Posts Tagged ‘1970s’

Everyone But Obama And Obama’s Fed Knows That Prices Are Rising Drastically

May 9, 2011

I’m from the government, and I’m here to mislead you.

Sticker Shock
Niall Ferguson – Mon May 2, 3:33 am ET

NEW YORK – Sticker ShockThe Fed may deny it, but Americans know that prices are rising. In this week’s Newsweek, Niall Ferguson takes a look at the Great Inflation of the 2010s.

“I can’t eat an iPad.” This could go down in history as the line that launched the great inflation of the 2010s.

Back in March, the president of the New York Federal Reserve, William Dudley, was trying to explain to the citizens of Queens, N.Y., why they had no cause to worry about inflation. Dudley, a former chief economist at Goldman Sachs, put it this way: “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful. You have to look at the prices of all things.” Quick as a flash came a voice from the audience: “I can’t eat an iPad.”

Dudley’s boss, Ben Bernanke, was more tactful in his first-ever press conference on Wednesday of last week. But he didn’t succeed in narrowing the gap between the Fed’s view of inflation and the public’s.

I respect Bernanke. As an expert on the financial history of the 1930s, he was one of the very few people in power back in 2008 who grasped how close we were to another Great Depression. But if we’ve avoided rerunning the 1930s only to end up with a repeat of the 1970s, the public will judge him to have failed.

To ordinary Americans, however, it’s not the online price of an iPad that matters; it’s prices of food on the shelf and gasoline at the pump.

To this, the Fed has a stock response. It points to the all-urban consumer price index (CPI-U) and notes that it was up only 2.7 percent in March relative to the same month a year earlier. Strip out the costs of food and energy, and “core CPI”—the Fed’s preferred measure—is just 1.2 percent. When Google unveils its new index of online prices, it’s likely to tell a similar story.

To ordinary Americans, however, it’s not the online price of an iPad that matters; it’s prices of food on the shelf and gasoline at the pump. These, after all, are the costs they encounter most frequently. And with average gas prices hitting $3.88 a gallon last week, filling up is now twice as painful as when President Obama took office.

Sensing a threat to his hopes of reelection, the president last week called on Congress to eliminate “unwarranted” tax breaks for oil companies and set up a Justice Department task force to investigate price gouging and fraud in the oil markets. Give me a break. The spike in gas prices is the result of Fed policy, which has increased the monetary base threefold in as many years, and a geopolitical crisis in the Middle East that the president and his advisers still haven’t gotten a handle on.

And the reason the CPI is losing credibility is that, as economist John Williams tirelessly points out, it’s a bogus index. The way inflation is calculated by the Bureau of Labor Statistics has been “improved” 24 times since 1978. If the old methods were still used, the CPI would actually be 10 percent. Yes, folks, double-digit inflation is back. Pretty soon you’ll be able to figure out the real inflation rate just by moving the decimal point in the core CPI one place to the right.

It’s not only the BLS that speaks with a forked tongue. Members of the Council on Foreign Relations last week heard Treasury Secretary Tim Geithner say: “Our policy has been and will always be that a strong dollar is in the interest of the country.” Fact: the dollar has depreciated relative to other currencies by 17 percent since 2009. That European vacation is going to cost nearly a fifth more than you anticipated when you booked the flights a year ago.

I grew up in the 1970s. My first-ever publication, when I was 10, was a letter to the Glasgow Herald lamenting the soaring price of school shoes (I genuinely thought my feet were growing too fast). I wrote my Ph.D. dissertation about German hyperinflation. So perhaps I’m also hypersensitive. Maybe in June, when the Fed stops quantitative easing (its program of injecting cash by buying government bonds), inflation will recede. Maybe high fuel prices will, as Goldman Sachs predicts, slow the economy and revive the specter of deflation.

Maybe. Or maybe inflation expectations started shifting when the guy from Goldman—a Marie Antoinette for our times—seemed to say: let them eat iPads!

