END FED: Wall Street Is Behind High Food-Oil Prices That Caused Arab Instability Plus Weak Dollar

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Bernanke and Ethanol Sink Egypt Tuesday, February 01, 2011
Decades of autocratic government and a lack of free elections are, of course, the main drivers of the political upheaval in Egypt. But did the sinking dollar and skyrocketing food prices trigger the massive unrest now occurring in Egypt — or the greater Arab world for that matter?

In addition to Egypt, the people have taken to the streets to varying degrees in Algeria, Jordan, Libya, Morocco, and Yemen. Local food riots have even broken out in rural China and other Asian locales.

While the mainstream media focuses on the political aspects of this turmoil, they are overlooking the impact of rising inflation, driven mainly by record food prices. For example, former Bush advisor Dan Senor notes that Egypt is the world's largest wheat importer. Yet because of skyrocketing prices, Egyptian inflation is now over 10 percent, while some experts estimate that Egyptian food inflation has risen as much as 20 percent.

So I have to ask this tough question: Is Ben Bernanke's ultra-easy QE2 money pump-priming partially to blame?

Commodities are priced in dollars, and the Federal Reserve has been overproducing dollars for more than two years. Consequently, emerging markets throughout the world — and the food sector in particular — are suffering from rising inflation.

The CRB food index is up an incredible 36 percent over the past year, including 8 percent year-to-date. Raw materials are up 23 percent in the past year. Inflation breakouts have occurred in China, among various Asian Tigers, and in India, Brazil, and other Latin American countries. Even Britain and Germany are registering higher inflation readings.

In dollar terms, the price of wheat has soared 114 percent over the past year. Corn has surged 88 percent. These are incredible numbers.

And let's not forget that the world's poor are the hardest hit by food-price inflation. They literally can't afford to buy bread. It brings to mind the French Revolution in the 18th century. When you see this kind of mass protest in the streets, spreading from country to country, you see a pattern that cannot be explained by local conditions alone.

The dollar is the world's reserve currency. And the rise of dollar food prices is a global phenomenon. It is a monetary phenomenon, as much as anything.

And that's why one can argue that the worldwide revolt against soaring food prices is an unintended consequence of U.S. Fed policy. That policy is aimed at reigniting inflation here at home. But unwanted dollars circulating worldwide are hitting foreign inflation rates first. We may well catch this inflation virus before long.

To be fair, not all of the food inflation can be blamed on the Fed. A good part of this problem can also be placed at the doorstep of bipartisan U.S. policies to subsidize ethanol.

According to the Wall Street Journal, in 2001, only 7 percent of U.S. corn went to ethanol. By 2010, the ethanol share was 39 percent. So instead of growing wheat, our farmers are growing corn in order to cash in on ethanol subsidies. Egyptians who can't afford to buy bread and have taken to the streets in protest might be very interested to know this.

Not even Al Gore still believes that ethanol provides any environmental benefits.

As the world watches events in Egypt play out, be mindful that if the U.S. fixed its mistaken monetary and energy policies, the forces of freedom and democratization would have an easier time of it in the rest of the world.

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[SuperAlexrios]

this video is crap it is a part of the mass confusion created by these so called experts.Especulators are part of the financial system Wall Street without them wouldnt exist.What incresases the food prices is nothing else but inflation ,originated by a weak dollar At the same time the Dollar is weak due to the massive and impossible to paid USA debt There is not exit to this crisis but by eliminatng the Dollar as international trade currency.

[VexZeez]

@SuperAlexrios Look into the 2008 food and oil bubble. In July of 2008 Oil peaked at around 143 per barrel before plummeting down in price to around 20 or 40 per barrel. Speculators did that...not supply or demand or devaluing dollar.

[verynicelookingguy27]

Truthfully it doesn't matter who's president of the corporation of the United States. The United States is not a country, it's a corporation controlled by bankers! And it has been a corporation controlled by bankers from England since 1913. Then of course it got worse when America filed for bankruptcy in 1933 under Franklin Delano Roosevelt. Americans became chattel which is why every American has to have a birth certificate, they are sold as slaves NYSE. Which is why Obama doesn't have one.

[SuperAlexrios]

@nothing980454 The international Banking has already a system that is call SDR Special Drawingn Rigths is kind of a international currency and actually has been used by some institutions to do transactions Unfortunally the Dollar has cronic  inbalances and polticians are the ones to blame due their lazyness in solving the problem By now is too little to late.

[nothing980454]

@SuperAlexrios It's not impossible to be paid. And what would you have to replace the dollar as the international trade currency? The Euro? I hear Greece is looking for another bailout.

[deadbutmoving]

So the Federal Reserve prints tons of money, makes people like me fear the value of the dollar. Because I fear the devaluation of the dollar I invest my dollars in commodities like gold, silver, wheat, and oil to protect myself from inflation.

This causes commodity prices to go up and the government then blames us speculators for trying to protect ourselves from their fiat currency?

This is bullshit. Commodidty prices relative to gold, has not changed. Blame the fed not us "speculators".

[flyingrabits]

@dragonballman07 u urself are a pig shit eater and choke ur ass while eating dont ever talk about the book which u have ever read a pious names in it hellfire dweller u r king of nothing but will be in torment as a lesser down thing speak we all woe on you .

[AmericanPie6Full]

Audit the FED.

[CartoonPoem]

Louisiana and Arkansas? The only people that suffer from the Fed's Theft? That's a LIE! We all feel it!

[agelessrocker]

Having worked at a major brokerage, I saw firsthand how futures trading works. The average person does not realize that THESE traders are what drives up prices.....because it makes them rich. They don't care if the world is starving or not.