Ethanol bio-fuels Hoax Mean Food Shortages

WORLD FOOD PRICES SOAR, WITH SOME LAYING THE BLAME ON THE
ETHANOL HOAX. Wholesale food prices have increased 10% in India,
and 6% in China (the world's two most populous countries), and as
much as 13% in Turkey and Hungary, according to research by
Moody's Economy.com. Moody's chooses to blame the ethanol craze
for this--although, as Lyndon LaRouche noted, that has only
accelerated the already existing hyperinflationary leap of the
last period.
It's true that ethanol plays a role, LaRouche elaborated,
but it's not the only truth. Obviously the shift in this ethanol
thing has {accelerated} the rate of inflation, but the rate of
inflation had already been in progress seriously, as anyone who
has been looking at the last several years of trends knows this
is the case. The costs of food have been soaring. This policy
coming out of the Bush Administration and internationally by
Gore, has accelerated that rate.
If corn prices continue to increase, Moody's argues, major
food price increases could hit Japan, Egypt, South Korea and
Mexico, the world's four biggest corn importers. According to the
Wall Street Journal, China, currently a grain exporter, now has
only a two- to three-month reserve, the lowest in the last 10
years. Indian officials have already removed import taxes on
corn, and barred the export of wheat, in order to insure domestic
supply.
Worldwide, grain stocks are at 30-year lows, and analysts
expect that only a "bumper crop" will save the world from
additional price spikes because of shortages. Food prices already
account for 35% of the consumer price index in Thailand, for
example, and as much as 50% in the Philippines. In the U.S., food
prices have risen 3% from a year ago, with predictions that food
will lead the overall inflation rate this year.
The Journal admits that the Journal's concern in all this is
not global starvation, but rather that "this puts the world's
central banks in a bind. .. [by] forcing them to keep interest
rates higher than they would otherwise be." In the words of one
analyst, "In 1972, the last time grain stocks were this low, the
story didn't end well in terms of inflation." Not said, is that,
since then, the world's financial system has been kept alive by
the monetary pump of low interest rates (such as the yen carry
trade), and could collapse overnight if interest rates are forced
to rise suddenly.