Food Riot Fed Policy Bandwagon
America and the Middle East Food Riots
By Steve McCann
Perhaps the most over used but most accurate term used to describe the policies and ideology of the American Left is the “Law of Unintended Consequences.” There is virtually nothing that these people espouse that once put in place has not had detrimental effects on either the people of the United States or the world.
Today there is a global food shortage and sky-rocketing prices. This has become the underlying factor in the riots in Tunisia, Algeria and Egypt, where up to 56% of a person’s income is dedicated to the acquisition of food. These riots are now leading to the upheaval of governments and the very real possibility of the ascendancy of the radical elements into control.
While bad weather in various parts of the world is an element of the accelerating food prices there are two other factors directly related to the United States and its policies.
First, because of the enormous deficits run up by Obama administration and the Democrat controlled Congress, the Federal Reserve has had to effectively print trillions of dollars which have flooded the global market. Commodities are priced in dollars, consequently emerging markets throughout the world, and the food sector in particular, are suffering from rapidly rising inflation.
The CRB food index is up an incredible 36% over last year. Raw materials are up 23%. Since 2009 the dollar has declined by over 13% against the Japanese Yen and 25% against the Canadian dollar.
Larry Kudlow in the National Review writes in regard to the riots in Africa and the Middle-East:
So I have to ask this tough question: Is Ben Bernanke’s ultra-easy QE2 money-priming partially to blame.But food riots in the North Africa/Middle East area are bumping smack into long-time resentment over autocratic government. If food is in fact the trigger for what may be a revolution in Egypt, then US monetary policy has to shoulder at least some of the blame.
An example of this inflation is in the price of wheat. The January 2011 futures price is $335.00 per metric ton, last year at this time it was $157.00 per metric ton an increase of 113%. Not all of this increase is due to the inflationary impact of the dollar, but when global yields are down due to weather factors this foolish US monetary policy has made matters needlessly worse.
The second factor in the overall global food situation is the American decision to, in essence, burn food in its cars, a policy championed by the environmentalists since the 1990’s. In 2010 the United States produced 13.1 Billion bushels of corn, of that amount 4.2 billion bushels went into ethanol (33% of total production). That represents in 2011, a year in which global stocks are down nearly 8%, over 14% of all corn grown in the world being used in the most inefficient manner possible-American gas tanks.
Thus the futures price of corn per bushel in January 2011 is $6.51 as compared to $3.84 in January 2010 an increase of nearly 70%. While the price spike is in part due to lower yields, had the corn destined for ethanol been put back into the overall corn stocks, the net effect would have been to offset this lower crop and the global market would have maintained the 2010 price level despite the inflationary impact of the dollar.
There is no quicker way to foment riots and revolution than to deprive the populace of food, particularly when so much daily income goes into feeding oneself and one’s family. The pictures we have seen in North Africa may well be repeated elsewhere throughout the world. This time the “Law of Unintended Consequences” wrought by the policies of the American Left and the Obama Administration will not be limited to the United States but to many throughout the world. If the riots in Egypt and the Middle East take a severe and radical turn, then the prospect of open warfare in that region, which will involve the United States, becomes a near certainty.
editors note: or you may say that in politics there is nothing that happens that is not planned. I am paraphrasing FDR.
The “intended consequence” is to drive the price of oil up. Governments do not care for the welfare of the people. From that standpoint, food riots play into oil price increase. That way you can blame it on the people.
In Egypt today there is police blundering and pillaging, which is being blamed on the protesters. So the police have the right to kill some more of them. That is an intended consequence.
The feds problem is it has to battle inflation and deflation at the same time.
and it will side with the banks and not the people as it pretends to accomplish that.
Glass-Steagall prevented short-term profit on long-term investment. When that law was repealed, inflation and deflation could occur simultaneously.
Which nullified ANY Fed action. The fed can’t make the right move now. It can only watch the ship sink.
Since the government only has intended consequences, it would seem the best way to destroy capitalism and U.S. Imperialism, is to kill the U.S. economy from the inside. They KNOW rising oil prices will result in food riots. The world is full of poor starving people, and the only way for that to change is to get the Military Industrial Complex off their backs.
And you can thank Bill Clinton for that. Obama is just making sure it happens.
and once again, there is not a food shortage, there is a transportation cost increase. The food is there, but no one can afford it. Thats what leads to food riots. The people know the food is available, but they are denied the RIGHT to buy it. If the people thought the food did not exist, who could they blame?