Looks like another increase in inflation coming.

 ENERGY AND FOOD MOVING HIGHER

SELF SUFFICIENCY IS BEST REMEDY

In the last few weeks we have seen heating oil rise by 50 cents a gallon, gas is now up by at least 30 cents and it is probably just the beginning. It is likely we will see near $5. fuel prices again in the coming winter. This is due to production cuts by OPEC and a strong demand everywhere. That and the fact the strategic oil reserve has already been mostly emptied and will not be able to be used to moderate prices. In fact, Opec protested the manipulation of oil prices for political purposes by using this reserve and consequently has had some effect in their failure to cooperate with western appeals to produce more supply. Of course the sanctions on Russian oil is also affecting supply.

As for food, it is also affected by the lake of supply from Ukraine, it is unlikely that a new grain deal will be enacted as the west refused to hold up their part of the bargain. This grain shortage will have an effect on European food prices which will increase demand for everyone. It is also expected that sanctions on Russian fertilizer will have negative effects on food production in the coming years. It may become very severe in the next harvest season.

While we can all lament the troubles affecting food and energy in other parts of the world, we could have the ability to be self sufficient in energy and food in this country. The policies that have stifled production and the regulations that have prohibited refining have allowed this country to become dependent on the rest of the world. It does not have to be the case, but is the result of political decisions in Washington.

Food prices will also be effected by the growing meddling from Washington in areas of food production and distribution. High energy prices alone will dramatically increase food prices and coupled with policies that try to curtail meat production will soon make common diet products luxury items. High energy prices will raise the price of fertilizer, transportation and food preservation, it will all translate to much higher food prices. 

Inflation will not be controlled by higher interest rates. It is a question of supply, more than demand. Much of these problems could be alleviated with sound decisions in Washington, a rare thing today.