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March 4, 2011 4:44 AM Subscribe
This post was deleted for the following reason: Poster's Request -- goodnewsfortheinsane
Absolutely reasonable to say it's a factor in the underlying sense of precarity that allows other grievances to boil over, in my view. It was the same in '89 in China. If you live in a dodgy authoritarian kleptocracy but personally are just about making it through the days, you may be circumspect about how far you go in protesting and resisting; once you find you're not even able to put food on the table the balance between acquiescence and opposition changes. Which is of course not to deny the importance of other locally specific factors or the domino effect of unrest in neighbouring countries.
That said, can't see that you can lay blame for the record highs in food prices at the door of the Fed alone; quite obviously it's a much more multi-polar world economically now and the fuel and other commodity price rises that play such a big role in the cost of food are largely due to increased demand in the BRIC nations AFAIK (as I think Bernanke says in his own defence in the second CSM article).
posted by Abiezer at 5:38 AM on March 4, 2011 [1 favorite]
That said, can't see that you can lay blame for the record highs in food prices at the door of the Fed alone; quite obviously it's a much more multi-polar world economically now and the fuel and other commodity price rises that play such a big role in the cost of food are largely due to increased demand in the BRIC nations AFAIK (as I think Bernanke says in his own defence in the second CSM article).
posted by Abiezer at 5:38 AM on March 4, 2011 [1 favorite]
I don't think I follow (or at least agree) with the basic premise that "responsible for an injustice that makes people revolt" = "freedom fighter." Either a logic failure or the author, Bill Bonner, starting with some very different premises about the way things work. I mean, for where the author is coming from, this is one of the self-congratulatory review quotes on The Daily Reckoning's "About Us" page: "The Daily Reckoning is a freewheeling Web site for libertarians, gold bugs and doom enthusiasts of every stripe..." (NY Times). So, take all this with whatever measure of salt you think it's worth.
posted by aught at 5:52 AM on March 4, 2011
posted by aught at 5:52 AM on March 4, 2011
Yea, sorry, didn't mean to sound snide. I get that food prices are a factor (and recognise they often seem to be a trigger in civil unrest), but I thought the CM article was rather glibly implying they were a key cause here. Is Bernanke the cause of high food prices? Don't know. Did high food prices cause an Egyptian revolution? Not on their own, and probably not in any major way. So did Bernanke topple Mubarak? Hardly.
posted by londonmark at 5:52 AM on March 4, 2011
posted by londonmark at 5:52 AM on March 4, 2011
I don't think I follow (or at least agree) with the basic premise that "responsible for an injustice that makes people revolt" = "freedom fighter."
Heh. This logic does enable us to credit Gadaffi with inspiring a spirit of democracy in East Libya.
posted by jaduncan at 5:54 AM on March 4, 2011
Heh. This logic does enable us to credit Gadaffi with inspiring a spirit of democracy in East Libya.
posted by jaduncan at 5:54 AM on March 4, 2011
Hey, food prices are rising in the US too. Only you wouldn't know it because Bernanke omits food and energy prices from the consumer price index.
Rising food prices around the world are a byproduct of the Fed's continuing desperate attempt to reinflate asset price bubbles in the US by pumping unlimited trillions into the monetary system. Another byproduct is decreased purchasing power in the US (at least for people who have to worry about things like gas and food prices more than they worry about the size of thier year end bonus check).
posted by T.D. Strange at 7:07 AM on March 4, 2011 [1 favorite]
Rising food prices around the world are a byproduct of the Fed's continuing desperate attempt to reinflate asset price bubbles in the US by pumping unlimited trillions into the monetary system. Another byproduct is decreased purchasing power in the US (at least for people who have to worry about things like gas and food prices more than they worry about the size of thier year end bonus check).
posted by T.D. Strange at 7:07 AM on March 4, 2011 [1 favorite]
Only you wouldn't know it because Bernanke omits food and energy prices from the consumer price index.
