Why Does Coffee Cost More?

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Broke: The Plan to Restore Our Trust, Truth and Treasure

24 Responses to Why Does Coffee Cost More?

  • I am not a huge fan of his style; the glib self-confidence, coupled with the self-deprecating humor annoys me. Beck has some very good points though – particularly with regards to the role of experts in the general understanding of the economy and the dangers of hyper-inflation.

    The posting raises an interesting question though: what should a Catholic family do to reasonably manage their assets and income?

    Even sage advice strikes me as challenged by the underlying premise that we are headed for stagnation. For example, my wife and I have studiously paid down debt. Our mortgage and student loans make up the largest portion of our debt at this point. Is this wise if inflation devalues the real cost of the debt? Taking just education debts, should a family pay extra each month on student loans when the “real” cost of a $50,000 loan is on its way down? Would they be better off to pay the minimum on credit card debt while using the money that they would have doubled up the monthly payment with on the purchase of durables such as a replacement car?

    Advice on how to manage an economy is important and it helps to focus the political consequences of elections but I think that there are a lot of us looking for advice that is truly useful to their families.

    Do you have a link for that?

  • G-Veg,
    I would be dubious about any such advice. Your thinking is sound regarding the treatment of debt, but predicting the future is perilous. For what it is worth I think it is important to look at the rate on long term loans. Long-term lenders have the same concerns as long term borrowers, and the rates they offer must take inflation risk into account in order to avoid the other side of the very same risk you identify. These folks are the so-called smart money, and they apparently think that inflation risk is low. They could be wrong, but it is risky to bet against the market decisions of the most sophisticated decision-makers. Accordingly, I do not think that most people will regret aggressively paying off debt. That said, to do so at the exclusion of other savings and investing would be a failure to diversify. A little of everything is most prudent. A smart family saves at least 10=15% of its income per year, and that amount can include some additional/extra mortgage and education debt repayment, but in most cases should probably not be limited to such repayments. Ordinary consumer debt is different. This debt should be avoided if at all possible and repaid as fast as possible since it carries rates higher than one could normally expect to earn via alternative investments. Finally, I don’t think these “rules” are in any way limited to Catholics.

  • I don’t think that I’ve ever seen 11 minutes of Beck before… That was pretty incoherent.

    - As he admits, commodity prices going up have a lot to do with people around the world being able to consume more, which overall is a good thing, both for them (we don’t really want most people to be so poor that they can’t afford meat and sugar, do we?) and for the US, which is a new producer of food.
    - One of the other reasons to appreciate a small amount of inflation is that it makes our goods more competitive on the world market. It makes the price of Fords and GMs more competitive against VWs and Fiats.
    - Finally he misunderstands the gold standard. If you had a sudden gold strike, this didn’t magically mean that everyone could buy more if the rate of gold discover was above that of economic growth. It meant there was inflation. That’s one of the reasons prices tended to go up in and around big gold strikes. If there was suddenly more gold, people wanted more of it in exchange for the same goods.
    - It’s deceptive to talk about the amount and 1895 dollar coin would buy now, given that the amount of work that goes into producing various items has changed so much. And overall, if you look at things in detail, it’s simply not the case that a specific amount of gold will buy you the same amount of stuff now as it would have 100 years ago.

  • Ditto what Mike and Darwin said. I would note that I have never been able to watch Beck for more than a few minutes on television or listen to him for more than a few minutes on radio. Whenever he refers to something from history he invariably gets it wrong, either from ignorance or intentional distortion. His mixture of bathos, pathos and distortion of facts I find off-putting in the exteme. I think my conservative credentials are in good order, but I regard Beck as a loosely wired, ignorant buffoon.

  • My impression aligns with Donald, though I admit I have seen too little of Beck to have a very confident opinion. He kind of reminds me of Howard Ruff in need of medication.

  • He has his lucid moments, and he does have some very good guests from time to time. But the tv show is monotonous and I can live without it. His radio show can be funny at times, but again, not exactly appointment listening. He does need to dial it back. He’s about an 11 on the freak-out-o-meter every day.

  • Tomorrow, in Confession I can tell Father I already did my penance, right? I listened to half that tape.

    One non-financial note: the India trip might be the first thing Obie gets right. We need India involved with us in the global terror war against us. Paki is not dependable, for one it cannot pacify vast areas of the country. Indian involvement keeps Paki at least marginally with us because they know that the better strategic partner against Islamic terrorism is another enemy/victim of the Islamic terrorists, not an unidicted co-conspirator.

    It is not just inflation. This QEII $600 billion monetary stimulus is the same as printing $600 billion in new worthless paper dollars. They call it monetizing the debt. Supply and demand: more dollars chasing relatively same numbers of goods, prices have to go up. Gold hit a new record yesterday. From 1999 to 2007, FNM/FRE/HUD pumped (buying and reselling mortgages, MBS, etc.) huge amounts of dollars into housing finance causing the bubbble prices which sunsequently burst and took down the economy. The question is: how much of the $600 billion gets into we the peoples hands?

    Interest rate risk. Even without QEII, market interest rates can only go up. Banks fund earning assets with short-maturity, insured deposits and short-term secured borrowings. If a bank extends a 30 year fixed rate loan, it must sell it or it will hold a 4.5% asset that is profitable when funds cost 1%, but a loss leader when funds costs rise to say 3%, which is low by historical experience. The banks sell 90% of such loans to FNM/FRE.

