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Us Accused Of Forcing Up World Food Prices

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http://www.guardian.co.uk/business/2010/nov/05/us-accused-of-worsening-price-rises

The US central bank was accused today of adding to soaring food prices with its new programme of quantitative easing, after oil and commodities surged on world markets.

Critics said the $600bn (£370bn) of QE announced by the Federal Reserve would hurt consumers by pushing up prices of soy, wheat and other staple foods, along with oil, copper and zinc.

The jump in commodity prices raised the prospect of an inflationary bubble reminiscent of 2008, when oil and other industrial raw materials struck all-time highs just before the crash.

While commodity traders said a decline in the dollar's value was expected following the QE decision, the Reuters/Jefferies CRB index, a global commodities benchmark, has since hit a two-year high. It has gained 18% since the start of September.

US light crude hit a year-high of $87.2 a barrel while copper flirted with record levels of $8,769.50 a tonne, within $200 of an all-time peak of $8,940 in July 2008.

UK food prices were 9.8% higher last month than a year ago, the biggest annual increase since October 2008, according to the Office for National Statistics. Imported food prices climbed 4.5% on the year, the fastest rate since October 2009, pushing up the price of bread and margarine. Prices are likely to be pushed higher in coming months, with refined sugar reaching a record of $783.90 a tonne today.

Despite surging commodity prices, Fed chairman Ben Bernanke has argued the likelihood of deflation is greater than inflation following prolonged weakness in the US economy. He said that the poor state of the housing market and continued weakness in consumer demand showed inflation was likely to undershoot the Fed's 2% target and that unemployment would remain high.

He is expected to be unmoved by the latest data showing 151,000 private-sector jobs were created in October. While many traders took the figures on face value, several analysts said they showed the jobs market remained depressed.

The Fed needs more than 300,000 jobs to be created a month to make a dent in US unemployment, which remains at 9.6%. A figure of about 150,000 is just enough to keep pace with the rising population.

Looks like Bernanke's free money is already finding a home. Lovely.

Luckily we can all do without food, so nothing to worry about here.

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If you have ever watched MAN V FOOD on the Travel Channel with Adam Richman you will probably notice that our "special" friends across the water are simply determined to eat ALL the food on the planet themselves.

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Looks like Bernanke's free money is already finding a home. Lovely.

Luckily we can all do without food, so nothing to worry about here.

surely what we can all do without, is the dollar?

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http://www.guardian.co.uk/business/2010/nov/05/us-accused-of-worsening-price-rises

Looks like Bernanke's free money is already finding a home. Lovely.

Luckily we can all do without food, so nothing to worry about here.

Think ZIRP has more to do with this than QE.

Starbuck boss seemed to be saying commodity prices rise are speculative and unsustainable though. I still believe inflation is the theme,

but that is interesting from somebody who actually uses the commodity.

( http://www.bloomberg.com/news/2010-11-04/starbucks-schultz-says-surge-in-coffee-futures-caused-by-speculation.html )

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If you have ever watched MAN V FOOD on the Travel Channel with Adam Richman you will probably notice that our "special" friends across the water are simply determined to eat ALL the food on the planet themselves.

LOL

I actually laughed out aloud with that one.

The saddening bit is that food prices hit the 3rd world the hardest. They starve whilst we pay an extra 5p for a Mars bar. That sucks. The third world bit not the Mars bar. That would be just bl**dy heartless.

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LOL

I actually laughed out aloud with that one.

The saddening bit is that food prices hit the 3rd world the hardest. They starve whilst we pay an extra 5p for a Mars bar. That sucks. The third world bit not the Mars bar. That would be just bl**dy heartless.

Actually, when food becomes more expensive for us due to collapsing local currency it becomes cheaper for other people.

Food only becomes more expensive for everybody when there is an increase in population or average physical labour done per person or when there is a decrease in food availability.

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http://www.guardian....ing-price-rises

Looks like Bernanke's free money is already finding a home.  Lovely.

Luckily we can all do without food, so nothing to worry about here.

Indeed, I didn't build my sturdy rugby playing frame by eating food -food's for girls.

