Archive for 2011

The 25 Countries Whose Governments Could Get Crushed By Food Price Inflation

Wednesday, January 26th, 2011

Food inflation is now a reality for much of the world. It contributed to the overthrow of the Tunisian government, has led to riots across the Middle East and North Africa, driven up costs in China and India, and may only be getting started.

Whether you blame a bad crop or bad monetary policy, food inflation is here.

Nomura produced a research report detailing the countries that would be crushed in a food crisis. One, Tunisia, has already seen its government overthrown.

Their description of a food crisis is a prolonged price spike. They calculate the states that have the most to lose by a formula including:

  • Nominal GDP per capita in USD at market exchange rates.
  • The share of food in total household consumption.
  • Net food exports as a percentage of GDP.

We’ve got the top 25 countries in danger here and the list, including a major financial center, may surprise you.

– To see the list of 25 counties click the arrow…

The year of living dangerously

Wednesday, January 26th, 2011

Rising commodity prices and extreme weather events threaten global stability

Get ready for a rocky year. From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: the prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world.

It’s not surprising then that food and energy experts are beginning to warn that 2011 could be the year of living dangerously — and so could 2012, 2013, and on into the future. Add to the soaring cost of the grains that keep so many impoverished people alive a comparable rise in oil prices — again nearing levels not seen since the peak months of 2008 — and you can already hear the first rumblings about the tenuous economic recovery being in danger of imminent collapse. Think of those rising energy prices as adding further fuel to global discontent.

Already, combined with staggering levels of youth unemployment and a deep mistrust of autocratic, repressive governments, food prices have sparked riots in Algeria and mass protests in Tunisia that, to the surprise of the world, ousted long-time dictator President Zine al-Abidine Ben Ali and his corrupt extended family. And many of the social stresses evident in those two countries are present across the Middle East and elsewhere. No one can predict where the next explosion will occur, but with food prices still climbing and other economic pressures mounting, more upheavals appear inevitable. These may be the first resource revolts to catch our attention, but they won’t be the last.

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China’s Hu Jintao: Currency system is ‘product of past’

Monday, January 24th, 2011

– Yes, this writing on the wall will be hard for folk in the U.S. to accept – that they are no longer the financial center of the world.   It’s coming.     If you watch the news flowing by, you will have seen a steady and increasing drum beat of calls to end the era of the U.S. dollar being the world’s reference currency.  And when that era ends, there are going to be big changes for the US, sad to say.  – Dennis

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Chinese President Hu Jintao has said the international currency system dominated by the US dollar is a “product of the past.

Mr Hu also said China was taking steps to replace it with the yuan, its own currency, but acknowledged that would be a “fairly long process”.

The remarks to two US newspapers come ahead of a state visit by the Chinese leader to Washington this week.

They reflect continuing tensions over currency issues between the two powers.

The remarks to the Washington Post and Wall Street Journal came in the form of written responses to questions. Mr Hu also reiterated criticism of a decision by the US Federal Reserve to inject $600bn into the economy, which some argue will weaken the dollar at the expense of other countries’ exports.

“The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level,” President Hu said.

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The world is only one poor harvest away from chaos

Friday, January 14th, 2011

BY Lester Brown

12 JAN 2011 3:39 PM

Our early 21st century civilization is in trouble. We need not go beyond the world food economy to see this. Over the last few decades we have created a food production bubble — one based on environmental trends that cannot be sustained, including overpumping aquifers, overplowing land, and overloading the atmosphere with carbon dioxide.

If we cannot reverse these trends, economic decline is inevitable. No civilization has survived the ongoing destruction of its natural support systems. Nor will ours.

Thos who forget history are doomed to re-heat it

The archeological records of earlier civilizations indicate that more often than not it was food shortages that led to their downfall. Food appears to be the weak link for our global civilization as well. And unlike the recent U.S. housing bubble, the food bubble is global.

The question is not whether the food bubble will burst but when. While the U.S. housing bubble was created by the overextension of credit, the food bubble is based on the overuse of land and water resources. It is further threatened by the climate stresses deriving from the excessive burning of fossil fuels. When the U.S. housing bubble burst, it sent shockwaves through the world economy, culminating in the worst recession since the Great Depression. When the food bubble bursts, food prices will soar worldwide, threatening economic and political stability everywhere. For those living on the lower rungs of the global economic ladder, survival itself could be at stake.

