Thursday, January 27, 2011

Why do people riot and rebel? Freedom? Liberty? It is more simple than that---INFLATION!

The latest evidence that most civil unrest, today and in history, is caused by the fundemental economic problem of scarcity...Rising food prices disproportionately hurt the very poor in developing countries.  They can suffer "a long train of abuses" (Declaration of Independence) but the tipping point for the masses is when food prices and availability become a problem. People normally not disposed to take to the streets to protest/riot will do so in this case.  Inflation is a thief that is not tolerated for long periods of time.

WSJ: Rising Price Pressures Spur Concerns
""With the risks of a double-dip recession apparently receding in most parts of the world, another economic challenge is emerging: inflation.

Rising prices for food, energy and other commodities are reducing the disposable incomes of poor people across the planet, providing a trigger for street protests in North Africa and posing a deep conundrum for policy makers world-wide.

In poorer countries, the disadvantages are more evident. In Tunisia, Algeria and Egypt, rises in food prices—such as a 30% increase in cooking oil in Algeria—have sparked street protests. Rising food prices heighten financial pressures on governments in the region because they are often direct buyers of commodities such as wheat, sugar and coffee, and they subsidize prices, said Francis Ghilès, a senior research fellow at the CIDOB Foundation in Barcelona.

In India, the chief executives of some of the country's largest companies cited rising food prices as a problem because they hurt the poorer sections of India's population and could translate into political uncertainty.

"Inflation is really our key's top of the government's priority," said Azim Premji, chairman of one of India's largest technology companies Wipro Ltd. He said he hoped that government support programs for the poor would help unrest from growing in the country's rural population. ""
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