In the video that you are about to watch, Ben Stein states that "when serious inflation hits, it hits everyone".
And that is absolutely true. Inflation is a hidden tax on ever single dollar that each one of us holds. Nobody can cheat that hidden tax and nobody can escape from it.
You may have noticed that the price of gas is going up.
In fact, just the other day UPI reported that the price of gas at one station in the Washington D.C. area was up to 5 dollars a gallon.
Can it get much worse?
Well, actually yes it can.
Richard Hastings, a strategist at Global Hunter Securities, recently told CNBC that he believes that we could potentially see $6 gas at some point this summer.
Do you think that a lot of American families will rethink their summer vacations if that happens?
Perhaps Americans will just fly instead.
Well, that is rapidly becoming more expensive as well. Just check out what one recent CNN article had to say about rising airfares....
Late Tuesday, Southwest Airlines raised all of its round-trip fares by $10. Delta (DAL, Fortune 500) initiated this latest round of price increases on Monday, and as of midday Wednesday American Airlines (AMR, Fortune 500), JetBlue (JBLU) and United Airlines (UAL) had matched it.As Ben Stein also notes in the video below, food prices are soaring as well. Rampant money printing by the Federal Reserve and serious crop problems all over the globe have created a "perfect storm" for agricultural commodities. In the video, Stein sounds downright apocalyptic as he describes crop failures around the world....
But now, we are getting serious crop shortfalls in China - an enormously important agricultural producer and consumer. U.S. crop forecasts are also disappointing. There are huge problems in Australia, South America, and Russia. Corn, wheat, rice and other foodstuff prices are just going wild.And you know what?
Ben Stein is right.
In a recent article about the global food crisis, I detailed some of the agricultural commodity price increases that we have seen....
*According to the World Bank, the global price of food has risen 36% over the past 12 months.
*The commodity price of wheat has approximately doubled since last summer.
*The commodity price of corn has also about doubled since last summer.
*The commodity price of soybeans is up about 50% since last June.
*The commodity price of orange juice has doubled since 2009.
But it isn't just food and gas that are going up. We are seeing inflation everywhere. The value of virtually all "hard assets" is going up.
Investors are running to precious metals such as gold and silver in a desperate attempt to preserve their wealth. Gold and silver have been absolutely skyrocketing. The price of gold set another brand new all-time record high this week. The price of silver hit a 31-year high today.
So why is this happening?
One of the biggest reasons for all of this is that the Federal Reserve has been flooding the system with new money. In the video below, Ben Stein points to quantitative easing as the primary reason why we are seeing so much inflation....
But most important of all, the Fed is just shoving money out the door as fast as it can, creating piles of cash in banks.The Federal Reserve had hoped that economic growth would be sparked by all of this new cash, but that is only happening to a minimal degree.
Instead, what Ben Stein believes all of this new money is going to bring about is a situation known as "stagflation".
Do you remember the 1970s and the "misery index"?
Well, we seem to be headed for a repeat of those days.
In a previous article, I defined stagflation....
Stagflation exists when inflation and unemployment are both at high levels at the same time.Up to this point, we have had high unemployment but relatively low levels of inflation.
But now we are going to get to enjoy high unemployment and high inflation at the same time.
Video of Ben Stein's recent appearance on CBS is posted below. You can read a transcript of his remarks here. It is amazing that a mainstream news outlet would allow this much truth to get out....