The summit on soaring food prices convened by the United Nations' Food and Agriculture Organization (FAO) in Rome on June 4-5 concluded with a wide-ranging declaration demanding international support and action - while failing to address a root cause behind the price surge. The declaration called on the international community to increase assistance to developing countries, in particular the least-developed countries and those that are most adversely affected by high food prices, increase investment in agriculture, provide balance of payments support and/or budget support to food-importing, low-income countries, and to provide more funding needed for UN agencies to expand assistance. The declaration also called for increasing the resilience of world's food systems to climate change, more dialogue on biofuels and their relation to food security, and for liberalizing international trade in agriculture by reducing trade barriers and market distorting policies. While these recommendations are laudable, the declaration did not addressed one of the root causes for explosive food prices, a purely monetary cause, and did not lay out an immediate action plan for the short-run stabilization of food prices.
The soaring oil and food prices are simply the tax burden imposed by the Fed's massive bailout of Wall Street investment banks and mortgage lenders. As the Fed creates money to buy bad mortgages and other worthless securities held by banks and brokerage firms, the value of the savings and wages of everyone on Main Street will continue to fall. Moreover, the various housing bills and stimulus packages now passing through Congress will significantly add to the eventual staggering price tag. The cost, in the form of accelerating energy and food prices, will be borne by ordinary citizens throughout the world. Had the Fed not succumbed to political pressures and followed prudent monetary policies, oil and food prices would have remained relatively stable. By ignoring the contributions of monetary policy to the food crisis at the summit, and with the monetary brake removed, oil and food prices will continue to race to dangerously higher and higher levels, with attendant recessionary effects and aggravation of malnutrition on the global level.
The cost, in the form of accelerating energy and food prices, will be borne by ordinary citizens throughout the world. Had the Fed not succumbed to political pressures and followed prudent monetary policies, oil and food prices would have remained relatively stable. By ignoring the contributions of monetary policy to the food crisis at the summit, and with the monetary brake removed, oil and food prices will continue to race to dangerously higher and higher levels, with attendant recessionary effects and aggravation of malnutrition on the global level.
As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
he declaration also called for...liberalizing international trade in agriculture by reducing trade barriers the declaration did not address one of the root causes for explosive food prices, a purely monetary cause, and did not lay out an immediate action plan for the short-run stabilization of food prices
the declaration did not address one of the root causes for explosive food prices, a purely monetary cause, and did not lay out an immediate action plan for the short-run stabilization of food prices
Markets work until they work, at which point we decide they don't work. The solution is more markets, which work until they work...
you are the media you consume.
