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June 18, 2008

Economy: When America Gets An Economic Cold, The Rest Of The World Gets Pneumonia

  In the States, food prices have reached a18-year high.  Bad weather, bad harvests and the demand for biofuels all add up to increased produce prices, shopping pressures and the result is more consumers are heading for discount supermarkets.

American families already feeling the pinch caused by soaring energy costs are taking another big hit to their household budgets as food prices increase swiftly.  Milk, cheese, eggs and cooking oil have all increased in price by 20% since last May.  Meat and bread were up by 9%; fish and vegetables were up by 7% and fruits increased by a more modest 2.4%.  The cost of living is now the highest since 1990 with half of the increase accounted for by food prices.

Escalating food costs could present a greater problem than soaring oil prices for the national economy because the average household spends three times as much for food as for gasoline.  Food accounts for about 13 percent of household spending compared with about 4 percent for gas.

The prices of most food products around the world have risen after basic commodities such as wheat, rice and corn hit record highs in recent months.

Riots have broken out in many poor countries due to surging bread prices. A succession of bad harvests in countries such as Australia, as well as competition for land space from biofuels, has combined to push food prices higher. This is made worse by the fall in the value of the U.S. dollar, in which most commodities are priced and traded.

In the U.K. it’s being reported that household energy bills could increase by as much as 40% this winter as oil and wholesale gas prices hit record highs.

The increases could mean households paying $800 more a year on average for their gas and electricity. The increase is far more than analysts have predicted in recent months. It will put more pressure on homeowners already struggling with higher food and fuel costs.  Additional announcements are most likely to come in August, when heating bills are not first and foremost on people’s minds.  The energy industry is reluctant to reveal one big rate raise, so increases may be revealed in stages to soften the blow.

The other main reason for the jump in inflation last month was rising energy bills. The price of heating oil is now 84% higher than a year ago. Reports are coming in from rural areas of theft of heating oil from tanks outside houses. The thieves either put the oil in their own tanks or use it to run their cars since it is half the price of diesel because it is not subjected to fuel taxes.

As difficult as it is for wealthy ‘first world’ countries like America and the United Kingdom (England, Wales, Scotland, Northern Ireland) and European nations, it is heartbreaking to think of what people from third world and tenth world countries are doing to make it; how are the surviving?  It is downright distressing thinking of their plight.

When America gets an economic cold, the rest of the world gets pneumonia.  We need a cure fast but in the meantime at least give us some medicine; we need it desperately so that we’re able to help ourselves and the rest of the world.  Please.

Paulette

 

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2 Comments »

  1. […] When America Gets An Economic Cold, The Rest Of The World … June 18, 2008 – 9:54 pm | unknown Escribio un articulo buenisimo hoyAqui hay un pedazo del articuloAs difficult as it is for […]

    Pingback by Futbol Argentino Mexicano y espanol » Economy: When America Gets An Economic Cold, The Rest Of The World … — June 18, 2008 @ 10:54 pm | Reply

  2. […] Economy: When America Gets An Economic Cold, The Rest Of The World …When America gets an economic cold, the rest of the world gets pneumonia. In the States, food prices have reached a18-year high. Bad weather, bad harvests and the demand for biofuels add to shopping pressures and more consumers are … […]

    Pingback by Pneumonia » Economy: When America Gets An Economic Cold, The Rest Of The World ... — June 19, 2008 @ 2:47 am | Reply


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