But in all seriousness, this does seem to be the new panic emerging in the US, Alex Jones keeps running adverts by eFoods Direct.:  http://www.efoodsdirect.com/   which is a kind of nutrition system for a crisis allowing you to stockpile food, They also have a crisis garden advert, that provides a package of non hybrid seeds with enough to sow and entire acre.  Essentially if you can't afford Gold then buy seeds and food seems to be the message.

Edited by Mikhail Liebenstein

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Actually, when food becomes more expensive for us due to collapsing local currency it becomes cheaper for other people.

Food only becomes more expensive for everybody when there is an increase in population or average physical labour done per person or when there is a decrease in food availability.

Indeed you are 100% correct, and at some level I am sure food is getting cheaper for the Chinese, not necessarily via the RMB as that is still tied to the Dollar, but I bet their wages are storming up. In this kind of situation the RMB either needs to rise, or they get inflation across the board, though perhaps rather less on some imports.

Edited by Mikhail Liebenstein

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surely what we can all do without, is the dollar?

Sadly, it is the $ that buys things. It keeps China going (looked at stuff in the shops recently to see where most of it is made?), it lines the pockets of the Arab oil Barons, it sucks in our exports (we are the US's single largest trading partner within the EU), and it funds the IMF.

The only alternative might be the Chinese currency--but not until they overtake the US GDP-wise.

Edited by Realistbear

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Sadly, it is the $ that buys things. It keeps China going (looked at stuff in the shops recently to see where most of it is made?), it lines the pockets of the Arab oil Barons, it sucks in our exports (we are the US's single largest trading partner within the EU), and it funds the IMF.

The only alternative might be the Chinese currency--but not until they overtake the US GDP-wise.

I have been thinking about this QE2 stuff - the more I think about it the more I think it will end in economic disaster but... in the short-term I think the DOW/FTSE will climb till the Spring.

I am no expert, have no idea how to do charts or graphs - in fact the last graph I drew was when I was in school - but I can see money flooding into stocks now for several months until people figure out that QE2 is not working or is causing more harm than good.

But I think it will be interesting what the Chinese, Germans and others, such as the South American and South Asian states, do about QE2. In effect the US has declared economic war on their economies.

I do wonder if it all could downhill rapidly in the coming weeks if the above countries oppose the US. No wonder Obama is in India today for trade talks.

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I have been thinking about this QE2 stuff - the more I think about it the more I think it will end in economic disaster but... in the short-term I think the DOW/FTSE will climb till the Spring.

I am no expert, have no idea how to do charts or graphs - in fact the last graph I drew was when I was in school - but I can see money flooding into stocks now for several months until people figure out that QE2 is not working or is causing more harm than good.

But I think it will be interesting what the Chinese, Germans and others, such as the South American and South Asian states, do about QE2. In effect the US has declared economic war on their economies.

I do wonder if it all could downhill rapidly in the coming weeks if the above countries oppose the US. No wonder Obama is in India today for trade talks.

TMT, you do make a good point. Right now the US is still King and still has the most powerful army, but increasingly other nations are able to exert pressure. Things will now largely be determined on a world trade level, we can either keep limping with the status quo, which kind of suits the US and China in the sense that they don't need to bite the bullet. But at some point it will all come to a head.

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Why is it a problem for anyone outside the US if Uncle Ben trashes his currency?

Ah yes, it's that reserve currency thing. And the little matter of dollar pegs. Well, I guess he's just telling the rest of the world to get off his back. Find another reserve currency, and kill the dollar pegs.

Bit of a turnaround from when they bombed Iraq for trying to lose the dollar as oil currency, though!

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Preparations are already being made for alternative reserve currencies (featuring baskets of commodities/gold/oil etc). Things are moving more quickly than people realise.

Edited by Errol

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Why is it a problem for anyone outside the US if Uncle Ben trashes his currency?

Ah yes, it's that reserve currency thing. And the little matter of dollar pegs. Well, I guess he's just telling the rest of the world to get off his back. Find another reserve currency, and kill the dollar pegs.

Bit of a turnaround from when they bombed Iraq for trying to lose the dollar as oil currency, though!

I'm betting Bernanke doesn't want that, remove the dollar pegs and the US might actually have to earn money to buy it's oil rather than just simply printing more currency to buy it.

Bernanke must be hoping he can trash the dollar and keep it's reserve status. America won't want to pay for oil in anything else other than dollars.

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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