Economists say food crisis prediction from Beck's inflation expert is "crazy"

Blog ››› ››› MATT GERTZ

Economists tell Media Matters that they've "never heard" of the organization Glenn Beck has cited to fearmonger over a coming "food crisis," and mocked the group's conclusion that massive inflation in food prices is imminent.

Last week, Beck repeatedly used his Fox News show to hype predictions from the "credible people" at the National Inflation Association (NIA) of a coming "food crisis." Beck cited NIA's forecast of huge increases in the cost of food staples, which Beck has said is a result of both the Federal Reserve's efforts at quantitative easing, and George Soros' supposed sinister plot to devalue the dollar for his own personal gain.

Dean Baker, the co-director of the Center for Economic and Policy Research, said he's "never heard" of NIA, but told Media Matters their conclusions are ridiculous on their face: "Inflation is falling, not rising, this is crazy." Josh Bivens of the Economic Policy Institute agreed, saying that he's "definitely never heard of them," but that based on their forecast, "no one would say they're a group you'd look to for serious analysis."

Likewise, Mark Thoma, professor of economics at the University of Oregon, who blogs at Economist's View, said, "I have never heard of this association and would not give it any credibility." He added that "[c]redible economists concerned about inflation do not believe we will get anywhere near to hyperinflation."

According to its website, the NIA "is an organization that is dedicated to preparing Americans for hyperinflation and helping Americans not only survive, but prosper in the upcoming hyperinflationary crisis." The group is headed by Gerard Adams, who is also president of Wall Street Grand, a website that makes penny stock picks. NIA also makes stock picks.

Both NIA and Wall Street Grand push a wide variety of precious metals stocks. Thoma told Media Matters that NIA "seems to be designed to get people to invest in gold and silver by making them believe that hyperinflation is just around the corner," and speculated that there might be "a connection between the site and firms operating in gold and silver markets."

In a report published November 5, Adams responded to the Federal Reserve's announcement that it would be engaging in $600 billion in quantitative easing by saying that agricultural commodity prices would "go through the roof like nothing any American has ever experienced before." He predicted, for example, that a loaf of bread "would likely rise to around $23.05" and a bar of Hershey's milk chocolate would reach $15.50. Adams provides no explanation for how he reached those figures.

On Monday, Beck said that he had NIA "checked out six ways to Sunday" and "these are credible people." He then provided NIA's predictions for food costs, and commented, "Welcome to your future of monetizing the debt." Beck listed the same predicted costs on Wednesday, suggesting that the increases would be due to Soros' purported efforts to "devalue the dollar." On Thursday, he brought up the prices again, saying, "I don't know if any of this is true." He added: "We called several experts to verify, 'Do you think this is true?' They said, no, they don't think that's true because they just think that people won't have any money to be able to afford $77 coffee."

But according to Baker, the idea that these sorts of price increases are coming makes no sense. He says that the Fed's quantitative easing "is $600 billion in a $15 trillion economy with massive amounts of idle capacity. If you multiple it by 1000 then maybe you might get the sort of hyperinflation they are talking about." He added, "Will Martians land in NYC? Will newborn babies have gills? Do they have any evidence in the world to support this view?"

Baker also points out that "if any significant number of people believed this crap, they would be shorting long-term bonds and pushing U.S. interest rates up," which isn't happening.

Givens agreed that there's "no economic reason for a surge in food prices like they're talking about." Thoma similarly cited the NIA's use of the term "hyperinflation" as evidence that they are "trying to sell something rather than present any sort of objective, factual information."

As Media Matters has noted, Beck has repeatedly portrayed Soros' call for a "managed decline" of the dollar as a dangerous effort in which Soros "will gain profit and power and you will learn both." But economists like Paul Krugman, Nouriel Roubini and Mark Zandi have all touted the positive outcome of a weaker dollar.

Posted In
Economy
Person
Glenn Beck
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