Normally, when we think of the Obama Boom™ we think of high unemployment and the still-collapsing housing/construction market. All of that is still going on, but I have been coming across reports that disturb me from another direction. There is strong evidence that inflation is on the move. When the government reports inflation, it deliberately does not include the food and transportation markets. The theory with transportation is that these costs are passed down to the consumer and are thus counted as inflation on down the supply chain. Food, I am not so sure about why, but they don’t include it. But it is the food market that concerns me. Check out this report in the London Telegraph:
Global food prices have hit a new record high, amid fears that the escalating cost of bread and meat is adding to the turmoil in the Middle East.
By Harry Wallop, Consumer Affairs Editor 10:56AM GMT 03 Feb 2011
The United Nations Food and Agriculture Organization (UN FAO) gave warning that the high prices, already above levels in 2008 which sparked riots, were likely to rise further.
The FAO measures food prices from an index made up of a basket of key commodities such as wheat, milk, oil and sugar, and is widely watched by economists and politicians around the world as the first indicator of whether prices will end up higher on shop shelves.
The index hit averaged 230.7 points in January, up from 223.1 points in December and 206 in November. The index highlights how food prices, which throughout most of the last two decades have been stable, have taken off in alarming fashion in the last three years. In 2000 the index stood at 90 and did not break through 100 until 2004.
Surging food prices have come back into the spotlight after they helped fuelled protests that toppled Tunisia’s president in January. Food inflation has also been among the root causes of protests in Egypt and Jordan, raising speculation other nations in the region would secure grain stocks to reassure their populations.
Abdolreza Abbassian, an economist at the FAO, said: “The new figures clearly show that the upward pressure on world food prices is not abating.
This is not good. While rising food prices may not be “inflation” to the economists, one thing that everyone must buy is food. When the price goes up, it pinches everyone. The poor, naturally, are the hardest hit. This is not good news in an America where we are struggling with Depression-level unemployment, but here, at least for now, we have a solid safety net. Between food stamps and food banks, people aren’t going to starve in America unless things get far, far worse than they have ever been. In the Third World, though, starvation is a real option. One that more people will be faced with as this goes on. I don’t know much that we can do to help, but there is one thing that we are doing that contributes directly to this catastrophe: the use of grain for ethanol for fuel. Not only is this bad for fuel economy. Not only does it waste billions of taxpayer’s dollars in the name of the false religion of Environmentalism. No, ethanol does not stop there. By taking grain that would otherwise be available for food, the use of ethanol raises the price of grain worldwide. America used to export grain to the world. We were, in a real sense, the world’s breadbasket. Enviro-Green policies have changed this. Now we burn 10% of every gallon of gas as ethanol, all across the country, for all road transportation. The end result: starving babies in Africa. Big Green wants babies in Africa to starve in the name of saving Mother Gaia from the Global Warming® Hoax. And I thought the Leftists were supposed to be the humanitarians.
Update:
Things aren’t going to get any better any time soon. The Wall Street Journal reports:
The global wheat market is caught between freezing winds and a sirocco. Prices, up 13% since the start of December, likely will keep rising.
Still more non-inflation that will hurt everyone’s bottom line. Everyone who eats, at any rate.
Tags: Food Crisis, Obama Economy
