That great economic news just keeps coming in:
The surge in the price of food will continue for at least a further two years, the chief executive of one of the world’s biggest food companies has told The Times.
Indra Nooyi, the joint chairman and chief executive of PespiCo, predicted that “structural inflation for food is here to stay for another two to three years”, and that it would be propelled by government initiatives to subsidise ethanol programmes, the biofuel that is seen as a more environmentally friendly alternative to oil.
Over the past 12 months milk prices have doubled as demand for corn, the staple diet of a dairy herd, increased substantially. Corn is also used in the fermenting process to produce ethanol. The cost of a bushel of corn doubled over the same period.
[...] Ms Nooyi is not the only senior business figure to predict that high food prices were here to stay. Carl Weinberg, co-founder of High Frequency Economics, a think-tank, predicted that continuing food-price inflation, along with an expected slowdown in China, presented one of the biggest downside risks to the American economy.
And this:
The U.S. has suffered recessions only twice in the past quarter century and both were short and mild. There are good reasons to fear that the looming recession, if it arrives, could be worse.
Housing is in the midst of its worst downturn since at least the 1970s. That has led to a meltdown in the mortgage market; with financial firms struggling to make sense of their losses, they are making it harder for even credit-worthy borrowers to get loans. The combination of heavy debt loads, still-high energy and food prices and a weakening job market has households tightening their [spending].
i find it simply stunning that this administration has been able to separate the fact fuel prices have doubled won’t mean that all other prices will increase as a result.
as if inflation doesn’t occur when energy prices go up…