Busted: Bankers and The Global Economy

May 7, 2008

Central Bankers Sound Alarm Over Food Prices

Soaring food prices are helping to push up inflation all around the world, say central bankers. They urge more market competition and free trade to even out prices.

Which came first: the chicken or the egg? In this case, central bankers are not admitting that high food prices are not only caused by tighter supplies but higher inflation is caused by the central bankers themselves. Central bankers, by nature are quiet animals that never point at themselves. In this instance, global inflation has been boosted by the excessive printing of money and overextension of bank credit coupled with the inflation and devaluation of the dollar, which still operates as the tour de force of the global economy.

Global rises in food, energy and other commodity prices are indicative of inflation, not the other way around. Inflation is not indicative of food, energy and commodity prices in and of themselves. Overheated economies across the board are flooded with greenbacks that are in reality, worth very little and generally have continued to decline in value. Bankers and multinational corporate raiders have weakened the U.S. economy by draining as much from that economy as possible and lavishing the proceeds upon themselves. To make matters worse, more speculation is going on in global markets, which is distorting the marketplace and costs financially.

Competition in the food and energy market, spurred by raging economies in China and India, coupled with continued demand from the first-world economies has created tighter supplies. Processing of more food products into fuel has further tightened food staples in general.

Millions in the third-world are facing devaluation of their currency and reduced buying power coupled with inflationary pressures on global goods that are needed. To make matters worse, millions have relocated to cities from the farm, resulting in lower production of food in many economies. This factor results in more pressure to the global market. When bad weather is coupled with stressed economic factors, redistribution creates more pressure on the supply chain and just-in-time shipments are stretched to their limits to meet global needs, both plannned and emergency.

“Food pressure is a global problem, we have to observe, monitor, but we cannot use monetary policy tools to manage this problem,” sidelined Polish National Bank President Slawomir Skrzypek.

Marketplace tensions along with global growth have created additional pressures. The European Central Bank, the U.S. Federal Reserve and the Swiss National Bank extended arrangements to provide U.S. dollar funding past the end of the year. The situation remains fragile. The central bankers realize that they must shore up the weakened U.S. system to keep the global banking system operating properly.

The dollar is a major weak spot in the global economy, resulting in a reversal and balance of trade imbalances over time as more business is diverted to the U.S. economy and that economy is bolstered somewhat. Carefully-veiled talk shows that central bankers are truly concerned by the weakness of the dollar and the number of devalued greenbacks in circulation coupled with the severely weakened U.S. and somewhat diminished global economies effected by monetary inflation.
Often overlooked are the Middle Eastern economies that are experiencing hyperinflationary pressures.

1 Comment

  1. Thanks for the information. What do central bankers now about food except they dont want to count on food prices in economic reports.

    Comment by FMoney — May 8, 2008 @ 11:04 am

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