Dude, Where Is Food and Crude?

Now these are the tax cuts we like!   Especially because the big flop in food prices directly benefits the poor (x/ farmers) more than anyone else.

Thus far, these are relative price shifts and and not a sign of general deflation.  We don’t see rents or medical insurance flopping.

Let’s hope the monetary policy geniuses will let food and crude continue to fall, which will increase real wages and, ultimately, consumption and growth.  We have our doubts, however, as the noise from Wall Street about a deflationary collapse will grow,  markets will grow nervous,  and the horn of QE3 will grow louder.

The People’s Bank is also walking a tightrope here.

(click here if charts are not observable)

This entry was posted in Crude Oil, Food Prices, Monetary Policy and tagged , , , . Bookmark the permalink.

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