Effects of QE2 already happening

Maybe it’s due to the first round, maybe the upcoming catastrophe, but I got this email which highlights perfectly the damage the fed has done.  For those of you who know, my love in life is fishing.  I buy (way too much!!!) fishing tackle online, and the retailers will send out promotional email.  It isn’t spam, as I signed up (I guess) when I ordered.  Anyways, here the latest email from them:

MEGABASS “MEGA” SALE – ALL MEGABASS ON SALE at 40% OFF For 2 WEEKS ONLY….

Here’s the situation: The Japanese Yen has increased in value by over 20% which means our cost for Megabass Lures has Gone Up almost 25%! This is not good. What was once almost affordable is now absurdly expensive. So we have stopped ordering Megabass for now. But, do we have a HUGE INVENTORY! What to do? Come on, you know the answer…..Let’s Have a SALE!!

Notice the key parts:  first the depreciation/debasement of the dollar has made imported goods much more expensive.  It’s not good?  No, it’s absolutely awful.  It hurts everyone.  And, they have stopped ordering Megabass lures directly as a result.

Now, a few things.  I’ve never used Megabass lures, they are for fishing I don’t do, and honestly, I would never spend that amount of money on lures.  But some do.  But now, because of the actions of the fed, they will have to pay far more, or worse, not be able to purchase.  And it will be felt in Japan as well.  No doubt, there are many other goods as well that US consumers won’t be able to purchase.  And no doubt as well, the Japanese government will see this (as well they should) as an attack on their economic well being.

This is policy driven economy its worst.  If anyone ever doubts just how destructive what the fed is doing really is, just read that email.

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