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Fed Chief Ben Bernanke Denies Us Policy Behind Record Global Food Prices

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Mr Bernanke said that the rapid growth of developing economies was behind the increase in food prices, rather than the Fed’s decision to embark on a second, $600bn (£371bn) round of printing money. “Clearly what’s happening is not a dollar effect, it’s a growth effect,” Mr Bernanke said in a rare question and answer session with journalists at the National Press Club in Washington on Thursday.

The United Nations Food and Agriculture Organization (UN FAO) has warned that 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 past 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 fuel 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 hoard grain stocks to reassure their populations.


“It’s entirely unfair to attribute excess demand issues in emering markets to US monetary policy,” Mr Bernanke said.

The Fed chairman also urged Congress not to use the fact that the US government will technically have to raise its legal debt limit as a “bargaining chip” in the debate over how to cut America’s budget deficit.

The government is projected to hit the current debt limit of $14.29 trillion in May, and Congress will be required to vote to extend it. Republicans and some Democrats are threatening to vote against it without immediate cuts in government spending.

“I would very much urge Congress not to focus on the debt limit as the bargaining chip in this situation,” Mr Bernanke said. “We need to be very careful not to create any impression that the US won’t pay its creditors.”

Mr Bernanke also added that he is optimistic that the rate of job growth will accelerate over the next couple of quarters.

Bernanke is excellent at denial, like all central bankers nothing is their fault. Flooding the world with cheap US dollars is clearly not the cause of food going up.

I'm surprised he didn't also claim it has nothing to do with the big Wall Street banks placing huge bets on food prices to generate big returns.

Got to love his opinion that the US isn't going to screw it's creditors.

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Like Merv, you've got to wonder whether he believes the crap he's spouting.

I can sort of understand if they're lying because they feel that they have to - if they believe it themselves, that's scary.

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MERV: we dont have inflation, we have rising prices which raise the CPI...as we know what the factors are, its not inflation.

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  • 284 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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