The following is from the Ignatius column:
The new danger is global inflation -- most worryingly in food prices, but also in prices for commodities, raw materials and products that require petroleum energy, which includes almost everything. Prices for these goods have been skyrocketing in international markets -- at the same time the Federal Reserve and other central banks have been hosing the world with new money in their efforts to avoid a financial crisis.
***"You cannot think in a purely domestic context about the pricing of oil or steel or pulp or shoes or clothing," Fisher said in a speech last month in London. For that reason, he continued, "We cannot, in my opinion, confidently assume that slower U.S. economic growth will quell U.S. inflation and, more important, keep inflationary expectations anchored."
Independent truck drivers in Pennsylvania, New Jersey and other states staged protests against high fuel prices this week. What do they have in common with rice consumers in Vietnam and soybean buyers in Indonesia and pasta aficionados in Italy? More than they probably think.
And comes from The New York Times:
The food-should-cost-more cadre wants to change an agricultural system that spends billions of dollars in government subsidies to grow commodities like grain, sugar, corn and animal protein as cheaply as possible.
The current system, they argue, is almost completely reliant on petroleum for fertilizers and global transportation. It has led to consolidations of farms, environmentally unsound monoculture and, at the end of the line, a surplus of inexpensive food with questionable nutritional value. Organic products are not subsidized, which is one reason those products are more expensive.
As a result, the theory goes, small farmers can’t make a living, obesity and diabetes are worsening, workers are being exploited and soil and waterways are being damaged. In other words, the true cost of a hamburger or a box of macaroni and cheese may be a lot more than the price.
In my earlier post, The Sunday Herald described this as another bubble and maybe a bigger one than the current mortgage crisis. So far not many are paying attention. I suggest starting a garden. We are here.
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