1. After the denial on recession, the newest trend is denail of stagflation. Everyone will try to convince you that the (still increasing) inflation is due to disappear in the second half of 2008. The main two drivers behind the current inflation are supposedly the (1) rising energy prices and (2) the rising food prices.
    When it comes to oil prices,you'll here the following claims "Unless you think oil is going to 150 US$ a barrel by the end of the year, energy inflation will be much lower."
    As to the rising food prices, the solution also seems simple: "If you want lower food prices, just tell your Senator to take away ethanol subsidies and stop using corn to make ethanol, when we can buy ethanol made from sugarcane in Brazil miuch cheaper than we can make here".

    On the ethanol level, I agree. What the US is doing is absurd. The dreams of the US of an energy-independent America is not more than a dream. The US currently has 60 ethanol plants under conrtsuction to add up to the already 140 plants in existence. Last year the US produced 6,6 billion gallons of ethanol from corn. This figure will rise to 8 billion in 2008. The US government spends 3 billion US$ a year subsidizing the ethanol production from corn. And we all know that US ethanol production from corn is a dead duck compared to the Brazilian ethanol proudtcion from sugar cane. Especially if you add the biomass ethanol production in the sugarcane-waste process.
    The figures are there: according to the IMF, the US production of ethanol consumes 0,82 gallons of fossil fuels to create a gallon of ethanol. According to David Pimentel of Cornel, it even takes 29% more fossiel fuel to create a gallon of corn ethanol; a net energy loss !

    Yet, the US will not turn it back to the ethanol business. And Brazil certainly won't, their yields on ethanol are contrary to the US impressive.

    I expect food prices to go up by 4% next year. But you have to make the right picks to profit form the wave, forget lifestocks.
    The real reason why we have inflation in Belgium is not only the increasing food and energy prices. I just received my Telenet (Internet & fixed phone bill); which mentions that my bill will go up 2,5% in April, due to 'higher cost of living'. Bullshit of course; the operationg costs of Telenet are decreasing. The real reason is that Telent need to obtain an organic growth of 5% in 2008, which it clearly cannot reach through selling more. So they decide to create inflation.

    Just to say that the truth on inflation and growth is more complex than journalists wants us to believe it is.

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