While most of the increases in food prices are due to droughts and floods, US policy contributed to it mightily, argues Mike "Mish" Shedlock on his global economic blog, revealing a reality the media has missed:
Bernanke's "Quantitative Easing" policies combined with rampant credit growth in China and India has led to increased speculation in commodities. That speculation has forced up food prices.Please note that speculation in commodities is not a cause of anything. Rather commodity speculation is a result of piss poor monetary policies not only the Fed, but central bankers worldwide.
The financiers schmoozing at the World Economic Forum in Davos know all about this and are worried as well, as Bloomberg News reported:
"This protest won't end in North Africa; it will spread in many countries because of high unemployment and increasing food prices," Hamza Alkholi, chairman and chief executive of Saudi Alkholi Group, a holding company investing in industrials and real estate, said in an interview in Davos, Switzerland.
In an age of globalization, a hike in global prices will spread unrest globally. Egypt had its own "bread riot" in 1977 when prices went up suddenly on the orders of the World Bank, so it is no stranger to the need to fight back.
The question is, why aren't Americans up in arms too as inflation at the pump and the grocery store drives prices higher here? Part of the reason is that they don't know that the US has worse economic inequality according to a scientific measure: The Gini Coefficient.
Washington's Blog reports, "According to the CIA World Fact Book, the US is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45. [In contrast] Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4."
He asks, "so why are Egyptians rioting, while the Americans are complacent?"
According to the report, Building a Better America (PDF), Dan Ariely of Duke University and Michael I. Norton of Harvard Business School show that Americans appear to "drastically underestimate the current level of wealth inequality".
And why is that? Could our media have anything to do with it -- a media consumed with 'when it bleeds it leads', but where context and background are missing?
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