Wednesday, May 9, 2012

Global Food Prices on the Rise

International food prices are on the rise and becoming increasing volatile, say economists Paolo Giordani.   Nadia Rocha  and  Michele Ruta.

Nadia Rocha
According to Rocha, Ruta and Giordani the climbing prices are the result of the reduction in key food stocks, increasing demand in emerging economies, financial speculation, changes in monetary policy in leading economies and  protectionist policies aimed at restricting food exports.

With Bernanke on the edge of implementing QE3 (according to Bill Gross at Pimco and Goldman Sachs chief economist Jan Hatzius), don't expect Paul Krugman's deflationary scenario to kick in any time soon, anywhere.

1 comment:

  1. The only deflation that Krugman, or any Wall Street banker, cares about is the deflation in housing prices.

    Of course, it is not really deflation of housing prices, but market correction, that they are really concerned about. As long as so much overvalued real estate remains in place of defaulted loan assets on the banks' balance sheets, those worried about "deflation" will continue to insist on 0% interest rates and probably more money printing.

    If I were to guess, I would say we're doing the Japan-dance for the next 10-15 years.