Dairy Sparking America's Infationary Spiral

by Robert Cohen/ NotMilk:
Dairy Will Spark America's Inflationary Spiral. Although inflation is that dirty "I" word which politicians and economists equally fear, inflationis the ultimate remedy for America's current financial woes, and that cure will all begin on Friday morning with dairy leading the way. Friday, September 11, 2009 will be day one. One year from today after America's cost of living has increased by ten to twenty percent due to increased food costs, consumers will be able to mark September 11, 2009 as the beginning day of America's greatest economic collapse, and subsequent recovery.It all revolves around dairy, and here's why.
***HEADLINE: September 10, 2009 - National Milk Producers Federation (NMPF) Press Release NMPF urges congressional leaders to direct $350 million toward the purchase of cheese claimingthat such subsidy "would enhance dairy farmer income by $1.3 billion several months." ***Rather than allow natural events to equalize the disparity between profits and losses in the milk industry, congress has allowed itself to be bought so that favorable new laws coupled with enormous subsidies have rapidly acted to dramatically raise the wholesale price of milk making dairy farmers the sole beneficiaries. How will such piracy change America? Walk through your supermarket and read the labels onprocessed foods. A majority of food items include one or more milk products on their ingredient lists. Even while dairy farmers allowed themselves to go broke this pastyear and invested millions of dollars to bribe membersof congress to enact legislation, dairy food processors were smart enough to react to the market and raiseprices so that their bottom lines were not affected. Such is the nature of free and honest commerce. As a matter of fact, profits have never been higher for dairy distributors and processors. This time around, the wholesale price increases will be so rapid and dramatic that processors will react again with overnight price increases. The must do so to break even,and their goals are to do a lot better than just break even. Their reactions will break the banks of many consumers. The cost of bread and cake will rise. The cost of processed cereal will rise. The cost of a cup of coffee and everything else containing lactose and whey and casein will go through the proverbial supermarket roof. This is trickle up economy, and as the cost of basic foods and commodities rise, the cost of labor and fueland everything else will rise to. The economic illness that America is about to experience and the suffering which follows will be unprecedented, but good things are down the road to recovery. As inflation raises the prices of everything, so too will the values of homes rise. In the "magic" 1980s, fortunes were made when home prices doubled in justa decade. A typical hundred thousand dollar home with a $50,000 mortgage became a two hundred thousand dollar home with a $50,000 mortgage. How easily money was made by what I call artificial equity. Multiply that example by tens of millions of homes and you see the effect that inflation will have tocreate new "paper" wealth.T he inflationary avalanche will bury many people in its wake. Once the avalanche begins, it will be too late to alter the wake of destruction. Few will stop to consider that every avalanche begins with just a single snowflake. It the coming economic avalanche, the snowflake isrepresented by dairy. On Friday, September 11, 2009, farmers will begin to see the end to their recent price collapse by celebrating ten to twenty percent increases in the payments they receive for their milk. That is the beginning. Take a deep breath and jump feet first into the murky waters of a black lagoon, and don't let that creature who resides there grab onto your legs.