With apologies to Sarah Palin, it’s true that the cost of food at the grocery store hasn’t gone up much.
But it’s also true that agricultural commodity prices have surged, and there are lots of folks — like Robert Lenzner at Forbes — who think it’s Bernanke’s fault.
Yes, the dollar has weakened, but to ascribe the commodity surge to QE2 is naive.
We posted this chart last night, but it’s worth recasting in this light. It shows rail care volumes for agricultural commodities going nuts. That’s DEMAND. That’s not dollar debasement. This is a very robust explanation for higher grain prices, and it’s also less conspiratorial and politically motivated.
Unless you think QE is somehow stimulating too much demand — in which case you’re saying it’s working — then you have to acknowledge this is playing a major part.