Monday, April 28, 2008

More on hunger

Related to my previous post, I've just found a couple of articles in the same vein. In the first one, Mike Whitney, at Dissident Voice, quotes Chavez:

“It is a massacre of the world’s poor. The problem is not the production of food. It is the economic, social and political model of the world. The capitalist model is in crisis.”

And the second, by Otto Spengler (mentioned by Whitney) in Asia Times:

The global food crisis is a monetary phenomenon, an unintended consequence of America's attempt to inflate its way out of a market failure. There are long-term reasons for food prices to rise, but the unprecedented spike in grain prices during the past year stems from the weakness of the American dollar. Washington's economic misery now threatens to become a geopolitical catastrophe.

Because such a small proportion of the global rice supply trades, the monetary shock from the weak dollar was sufficient to more than double its price.

(I recommend the article be grokked in fullness). In essence, those buying in dollar-tied currencies have seen their purchasing power wither. Those not tied to such currencies have also seen their purchasing power decline as cash-rich countries use their dollars the only way they can: buying up commodities. For sure, the surge in prices of commodities (food, precious metals, real estate) over the last few years can certainly be ascribed to a world awash with liquidity, in large part US dollars. In the case of food, there are other complicating factors Spengler doesn't consider (poor harvests, biofuels, and so on). But even the use of biofuels can be ascribed at least to some extent to the weakening of the dollar and the concomitant surge in crude oil prices. In a nutshell high commodity prices in general (including food staples) and the impact of biofuel on food prices can both be ascribed to US monetary and economic policies of the last several years. It strengthens my argument that the food crisis is an engineered one (albeit inadvertently). But the poor are powerless.

1 comment:

Renegade Eye said...

Really good post. The US sneezes and the world has pneumonia.