Niall Ferguson is a professor of history at Harvard University and a professor of business administration at Harvard Business School. He is also a senior research fellow at Jesus College, Oxford University, and a senior fellow at the Hoover Institution, Stanford University. His latest book, The Ascent of Money: A Financial History of the World, was published in November.

IPads may start looking tastier and tastier as food prices keep soaring.

Allow me to re-introduce an article which I wrote in October of last year titled “Financial Expert HOPES Inflation Will Only Be As Bad As 1970s“:

The numbers told the sad story of the Jimmy Carter presidency: interest rates of 21%; inflation at 13.5%, and an unemployment rate of 7%.  And a relatively new economic device called “the misery index” – the combination of the unemployment and inflation rates which Carter had himself used to great effect in his 1976 campaign to win election – was at a shocking 20.5%.

And those who went through those dark and difficult times may soon be looking back to that period as “the good old days.”

Welcome back, Carter.

When Ronald Reagan took office from Jimmy Carter, inflation was at a meteoric 13.3% and the country was in the throes of a fierce recession. There was a real question as to whether workers’ wages would keep up with the costs of living, which made people afraid to either spend or save. And nobody knew how to control inflation – which had risen from 1.4% in 1960 to the aforementioned 13.3% in 1980 – causing a real erosion of confidence in the future. Jimmy Carter answered a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

But Ronald Reagan had a solution.  And by the time he left office, he had solved the problem of creeping inflation increases and had actually reversed the trend: he left behind a healthy inflation rate of 4.1%.

Reagan’s policies set the trajectory for growth that would last for 20 years.

And the only thing that could truly destroy the fruit of Reagan’s policies was the coming of another Jimmy Carter.

Inflation Inevitable, Rogers Says: Could Be “Much Worse” Than the 1970s
Posted Oct 12, 2009

Given the Fed’s extremely easy policies, runaway government spending and shortages of many commodities, inflation pressures are building and destined to get much worse, according to famed investor Jim Rogers of Rogers Holdings.

“The Federal Reserve has laid the groundwork for some serious inflation down the road by printing all this money,” Rogers says. “So have many other central banks.”

Although “the U.S. government lies about inflation” in its official data, inflationary pressures are already evident in nearly everything, excluding energy, Rogers says. Inflation is “going to continue, going to accelerate,” he says. “We’re going to be paying more for just about everything down the road.”

Asked if he foresees a 1970s-style stagflation period ahead, Rogers chuckled and gave an ominous reply: “I hope it’s that good. It might be much, much worse.”

Given that view, Rogers remains very bullish on commodities as we discuss in subsequent clips.

You don’t massively increase the money supply (by running printing presses night and day) without consequences.  But that is exactly what we’ve done.  “The money supply was increased from $600 billion in 2000 to $800 billion in 2007.   This year, it has risen from $800 billion to $1.7 trillion! (Source: Federal Reserve Bank of St. Louis).”  And we aint seen nothin’ yet, as the Fed is planning a 15-fold increase in the monetary base.  Actions have consequences.  And the crazier and more irresponsible the action, the worse and more dramatic the consequences.

The National Inflation Association released a statement back in March following the passage of the massive $3.27 trillion stimulus porker:

“The United States today is in a short-term deflationary phase caused by forced liquidations, de-leveraging, going out of business sales, and other temporary factors.

It is our belief that the monetary policies of the Federal Reserve and United States Treasury will soon put an end to this deflationary phase, and we will see massive inflation in the U.S. that could ultimately lead to Zimbabwe-style Hyperinflation.

The U.S. has lost more than 2.8 million jobs since the passage of the stimulus bill and its promise of “shovel ready projects” that was supposed to prevent unemployment from going over 8%.  It failed to create jobs, but only massively increased our debt.

This country is going to go for a ride, and it won’t be a fun one.

