Corn and soybean futures prices reached record highs this month, and wheat rose to its highest since 2008 as crop conditions worsened in the US grain-growing regions. This, however, should not be considered price inflation in the sense that all prices are rising.
Food prices are climbing because of supply problems, not because of Fed money printing. If the Fed starts printing aggressively again, either because of a stock market crash or after the election, food prices will climb even higher, perhaps at double-digit rates.
"If the Fed starts printing aggressively
ReplyDeleteagain, either because of a stock market crash or after the election, food prices will climb even higher, perhaps at double-digit rates. "
Can you explain why in mid 2011 when m2 increased in double digit rates, commodities prices actually started trending down? I remember you said "new money" always entered commodities first, but I didn't see that reflected in the commodities prices. Looking at m2 doesn't seem like much of a reliable guide to predict inflation to me.