The FEDeral Reserve Continues To Screw The American Consumer

[Obama 2012 1,714]

This of course again is for those who think the Fed pumping in more money is a good thing and the devaluing of the dollar is a good thing..... ugh...

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http://money.cnn.com/2010/10/28/news/economy/quantitative_easing_consumer_impact/index.htm?hpt=Sbin

NEW YORK (CNNMoney.com) -- Investors have been cheering about the prospect of the Federal Reserve pumping more money into the economy, but some experts warn that move may wind up hurting consumers' wallets.

Ever since Fed Chairman Ben Bernanke pledged in late August that the central bank would take "unconventional measures" to keep the economy afloat, the S&P 500 (SPX) has climbed more than 11%.

Those 'unconventional measures' would likely be another round of asset purchases, known as quantitative easing, or QE2 for short. The move is designed to boost the economy and lower interest rates. But it would also add further pressure on an already weak U.S. dollar.

Since Bernanke's comments in August, the dollar index has dropped 7%, while commodities -- which are priced in dollars -- have surged. Crude oil has jumped 14%, while gold has spiked 8%. Prices for cotton, corn, sugar, wheat and coffee also have all hit new highs during the past two months.

Ultimately, those lofty prices will trickle down to consumers in the form of higher prices for coffee, bread, pizza, gas, clothing and more.

"The problem I have with QE2, is it behaves like a tax on the consumer," said David Giroux, a fund manager at T. Rowe Price. "People want to believe it's a free lunch for the economy, but it's definitely not. Next year, we're going to be paying more at the gas pump and the grocery store."

American households already spend $340 billion a year on gasoline, according to U.S. economist Paul Dales of Capital Economics. Since late August, the price of a gallon of gas has jumped 4.8%.

All it would take is another 10% increase, and the average cost per gallon would rise above $3, adding $51 billion a year to your household tab, he said. Even a modest 5% rise in food prices would force a family to add about $350 a year to their grocery budget.

[Saddle Bronc 124]

F-DIC was a scam from the day Woody Wilson conceived it!