Friday, February 4, 2011

Fed Foments Revolution?

Said conspiracy theorists: "Debatably,  
That the cost of food acted inflatably  
Brought Egyptians to crisis,  
But started when prices  
Were eased by the Fed quantitatively."    

The Wall Street Journal's Real Time Economics reports on a speech yesterday by Fed Chairman Ben Bernanke, in which he said that it's unfair to blame global food inflation (and by extension, political unrest) on US monetary policy.  Recent spikes in the prices of such commodities as wheat, soy and sugar are due to supply constraints such as bad weather, and increased demand from increasingly prosperous emerging markets, says Bernanke.

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