Lew Rockwell posted an excellent article (“The Force Is With Us”) on the downward trend in prices we are seeing in some sectors of the economy, and why this is a good and absolutely necessary thing to be happening. As we all know, the powers-that-be at the Federal Reserve, in the federal government, and on Wall Street are trying their best to make sure that prices do not come down. In seeing falling prices as one of the big problems of “the economy”, they fail to understand that housing prices (for example) must be allowed to fall to market levels so that more people can afford to buy houses at mortgages they can afford, and so that the huge surplus of housing that won’t sell at previous prices will be able to sell. In other words, take the shackles off of the free market and allow natural forces to bring prices where they should be. Meanwhile, the question arises, why are we not seeing a downward trend in food prices? After all, wouldn’t this be an ideal time for food prices to come down, so that people in dire financial straights can better afford to keep food on the table? Part of the answer to this question can be found in two words: farm subsidies. These programs, which were a huge part of Franklin Delano Roosevelt’s New Deal, have been responsible to a large degree for keeping food prices too high. The basic strategy of the New Deal was to keep the prices of agricultural goods artificially high, so that farmers would be “helped” by more money from the higher prices. (Never mind that people who had very little money to spend couldn’t afford food at the artificially high prices, having instead to subsist on as little as one meal a day, with farmers meanwhile getting no income from food that wouldn’t sell). Prices supports, quotas, and subsidies for non-production (setting aside or “idling” land) aimed to make crops more scarce at a time when more food was needed at lower prices. Of the last example, the late Senator Barry Goldwater once said, “I cannot conceive of a more absurd and self-defeating policy than one which subsidizes non-production.” He was absolutely right. Agriculture subsidies have also had the effect of placing American farmers of certain crop commodities at an artificial disadvantage to those of other commodities, as well as to farmers of the same in other countries. For example, the sugar subsidy program, with its upward pressure on sugar prices, has led the U.S. food industry to rely more heavily on corn, substituting corn syrup for sugar cane syrup, which, for example, was originally found in recipes for famous cola beverages (such as coca-cola). At the same time, imported sugar is cheaper that American-grown sugar, for the same reasons, posing a further disadvantage to U.S. sugar farmers. Meanwhile, the corn ethanol subsidy program, which is one of the greatest scams foisted on the American people in the name of “environmentalism”, has pushed the prices of corn products used in food (again, corn syrup among them) higher, and has further impacted the world markets by pushing prices of wheat higher by making wheat more scarce, because the land that could be used to grow wheat is being used instead for corn. Corn is actually harmful to land when grown for too many seasons without relief. Farmers who are not under the tempting pressures of such subsidies would instead rotate their lands seasonally for different kinds of crops, including giving the land a rest from farming when necessary. It is also known that more carbon-based fuels are consumed in the production of corn-based ethanol than would be the case without the program. It’s no wonder that more perceptive environmentalists have come to oppose not only the corn ethanol program, but also farm subsidies in general. Farm subsidies are yet another example of government intervention that is harmful to the environment and to conservation. The existing policies of agriculture subsides make no sense whatsoever. It’s arrogant of those in government to think that they have the wisdom and the intelligence to determine, via subsidies, quotas and price supports, how much farmers ought to be growing and what the prices ought to be, and whether they should rise or fall. These are decisions that can only be properly made by the complex decisions of millions of consumers charged with feeding themselves and their families, in concert with the decisions made by farmers on how best to provide for those needs in an economical fashion. It’s time to end agriculture subsidies, once and for all, and to allow the forces of the free market to set prices and production levels for our nutritional needs. Only then can the prices be allowed to come down to a level that more people can afford, especially in the difficult times which lie ahead. And perhaps then we can see the demise of the agriculture-industrial complex (“agri-business”) and the simultaneous “rise from the ashes” of the nearly extinct family farm. http://www.unitedliberty.org/articles/falling-prices-why-is-food-not-part-of-this-trend
Falling Prices: Why is Food Not Part of This Trend?
by What-A-Coincidence 10 Replies latest jw friends
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stillajwexelder
If fule is coming down in price, then food should too
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FlyingHighNow
Why is diesel so high? Our food is shipped with trucks that use diesel.
