Rising prices for food and fuel helped drive the uprisings racking the Middle East, now those uprisings are pushing prices higher still and threatening America's economic recovery.
Prices had been on the rise for months around the world as increased demand following a long recession - especially driven by economic booms in China and India - squeezed available resources.
Massive increases in the cost of staples like flour and cooking fuel helped stoke popular anger in the poor countries in the Middle East and could do the same elsewhere. Note well that the ChiComs are heavily censoring the news on the Arab uprising lest their inflation-strained subjects get any funny ideas.
In the U.S., increased competition and rising domestic demand augmented by a regulatory crackdown on the energy sector - particularly oil and coal -- has driven a still relatively modest increase in food and fuel prices. Enough to be a small drag on recovery, but not stifle it.
In Europe, though, inflation is already sinking in its fangs.
Central bankers and heads of state are preparing to jack up interest rates and tighten monetary supplies in an effort to prevent runaway inflation. When President Obama asked his fellow leaders to keep pushing stimulus, as he is here, they refused, largely on the grounds they feared inflation.
Here, the Federal Reserve has been gushing cheap dollars into the economy for three years and the Obama Democrats have ramped up spending and borrowing to historic highs all in effort to stave off what they said would have been another Great Depression.
But now, economists fear that there will be too many dollars chasing too few goods and that a serious inflationary cycle could begin. As those who endured the 1970s will attest, once begun, an inflationary cycle is hard to shake. Every bit of growth is gobbled up by inflation, and people lose ground in their personal finances.
Fed Chairman Ben Bernanke and Obama have promised that they can switch from stimulus to inflation control at precisely the right moment. But turmoil in the Middle East could trump their abilities to make the transition.
If oil prices shoot up because of concerns over access to the Suez Canal or instability inside significant petroleum producers in the region, it could kick start inflation here. High gas prices push other prices up and with bushels of cheap dollars available, there is little check on costs rising faster than stagnant wages can match.
Inflation stalls recoveries, but so do the steps necessary to prevent inflation - like tightening monetary policy and raising interest rates.
Our stimulus bubble is pretty big, and while Obama and Bernanke promise to let the air out in an orderly fashion, problems abroad could pop it instead.
