congress to cut spending, but they never did. The Constitution clearly states that Congress is responsible for the budget and spending, not the President. Reagan still signed the appropriations bills, however. At best, I suppose we can affix blame to both parties. During the Bush years, however, the exploding deficit and spending could only be laid at the feet of the Republicans. That's why neither party, in my view, has any credibility left in talking about controlling their spendthrift ways. It's all just talk!

The creating of more and more paper money, combined with mailing all this new money to everyone -- a helicopter drop -- will just create more and more inflation. (See the purple-colored graph.) Our government hopes that it can simply inflate its way out of economic distress. The danger is that throughout human history, eventually, every system of fiat money has lead to hyperinflation as the citizens realize that their money has no foundational value, and they spend it as fast as they can acquire it, leading to hyperinflation and eventual collapse into worthlessness. Those who are unwilling to learn the lessons of history are doomed to repeat them!

U.S. Government deficits on the rise again

Here is some news that hardly makes the media reports, but it's true. Beginning about 3 months ago, the U.S. government has begun to report that budget deficits are rising again. If Congress and the President don't pull out the budget scalpel or raise taxes, the deficits will rise even faster. I haven't heard either seriously talk about cutting the size of government!

Republicans and Democrats BOTH to blame!

While I am politically conservative, and believe generally that less government is better government, Congress and the President are going to have to start cutting spending dramatically or else taxes will have to be raised. Let the record show that I prefer the former. This fiscal ship is heading into a financial tsunami, and no one wants to take responsibility for it. Both Republicans and Democrats are more concerned about maintaining or obtaining greater power than doing what's best for the Republic or the American people.

The Republicans abandoned their principles for the sake of power, and they have now lost both. It's no coincidence!
The Democrats have always believed they have a right to take what belongs to other people, for which there is never an excuse.

I'm disgusted with them all.

Stealing is still stealing whether by hand or by vote!

Why is it that if someone takes the property of someone else with their hands, we call it "stealing" and send them to prison. However, if we hide behind our vote and steal someone else's property via a corrupt politician, we applaud the politician and name freeways and buildings after them. It's still stealing, either way! It's still coveting property of another, either way. I doubt if our Maker is so deceived.

The Founders knew and provided for appropriate government

"The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If `Thou shalt not covet' and `Thou shalt not steal' were not commandments of Heaven, they must be made inviolable precepts in every society before it can be civilized or made free." -- John Adams (A Defense of the American Constitutions, 1787)

Wise man, that John Adams! We would do well to learn from him and the other Founders. They were wise men, all! God bless their hallowed names!

The Founders also provided for effective and limited government, as well as appropriate and sufficient revenues for that limited government in the Constitution, but we have proudly abrogated that precious document and destroyed the Republic they gave us, until now, I believe it hangs by a thread. There will be hell to pay!