Quantitative Easing Is Causing Food Prices to Skyrocket

Published on Global Research.ca, by Washington’s Blog, January 22, 2011.

… (Summers shows the share price of Elements Rogers International Commodity Agriculture ETN as a proxy for food prices generally).

  • As you can see, it wasn’t until the Fed announced its QE lite program that agricultural commodities exploded above long-term resistance. And in case there was any doubt, QE 2 sent them absolutely stratospheric. This isn’t really unexpected.
  • Last November, David Einhorn warned: It is quite likely that QE2 will slow the economy by raising food and energy prices [because it is easier to generate these price increases]. [These price hikes] would act as a tax on consumers and businesses.
  • Also in November, Karl Denninger wrote: We have a Federal Reserve that, in the last two years, has printed and debased the currency of this nation by more than 100%, taking their balance sheet from $800 billion to more than $2 trillion. They now threaten, today, to do even more of that. This has resulted in insane price ramps in soft commodities

(soft commodities means food crops).  As the Wall Street Journal, Tyler Durden, the Economic Policy Journal
and others note, inflation in food prices isn’t limited to developing nations, but is coming to the U.S. (full text).

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