This year, food prices rose 3.9%... the largest increase since November 1974.

Prices are going UP... and with no end in sight. WHY? And what can we do about it? 

It's no secret that we are not fans of the Federal Reserve or of its policies and actions. (This article will definitely get us bounced off of its Christmas card list!)

Because, at least in part, we blame the Fed and its actions for the run-up in food prices.

In all fairness to the Fed (did we say that?), there are other causes to food prices soaring, including:

• Economic growth in a large number of developing countries, which increases the demand for a wide variety of food products.  For example, when a country becomes wealthier, its citizens eat more meat, and that increases demand for feed grain crops, and on and on.
• Poor harvests in some large food-producing countries such as Russia (droughts), Australia (floods) and the US (floods in some areas, record drought in others).
• Increased demand and shrinking supply—a classic equation that leads to higher prices.
• Increased cost of fuel that is needed to power machines for harvesting, planting, shipping, etc. that then get passed on to consumers.

But part of this food inflation crisis lies at the foot of the Federal Reserve.  Does Chairman Bernanke ever shop at a supermarket?

When the Fed flooded our economy with trillions of cheap dollars in the past two years, more money became available for investing.

Where did a chunk of those "new" bucks go? Into commodities.  And that helped drive up commodity prices and the stock market.

Commodity speculation (traders betting on the direction of commodity prices) have driven up the price of fuel and crops, both of which are major components of food costs.

Flooding the market with Fed dollars debased the dollar (now at its lowest value in three years) and has also led, in large part, to the increase in inflation of those prices and acted as a hidden tax on our purchasing power.

The end result?

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