Ben Bernanke, Chairman of the Federal Reserve, reputation is in shambles after spending last week aggressively denying a report by this author, in an article appearing in Andrew Breitbart’s Big Government Blog and featured on Rush Limbaugh’s radio show, that the Fed’s QE2 monetary stimulus program is the cause of revolts in poor countries worldwide. In a stunning development, the United Nations Agricultural and Food Organization at the end of the week released a crisis report warning of the growing dangers from starvation and political unrest from global food inflation.
Chairman Bernanke tried to distract criticism from his dangerous policies that have inflated food costs by trying to shift blame to the leaders of other countries in the developing world. Bernanke urged leaders in emerging countries to stop subsidizing food costs. At a National Press Club meeting Bernanke said; “In some cases, some of the emerging markets are facing inflationary pressure because their own economies are growing faster than their own capacity.” He added: “It is up to emerging markets to find the right tools to balance their own growth,”
In response to a reporter’s direct question about the civil unrest in the Middle East and the Fed’s role in the months-long surging commodities prices, Bernanke strongly denied that the U.S. central bank’s continuing purchases of Treasury bonds, known as Quantitative Easing Two, are the primary driver of higher global food prices. Mr. Bernanke stated: “It is entirely unfair to attribute excess demand pressures to U.S. monetary policy.” Instead, Bernanke suggested surging prices of things like corn, soybeans, sugar and livestock to rising incomes in developing countries. He stated that higher incomes translate into strong growth in global demand for food, particularly an increased appetite for animal proteins such as beef, pork and chicken. “As people’s diets become more sophisticated, their demand for food and energy grows,” he said.
A new United Nations report debunks Bernanke’s pathetic alibi. As demonstrated below, the index of food prices would be up a lot more than 35%, if inflation in meat and dairy costs were not so low as compared to the cost of cereal feed, which have sky-rocketed. Farmers are actually liquidating flocks and herds right now because they cannot afford the cost of grain to feed them.
Commodity Index Increase
Overall 35%, Meat 10%, Dairy 12%, Cooking Oil 42%, Cereal 52%, Sugar 70%
Poor people around the world eat little or no meat or dairy. The majority of their diet consists of rice, corn, flour, sugar and cooking oil. Those food costs are up 55% since the Fed’s stimulus.
The United Nations grain expert and report author, Abdolreza Abbassian, warned, “The new figures clearly show that the upward pressure on world food prices is not abating,” and that “These high prices are likely to persist in the months to come. High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food.”
To the poor of the world, Fed Chairman Bernanke’s comments suggesting that they are eating too much meat, sound allot like the comments attributed to Queen Marie Antoinette’s during the French Revolution regarding her starving subjects: “If there is no bread, let them eat cake.” These insensitive comments by the Queen won her trip to the gallows. Chairman Bernanke’s actions and comments are winning America a place of wrath from the poor of the world.