Warren Buffet speaks common sense; alarms most Republicans

[giblets]

Are Kuci for real ? I mean, claiming that price on food goes up because it's expected that poor people gets richer ? Are he trying to compete with Ben ?

He's not competing with Ben. You just aren't bothering to think about why an expansionary monetary policy would make prices go up.

[Jon Miller]

All the data I have seen show that the income of the lower ~40% has held constant over the last ~40 years.

JM

[Dinner]

He's not competing with Ben. You just aren't bothering to think about why an expansionary monetary policy would make prices go up.

Yes, the US has an expansionary monetary policy right now which does cause general inflation (in this case it is being correctly used to combat a general post bubble deflationary environment) but our inflation is specific to food and fuel where as just about everything else is experiencing deflation. Also food prices are at record levels all over the world independent of what happens in dollar denominated markets.

[Kuciwalker]

All the data I have seen show that the income of the lower ~40% has held constant over the last ~40 years.

JM

That's real, not nominal income Jon, and is absolutely false in either sense if you are speaking globally.

[Kuciwalker]

Evidence that incomes of at least a large number of 'poor' people increased greatly would help.

The price of food rose and it doesn't appear that any natural disasters substantially reduced supply.

Unless you have an alternative explanation for why food prices rose (one beyond "um, QE, therefore!")? Do you think every farmer in the world conspired to charge more money?

[Jon Miller]

Of course I am speaking of the US.

JM

[notyoueither]

All the data I have seen show that the income of the lower ~40% has held constant over the last ~40 years.

JM

He should now come back with info about rising standards of living in China (and India?).

[giblets]

Yes, the US has an expansionary monetary policy right now which does cause general inflation (in this case it is being correctly used to combat a general post bubble deflationary environment) but our inflation is specific to food and fuel where as just about everything else is experiencing deflation. Also food prices are at record levels all over the world independent of what happens in dollar denominated markets.

Kuciwalker was responding to a criticism of the Fed that its policy would make the price of food go up, and he pointed out that the same policy also makes wages go up so it doesn't make it harder for the poor to buy food. Bad weather and other external factors do make it harder, of course.

[BlackCat]

He's not competing with Ben. You just aren't bothering to think about why an expansionary monetary policy would make prices go up.

Ehrr, please explain why such a policy should force prices going up ? Yes, if it creates inflation, the prices do that, but otherwise it will be demand/competition/cost that decides the price.

[Kuciwalker]

Of course I am speaking of the US.

JM

Commodities are a global market. The Fed has no power to make commodities cheaper relative to wages in the US, except perhaps by grossly mismanaging the money supply in a way that throws the global economy into a depression, collapsing economic growth in the developing nations even more than at home.

[Jon Miller]

I am sorry, I misunderstood you, I didn't realize you were talking about poor in India/China/etc.

The rising wealth of the third world definitely increases the demand for food.

JM

[Kuciwalker]

That said, Congress could certainly control rising food prices at home by prohibiting or taxing exports, since we are a net exporter of food

[Dinner]

The price of food rose and it doesn't appear that any natural disasters substantially reduced supply.

Heck yeah there have been natural disasters which have substantially reduced supplies. Remember the fires which swept through Russia as most of their grain crop was wiped out by drought? Remember how Australia has had drought for years with farms so dry not even weeds grow? We're talking about that happening across most of Australia's wheat belt. China has had massive floods which swept down their main rivers, which just so happens to be the area making up China's rice bowl. For more specific localized example is how bananas now cost ~$4 a banana (not a bunch) in Australia due to a cyclone destroying most of Australia's banana plantations.

There have been a lot of big natural disasters over and above bad government policy (like the ethanol debacle).

[notyoueither]

Kuciwalker was responding to a criticism of the Fed that its policy would make the price of food go up, and he pointed out that the same policy also makes wages go up so it doesn't make it harder for the poor to buy food. Bad weather and other external factors do make it harder, of course.

Has the Fed's policy inflated markets, including commodities? My impression from reading is that it has (I could be mistaken).

Kucis might say that the problem is that not much of it is making it through to the rest of the economy. Or, that there has not been enough of it to make businesses and individuals behave as if deflation were not imminent.

[Dinner]

That said, Congress could certainly control rising food prices at home by prohibiting or taxing exports, since we are a net exporter of food

That's a bad idea, ask Argentina and Thailand. Food still costs next to nothing compared to incomes for most Americans so let the farmers cash in on world markets.