And you tell me whether, going on two years later, you feel like that little girl or notIt might be a lot better to shut your eyes – like the “grownup” and just pretend it isn’t happening; that way you’ll believe whatever reassuring pabulum the liberal Obama government and the liberal mainstream press tell you.

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Financial Expert HOPES Inflation Will Only Be As Bad As 1970s

October 14, 2009

The numbers told the sad story of the Jimmy Carter presidency: interest rates of 21%; inflation at 13.5%, and an unemployment rate of 7%.  And a relatively new economic device called “the misery index” – the combination of the unemployment and inflation rates which Carter had himself used to great effect in his 1976 campaign to win election – was at a shocking 20.5%.

And those who went through those dark and difficult times may soon be looking back to that period as “the good old days.”

Welcome back, Carter.

When Ronald Reagan took office from Jimmy Carter, inflation was at a meteoric 13.3% and the country was in the throes of a fierce recession. There was a real question as to whether workers’ wages would keep up with the costs of living, which made people afraid to either spend or save. And nobody knew how to control inflation – which had risen from 1.4% in 1960 to the aforementioned 13.3% in 1980 – causing a real erosion of confidence in the future. Jimmy Carter answered a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

But Ronald Reagan had a solution.  And by the time he left office, he had solved the problem of creeping inflation increases and had actually reversed the trend: he left behind a healthy inflation rate of 4.1%.

Reagan’s policies set the trajectory for growth that would last for 20 years.

And the only thing that could truly destroy the fruit of Reagan’s policies was the coming of another Jimmy Carter.

Inflation Inevitable, Rogers Says: Could Be “Much Worse” Than the 1970s
Posted Oct 12, 2009

Given the Fed’s extremely easy policies, runaway government spending and shortages of many commodities, inflation pressures are building and destined to get much worse, according to famed investor Jim Rogers of Rogers Holdings.

“The Federal Reserve has laid the groundwork for some serious inflation down the road by printing all this money,” Rogers says. “So have many other central banks.”

Although “the U.S. government lies about inflation” in its official data, inflationary pressures are already evident in nearly everything, excluding energy, Rogers says. Inflation is “going to continue, going to accelerate,” he says. “We’re going to be paying more for just about everything down the road.”

Asked if he foresees a 1970s-style stagflation period ahead, Rogers chuckled and gave an ominous reply: “I hope it’s that good. It might be much, much worse.”

Given that view, Rogers remains very bullish on commodities as we discuss in subsequent clips.

You don’t massively increase the money supply (by running printing presses night and day) without consequences.  But that is exactly what we’ve done.  “The money supply was increased from $600 billion in 2000 to $800 billion in 2007.   This year, it has risen from $800 billion to $1.7 trillion! (Source: Federal Reserve Bank of St. Louis).”  And we aint seen nothin’ yet, as the Fed is planning a 15-fold increase in the monetary base.  Actions have consequences.  And the crazier and more irresponsible the action, the worse and more dramatic the consequences.

The National Inflation Association released a statement back in March following the passage of the massive $3.27 trillion stimulus porker:

“The United States today is in a short-term deflationary phase caused by forced liquidations, de-leveraging, going out of business sales, and other temporary factors.

It is our belief that the monetary policies of the Federal Reserve and United States Treasury will soon put an end to this deflationary phase, and we will see massive inflation in the U.S. that could ultimately lead to Zimbabwe-style Hyperinflation.

The U.S. has lost more than 2.8 million jobs since the passage of the stimulus bill and its promise of “shovel ready projects” that was supposed to prevent unemployment from going over 8%.  It failed to create jobs, but only massively increased our debt.

This country is going to go for a ride, and it won’t be a fun one.

Government Covering Up Science Proving Global Warming Is Bogus

July 1, 2009

In April, President Obama declared that “the days of science taking a back seat to ideology are over.”  It was just another smarmy attempt on his part to demagogue the Bush administration and hold himself up as superior.  But rather than actually proving himself morally superior to George Bush, Barack Obama has actually demonstrated just the opposite.

