Nearly seven in 10 Americans are worried about maintaining their standard of living, as concern has spiked higher in just the past five months, according to a new Washington Post-ABC News poll. Soaring consumer prices are a major challenge, with many people struggling under the weight of the rising costs of fuel, food and health care.

The poll shows that the weak economy and rising prices are high among voters’ concerns, and contribute to a souring national mood in this presidential election year. More than eight in 10 said the country has veered pretty seriously off-track, and a separate poll released yesterday by ABC showed economic anxiety at its highest level on record since 1981.

http://www.washingtonpost.com/wp-dyn/content/article/2008/05/13/AR2008051303120_2.html?sid=ST2008051400066

Like Early ’70s

Volcker, who engineered a surge in interest rates to 20 percent when battling consumer price gains 18 years ago, said “there is some resemblance to where we are now in the inflation picture to the early 1970s.” The Fed failed to contain a pickup in prices at that time, spurring the acceleration of inflation later that decade, he said.

“If we lose confidence in the ability and the willingness of the Federal Reserve to deal with inflationary pressures” and buttress the dollar, “we will be in real trouble,” Volcker said. “That has to be very much in the forefront of our thinking. If we lose that we are back in the 1970s or worse.”

Consumer prices rose 3.9 percent in April from a year before, compared with an average rate of 2.7 percent over the past decade, a Commerce Department report showed today. Volcker said there’s “a lot more inflation” than reflected in government figures.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1ODhNdXi8Mw&refer=home

This is happening worldwide because consumers feel as if their monetary systems are being mismanaged causing them to lose confidence which pushes the value of currency lower and real assets higher.

Banks are hard up for money and customers are finding it more difficult to get credit.

In the Sussex town of Lewes they’re devising a plan which could change all of that. They want to print their own local money.

Inspired by the Devon town of Totnes which launched its own currency last year, Lewes locals are at the start of the process of re-launching their own cash.

The town did have its own pound before but it was last in circulation in 1895.

Shop near where you live

The group behind the schemes in both Totnes and Lewes are part of the “Transition” movement which is concerned with the impact of rising oil prices and consumption.

They hope that the new money will encourage shops and customers to buy local produce and reduce their fuel consumption.

It’s also hoped the scheme will encourage a greater sense of community.

Adrienne Campbell, one of the people behind the plan, says: “We’re a group of people who want to re-localise and strengthen the local economy - grow our food locally, have more businesses locally and generate our own energy locally as well.”

Whether it’s popular or not, the very question of a town issuing its own currency does stimulate a debate about how money actually works.

It is after all simply paper, which only works because we all agree it has a special value.

The team in Lewes may have a job convincing some of the locals to agree that their pieces of paper carry the same value.

http://news.bbc.co.uk/1/hi/programmes/working_lunch/7392286.stm

Is oil going up or is the value of the dollar going down? 

With costs as high as an elephant’s eye, some growers are even cutting back on crops that are in short supply.

All over the world, prices for basic foods — barley for beer, milk for cheese, corn for tortillas, and the rice that serves as a staple for more than half the world’s population — are soaring. But farmers aren’t rushing to cash in on the boom by planting more of the crops.

The amount of corn planted in the U.S. is expected to dip this year. Rice acreage in California, which sells as much as half its crop overseas, is predicted to increase by only a small amount. Instead, farmers are planting cheaper-to-grow wheat and soy.

They say the reason is simple. The cost of planting some crops is rising as fast as their prices, and sometimes faster, leaving little incentive to increase production of some foods that remain in high demand around the world.

Farmers typically plant their crops once a year and not all of them cost the same to produce. Both corn and rice, for example, require more fertilizer to grow and fuel for farmers to tend than other crops. As the prices of those supplies rise faster than the prices of some commodities, farmers are shying away from some expensive crops.

The little-noticed development could keep the price of some foods at their current high levels, or send them even higher, until worldwide supply can catch up with demand, economists say.

http://www.latimes.com/business/la-fi-farm13-2008may13,0,38893.story

Ben Bernanke, the Fed’s bearded money wizard, can tinker with the interest rate all he wants. But when a guy like Efthymios “Please call me Tim” Athanasiadis finds himself paying $32 for the same 50-pound bag flour that cost him about $15 six months ago, you know we’re in trouble.

This is a story about a 45-year-old Greek immigrant who has worked, and worked, and worked some more to secure a piece of the American dream. But these days, when you stare into the eyes of the gregarious gentleman who owns the Esperia Grill & Rotisserie in Brighton, anxiety is all you see.

“The fun of running your own business has just about disappeared,” Tim said as Esperia’s spotless floors were being scrubbed in preparation for another day. “Competition is not the problem. You serve good food and the people will come.”

