Grains Gone Wild
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By PAUL KRUGMAN
Published: April 7, 2008
These days you hear a lot about the world financial crisis. But there¹s
another world crisis under way ‹ and it¹s hurting a lot more people.
I¹m talking about the food crisis. Over the past few years the prices of
wheat, corn, rice and other basic foodstuffs have doubled or tripled,
with much of the increase taking place just in the last few months. High
food prices dismay even relatively well-off Americans ‹ but they¹re
truly devastating in poor countries, where food often accounts for more
than half a family¹s spending.
There have already been food riots around the world. Food-supplying
countries, from Ukraine to Argentina, have been limiting exports in an
attempt to protect domestic consumers, leading to angry protests from
farmers ‹ and making things even worse in countries that need to import
food. . .
Asian Inflation Begins to Sting U.S. Shoppers
Justin Mott for The New York Times
. . . Developing countries have had bouts of inflation before. Indeed,
some are famous for them, like Brazil, which experienced triple-digit
inflation in the late 1980s and early 1990s. But two things make this
time different, and together promise to send prices higher at Wal-Mart
and supermarkets alike in the United States, just as the possibility of
First, developing countries now produce nearly half of all American
imports. Second, inflation in these countries is coming at the same time
that many of their currencies are rising against the dollar.
That puts American consumers in a double bind, paying at least some of
producers¹ higher costs for making their goods, and higher prices on top
of that because the dollar buys less in those countries. . .
. . . And there are signs that the dollar could fall further if
developing countries¹ central banks stopped supporting it, particularly
Vietnam¹s central bank even had to order the country¹s commercial banks
late last month to resume buying dollars within the tight range of
exchange rates set by the government. Many banks had started betting on
dollar depreciation and refusing to accept large sums in dollars, to the
point that multinationals and exporters had trouble wiring money into
the country to pay their employees¹ salaries.
Make that garden as big as you can. Food = $
Impeach Pelosi, Bush & Cheney to the Hague
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