Perhaps central bankers are like potted plants, able to subsist on little more than water and sunlight. That would help explain Federal Reserve Chairman Ben Bernanke's statement Thursday that -- rising commodity prices notwithstanding -- overall inflation remains "quite low." As for folks who eat food, well, global food prices hit an all-time high last month, in both nominal and inflation-adjusted terms, according to the U.N.

True, wildfires in Russia last year, drought in the U.S. and flooding and a cyclone in Australia have helped cause price spikes for wheat and sugar. But the longer-term trend is still the same. Global food prices have increased for seven straight months, the Food and Agriculture Organization of the U.N. said Thursday, as its closely watched food price index hit its highest level ever in January.

Food Commodities Rising

"Prices of all the commodity groups monitored registered strong gains in January compared to December, except for meat, which remained unchanged," the FAO said in a release. Indeed, the index topped its prior peak set in mid-June 2008, when the global food crisis set off riots around the globe. Sugar, which has reached all-time highs, has been the main culprit this time around, but prices for cereals and oils also have gone nearly vertical since June. (See the chart below.)

So-called core inflation excludes volatile food and energy prices in an attempt to give a more accurate picture of long-term inflation. That's why Bernanke can say inflation remains muted. Take out food and gas prices, and inflation really is pretty low.

But even some bullish economists aren't buying it, like Ed Yardeni, president of Yardeni Research. He's starting to fret that Bernanke may have unleashed a global inflation beast with his second round of quantitative easing.

"Governments are scrambling to purchase more grains to quell food riots," said Ed Yardeni, president of Yardeni Research, in a Thursday note to clients. "The idea was to avert deflation and to bring back just a tiny bit of inflation. The unintended global consequences seem to be hoarding, hyper-inflating commodity prices, food riots and revolutions."

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May 29 2011 at 1:32 AM Report abuse rate up rate down Reply

For those of us that don't have money to buy gold... buy freeze dried and dehydrated food that can be stored for up to 25 years. My wife and I decided to take our entire tax return this year and spend it on food provisions. We will get a years supply of freeze dried food and hide it in our basement. Found a great deal at Usually we would spend the tax return on furniture or vacation… not this year. Times have changed!

February 21 2011 at 8:18 AM Report abuse rate up rate down Reply

Over the life of a 30 year loan, a $300 per month decrease would equal over $100K in savings. Search the web for "123 Mortgage Refi" website they helped me find 3.118% rate easily. Strongly recommend them for anyone.

February 07 2011 at 5:22 AM Report abuse rate up rate down Reply
Mary Finn

Increasing food prices were behind the French Revolution and they caused the Irish immigration that permanently changed the face of America as well as Ireland. This is a big deal.

February 06 2011 at 8:23 PM Report abuse rate up rate down Reply

perhaps the 3rd world nations should advise their populations to stop breeding like cockroaches.

February 06 2011 at 12:58 PM Report abuse +1 rate up rate down Reply
Karl Hammerle

"Let them eat cake" Marie Antonette, Queen of France before the revolution. The price of food has been increasing for over a year. Perhaps we should cut Bernake's pay down to $30,000 a year and see what he says then. Reality would set in abruptly and he would be screaming for price controls, the final gasp of incompetent economists.

February 05 2011 at 12:38 PM Report abuse +2 rate up rate down Reply

We are liquidating the earth’s natural assets to fuel our consumption. Water tables are falling and wells are going dry, soil erosion exceeds soil formation on a third of world cropland, forests are shrinking, ocean fisheries are at capacity or collapsing, and ever-growing herds of cattle, sheep, and goats are converting vast stretches of grassland to desert.....

February 05 2011 at 11:35 AM Report abuse +2 rate up rate down Reply
1 reply to gardeningatnite's comment

Not to mention the huge number of ever growing landfills, and the billions of tons of feces being dumped into the ocean every single day!

February 06 2011 at 3:38 AM Report abuse rate up rate down Reply

Great book came out January 2011 entitled "World on the Edge" by Lester R. Brown. He is dead-on with his facts and this headline merely reinforces them. Red or Blue, it affects you...

February 05 2011 at 11:26 AM Report abuse +3 rate up rate down Reply
1 reply to klowrey106's comment

Our ability to provide enough food is at stake, and depends not only on efforts within agriculture but also having an energy policy that stabilizes climate, a worldwide effort to raise water productivity, the evolution of land-efficient transport systems, and population policies...

February 05 2011 at 11:32 AM Report abuse +2 rate up rate down Reply


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