Science is forced to sit at the back of the bus now as it has never been before.  And it is Barack Obama who is making it sit there.

While we consider massive legislation that would cripple U.S. productivity for a generation in the name of curbing carbon dioxide gasses that supposedly cause global warming, shouldn’t we consider the fact that the science actually says that global temperatures actually DROPPED for the past 11 years, even as carbon dioxide gas increased? Shouldn’t it matter that global temperatures are roughly where they were at the middle of the 20th century, and that if anything temperatures are going down rather than up?  Shouldn’t it matter that the models that created the alarmist hype of “global warming” have now been proven to have been entirely wrong?  Shouldn’t we truly question the link between whatever global warming we are seeing and carbon dioxide?

Not if the Obama White House and his Envioronmental Protection Agency have anything to do with it.

EPA May Have Suppressed Report Skeptical Of Global Warming

The Environmental Protection Agency may have suppressed an internal report that was skeptical of claims about global warming, including whether carbon dioxide must be strictly regulated by the federal government, according to a series of newly disclosed e-mail messages.

Less than two weeks before the agency formally submitted its pro-regulation recommendation to the White House, an EPA center director quashed a 98-page report that warned against making hasty “decisions based on a scientific hypothesis that does not appear to explain most of the available data.”

The EPA official, Al McGartland, said in an e-mail message to a staff researcher on March 17: “The administrator and the administration has decided to move forward… and your comments do not help the legal or policy case for this decision.”

The e-mail correspondence raises questions about political interference in what was supposed to be a independent review process inside a federal agency — and echoes criticisms of the EPA under the Bush administration, which was accused of suppressing a pro-climate change document.

Alan Carlin, the primary author of the 98-page EPA report, told CBSNews.com in a telephone interview on Friday that his boss, McGartland, was being pressured himself. “It was his view that he either lost his job or he got me working on something else,” Carlin said. “That was obviously coming from higher levels.”

E-mail messages released this week show that Carlin was ordered not to “have any direct communication” with anyone outside his small group at EPA on the topic of climate change, and was informed that his report would not be shared with the agency group working on the topic.

“I was told for probably the first time in I don’t know how many years exactly what I was to work on,” said Carlin, a 38-year veteran of the EPA. “And it was not to work on climate change.” One e-mail orders him to update a grants database instead.

The suppression of evidence against global warming is not just occurring at the EPA.  It goes on all the time.  In another example that is occurring right now, one of the world’s leading polar bear experts is being barred from a conference simply because he knows how to count and doesn’t want to be pressured into positions that are opposed to his own scientific conclusions.

One of the world’s leading polar bear experts has been told to stay away from an international conference on the animals because his views are “extremely unhelpful,” according to an e-mail by the chairman of the Polar Bear Specialist Group, Dr. Andy Derocher.

The London Telegraph reports Canadian biologist Mitchell Taylor has more than 30 years of experience with polar bears. But his belief that global warming is caused by nature, not man, led officials to bar him from this week’s polar bear specialist group meeting in Denmark.

Taylor says the polar bear population has actually increased over the last 30 years. He says the threat to them by melting Arctic ice — illustrated by a famous photo taken by photographer Amanda Byrd — has become the most iconic cause for global warming theorists. The photo is often used by former Vice President Al Gore and others as an example of the dangers faced by the bears. But it was debunked last year by the photographer, who says the picture had nothing to do with global warming, and that the bears were not in danger. The photographer said she just happened to catch the bears on a small windswept iceberg.

As Alan Carlin’s own suppressed report also states, the best evidence holds that we will actually be seeing global cooling over the next three decades.

