Tensions rise on worldwide surge in food prices – ‘I am here today because I cannot afford to feed my family’
By Annalyn Censky, staff reporter
January 28, 2011: 5:11 PM ET NEW YORK (CNNMoney) — Food prices have been rising worldwide, as the cost of raw materials and agricultural products surge, contributing to political unrest around the globe. In December, international food prices broke an all-time high when they rose 25% for the year, led by rising costs for staples like rice, wheat, and maize, the United Nations reported. The sharp rise in food prices, in particular, has become “a source of political instability,” New York University economist Nouriel Roubini, told CNNMoney’s Poppy Harlow, at the World Economic Forum in Davos, Switzerland this week. Roubini, nicknamed “Dr. Doom” for his famously bearish predictions, said spiking energy and food prices pose one of the greatest global threats — especially to emerging market economies. Why prices are rising: Bad weather in Australia and Russia over the summer severely diminished wheat crops, partially fueling the latest commodities surge. Rising incomes in emerging markets like China and India also play a role, analysts at the Eurasia Group say. The growing middle class in those countries has prompted a shift from a grain-based diet to one consisting of more meat. And a push toward biofuels has also led to rising demand for corn and sugar, pushing up commodity prices. Where it’s hitting: The pinch has been felt most in rapidly developing countries like China, India, and Russia, which still have large portions of their population living in poverty. Food inflation in China was recently at 9.6%, while in India it surged a staggering 18%. Countries that depend on imports and don’t grow a lot of their own grains, like many Middle Eastern nations, are also feeling the pain from price pressures. The recent turmoil there, with outbreaks of riots and violent clashes with police and military forces, is partially related to surging food prices. “What has happened in Tunisia, is happening right now in Egypt, but also riots in Morocco, Algeria and Pakistan, are related not only to high unemployment rates and to income and wealth inequality, but also to this very sharp rise in food and commodity prices,” Roubini said. In Egypt alone, food prices soared 17% — in part because of the worldwide surge in commodities prices but also because of local supply imbalances. …
Tensions rise on surging food prices
By Colin Freeman, Cairo
28 Jan 2011 In Cairo, chants of “Down with the system”, “Down with Mubarak” and “From revolution to victory” echoed throughout the city. “I am here today because I cannot afford to feed my family,” said Maha Egadi, 50, a chartered accountant, as his nose streamed from the effects of tear gas. “We have come because we want our freedom, and we want to stop corruption and theft by the government.” By 2pm, small knots of people were congregating in the streets urging onlookers to join them. “Where are the Egyptian people?” they shouted. “Come and protest with us.” …
Since 2005 the Egyptian Pound has been pegged to the United States dollar, and the nation has undergone a cumulative 45% inflation rate in the last three years imposed on it by our Central Bank (the FED) and profligate Federal spending, which Bernanke has been all too eager to monetize.
With a per-capita GDP of about $2,700 it's people are 1/17th as capable of producing income as those of The United States on average and well-below other nations such as China ($4,300) and Belize ($4,500) that are commonly regarded as quite poor.
The nation's people are clearly incapable of absorbing a 45% increase in their cost of living and this has largely played into the causes of the current uprising.
We have funded Egypt with both weapons and money, some of which they are using against their own people today.
The facts are this: We're largely responsible for what's happening over there. We have, through our abuse of our status as the world's reserve currency and the pegs maintained by other nations, forced inflation into other countries instead of taking the hit ourselves.
Our Central Bank and Treasury continue to claim that there's "no inflationary pressure" but that's a lie. There has been enormous inflation but we have shifted it onto the backs of other people and literally forced them to eat it, both in China and through other nations with currency pegs, such as Egypt.
America "loves" these pegs, especially in the oil-producing nations in the Middle East. Through them we get to enjoy oil that doesn't cost $300/bbl as a consequence of our money printing.
We get to force others to swallow the ever-increasing loads of monetary inflation that our government and Federal Reserve emit upon the world. This is our definition of "stability": We print, you starve, we enjoy it.