Karl Denninger: Here We Go Again..... Dollar Debasement

10-24-2010 • Market-ticker.denninger.org/

Goldman came out with a report basically demanding (you know how these guys are) $4 trillion in money printing - so says the FX chatter and Zerohedge. The result? The dollar took an instant header, down more than a 1/2% this evening alone. How about the price of some of the things sensitive to threats of monetary debasement? These are all price changes since the futures started trading this evening - that is, they're six hour changes in price. These are all things you need to buy, either directly or indirectly. Oil, up 1%. Wheat, up 1.49%. Corn, up 2.05%. (Oh yeah, and ethanol on your gas will soon be mandated to be 15%, not 10%.) Soy, up 1.5%. Rough Rice, up 1.51%. Oats, up a stunning 4.27% (!) Cotton is lock-limit up 500 ticks. To be fair there's a crop disruption related to Cotton, which is adding to the problem. Dollar debasement, of course, isn't helping. Remember, these are all soft commodities we produce right here at home. These aren't import prices, they're home-grown products (excepting oil, of course.) And they're moving - at anywhere from double to eight times the devaluation in the dollar. The stock futures, of course, are skyrocketing, with the Dow futures up nearly 100 points. After all, everyone loves the market impact of you going broke trying to buy food - especially if you're not rich, and most of America isn't. This is all quite impressive. And what's even more impressive is that Bernanke and our government will, of course, claim that there is "no inflation", because they don't count the rise in the price of food or energy - even though every person in America has to buy those things.