Saturday, April 14, 2007

Consumers and Rising Costs

As always, consumers notice rising costs. And yet, I find this excerpt quite telling:
Prices on everything from cereal and milk to soft drinks and red meat are on the upswing, partly because of the ethanol and biodiesel boom that is pushing up prices for corn and other commodities. Energy prices also remain troublesome, regardless whether gas tops $3 a gallon, and clothing costs are up too.

All that explains why Federal Reserve policymakers cited 'uncomfortably high' inflation readings as being their biggest worry, according to minutes released Wednesday of their discussions last month."
So, government interference in the energy market is distorting both energy and food prices. I think we would all be better off if they would stay out of it.


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