I think the Fed actually moved away from the CPI to the PCE. They still don't include food or energy, but that's because they're historically volatile markets that don't lend themselves well to long term fiscal planning.
posted by electroboy at 7:18 AM on March 4, 2011 [1 favorite]
I think the Fed actually moved away from the CPI to the PCE. They still don't include food or energy, but that's because they're historically volatile markets that don't lend themselves well to long term fiscal planning.
posted by electroboy at 7:18 AM on March 4, 2011 [1 favorite]
Ben Bernanke also had the following to say about food rationing: Are you proud of your country? I’ll bet you are, pretty little boy, sitting up there in your high chair, demanding more applesauce. Well you’ve already got enough applesauce, Spencer. There’s plenty of applesauce on your plate.
posted by adipocere at 7:23 AM on March 4, 2011
posted by adipocere at 7:23 AM on March 4, 2011
Well, another reason Americans do not notice their rising food prices is because of how heavily processed our food is - this was actually the topic of a recent Planet Money. Take, for example, the old standby, a loaf of bread. In the US, the cost of wheat is not even 10% of the total cost of that loaf of bread : most of the cost comes from logistics, advertising, equipment, processing, etc.
In the developing world, though, this is not the case, and the cost of the commodity itself is pretty much the only factor in play.
posted by absalom at 7:44 AM on March 4, 2011 [4 favorites]
In the developing world, though, this is not the case, and the cost of the commodity itself is pretty much the only factor in play.
posted by absalom at 7:44 AM on March 4, 2011 [4 favorites]
Also the CPI does include food prices (which are up slightly, but not as much as gas/fuel oil). The one the Fed used did not, for the reasons stated above.
posted by electroboy at 7:46 AM on March 4, 2011
posted by electroboy at 7:46 AM on March 4, 2011
It's obvious that prices are rising every time I shop for dinner.
It's become enough of an issue that our local mega-store has made a marketing strategy based around it.
posted by aught at 7:46 AM on March 4, 2011 [1 favorite]
It's become enough of an issue that our local mega-store has made a marketing strategy based around it.
posted by aught at 7:46 AM on March 4, 2011 [1 favorite]
It's become enough of an issue that our local mega-store has made a marketing strategy based around it.
And some times they exploit the fact people aren't generally good at arithmetics AND have a short memory. If one buys a mega/value/saving some-kind-of-food-pack, how much of it is actually used? That's what one must take into account to calculate the actual _cost_ of purchase.
The math is rather simple: if I pay $1 for 1lb, the price is $1 and the value of the cost is $1. But, if half of the lb gets spoilt or is thrown away anyhow, the price remains $1, but the cost doubles to $2 per lb!
Also, mini/normal portions usually cost more (per lb or kg) then mega/value etc pack, but their price is _lower_, which means that people short on money are probably better off not buying a value/etc food pack, from a financial point of view.
posted by elpapacito at 8:12 AM on March 4, 2011
And some times they exploit the fact people aren't generally good at arithmetics AND have a short memory. If one buys a mega/value/saving some-kind-of-food-pack, how much of it is actually used? That's what one must take into account to calculate the actual _cost_ of purchase.
The math is rather simple: if I pay $1 for 1lb, the price is $1 and the value of the cost is $1. But, if half of the lb gets spoilt or is thrown away anyhow, the price remains $1, but the cost doubles to $2 per lb!
Also, mini/normal portions usually cost more (per lb or kg) then mega/value etc pack, but their price is _lower_, which means that people short on money are probably better off not buying a value/etc food pack, from a financial point of view.
posted by elpapacito at 8:12 AM on March 4, 2011
I don't want to gloat (too much), but back in Mid-January, immediately after the Tunisian revolution, I predicted that unrest over the cost of food was going to cause at least one more government in the Maghreb to be overthrown.
There was an interesting series about food security and costs in the previous issue of the Economist. One interesting opportunity (warning, semi-paywall) they talked about from a logistics rather than production point of view, and one that speaks to elpapacito's point, was that, worldwide, 30% - 50% of all food produced is spoiled or wasted.
posted by strangely stunted trees at 8:40 AM on March 4, 2011
There was an interesting series about food security and costs in the previous issue of the Economist. One interesting opportunity (warning, semi-paywall) they talked about from a logistics rather than production point of view, and one that speaks to elpapacito's point, was that, worldwide, 30% - 50% of all food produced is spoiled or wasted.
posted by strangely stunted trees at 8:40 AM on March 4, 2011
Obligatory here: The Food Bubble: How Wall Street starved millions and got away with it by Frederick Kaufman, July 2010 Harper's.
Most relevantly:
"It may be hard to imagine commodity prices advancing another 460 per-cent above their mid-2008 pricepeaks," hedge-fund manager JohnHummel wrote in a letter to clients of AIS Capital Management. "But the fundamentals argue strongly," he continued, that "these sectors have significant upside potential."
It's in times like these that I take comfort in my communist faith.
