ALGIERS, Algeria – Riots over rising food prices and chronic unemployment spiraled out from Algeria's capital on Thursday, with youths torching government buildings and shouting "Bring us Sugar!"
At no time since records have been kept has the cost of eating been so expensive. The last time prices were this high there were food riots in 32 nations, and that has some people worried.
"We are entering danger territory," said the UN Food and Agriculture Organisation's chief economist, Abdolreza Abbassian.
Global food prices have risen for the sixth month in succession. Wheat has almost doubled since June, sugar is at a 30-year high, and pork is up by a quarter since the beginning of 2010.
So far there hasn't been widespread unrest, mostly because the cost of rice, the food of the world's poor, has lagged the rising price of other foods, such as cereals, oils, and sugars.
But unless the world acts, and acts soon, unrest and violence will surely follow.
Unlike in 2008, food prices are expected to remain high all year.
If you haven't noticed the rising prices in your local grocery store, there is a reason for it: you aren't getting as much for your money.
Household brands ranging from Ivory soap to Kraft cheese singles have seen their packages downsized up to 20% over the last few years - even though shoppers are paying just as much, according to a new study by Consumer Reports.
It's a sneaky way of passing along the rising costs, and it may fool people for a little while, but not forever.
The recent spat of good economic news was exactly what the producers and retailers were waiting for to pass along the cost of rising commodity prices.
U.S. companies will welcome the opportunity to charge more because they have so far been absorbing higher input costs. The latest prices-paid indexes from the Institute for Supply Management increased in December.
Indeed, businesses are already expecting to mark up their price lists this year. VF Corp., which makes Lee and Wrangler jeans, and Hanesbrands Inc. have said they will raise apparel prices in 2011 to offset higher cotton prices. A survey released last week by the Kansas City Fed showed that a rising number of regional manufacturers anticipate passing along higher costs to their customers.
So what is causing all this price inflation? Competitive currency devaluation.
When one country devalues its currency, others tend to follow suit. As a result, nobody achieves trade gains. Instead, the devaluations put upward pressure on the prices of commodities such as oil.
It's the reason why you can't money print your way to prosperity. There is no free lunch.