Gas prices are said to be headed for below $1 per gallon in the US.
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sammielee24
Gas prices are said to be headed for below $1 per gallon in the US.
LOL..we'll believe that one when it happens! Food is still a lot higher than it ever was - it's a fact that as more people are unemployed, they cut a lot of 'good' foods out of their diets because it's cheaper to get filler food. I hardly ever eat hot dogs but had a craving a few weeks ago - a package of 'dogs' cost me almost $5.00. You used to get franks for half that price! Apples - $.50 each last week...I can get a box of mac and cheese for the same price. Go figure - but if you think we have it bad just check out Zimbabwe - no electricity, no water, no sewage..people eating grass soup and getting sicker by the day..in a country that farmland rich, it's a shame what has happened to the people there. If I had my own house, I'd be putting in a garden that's for sure..no pesticides, no GM foods - pick and grow...sammieswife.
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SacrificialLoon
http://www.cbsnews.com/stories/2008/10/28/earlyshow/main4551665.shtml
Short answer: greed.
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FlyingHighNow
LOL..we'll believe that one when it happens!
Andy heard a report about it this morning. He'll be over in the morning. I'll ask him who gave the report. He keeps up with all of this and he never steers me wrong. I don't doubt it. Look at how much they have fallen already. They went down from $4.30 to $1.58 here in Michigan. That is a drop of $2.72 per gallon in a very short time.
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iceguy
Fuel in US is expected to go down to about a dollar a gallon because the price for a barrel of oil is expected to fall between 20-25 dollars a barrel.
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DJK
Much of what is in stores right now was produced and transported when energy costs were high. Might see falling prices by spring if energy costs stay low. Although, this is an area where producers don't like to lower prices and greed seems to be in control.
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hillbilly
some things like food (processed foods in particular) will stay high ... the rew products cost more a few months back so there should be a bit of a hangover effect as those higher costs are recovered.
We made as much hay round here as usual..demand is about the same but but the production fuel cost neary $4 bucks a gallon... we need to make the costs up so prices are up this winter.
diesel priced will stay up... as will asphalt prices. The the stuff in a barrel of oil gets sorted out in production for special fuels and products...
Hill
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FlyingHighNow
Okay, news in on gas going to a dollar or below. For Sammie or wife or both and everyone else who wants to know.
http://www.msnbc.msn.com/id/12400801/
Return to $1 gas? Energy prices evaporate
Dismal data counteracting usual trend for increased winter demand
View related photosVideo Gulf CEO: Gas may get back to $1 per gallon
Dec. 5: Gulf Oil CEO Joe Petrowski tells CNBC's Melissa Lee that 2009 may bring the return of one dollar per gallon gas.CNBC
Most popular Slide show The high price of fuel
Our cartoonists take a look at soaring oil and gas prices. updated 37 minutes ago Oil prices hit four-year lows Friday as employers cut the highest number of jobs in 34 years. The continuing decline in prices is so dramatic and so sudden that it is raising the prospect that gas prices could soon fall below $1 a gallon.
The worst jobs data in 34 years on Friday just added more fuel to the deepening global recession as U.S. employers slashed a far worse-than-expected 533,000 jobs in November and the unemployment rate rose to a 15-year high of 6.7 percent.
A gallon of gasoline can be had for 50 cents less than it cost just last month, and people are starting to talk about $1 gas.
Story continues below ?
advertisement | your ad hereGranted, gas prices are a long way off from that magic number last seen in March 1999 when prices were at 97 cents a gallon, according to motor club AAA. Prices at the pump fell 1.6 cents overnight to $1.773 nationally, according to AAA, the Oil Price Information Service and Wright Express.
But consider what has happened since July 11 when a barrel of oil hit a record $147.27 and a gallon of gas was $4.117 on July 17. In less than five months, oil has fallen 72 percent.
Just this week, in which the National Bureau of Economic Research determined that the U.S. is in recession, oil has fallen 25 percent.
