Global inflation a problem, oil hits another record high on Friday!

Read this on the International version of the New York Times today:

“We were flabbergasted to see how many countries around the globe have inflation running in the double digits,” he added. “We found around 50 countries. And we probably missed some more where data are hard to come by.”

With heavily populated countries such as India on that list, they represent 42 percent of the world’s people grappling with soaring prices that threaten to crimp economic growth.

Oil prices hit another record high above $142 per barrel on Friday, while flooding in the U.S. Midwest, where much of America’s corn and soybeans grow, sent grain markets to record highs.

That will surely stoke already high food and fuel prices and hit emerging markets particularly hard.

India raised interest rates twice in June and economists think more increases are imminent after inflation hit its highest level in more than 13 years in mid-June.

Mexico’s central bank raised its key interest rate on June 20 for the first time in eight months. That surprised many economists, who thought Mexico would keep borrowing costs unchanged because of concerns that weakness in the United States, its top trading partner, would hurt the economy.

Given the widespread price pressures, it is little surprise that the Fed vice chairman, Donald Kohn, stressed that tackling inflation required an international response.

“Policy makers around the world must monitor the situation carefully for signs that the increases in relative prices globally do not generate persistently higher inflation,” Kohn said in a speech last week.”

Cam Cardow National Debt Cartoon, again.

A Cam Cardow National Debt Cartoon, and U.S. National Debt Clock, here…

U.S. and post World War I German republic share monetary policies, lets pray it does not lead to the same results…

Read a great new post about the US economy and monetary policy here, this is an excerpt:

“…We are reaching a point, however, where the economic issues facing our nation are becoming a grave moral concern. What happens when we run out of money? When foreign countries dump our currency? When the dollar completely tanks? When unemployment soars?

Ever heard of the Weimar Republic? That period of post World War I Germany where inflation had spiralled so far out of control that the German Mark, which had an exchange rate of 4.2 to the American Dollar in 1914 had reached an unfathomable low of 2 TRILLION marks to the dollar by 1923? People were bringing cash to the store by the wheelbarrow full to buy things like a loaf of bread. Nearly 1,800 government printing presses were running around the clock just to produce enough cash. (For more on this aspect of Weimar Germany, go here.)

What had precipitated this massive decline? A huge war debt, financed only partially by taxes. The bulk was paid for by loans, the sale of treasury bills, and an increased monetary supply.

Sound familiar?

We need to get this country’s spending under control. We are making ourselves vulnerable in so many ways. Economic crisis leads to real suffering – extreme poverty, starvation, loss of life…”

Congressman Ron Paul, MD vs. Fed Reserve Chairman Ben Bernanke, 11/08/2007: