"It's free money!" said Alecia Rumph, 26, who waited in a Morris Park, Bronx, line 300 people deep for the cash to buy uniforms and book bags for her two kids. "Thank God for Obama. He's looking out for us." Thousands of people lined up at banks and check-cashing shops to withdraw the cash that magically appeared on their electronic benefit cards. ... Every child between 3 and 17 was eligible for $200, which worked out to 813,845 kids across the state - including 498,866 in the city. ... Billionaire philanthropist George Soros gave $35 million toward the program, with $140 million in federal stimulus funds routed through state government making up the rest.Just so you know, it's not that federal spending or George Soros giving money away is inflationary. Its that Treasury gave money to average Joes instead of investment banks and bankers that means that this money will inflate consumer prices. Up until now, Treasury money freshly printed up by the FED has been going to uber-wealthy bankers, who don't spend quite the fraction of their "free" money on "back-to-school" goodies for their kids that these recipients will. Instead, as you might have guessed, they usually buy things like stocks and other financial assets. Perhaps you've seen a little of that sort of inflation of late. Free money to bankers = inflation of financial assets. Free money to average Joes = consumer price inflation. Eventually, money will flow down to the masses through programs like this and others, and to some of the masses and not others, and the money will go towards driving up consumer prices irrespective of unemployment. It's just a matter of time.
Wednesday, August 12, 2009
Wondering About Inflation?
Have you been wondering where the inflation would be coming from? With high unemployment, it seems inconceivable that consumer prices should inflate. After all, who is going to bid up those prices if nobody has a job or money in his pocket? Here we see part of the answer, courtesy of Vox Day: