Currency debasement

Sunday morning, December 5, 2010. The Sabbath came. I wrote nothing because I had nothing to say. Or perhaps I was too tired or lazy to force the issue.

Every week I expect to finish harvesting pecans; every week I find more we’ve missed. What we’re doing is more gleaning than full on harvesting, but to date we’ve managed to pick enough pecans to pay the laborers involved, not to make money, but to pay laborers. Pecans have not only maintained a higher price than in years past; the price has gone up as the season progressed. I sold small native pecans for $1.45 a pound in quantity, a previously unheard of number, to a broker that will sell them for more to someone else.

Corn, wheat, cotton, oil and other commodities have also gone up in price. I still sit on my corn, waiting for the local glut to be erased, and it should be soon, considering all the poultry and livestock feeding businesses in these parts consume more corn than we grow. About ten to one I’m guessing.

Fuel costs are going up; diesel has once again broached $3/gallon and gas is right there as well, but there seems to be a lag in the price of food compared to the cost of basic staples necessary to produce food. Expect higher prices, soon. Anything containing cotton fiber, and that’d include jeans, t-shirts, socks and underwear should, by necessity, go up in value soon as well.

Precious metals are becoming more expensive, almost by the day. Actual physical silver is getting hard to come by, both locally and over the Internet, or so I am told. I suspect physical gold is a bit easier to find as the price of gold at $1,400/ounce is already cost prohibitive for the average working class (or unemployed) American strapped with ass-loads of debt.

Some respected economists continue to say that deflation will rule the day. To be sure, the fed’s efforts seem designed to fight deflation. But last week, news began to appear about one of the fed’s backdoor lending programs (notice I said one, as if this isn’t the only one). Seems the fed lent $9,000,000,000,000 (nine trillion dollars, or if you prefer enough money to make 9 million totally broke Americans millionaires), through the overnight window at just above zero percent interest rates over the last couple of years.

Many say this does nothing but increase public debt and I’m sure it does. These also say bad debts remain hidden on balance sheets, and I am sure some do. But I am also sure that some bad debts are being cured, as representatives of the fed/big bank duo purchase delinquent loans with what amounts to money created with the wave of a wand, in essence repossessing valuable assets around the land with an unlimited supply of paper and digital notes.

These same deflationists say this trend can’t continue, that the rest of the world will not allow the fed to continue creating more dollars out of thin air.

My question: Who is going to stop them, and how?