    G-Veg, Dave Ramsey says pay off all debt. Certainly pay off high rate credit card debt. Traditional Wall Street advice is to have about six-month safe dollars stashed away for a rainy day. Then, or simultaneously, consider max-out whatever deferred retirement accounts – diversify and do not try to time the market. Keep yourself sane and sober and work to improve yourself on the job.

    Moderation (in finance that would he diversification) in all things consider less emphasis on repaying all debt, and consider/plan other strategies.

    And, American Catholics should pray for Divine assistance.

  • When Beck concentrates on history, I am for him but when he seems to portray himself as the Messiah, he turns me off. Lately he is proclaiming more and more that he is Mormon, but does not say that he left Catholicism, the faith founded by Christ made in the image and likeness of God for a faith where God is made from and in the image of man. Lately Beck talks about those who go to Church because they have to -Catholics?- while he goes because he wants to. There is a belief in Mormonism that when the world starts to fall to pieces, Mormons will take over and Beck proclaims over and over and over that the world is falling to pieces. No matter how you look at it, Mormonism is not only not Christian, but it is anti-Christian because they consider any religion that came before Joseph Smith’s revived religion is false…they do not believe that God is eternal but that He evolved from man and they believe Jesus is the Son of Mary and a human father and that Jesus and Lucifer are brothers – surely Beck, who researches everything, knows this. So he led his family away from Christianity to embrace an antiChristian cult…I know Mormons and they are good people and many do not know of these controversial tenets – but surely Beck does. So why would he have left the Catholic Church to embrace Mormonism…is it because they are promised a planet at some point if they remain faithful? I pray her returns to the Church in which alone is found the fullness of faith…but then he would have to limit his ego somewhat…but he can do it.

  • No florin, we Mormons are NOT promised “a planet” for being faithful.

    We are taught that God has offered us everything that he has if we are faithful.

    Get it right.

  • Perhaps Mormons are not offered a planet but the rest of what I mentioned I read in the Book of Mormon…

  • Really?

    Perhaps you could quote me the passage in the Book of Mormon that says that “Jesus and Satan are brothers.” Where exactly in the Book of Mormon is that passage?

    Or how about the idea that God evolved from a mortal human being? Could you pinpoint that one for me?

  • WSJ – Gold rallies to record, a whisper from $1,400
    Silver’s at 30-year high; copper at its best in more than two years
    http://www.marketwatch.com/story/gold-turns-higher-trades-in-record-territory-2010-11-05

    Bloomberg – Corn, Soybeans Jump to Two-Year Highs as Dollar Drop May Spur Hedge Buying
    http://www.bloomberg.com/news/2010-11-04/corn-soybeans-jump-to-two-year-highs-as-dollar-drop-may-spur-hedge-buying.html

    NIA – U.S. Food Price Increases
    http://inflation.us/foodpriceprojections.html

  • The Daily Bell – Scarce Commodities & the High Price of Gold
    http://www.thedailybell.com/1507/Rick-Rule-on-Scarce-Commodities-the-High-Price-of-Gold-and-the-Sale-of-Global-Resources.html

    How I See the World Today: Question and Answer Period | Jim Rogers

  • Quote of the Week
    “Zimbabwe’s Mugabe is Ben Bernanke’s mentor.” – Dr. Marc Faber

  • Study agriculture and mining, Jim Rogers advises Oxford University students
    http://www.bi-me.com/main.php?id=49391&t=1&cg=4

  • Team American Catholic – My apologies… The original YouTube videos went bad, but I was able to locate this program once again. Focus on the first video and a portion of the second. I am showing the third video so you can see all his comments in their entire context. Focus on his comments regarding commodities.

    Like many of you I am no Glenn Beck fan for many of the same reasons that have already been mentioned above. I would only suggest to you that as Catholics we must face reality. Judge everything and retain what is good. The stats he mentioning about commodities are facts. We must confront this reality.

    I would also propose to you to watch or listen (via Lew Rockwell’s podcast) the above Jim Rogers Q&A. Jim is one of the foremost experts in the world regarding commodities.

    Let us hope and pray what NIA mentions above doesn’t happen. It would be prudent to be aware of that possibility though. From an investment standpoint commodities are a good place to be…

  • To watch all of Glenn Beck’s shows from last week and this week in their entirety go here:
    http://www.therightscoop.com/?s=glenn+beck+november&x=16&y=13

    For example refer to this excerpt regarding commodities from today’s (Monday Nov 8) show.

  • To watch all of Glenn Beck’s shows from last week and this week in their entirety go here:
    http://www.therightscoop.com/?s=glenn+beck+november&x=16&y=13

    For example refer to his show today (Monday Nov 8th) when he talks about commodities once again.

  • To watch all of Glenn Beck’s shows from last week and this week in their entirety go here:
    http://www.therightscoop.com/?s=glenn+beck+november&x=16&y=13

    For example refer to his show today (Monday Nov 8th) when he talks about commodities once again.

  • Reuters – World Bank chief surprises with gold proposal
    http://www.reuters.com/article/idINN0824920920101108?pageNumber=1

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