The danger signs are everywhere. In the summer of 2010, record high temperatures scorched Moscow from late June through mid-August. Western Russia was so hot and dry in early August that 300 to 400 new fires were starting every day.

The average temperature in Moscow for July was a scarcely believable 14 degrees Fahrenheit above the norm. Watching the heat wave play out over the seven-week period on the TV evening news, with the thousands of fires and smoke everywhere, was like watching a horror film. Over 56,000 people died in the extreme heat. Russia’s 140 million people were in shock, traumatized by what was happening to them and their country .

The record heat shrank Russia’s grain harvest from roughly 100 million tons to 60 million tons. This 40-percent drop and the associated grain export ban helped drive world wheat prices up 60 percent in two months, raising bread prices worldwide.

Crop ecologists estimate that for each 1 degree Celsius (1.8 degrees F) rise in temperature above the norm during the growing season, grain yields decline by roughly 10 percent. In parts of Western Russia, the spring wheat crop was totally destroyed by the crop-withering heat and drought. As the Earth’s temperature rises, the likelihood of more numerous, more intense heat waves increases.

– More…

– Research thanks to LA

Last December UK’s coldest for 100 years

Thursday, January 13th, 2011

Last month was the coldest December documented for the UK since nationwide records began 100 years ago, the Met Office has confirmed.

For central England, it was the second coldest December since 1659.

However, the first analysis released of global temperatures shows 2010 was one of the warmest years on record.

The UK’s harsh weather was caused by anomalously high air pressure that blocked mild westerly winds and brought cold air south from the Arctic.

The provisional monthly Met Office figures show the UK temperature averaged -1C – a long way below the previous coldest December, in 1981, which registered -0.1C.

The December average for the century-long series is 4.2C.

It was also the coldest calendar month since February 1986, the Met Office reports.

“It’s been an exceptional month, there’s no question about that – it will go down in history as one to remember,” said chief meteorologist Ewen McCallum.

“Our records go back to 1910 and it’s certainly the coldest since then, so it’s the coldest December in 100 years,” he told BBC News.

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Hunger index shows one billion without enough food

Thursday, January 13th, 2011

One billion people in the world were undernourished in 2009, according to a new report.

The 2010 Global Hunger Index shows that child malnutrition is the biggest cause of hunger worldwide, accounting for almost half of those affected.

Countries in sub-Saharan Africa and South Asia were shown to have the highest levels of hunger.

The report’s authors called on nations to tackle child malnutrition in order to reduce global hunger.

The Global Hunger Index is produced by the International Food Policy Research Institute (IFPRI), Welthungerhilfe and Concern Worldwide.

The UN Food and Agriculture Organization (FAO) defines hunger as the consumption of fewer than 1,800 kilocalories a day – the minimum required to live a healthy and productive life.

Despite the number of undernourished people in the world falling between 1990 and 2006, the report’s authors say in that number has crept up in recent years, with the data from 2009 showing more than one billion hungry people.

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World food prices at fresh high, says UN

Thursday, January 13th, 2011

Global food prices rose to a fresh high in December, according to the UN’s Food and Agricultural Organisation (FAO).

Its Food Price Index went above the previous record of 2008 that saw prices spark riots in several countries.

Soaring sugar, cereal and oil prices had driven the rise, the report said.

The index, which measures monthly price changes for a food basket composed of dairy, meat and sugar, cereals and oilseeds, averaged 214.7 points last month, up from 206 points in November.

It stood at 213.5 points at the high of June 2008 – sparking violent protests in countries including Cameroon, Haiti and Egypt.

There were further riots over food prices in Mozambique in September last year.

However, despite high prices, FAO economist Abdolreza Abbassian said that many of the factors that triggered food riots in 2007 and 2008 – such as weak production in poor countries – were not currently present, reducing the risk of more turmoil.

But he added that “unpredictable weather” meant that grain prices could go much higher, which was “a concern”.

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Brazil Finance Minister Mantega warns of trade war

Thursday, January 13th, 2011

Brazil has warned that the world is on course for a trade war because of what it says is currency manipulation by China, the US and others.

Finance minister Guido Mantega said Brazil was preparing moves to prevent further appreciation of its currency.

He said his government would raise the issue at the World Trade Organization and the G20 group of rich and developing countries.

Mr Mantega was speaking in an interview with the Financial Times newspaper.

