Riots Erupt as Global Food Prices Climb Out of Poors Reach

[Optimus]

Posted at 1:42 PM ET, 01/14/2011
Spike in global food prices contributes to Tunisian violence
By Ariana Eunjung Cha



The state of emergency in Tunisia has economists worried that we may be seeing the beginnings of a second wave of global food riots.

Battered by bad weather and increasing demand from the developing world, the global food supply system is buckling under the strain. This month, the U.N. Food and Agricultural Organization (FAO) reported that its food price index jumped 32 percent in the second half of 2010 -- surpassing the previous record, set in the early summer of 2008, when deadly clashes over food broke out around the world, from Haiti to Somalia.

An FAO report noted that "recent bouts of extreme price volatility in global agricultural markets portend rising and more frequent threats to world food security."

In announcing the new numbers, Abdolreza Abbassian, the FAO's chief economist at the FAO, told reporters that "We are entering a danger territory."

More: http://voices.washingtonpost.com/political-economy/2011/01/spike_in_global_food_prices_tr.html

[Optimus]

On The Verge Of A Global Food Crisis
Jan. 13 2011 - 3:03 pm


Algerian police in a recent food riot.

A week after the UN’s Food and Agricultural Organization (FAO) warned of a possible “food price shock” if prices continued to rise, the USDA downwardly revised its outlook for global harvests of key crops, sending future prices surging and fueling concerns over a repeat of the 2008 food crisis which sparked riots in over 30 countries.  With riots already occurring in Algeria and Mozambique, the impending crisis even sparked a reaction by World Bank Chief Robert Zoellick, who sought to calm the already uneasy markets.

The global food situation doesn’t look too promising, as floods in Australia and excessively hot weather in Latin America harm harvests, upward pressure is mounting on prices.  According to the FAO, a basket tracking the wholesale cost of food commodities such as wheat, corn, rice, vegetable oils, and meats, has already topped 2008’s peak values, reaching 214.5 points (compared to 213.5 on June 2008).  And, as the USDA cuts its global grain supply outlook, soybean, corn, and wheat prices have spiked, nearing or passing 30-month highs.

The situation prompted a response by Zoellick, who a few months ago rallied the markets with talk of the gold standard.  On this occasion, he told the Financial Times that “with food accounting for a large and volatile share of tight family budgets in the poorest countries, rising prices are re-emerging as a threat to global growth and social stability.”  Zoellick went on to enumerate measures to make markets more efficient, such as establishing small regional humanitarian reserves in disaster-prone, infrastructure-poor areas and improving long-range weather forecasting and monitoring.  (See World Bank Chief Riles Up Economists By Talking Gold Standard).

Zoellick’s op-ed piece was titled “Free markets can still feed the world,” but the problem is that many of these markets are actually not liberated.  During the ‘08 crisis, many producing nations sought to freeze prices and curb exports in order to keep domestic food stocks available, Argentina and Russia were among them.

More: http://blogs.forbes.com/afontevecchia/2011/01/13/on-the-verge-of-a-global-food-crisis/

[Optimus]

THE FED IS STARVING THE WORLD

In a truly shocking interview with Steve Liesman on CNBC last week, Federal Reserve Chairman Ben Bernanke shrugged off food riots in Tunisia, Jordan, Morocco and Yemen, the threat of mass starvation among Third World populations globally, and ominous price increases in food and energy everywhere with the observation that US broad stock market prices were up 20% off their 2008 lows. Gee thanks, Ben. When the price of gasoline in the U.S. once again rockets over four dollars per gallon and the number of Americans receiving food stamps - the present-day equivalent of the bread lines of the Great Depression- doubles from the current 43 million, both of which are likely in 2011, one wonders if Mr. Bernanke will remain so sanguine. Perhaps Americans need to bring food riots to Mr. Bernanke's front stoop.

Why is this happening, when the laws of supply and demand would dictate the opposite? It is happening because all commodities are priced in U.S. dollars and we have a Federal Reserve hell-bent on crashing the purchasing power of the U.S. dollar. It has been argued that Mr. Bernanke intends to force China to revalue its currency.  But China, close to becoming the wealthiest nation on earth, (in sum if not per capita) has, as a matter of pride and practicality, remained aloof and immune to U.S. pressure. China's response has been to cease purchasing U.S. treasury bonds and divest itself of excess dollars by investing in hard assets and European bonds. The 20% rise in food and energy costs over the last seven months is attributed by the CNBC cheerleaders to "increased consumption by the new middle class of emerging market countries". Excuse me? Could anybody argue that Chinese or Malaysian workers have seen their incomes rise 20% over the last seven months? Not by a long shot, as layoffs have spread to even those economies. Moreover the US has exported not only inflation, but also the income inequality that has seen only the top 1% increase their wealth in any measure, even in China.


