[quote=pri_dk][quote=SD Realtor]So necessary commodities like food, resources and other tangible goods will go up in cost.[/quote]
Why?
What will prompt my local Ralphs to raise prices?
Is the store manager going to read about QE2 and start remarking items on the shelves?
And what will stop the manager at Albertsons from lowering his prices? Because of high unemployment his cost of labor is lower. So he decides to get an edge on Ralphs…
Can someone explain exactly how current policy leads to massive inflation without simply using the premise that “printing money leads to inflation?”[/quote]
They will have to raise prices because the cost of their goods is going up. As SDR has pointed out before (and I agree), prices of most basic necessities have gone up in the past year.
With IPods and such, people don’t need to buy if prices rise too dramatically, but people will always need food, energy, water, housing, medical care, etc.; and the prices of ALL of those things have been going up, even during “The Greatest Recesssion Since the Great Depression.”
It’s not whether or not the local consumers can afford it, in many cases, it’s a problem of too much money in investors’ hands that cause prices to rise. Currency issues play a huge part in this. Most investors are trying to hedge against inflation, so they are buying up all kinds of hard assets. End consumers just have to pay the price set by these speculators, whether we like it or not.
edit: Just saw Rich’s above post adressing this point. Agree with what he said.
