Seven Dead in Food Riots

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machinehead's picture
Status: Diamond Member (Offline)
Joined: Mar 18 2008
Posts: 1077
Seven Dead in Food Riots

From the Financial Times:

Russia announced a 12-month extension of its grain export ban on Thursday, raising fears about a return to the food shortages and riots of 2007-08 which spread through developing countries dependent on imports.

The announcement by Vladimir Putin came as the UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage, and riots in Mozambique left seven dead.

The unrest in Maputo, in which 280 people were also injured, followed the government’s decision to raise bread prices by 30 per cent. Police opened fire on demonstrators after thousands turned out to protest against the price hikes, burning tyres and looting food warehouses.

Although agricultural officials and traders insist that wheat and other crop supplies are more abundant than in 2007-08, officials fear the deadly Mozambique riots could be replicated.

Not to be alarmist, but today my preferred index of commodity prices, the CCI, closed at a post-2008 high, echoing the food and wheat charts above. CCI chart:

Ultimately, this is how falling living standards are imposed: incomes stagnate or fall, while the prices of essentials (and taxes) go up. The vice tightens, and the pips squeak. Lash out in anger, and the bullets fly.

That's why they call economics the dismal science. It delivers bad news, but it doesn't make you any money. Frown

agitating prop's picture
agitating prop
Status: Platinum Member (Offline)
Joined: May 28 2009
Posts: 864
Re: Seven Dead in Food Riots

Govts will intervene eventually.  Extrapolating into the future by relying on the present economic model of food production and delivery probably isn't useful.   Food is touchy, a survival issue.  Govt ineptitude may be preferable to rampant unchecked speculation in essential commodities.  Command economies, or some reasonable facsimile, could form almost overnight if food insecurity causes panic. One of the reasons I haven't bought shares in Potash corp is because I've assumed that if the problems of 2008 ever replicate, as they now seem to be, food and fertilizers etc...would cease to trade in a "free market".

yobob1's picture
Status: Silver Member (Offline)
Joined: Apr 20 2009
Posts: 132
Re: Seven Dead in Food Riots

Speculators get rich, the farmers get stiffed and the poor die.  Isn't rampant speculation wonderful?

We may be better off wiping out everyone by blowing up the global fiat fractional reserve monetary scheme rather than allowing ever increasing liquidity in the financial sphere to wreck the real world.  God bless our central banks, every one.

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