Also, Rising Food Prices and the Egyptian Tinderbox: How Banks and Investors Are Starving the Third World
It's a fascinating subject to me. I don't know why, but I never imagined that the privatization of food might spark a turning point in the battle against global capitalism. I always thought it would be water.
posted by mrgrimm at 9:07 AM on March 4, 2011 [1 favorite]
Most relevantly:
"It may be hard to imagine commodity prices advancing another 460 per-cent above their mid-2008 pricepeaks," hedge-fund manager JohnHummel wrote in a letter to clients of AIS Capital Management. "But the fundamentals argue strongly," he continued, that "these sectors have significant upside potential."
It's in times like these that I take comfort in my communist faith.
Also, Rising Food Prices and the Egyptian Tinderbox: How Banks and Investors Are Starving the Third World
It's a fascinating subject to me. I don't know why, but I never imagined that the privatization of food might spark a turning point in the battle against global capitalism. I always thought it would be water.
posted by mrgrimm at 9:07 AM on March 4, 2011 [1 favorite]
Here's a shorter explanation of 2008: How Goldman Sachs gambled on starving the world's poor - and won
That article links to the Stop Gambling on Hunger site.
posted by mrgrimm at 9:12 AM on March 4, 2011 [1 favorite]
That article links to the Stop Gambling on Hunger site.
posted by mrgrimm at 9:12 AM on March 4, 2011 [1 favorite]
What exactly do you mean by the "privatization of food"? It's not exactly as if most agricultural production happened on kolkhozes until the '90s.
I don't think the relevant trend here is even financial speculation as such - after all, the main point of futures markets has always been speculating in the price of food since the days of Thales of Miletus - but simply the effectiveness with which the markets have been manipulated, and the complexity of the instruments being used to do so. Trying to corner the market in commodity foodstuffs, while evil, is a time-honored but usually unsuccessful gambit; it's just that Goldman Sachs is sort of novel in its ability to actually pull the damn thing off.
posted by strangely stunted trees at 9:23 AM on March 4, 2011
I don't think the relevant trend here is even financial speculation as such - after all, the main point of futures markets has always been speculating in the price of food since the days of Thales of Miletus - but simply the effectiveness with which the markets have been manipulated, and the complexity of the instruments being used to do so. Trying to corner the market in commodity foodstuffs, while evil, is a time-honored but usually unsuccessful gambit; it's just that Goldman Sachs is sort of novel in its ability to actually pull the damn thing off.
posted by strangely stunted trees at 9:23 AM on March 4, 2011
Yeah, I realized that as soon as I wrote it. Food has been privatized forever. (Heavily regulated commercially, but yeah, privatized for sure (saving collectivist regimes).)
I should have written "securitization" or "security-derivativization"?
I don't think the relevant trend here is even financial speculation as such
I think it's big enough to be a serious issue. From that article I linked:
"The hedge fund manager Michael Masters estimated that even on the regulated exchanges in the US - which take up a small part of the business - 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat."
It just seems like the market is tenuous enough as it was with the regulations on speculation. Without them, we're always minutes away from another "crisis," despite, as mentioned we have 5x the amount of food needed to feed everyone on the planet.
Depressing all around.
posted by mrgrimm at 9:56 AM on March 4, 2011
I should have written "securitization" or "security-derivativization"?
I don't think the relevant trend here is even financial speculation as such
I think it's big enough to be a serious issue. From that article I linked:
"The hedge fund manager Michael Masters estimated that even on the regulated exchanges in the US - which take up a small part of the business - 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat."
It just seems like the market is tenuous enough as it was with the regulations on speculation. Without them, we're always minutes away from another "crisis," despite, as mentioned we have 5x the amount of food needed to feed everyone on the planet.
Depressing all around.
posted by mrgrimm at 9:56 AM on March 4, 2011
It's become enough of an issue that our local mega-store has made a marketing strategy based around it.
WHOO WEGMANS!
posted by thsmchnekllsfascists at 10:21 AM on March 4, 2011
WHOO WEGMANS!
posted by thsmchnekllsfascists at 10:21 AM on March 4, 2011
Only you wouldn't know it because Bernanke omits food and energy prices from the consumer price index.
In the US, the BLS calculates the CPI. Not the Fed.
posted by atrazine at 2:03 AM on March 5, 2011
In the US, the BLS calculates the CPI. Not the Fed.
posted by atrazine at 2:03 AM on March 5, 2011
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posted by londonmark at 5:03 AM on March 4, 2011