On Friday, light, sweet crude for January delivery settled at $40.81 a barrel on the New York Mercantile Exchange, down by nearly $3 per barrel. Prices fell as low at $40.50, levels last seen in December 2004.
Gasoline futures for January delivery tumbled to 90 cents.
For gas prices to get close to a $1, oil prices probably would need to fall another $10 a barrel — something that would have impossible to fathom during first part of this year as oil prices soared near $150 per barrel.
“Just seeing that ’1’ up there is just hard to imagine,” said Kevin Keating, 65, an attorney as he filled up his Volvo S60 at a station in Phoenix that advertised prices at $1.67. “Wasn’t that long ago that we worried about the ’4’ being up there.”
Prices in New York City are well above the national averages, but still well off their highs of nearly $5 this summer.
“When gas prices are OK, we make a little profit,” said Mamady Kourouma, 36, a cab driver from Guinea who paid $2.41 a gallon at a station in Chelsea.
With wages stagnant, home prices plummeting and foreclosure rated soaring, dollar-a-gallon gas may help mom fill up in the family minivan and cab drivers in New York City, but prices that low also would truly speak to how rotten the economy has become.
“The economy at that point worldwide would be in a serious, serious deterioration,” said Geoff Sundstrom, spokesman for AAA.
CONTINUED : An ugly January< Prev | 1 | 2
Video Gulf CEO: Gas may get back to $1 per gallon
Dec. 5: Gulf Oil CEO Joe Petrowski tells CNBC's Melissa Lee that 2009 may bring the return of one dollar per gallon gas.CNBC
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Our cartoonists take a look at soaring oil and gas prices.Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said Thursday on his blog that retail prices could fetch $1.25 a gallon soon in parts of the Midwest, including Ohio, Indiana, Illinois and Missouri.
Already, some parts of the country are seeing prices around that level. The Web site gasbuddy.com, where motorists can post local gas prices, motorists can fill up for $1.29 in Neelyville, Mo., a village of about 500 people near the Arkansas state line.
The jobs number suggests that demand for gasoline, which has been running well below year-ago levels even with the cheaper prices in the last several weeks, will fall even more in early 2009 as work-related driving plummets, said Kloza.
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advertisement | your ad here“I believe that January 2009 will represent the most ’challenging’ and ugly economic month of my lifetime, and my first memory is of Sputnik,” Kloza said.
There is plenty of reason to suspect Kloza is right.
Since the start of the recession, the economy has lost 1.9 million jobs, the number of unemployed people has increased by 2.7 million and the jobless rate is up 1.7 percentage points. The meltdown in financial markets has crushed lending, the Detroit 3 are on the brink of bankruptcy without a big government bailout.
Friday’s report was much deeper than the 320,000 job cuts economists were forecasting. If there is a plus side it is that the unemployment rate did not climb to the 6.8 percent level economists were expecting.
Kloza does not believe prices will make it to a $1. Gas prices neared a dollar last time on Dec. 18, 2001, three months after the terrorist attacks and the country in its last recession, when prices hit $1.08 a gallon.
Though the weak gasoline prices point how bad the economy is, they also could help it turnaround.
Kloza figures the U.S. gasoline bill at $1.75 per gallon average will be about $20.5 billion this month, down about $16 billion a year ago. Five years ago, the bill was $17.2 billion.
“That could be one important spur to some kind of economic recovery,” Sundstrom said.
In other Nymex trading, gasoline futures tumbled 6.83 cents to settle at 90 cents. Heating oil slid 8.26 cents to $1.4265 a gallon while natural gas for January delivery shed 24.7 cents to sell at $5.77 per 1,000 cubic feet.
In London, January Brent crude slipped by $2.42 cents to $39.86 on the ICE Futures exchange.
Gulf CEO: Gas may get back to $1 per gallon
Dec. 5: Gulf Oil CEO Joe Petrowski tells CNBC's Melissa Lee that 2009 may bring the return of one dollar per gallon gas.CNBC
updated 37 minutes ago