Global Food Prices at Record Levels

[Meatpie]

The New York Times published an interesting article yesterday discussing the current spike in global food prices and whether this could herald another global crisis.

You can read the article here.

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Discuss the situation in your country.

In Bulgaria prices are going up every week.

 

[markfive]

I read somewhere recently that all the major countries are increasing their money supplies in order to stimulate their economies, so the inflation that results doesn't show up in exchange rates, but instead shows up in increasing prices for things whose supplies can't be readily increased--food, fuel, minerals, etc. Seemed fairly convincing when I thought about it.

Most people I know are not talking so much about food prices as gas prices, though. Those have been zooming right up.

 

[Meatpie]

I read somewhere recently that all the major countries are increasing their money supplies in order to stimulate their economies

Can you elaborate on that because to me it doesn't make sense. Most European countries and the US are running huge budget deficits, in some cases in the billions.

Greece needed a bailout because it's deficit reached 100% of GDP and the country would have been torn apart if Germany didn't help.

Germany is Europe's powerhouse.

40 million peoople are currently employed with thousands more finding jobs every month.

By contrast, the UK and Spain suffer from massive unemployment. More than 20% in Spain.

If I need something special I order it online from Deutschland, I just can't find it here or if I can it would be double the price.

They produce everything and are good traders and invenstors. The largest supermarket in granny's vilage is German. They sell German soap, and all other goods at competetive prices, not that we can't produce them here but because that's how they boast their economy - they produce and export everything to stupid countries like Bulgaria.

Bulgaria on the other hand exports wine and Cheese to France and Germany.

LoL

Greece also exports large quantities of cheese and olives. They only sell Greek olives and oranges in supermarkets here.

 

[markfive]

Most European countries and the US are running huge budget deficits

Yes, I think that's the point. Running a deficit tends to increase the money supply. Governments can only run deficits by a) borrowing, or b) by printing money. Effectively, both the US and the EU are doing the latter now, since the Federal Reserve is "buying" Treasury Bills ("quantitative easing") and the ECB is backing its member states' bonds--popularly called a bailout. Where do the Fed and the ECB get the money? They make it out of thin air--or thin electrons, since it's all computerized nowadays. But you can't create wheat or iron ore that way, so their prices in the expanded supply of currency has to rise.

I found the article I remembered:

http://www.nationalreview.com/exchequer/256396/massive-inflation-right-under-our-noses

 

[Meatpie]

Thanks for providing that link, a lot clearer now.