IndianaGreen
01-24-2011, 04:20 PM
Tunisia and the global crisis
David McNally
January 24, 2011
THE FIRST effect of the global economic slump was to dampen rising food prices. As layoffs and unemployment soared, demand slumped and food prices came down. But now, as the crisis changes form, they are on the rise once again, and reaching unprecedented heights. Indeed, the United Nations Food and Agriculture Organization's food price index has reached an all-time high, having risen a staggering 32 percent in the last half of 2010. Food is now more expensive than ever, aggravating economic hardship across the Global South, and throwing fuel on the fire of popular resentment.
One part of the story here has to do with new flows of "hot money" generated by the worldwide bank bailouts and economic stimulus programs. As banks melted down and the world financial system teetered in 2008-09, governments in the dominant capitalist nations poured something in the range of $20 trillion into propping up the system and pushed down interest rates. In the U.S., a further $600 billion is being injected into the system by the Federal Reserve.
With a growing money supply and record low interest rates, there is a huge incentive for investors and speculators to borrow on the cheap in order to buy commodities (and currencies) that look likely to appreciate. So currencies like the Brazilian real have been soaring, as have prices for basic commodities like food and oil.
All of this is driving forward a wave of land grabs, particularly in Africa and Latin America, as global corporations and governments, like China's, buy and lease millions of hectares of arable, drillable, and water- and mineral-rich land. The result is yet further waves of accumulation by dispossession, to use David Harvey's term, that displace indigenous peoples, peasants and farmers and deprive them of means of feeding themselves, thus exacerbating problems of displacement, hunger and poverty.
http://socialistworker.org/2011/01/24/tunisia-and-the-global-crisis
David McNally
January 24, 2011
THE FIRST effect of the global economic slump was to dampen rising food prices. As layoffs and unemployment soared, demand slumped and food prices came down. But now, as the crisis changes form, they are on the rise once again, and reaching unprecedented heights. Indeed, the United Nations Food and Agriculture Organization's food price index has reached an all-time high, having risen a staggering 32 percent in the last half of 2010. Food is now more expensive than ever, aggravating economic hardship across the Global South, and throwing fuel on the fire of popular resentment.
One part of the story here has to do with new flows of "hot money" generated by the worldwide bank bailouts and economic stimulus programs. As banks melted down and the world financial system teetered in 2008-09, governments in the dominant capitalist nations poured something in the range of $20 trillion into propping up the system and pushed down interest rates. In the U.S., a further $600 billion is being injected into the system by the Federal Reserve.
With a growing money supply and record low interest rates, there is a huge incentive for investors and speculators to borrow on the cheap in order to buy commodities (and currencies) that look likely to appreciate. So currencies like the Brazilian real have been soaring, as have prices for basic commodities like food and oil.
All of this is driving forward a wave of land grabs, particularly in Africa and Latin America, as global corporations and governments, like China's, buy and lease millions of hectares of arable, drillable, and water- and mineral-rich land. The result is yet further waves of accumulation by dispossession, to use David Harvey's term, that displace indigenous peoples, peasants and farmers and deprive them of means of feeding themselves, thus exacerbating problems of displacement, hunger and poverty.
http://socialistworker.org/2011/01/24/tunisia-and-the-global-crisis