Do we have an impartial analysis of climate change data that shows the best conclusion of science apart from bias?  Not even close.  NASA has repeatedly erred in its presentation of data that reveals outright bias.
Back in 2007, NASA had to eat a report that had showed the hottest recorded years on record had occurred during the 1990s when in fact they had occurred in the 1930s.  There have in fact been repeated corrections that always erred on the side of the global warming alarmists.  And the unfortunate past shows that NASA has been all-too-willing to engage in speculation and hype in place of legitimate science.

During the 1970s, NASA scientists were warning about ice-age-like global cooling due to “the fine dust man constantly puts into the atmosphere” and saying that “fossil fuel-burning could screen out so much sunlight that the average temperature could drop by six degrees” (realizing that all the disaster-hype now is freaking out over certain predictions of just a ONE degree increase.  That alarmist prediction was published in the Washington Post on July 9, 1971 in an article entitled, “U.S. Scientist Sees New Ice Age Coming.”  The NASA scientist who offered that clearly false prediction relied on data compiled by a computer model created by colleague James Hansen.  And Hansen has flipped from being one of the very worst alarmists about a cataclysmic ice age to one of the very worst alarmists about a cataclysmic global warming.

We have seen a pattern of bogus science and alarmism for decades now.  And all men like Alan Carlin ask is that bureaucrats take a step back and assess the science before they jump into overreaching policies that will destroy our economy.

The Competitive Enterprise Institute (CEI), which released the EPA-suppressed Alan Carlin report, made the following statement:

“We have become increasingly concerned that EPA and many other agencies and countries have paid too little attention to the science of global warming. EPA an d others have tended to accept the findings reached by outside groups, particularly the IPCC and the CCSP, as being correct without a careful and critical examination of their conclu sions and documentation. If they should be found to be incorrect at a later date, however, and EPA is found not to have made a really careful review of them before reaching its decisions on endangerment, it appears likely that it is EPA rather than these groups that may be blamed for this error.”

CEI also released the emails, avalible here.

That the IPCC should be discounted as a serious scientific entity should be proven by their gullible and ideological acceptance of a “hockey stick” model (so named because the data were manipulated to appear as though temperatures which had supposedly been flat for centuries suddenly shot up to form a hockey stick-like graph) was entirely fraudulent.

Anyone who takes a long view of things – and takes a few minutes to actually look at the scientific evidence – isn’t particularly alarmed about the “global warming.”  What we find instead of anthropogenic global warming is a consistent cycle that has continued steadily long before man began to do anything to change the environment.

(Accessed via Newsbusters, which has a write-up on the chart).

I read the powerful book, Unstoppable Global Warming Every 1,500 Years, which presents such an overwhelming case for naturally occurring warming and cooling cycles (having nothing to do with carbon dioxide or human activity) that it is posivitively unreal.  Based on my reading, I wrote 2 articles that summarized some of what I learned:

What the Science REALLY Says About Global Warming

What You Never Hear About Global Warming

Not only is the current Obama cap-and-trade legislation based on bogus science, but even if it WEREN’T bogus, the massively costly program would STILL have absolutely no impact on “global warming.”

Harvard economist Martin Feldstein writes in the Washington Post:

Americans should ask themselves whether this annual tax of $1,600-plus per family is justified by the very small resulting decline in global CO2. Since the U.S. share of global CO2 production is now less than 25 percent (and is projected to decline as China and other developing nations grow), a 15 percent fall in U.S. CO2 output would lower global CO2 output by less than 4 percent. Its impact on global warming would be virtually unnoticeable. The U.S. should wait until there is a global agreement on CO2 that includes China and India before committing to costly reductions in the United States. […]

In my judgment, the proposed cap-and-trade system would be a costly policy that would penalize Americans with little effect on global warming. The proposal to give away most of the permits only makes a bad idea worse. Taxpayers and legislators should keep these things in mind before enacting any cap-and-trade system.

The people who are advancing the global warming agenda don’t give a whig about climate change.  What they want is statist government control, and the implementation of economic redistributionism in the name of “science.”