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Import prices just exploded higher by 2.7% last month after a 1.4% surge in February.
On an annualized basis, that means import price inflation is running at a rate of over 32% without compounding!
Heck, even if you strip out all fuels (since, you know, the Fed thinks none of us drive or heat our homes), you get a 0.6% rise. That’s the fastest rate of non-energy inflation since October 2008!
With this kind of inflation, you’d think Ben Bernanke and his buddies at the Fed would be at least a little bit disturbed — that they’d worry about the massive surges in oil, cotton, corn and plenty of other things that we use on a daily basis.
But recent speeches from Fed officials not only downplay these HUGE moves … they promise to keep pumping even MORE money into the markets!
Just listen to what Federal Reserve Vice Chairman Janet Yellen said this week:
“The surge in commodity prices over the past year appears to be largely attributable to a combination of rising global demand and disruptions in global supply. These developments seem unlikely to have persistent effects on consumer inflation … [and] do not, in my view, warrant any substantial shift in the stance of monetary policy.”
Translation? “Yeah, prices are rising like crazy. But it’s not our fault and it shouldn’t really be hurting you very much anyway. So we’re going to keep printing money.”
Yellen isn’t alone either. Her comments came mere hours after William Dudley, the president of the N.Y. Fed, pledged to keep the money printing presses rolling … and only a few days after Bernanke himself promised more of the same!
My take? The men and women at the Fed have lost their marbles! They’re completely divorced from reality!
First of all, even if you accept their argument that global demand is behind some of this inflation … do they expect THAT to stop anytime soon?
Second, do they think that by printing more dollars to chase the same basket of goods, it’s HELPING the situation?
And third, anyone who fills their car with gas or buys groceries for their family knows inflation isn’t “transitory,” to use the Fed’s latest catch phrase. It’s widespread, persistent, and accelerating virtually every day!
Bernanke’s Tacit Message to America:
“I Don’t Care. I’ll Keep Doing as I Please!”
It’s pretty clear that Bernanke & Co. don’t want to even try and tackle the big issues. The problem is, they no longer have the luxury of time!
Big foreign investors are running as fast as they can away from the U.S. dollar, away from Treasury bonds, and away from nearly anything else based on the “full faith and credit of the U.S. government.” They simply don’t trust the Fed or the Treasury to protect the value of their investments.
And in a startling revelation yesterday, we learned that at least one major U.S. investor is now betting AGAINST the U.S. government!
Bill Gross, the largest bond investor in the world, just reported that his allocation to long-term U.S. debt had plunged to NEGATIVE three percent!
In plain English, Bill Gross is shorting the U.S. government!
So I ask you: How long will it be until more and more investors start doing the same? Until they call Washington’s bluff? And until Federal Reserve officials can no longer deliver their “no inflation” lies without dire — and immediate — consequences?
Fortunately, you don’t have to stand idly by, waiting for the answers.
As Dr. Weiss explains in his landmark video presentation — American Apocalypse — there are very clear steps you can take right now to insulate yourself and your family from the consequences of this historic event. And even investments you can use to multiply your money many times over in 2011 and 2012!
Be sure to watch American Apocalypse now, while there’s still time to act.
Best wishes,
Mike
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