“This is a currency war which is turning into a trade war,” Mr Mantega said in his first major interview since Dilma Rousseff took office as Brazil’s new president on 1 January.

He said Brazil’s trade with the US had slipped from an annual surplus of about $15bn (£9.6bn) to a deficit of $6bn because of US efforts to revive its economy through loose monetary policy.

“The exchange rate is one of the main drivers of economic policy, more so even than productivity,” he said.

Mr Mantega added that China’s “undervalued currency” was also distorting world trade.

He has been finance minister since 2006. In September last year he accused some rich countries of deliberately devaluing their currencies to boost exports and make their economies more competitive.

The Brazilian real has increased by 39% against the US dollar in the last two years.

Its value has been going up steadily as Brazil’s economy has grown, making Brazilian exports less competitive.

Brazil has been swamped by a flood of foreign capital that is taking advantage of low interest rates in the developed world to chase high returns in emerging economies, the BBC business reporter Linda Duffin says.

The International Monetary Fund warned in October that some countries appeared to be trying to use their currencies “as a weapon” and the issue of currency manipulation was discussed at the G20 summit in November.

– To the original…

Missing China activist Gao Zhisheng ‘tortured’

Wednesday, January 12th, 2011

One of China’s most prominent human rights activists, Gao Zhisheng, has told of his torture by police during more than a year in secret detention.

The lawyer told the Associated Press he was stripped naked, beaten and pistol-whipped until he feared for his life.

Mr Gao gave the interview last April – just two weeks before he went missing.

He asked that his account only be published if he disappeared or arrived “someplace safe” like the US. Mr Gao has not been seen for several months.

The AP said it decided to publish his account given the length of his current disappearance.

Mr Gao is one of China’s leading human rights defenders. In 2006, he was sentenced to three years in prison for “inciting subversion” but the jail term was suspended for five years.

Death threats

Mr Gao said that during his 14-month ordeal he had been moved between Beijing, his native province of Shaanxi and the far western region of Xinjiang.

He said weeks of inactivity were punctuated by outbursts of brutality.

He described being bound with belts and hooded, while his jailers threatened to kill him.

“You must forget you’re human. You’re a beast,” Mr Gao said his tormentors told him in September 2009.

He said he was told by Beijing police that he was “not good enough” for prison. “Whenever we want you to disappear, you will disappear,” he quoted police as saying.

In October, Mr Gao’s daughter, Grace Geng, appealed to US President Barack Obama for help in an open letter.

She said her father had been abducted and tortured “for exercising his right to freedom of speech”.

She said she too, aged 12, was beaten by police and barred from going to school; she finally fled China with her mother and brother in 2009.

Human rights advocates often cite Mr Gao’s case along with that of Liu Xiaobo, the jailed academic awarded the 2010 Nobel Peace Prize, as examples of what they say is the Chinese Communist Party’s increasing persecution of human rights defenders in China.

– To the original…

Indian shaman ‘poisons women in witchcraft test’

Wednesday, January 12th, 2011

An Indian shaman who allegedly forced women to drink a potion to prove they were not witches has been arrested.

Nearly 30 women fell ill after they were rounded up in Shivni village in central Chhattisgarh state on Sunday and made to drink the herbal brew.

A senior police officer told the BBC that six villagers had also been arrested.

Witch hunts targeting women are common in east and central India, and a number of accused are killed every year.

Most of the cases take place in Chhattisgarh, Madhya Pradesh, Jharkhand and Bihar.

Police spokesman Rajesh Joshi told the BBC that an 18-year-old villager was accused of witchcraft because she had been unwell.

“Her father Sitaram Rathod and other villagers suspected that it [her illness] could be due to an evil spell cast by a witch,” Mr Joshi said.

“They [the villagers] called for an ojha [witch doctor] to ward off the spell.”

Authorities said the shaman, named as Bhagwan Deen, had been helped by a few other residents as he rounded up nearly all the adult women in the centre of the village.

He concocted the potion test after conducting rituals which failed to expose the alleged witch.

“The shaman then forced the women to consume a drink that he had made out of a local poisonous herb,” Mr Joshi said. “He said that after drinking the brew, the real witch would voluntarily confess.”

Of the nearly 30 women taken to hospital after the incident, around 25 women have since been discharged.

But police said five remained in hospital, including a 70-year-old woman who was in a serious condition.

– To the original…