Thursday, November 01, 2007

Expansionary Monetary Policy Hits Home

Coffee and dish soap

I guess I knew that the Fed increased the money supply or lowered interest rates or whatever else it does, awhile back and then again eg putting in motion inflationary expectations, because prices are starting to go up. Whereas the neighborhood coffee in the area where I go to school in Manhattan was everywhere $1.25 for a large it is now up to $1.50. Same thing with dish soap, the local $.99 store in Brooklyn has broken the barrier and is now selling dish soap for $1.29. When the elephants dance/fight (central banks and monopoly capital) it is the ants (everyone else) who get squashed. I didn't need to read about the policy in the paper, I knew it happened because daily necessities cost me (and you) more.

Workers is not whining, just giving more examples of why central banks should not try to fine tune the economy. Just leave the money supply and interest rates alone and let people set the demand and supply based on their own needs. I sure didn't need my daily living to go up in price so that bankers - who are bailed out already with government deposit insurance and mortgage guarantees - can get bailed out when they were overly risky with their (actually our, due to all the support the government gives them) money in subprime mortages. Bailouts just beget more bailouts.