The inflation watch has begun. Bernanke is warning us inflation is on its way.
I remember in Econ 101, the idea of "dollar bombs" being dropped -- so that currency is doubled, and soon all price double as there are only so many goods to go around.
So as airlines charge for bags and food prices rise and oil takes off in a hyperinflationary way, everything else will follow suit. This is the next big oil spill. Oil prices spilling over the economy and fouling everything.
Everything oil touches won't turn to gold, but will go up in price. The more oil prices rise, the more everything else will rise and the less the speculators will make.
Yet governments seem paralyzed to stop it, and there may be a few that think they can turn it to an advantage. In the end, whatever reserves they have in the form of the balance of payments will be washed away as the cost of things spike, and these balances erode.
Maybe the current generation will laugh along in the old Saturday Night Live classic with Dan Akyroyd as "Jimmy Carter" who tells us "inflation is your friend." Who wouldn't want to smoke a $500 cigar, or wear a $7,500 suit, or living in a $10,000 apartment. "I know I would." It ends with "Carter" calling the Treasury Department to say, "Hello, this is Jimmy. Print me some more of them 20s."
In the end, though, few of us will be laughing.