A Measure of Meal plus Oil No Longer Makes a Full Loaf of Bread

In February, reports of the Fed claim that QEII had been successful were floated, though not taken seriously.  The reason is that food/commodity prices, especially grains, are the highest that they have been in twenty years.  This has been exasperated with the speculator-driven rise in oil prices due to the unrest in Libya with the potential of further unrest in other Middle East Nations, including Saudi Arabia.  We have been warning about this for over a year. 

Fed policy has now been proven to drive inflation.  True, the unrest in Libya cannot be blamed on Fed policy, but the current federal government policy is contributing to inflationary pressure in the oil sector.

What this means to you and me is that a measure of meal (grain) plus oil no longer makes a full loaf of bread – meaning that inflationary pressures on commidities and oil caused by central bank policy, combined with instability and unrest in other areas of the world, result in the consumer being alble to acquire less food for our money .  This is causing folks in some regions of the world to take to the streets in protest.  While the street protests over food prices haven’t materialized in the United States, in the least, for those of us who like to eat every day, this is NOT good news.