My problem is the price of doing business. Suddenly,” he sighed, “it seems as if everything has gone crazy . . . . I’m talking way, way out of control.”The wholesale cost of essentials like rice, flour, eggs and olive oil has gone through the roof over the last half-year, Tim says.

“What I’m paying for gas, electricity and oil in the last six months to a year has either doubled or tripled,” he said. “I thought when Boston Gas and Boston Edison were split up and taken over by other companies like NStar [NST], commercial customers like me would see a savings. But gas and electric is costing almost $2,000 a month, each. And the air conditioning bills this summer will run me about $4,000 a month. But then, what choice do I have?”

“If this wasn’t a family business,” Tim said, “I wouldn’t be in business, simple as that. There’s just no way we could afford to do it. How could I pay health insurance for, say, 10 people? Add another 10 grand (in insurance payments) on to everything else? It’s just crazy.”

Tim Athanasiadis arrived here some 38 years ago from Katerini in northern Greece. He has been working for as long as he can remember. If he’s lucky, he says, he and his wife, Georgia, can steal away for a half-day on the weekends when both children are out of school and working in the restaurant, and “maybe take a ride to the Cape.”

After devoting the first 20 years of his business life to selling pizza, subs and salads out of Center House of Pizza, Tim gambled on a back-to-the-future move. “Georgia and I decided we would change the cuisine to the kind of Greek and Mediterranean food we grew up with,” he explained. “This is the menu we have always wanted to serve - lamb and chicken specials, the kebobs, dishes like moussaka and spanakopita. And though our customers were a little stunned when we first made the change, it’s turned out to be the right move. Our customers here in Brighton have been wonderful.”

Tim Athanasiadis’ larger view of the economy was forged from the time he spent in the Dunkin’ Donuts management program. “What I learned there took me way beyond the world of subs and pizzas.” A Dunkin’ franchise occupies the storefront next to the Esperia Grill. “Without Dunkin’ Donuts as our tenant next door, this would definitely be a whole different ballgame, I can tell you that.”

We have grown numb to shelling out $60 or $70 to fill up our SUVs. Meanwhile, there’s a humble Greek gentleman in Brighton struggling to figure out how he holds his lamb special at $12, when a container of olive oil that used to cost him $16 less than a year ago now sets him back $55.

“Who’s responsible for this?” Tim asked. “I mean, is China buying up all our food? Have our farmers decided to grow nothing but corn so they make ethanol? Something’s not right. All I know is, if things don’t change and soon, we’re going to be asking people to pay $30 for a pizza. And who’s going to do that?”

http://www.bostonherald.com/news/opinion/columnists/view.bg?articleid=1092791&srvc=home&position=recent

The Lazarus phenomenon refers to an event in which a person spontaneously returns to life (the heart starts beating again) after resuscitation has been given up

Lazear Sees No Recession for U.S. Economy

The White House’s top economist said he’s confident the U.S. economy hasn’t dipped into recession, and expressed optimism that stimulus checks could bolster growth in the current quarter, earlier than expected.

“The data are pretty clear that we are not in a recession,” Council of Economic Advisers Chairman Edward Lazear told a meeting of editors and reporters from the Wall Street Journal and Dow Jones Newswires.

Battered by the housing crisis and rising energy prices, the economy grew at an anemic 0.6% rate in the first three months of the year, the same pace as in the fourth quarter of 2007. Despite the still-positive growth, many economists believe a recession already is under way.

But the official declaration of a recession would likely be made after the fact by the National Bureau of Economic Research. And Mr. Lazear said just two areas of the economy are showing the type of deterioration that the NBER would consider recession range: retail sales and manufacturing. NBER says a recession is marked by a significant decline in economic activity, lasting more than a few months and seen in real gross domestic product, real income, employment, industrial production and wholesale-retail sales.

Jim Rogers likes Taiwan and China . US stock market is too high. This recession is going to be the worst in a long time. There is no supply of commodities. How can you have a bubble when no one has bought the sector yet. Food stocks are at the lowest they have been ever. Starting to look at buying metals again. Three billion new people need commodities.

 The Toronto Venture exchange consists of smaller gold companies. The index has been beat down while gold has risen. This sector, by every measure, is extraordinarily cheap here.

Soros: Well, we are close to a tipping point where, in my view, the willingness of banks and countries to hold dollars is definitely impaired. But there is no suitable alternative so central banks are diversifying into other currencies; but there is a general flight from these currencies. So the countries with big surpluses—Abu Dhabi, China, Norway, and Saudi Arabia, for example—have all set up sovereign wealth funds, state-owned investment funds held by central banks that aim to diversify their assets from monetary assets to real assets. That’s one of the major developments currently and those sovereign wealth funds are growing. They’re already equal in size to all of the hedge funds in the world combined. Of course, they don’t use their capital as intensively as hedge funds, but they are going to grow to about five times the size of hedge funds in the next twenty years.

http://www.nybooks.com/articles/21352