Financial Wealth Distribution by courtesy Who Rules America

Here is the evidence on the domestic front.   The February 2011 edition of Consumer Reports magazine shows the reality of inflation in the U.S. and how manufacturers are coping with it.   Rather than raising prices, they are giving you "less" -" as much as 20% less -" in each package. The shrinking contents: Tropicana orange juice -7.8%, Ivory Dish detergent- 20%, Kraft Cheese slices-8.3%, KirkLand (Costco) Paper Towels-11.6%, Haagen-Dazs ice cream-12.5%, Scott Toilet Tissue-9%, Lanacane First aid spray-12.4%, Chicken of the Sea Salmon-13.3%, Classico Pesto-19%, Hebrew National franks-8.3%, Folgers Classic Roast and French Roast-8.8%. Kraft Macaroni and Cheese-24%. The Companies told Consumer Reports that shoppers prefer to receive less product than a price increase, but the reality is that they are successfully hiding price increases from unwary consumers

Ellen Brown, author of Web of Debt recently pointed out that   the Fed has no money at all to loan to states and cities so bankrupt they are forced to fire their policemen and firefighters, and yet it has 600 billions dollars plus with which to jack up stock prices. ).   As Chris Martenson observed this week, "Where states are struggling with extremely painful budget deficits measured in the single billions (in most cases), the Fed has been busy printing up and handing out some $75 billion per month to its coziest clients." -" those being the Wall Street bankers.   In November, as it became apparent the Fed's stated goal of lowering interest rates had failed, Bernanke simply revised his argument for printing money and stuffing it into stocks " higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending ." But who owns those stocks? Almost nobody, but for a few hedge funds who hold the wealth of multi-millionaires -" the wealthiest 5% (see chart above). Who is still cashing out?   The middle class, who need the funds to live on and pay for ever-rising grocery bills. In fact in the first week of this month, U.S. stocks saw their largest net redemption since October - $4.2 billion dollars worth . Tyler Durden, Editor of ZeroHedge put it this way, "" Saving middle class assets" turns out to benefit only the top slice of households , while the dwindling middle class is left with food and energy inflation and the ginned-up perception of "rising wealth" gained by staring at the ever-rising Dow Jones Industrials"

More: http://www.opednews.com/articles/THE-FED-IS-STARVING-THE-WO-by-lila-york-110116-378.html?show=votes

[Optimus]

Food Riots 2011

The stunningly violent food riots in Tunisia and Algeria show just how quickly things can change.  Just a few months ago, these two northern Africa nations were considered to be very stable, very peaceful and without any major problems.  But now protesters are openly squaring off with police in the streets.  Many of the protesters are throwing "fire bombs" or are shooting fireworks at the authorities, and the police are responding with a tremendous amount of violence themselves.  In Algeria, several protesters have been killed by police and several others have actually set themselves on fire to protest the economic conditions.  In Tunisia, more than 100 people have been killed and the president of that country actually had to flee for his life.  But on a global scale, food shortages have not even gotten that bad yet.  Yes, food prices are starting to go up and food supplies are a little bit tighter right now, but much worse times than these are coming.  So what in the world are the cities of the world going to look like when we have a very serious food shortage?

Just as we saw during the food riots of 2008, when people get to the point where they can't even feed themselves anymore, they tend to lose it.  In the video posted below, you can really feel the desperation of these young Algerians as they riot in the streets....

http://www.youtube.com/watch?v=fpQkHcIJpFg&feature=player_embedded

This next video is of the food riots in Tunisia.  You will not want to let any young children watch this video.  In fact, if watching police beat and smash protesters laying on the ground upsets you, then you might not want to watch this video either.  The massive food riots that have erupted in Tunisia have left many city streets looking like war zones and at this point it is being reported that the violence has left over 100 people dead.  The president of Tunisia has left the country because of the rioting, and an interim president has been sworn in.  It is hoped that this will help restore order.  This video is absolutely stunning....

http://www.youtube.com/watch?v=omWjoDlS0LE&feature=player_embedded

You see, the truth is that it is not just in the United States that people are becoming angry at government.  All over the world, frustration is boiling over.  But unlike the United States, where food is still very plentiful, in many areas of the world it is the deteriorating economic conditions that are sparking many of these riots.

According to the FAO, the global price of food hit a new record high in December.  For most Americans and Europeans, a rise in the price of food is just an inconvenience.  But in many areas of the world, even a relatively small rise in the price of food can mean that the survival of millions is suddenly threatened.

Global authorities are concerned that these food riots might start spreading - especially if the extremely harsh weather all over the globe continues to damage crops.

In fact, there are some signs that economic unrest is already beginning to spread....

*In the nation of Jordan, peaceful demonstrations were held in several locations around the country on Friday to protest rising food prices.

*In Libya, protests about the late completion of government subsidized housing entered their third day on Sunday.  Reportedly, hundreds of uncompleted units have been taken over by protesters and so far the police are not taking action to evict them.  There is also growing concern that the food riots in neighboring Tunisia will soon pour over into Libya.

*Economic protests also been reported recently in Mozambique, Morocco and Chile.

Sadly, the desperate economic conditions that are sparking these food riots did not develop overnight.  Rather, they have been building for decades.  The truth is that the new "global economy" is designed to funnel more and more of the wealth of the world into the hands of the wealthiest 0.001% of the global population.  Everyone else is left to fight with one another to divide up a pie that is increasingly shrinking.

Just consider the following five facts....

Continue....