Global Economic News

Hyperinflation Shuts Spigot on World Food Program Supplies

Jan. 26 (EIRNS)—UN World Food Program (WPF) officials at the World Economic Forum at Davos warned that food supply shortages are threatening their humanitarian mission. "We have never seen this before: We went begging for wheat, and for two weeks we could not find it," today's Financial Times quoted one WFP official.

Behind the scarce market of food staples such as grains, are record-breaking price increases over the past months. Wheat, rice, and soybeans have reached all-time highs in the commodities markets, with corn at a 12-year high. Commodities dependent on these items—poultry, livestock, dairy, and eggs—are also inflated. Many countries are imposing export controls to secure supplies, especially for necessities such as wheat and rice. Export supplies have plummeted, leading to even more price increases. The cost of imported food rose in 2007 by 21% to $745 billion for the world.

Food Shortages: Malaysia Begins Stockpiling Commodities

Jan. 26 (EIRNS)—The Malaysian government announced a program to stockpile food commodities, including wheat, edible oils, and others, in an effort to guard against shortages and out-of-control inflation. The inflation has provided a pretext for anti-government demonstrations. Malaysian police on Jan. 26 detained about 50 people from the opposition who called an unauthorized rally to protest rising prices of food and fuel.

I Must Maintain My Dignity, Said the Prostitute

Jan. 23 (EIRNS)—The European Central Bank, which is rapidly earning a reputation as the loosest tramp in Europe, due to the indiscriminate way in which it passes out its financial favors, announced yesterday that it would lend another Eu175 billion (about $250 billion) to the banks in seven-day loans, more than the banks claim they need. Attempting to preserve the dignity of his institution, ECB president Jean-Claude Trichet told the European Parliament today, "Particularly in demanding times of significant market correction and turbulences, it is the responsibility of the central bank to solidly anchor inflation expectations to avoid additional volatility." The ECB may not have much, but it does have its pride.

China Sets Up Task Force To Monitor Banks

Jan. 23 (EIRNS)—The China Banking and Regulatory Commission (CBRC) is setting up a task force to monitor the effects of the global financial crisis on the nation's top five banks, Xinhua reported. The CBRC will pay particular attention to the valuations of securities affected by the banking and securities crisis in the West. Professor Zhong Wei of the Beijing Normal University, warned that bad assets are rising in the Chinese banks as a result of the problems, and the Bank of China, the nation's biggest foreign-exchange bank, denied reports that it has taken sharp writedowns on its holdings of Western securities.