Corn, ethanol and inflation will these three words be linked together in news stories about rising costs until cellulosic ethanol comes on stream?
Over on NDNblog,(pretty partisan Democrats by the look of things) they think it has already happened: quoting from "With Growth Slowing and Inflation Rising, What's the Administration's Plan" US Robert J. Shapiro says there are a number of reasons why inflation in the US is rising:
Some of it is the impact of last year's higher energy prices now making their way through the economy - for which, again, this administration has no answer. Some of it is food prices, driven up by bad weather and the unintended effect of government-directed demand for ethanol, which drives up the price of corn that goes into animal feeds and sweeteners,as well as the price of other gains as farm businesses shift from them to corn. And some of it is higher import prices from last year's weakening dollar.It is always hard to predict the future (as meteorologists know, but economists implicitly deny), and you can make statistics say what you like if you pick the right historical inflation data set. but taking the average inflation rate in the US from 1996 to 2004 as about 2.4% it will be interesting to see how that changes over the next year or two...
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