Monday, October 11, 2010
Monday, October 11, 2010 No comments
The USD continues to fall as it is becoming seen as inevitable that the Federal Reserve will start printing money in a big way. The weak dollar is driving up the price of grain in the US and on the Chicago Board of Trade corn futures were up the limit again today. An awfully large chunk of the US economy runs on corn and this is going to create inflation pressure on the rest of the economy. That Christmas ham is going to cost a lot more with the wholesale price already nearly double from last year and inflation hasn’t really taken hold yet.
Then of course there are millions of home foreclosures that may or may not be resolved and that could drag down some pretty big banks. The Federal Reserve holds a couple of trillion of the toxic assets based on those mortgages, but they can’t go bankrupt, it’s just that our money might not be worth much after that reckoning.