On Inflation
Our little performer before school and by far the best part of my day. After the drop, I join Eitan's class to help his teacher Miss Sw. and enjoy the antics - the kids have potted beans and over the weekend squirrels raided the farm. Chaos and disappointment turns into replanting and determination. After science and during roll-call (who can forget?) the children are asked to describe their various weekends then we jump into "advertising." To explain, Miss Sw. puts three van Gough paintings on the key board and hands go up for marketing-words: "One-of-a-kind!" "Famous painter!" "Buy it for £1 only!" Yes, the kids know how to sell and Eitan gets style points offering the definition of "imperative" or a "bossy order. " hmmm.
The typical British family is spending almost £1000 a year extra on food as increase in the price of a basket of essentials surged 19.1% in May, according to the Daily Mail Cost of Living Index. The surge has been triggered by a worldwide crisis over supplies of key crops like corn, wheat and rice as the Western World thirsts for biofuels (the EU agreed this year that biofuel content of petrol and diesel should be 2.5% rising to 10% by 2020). The effect of biofuels on food prices dramatic: a litre of corn oil has doubled in a year to £1.38; fusilli pasta, made from wheat, is up 81%; a baguette by 41% and Weetabix cereal 21%. If we include further 'must-pay' bills for petrol, mortgages, power and council tax, the extra cost per household rise to £2,500. Despite the pocket pinch, the inflation rate reported by government is 2.6% - Alistair Darling yet again is smoking dope. The cost of under-reporting: the Bank of England has lowered interest rates from 5.5% to 5% attempting to maintain the housing market. But savings trumps home values or at least it has in the past: this country's rate peaked at 17% in 1979 and two years later Britain borrowed £4B from the World Bank and Thatcher arrived with her black whip cracking. Today: further pressure to raise rates is the pound, which has fallen sharply against the Euro. At the day's end, owning a variable rate mortgage coming off an entrance holiday is painful: housing repossessions are up 17% from last year. I think the worst to come yet.
"And so, we're strongly committed to corn-based ethanol produced in America. Yet you've got to recognize there are limits to how much corn can be used for ethanol. I mean, after all, we got to eat some."
El Presidente, April 25, 2006, actually prescient for once
