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The global economies have been battling with inflation since the last few months as food and commodity prices have surged out of control. Now it is not only the excess US liquidity that will hunt the global markets for assets and commodities but also the huge infusion by Bank Of Japan after the recent multiple disasters hit the island nation. Bloomberg columnist William Pesek in an insightful article observed that the global inflation is now not only governed by two major inputs, traditionally known to be supply and demand. It also has today a third component . That is excess liquidity from the Fed and BOJ infused into the global supply chain that is chasing both fixed assets and consumer goods.
It has been apparent since the beginning of the year, that 2011 will be a year of global unrest since commodity food and metal prices had been spiked taking advantage of the liquidity provided by the US Federal Reserve.
Now the voracious demand from 120 million wealthy Japanese consumers backed by money power from the Bank of Japan will further worsen the situation and strain the global supply chain. The most affected will of course be the poorest of poor world wide who will be hit by sharp price surges across the world. This means the poor will be out in numbers on the streets willing to brave batons and bullets to earn a square meal and social unrest will spread globally.
North Africa and the Middle East which produces nothing but oil will be hit most as they have to import all products. The US and Europe will also be affected as they will be forced to spend huge amount of resources
to quench the fire of unrest in the middle east . If oil prices further move up the situation will go from bad to worse as they consume great amount of energy on per capita basis. US and Europe will profit from higher farm prices and from early stock piling of commodities but will eventually be hit the hardest because they are likely to remain net importers and will keep on running huge budget deficits and balance of payments.
Producer nations like China and India with large populations will be hit because they have large populations to feed and because imported oil will be pricey . The millions of poor in those nations will be hardest hit . However the educated ,the middle class and the prosperous will gain from the fact that their manufacturing and service industries especially their export driven industries which will bring home greater profits. In short the imbalance between the rich and the poor in those countries will grow and lead to social and political unrest. So watch out for the summer of discontent in the year 2011, when price surges and global unrest will change the face of the planet earth.
The global economies have been battling with inflation since the last few months as food and commodity prices have surged out of control. Now it is not only the excess US liquidity that will hunt the global markets for assets and commodities but also the huge infusion by Bank Of Japan after the recent multiple disasters hit the island nation. Bloomberg columnist William Pesek in an insightful article observed that the global inflation is now not only governed by two major inputs, traditionally known to be supply and demand. It also has today a third component . That is excess liquidity from the Fed and BOJ infused into the global supply chain that is chasing both fixed assets and consumer goods.
It has been apparent since the beginning of the year, that 2011 will be a year of global unrest since commodity food and metal prices had been spiked taking advantage of the liquidity provided by the US Federal Reserve.
Now the voracious demand from 120 million wealthy Japanese consumers backed by money power from the Bank of Japan will further worsen the situation and strain the global supply chain. The most affected will of course be the poorest of poor world wide who will be hit by sharp price surges across the world. This means the poor will be out in numbers on the streets willing to brave batons and bullets to earn a square meal and social unrest will spread globally.
North Africa and the Middle East which produces nothing but oil will be hit most as they have to import all products. The US and Europe will also be affected as they will be forced to spend huge amount of resources
to quench the fire of unrest in the middle east . If oil prices further move up the situation will go from bad to worse as they consume great amount of energy on per capita basis. US and Europe will profit from higher farm prices and from early stock piling of commodities but will eventually be hit the hardest because they are likely to remain net importers and will keep on running huge budget deficits and balance of payments.
Producer nations like China and India with large populations will be hit because they have large populations to feed and because imported oil will be pricey . The millions of poor in those nations will be hardest hit . However the educated ,the middle class and the prosperous will gain from the fact that their manufacturing and service industries especially their export driven industries which will bring home greater profits. In short the imbalance between the rich and the poor in those countries will grow and lead to social and political unrest. So watch out for the summer of discontent in the year 2011, when price surges and global unrest will change the face of the planet earth.
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