For most of the world, inflation in food prices are much more important than the cost of a new TV. In the U.S., the CPI measurement has been watered down over the years to be virtually worthless to the average person. Those $2.50 hamburgers are now $5.25. How can this happen when inflation is running at only 2-3% on an annual basis? The protests in the Middle East are connected to inflation and unemployment. Protestors in Jordan complain about food prices. China’s big concern is inflation in food prices affecting its poor population. Hunger is a strong motivating force and the various dictatorships are scurrying around trying to come up with a solution before they are run out of town by a hungry and angry mob.
It’s all about percentages. If my monthly food bill is 5% of my total salary, I am irritated when I have to pay more for a pound of hamburger meat. But if my monthly food expense is 25% of the total, I’m infuriated. If I can no longer afford to buy the staples, I’m just flat desperate. This is a major problem in the Middle East. When the Federal Reserve decides to print money in order to stimulate the economies around the world, there are consequences. Ben Bernanke went to sleep last night on a full stomach. I would be surprised if he had ever gone to bed hungry. If you don’t know how it feels, it is hard to appreciate the plight of those protesting higher food costs and unemployment.
The above picture provides us with a stark reminder of the repercussions of a loose monetary policy and supporting dictatorships. When the tipping point occurs, the status quo is removed. The path of Love at the highest levels is the only lasting solution to peace and prosperity. The people will then respond in like manner.