Philippines threatens rice hoarders with life imprisonment

Filipinos face life in prison if they’re caught hoarding rice.

“The Department of Justice is preparing economic sabotage or plunder charges that carry a life sentence against traders found to be hoarding rice, the price of which has risen sharply amid a tight global supply,” The Inquirer reports. “Although the country has yet to experience a shortage, Justice Secretary Raul Gonzalez Thursday vowed to hale to court hoarders and other unscrupulous rice traders for acts ‘inimical to the public interest.'”

President Gloria Macapagal-Arroyo reiterated the warnings during a speech today, but also pledged to increase imports of the staple.

“Those who seek to take advantage of our people must be stopped,” she says, according to The Inquirer. “I am leading the charge to crack down on any form of corruption by public or private officials who would divert supplies or pervert the price of this essential commodity in any way.”

“Anyone caught stealing rice from the people will be thrown in jail,” she adds.

Bloomberg News
reports that the price of rice, a key staple in the global food supply, keeps hitting record highs. It’s now twice as expensive as it was at this time in 2007.

“We’re in for a tough time,” Roland Jansen, CEO of Mother Earth Investments AG, tells the financial news service, adding: “you will have huge problems of daily nutrition for half the planet.”

(Photo of workers in Manila taken March 28 by Romeo Ranoco, Reuters.)

Source: USA Today

IMF says US crisis is ‘largest financial shock since Great Depression’


A foreclosure sign in Florida. Photograph: Joe Raedle/Getty Images

America’s mortgage crisis has spiralled into “the largest financial shock since the Great Depression” and there is now a one-in-four chance of a full-blown global recession over the next 12 months, the International Monetary Fund warned today.

Read moreIMF says US crisis is ‘largest financial shock since Great Depression’

Fed: Severe Downturn Possible

WASHINGTON (Reuters) – Members of the Federal Reserve’s policy-setting committee worried at their most recent meeting that housing and financial market stress could trigger a nasty slide in the economy, even as inflation pushed higher, minutes of the meeting released on Tuesday show.

“Some believed that a prolonged and severe economic downturn could not be ruled out given the further restriction of credit availability and ongoing weakness in the housing market,” minutes of the March 18 meeting said.

Fed economists presented a somber picture of short-term prospects — central bank staff now fully expect negative growth over the first six months of the year — but held out the possibility of a modest rebound later.

“The staff projection showed a contraction of real GDP in the first half of 2008 followed by a slow rise in the second half,” the report said, referring to gross domestic product, a broad measure of a country’s output of goods and services.

At the same time, Fed officials found recent inflation reports “disappointing,” noting also with concern that some indicators of inflation expectations were edging higher.

Read moreFed: Severe Downturn Possible

USA 2008: The Great Depression

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world’s richest country faces economic crisis

We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.


Disadvantaged Americans queue for aid in New York

Read moreUSA 2008: The Great Depression

IMF Approves Selling 400 Tons Of Gold

Washington (AHN) – The executive board of the International Monetary Fund has approved the sale of some 440.3 tons of its gold supplies in a wide-ranging financial overhaul and to replenish its depleting coffers.

Dominique Strauss-Kahn, IMF managing director, welcomed the board’s move on Monday, the action seen as a buffer to the expected $400 million budget deficit the Washington-based lending institution could experience in the next few years.

The board is projecting to generate at least $11 billion from the sale of at least 12 percent of its gold reserve. The money to be generated from the sales would fund the reorganization of the IMF and finance lending to needing countries.

Read moreIMF Approves Selling 400 Tons Of Gold

Feed the world? We are fighting a losing battle, UN admits

Huge budget deficit means millions more face starvation.

Ears of wheat growing in a field. Photograph: Steve Satushek/Getty images

The United Nations warned yesterday that it no longer has enough money to keep global malnutrition at bay this year in the face of a dramatic upward surge in world commodity prices, which have created a “new face of hunger”.

Read moreFeed the world? We are fighting a losing battle, UN admits

IMF: mortgage crisis may cost $945bn worldwide

The International Monetary Fund released its semiannual Global Financial Stability Report, predicting that the economic crisis “is spreading beyond the US subprime market.” The report comes ahead of the IMF and World Bank spring meetings.

The International Monetary Fund said Tuesday the worldwide losses stemming from the US subprime mortgage crisis could hit 945 billion dollars as the impact spreads in the global economy.

Read moreIMF: mortgage crisis may cost $945bn worldwide

Fed’s interest rate games could destroy the dollar

Federal Reserve Chairman Ben Bernanke has reduced the key federal funds rate six times in as many months — reducing the cost for major borrowers significantly. This combines with providing $270 million in funding, plus $30 billion in additional guarantees, for JP Morgan Chase to buy Bear Stearns Cos.

“Helicopter Ben” is living up to the nickname he earned after he remarked in a 2002 speech that he would stave off a recession even if he had to drop money from helicopters to do it.

The results of these policies have been destructive. The dollar is collapsing not only against foreign currencies — we’re now at par with the Canadian dollar and rocketing toward a 2-1 deficit against the Euro — but also against commodities. Gold was passing the $1,000-an-ounce landmark, silver $20. Even industrial metals like copper and zinc are fetching record prices.

Now, a spike in a particular commodity — say, for instance, $100-per-barrel oil — can be attributed to a shortage. But when they all move dramatically and simultaneously, it’s the purchasing power of our money that has gone down.

In fact, the increasing cost of even the base metals recently prompted Edmund Moy, director of the United States Mint, to propose further debasing the copper and nickel-plated, zinc slugs we call coins by substituting color-coated steel.

Read moreFed’s interest rate games could destroy the dollar

World Bank Expects More High Food Prices

Rising food prices, which have caused social unrest in several countries, are not a temporary phenomenon, but are likely to persist for several years, World Bank President Robert Zoellick says.

Strong demand, change in diet and the use of biofuels as an alternative source of energy have reduced world food stocks to a level bordering on an emergency, he says.

Speaking to reporters Monday before the bank’s spring meeting this coming weekend, Zoellick said the 185-member World Bank would work with other organizations to deal with the crisis by seeking ways to help farmers, especially in Africa, to increase productivity and improve access to food through schools or workplaces.

“This is not a this-year phenomenon,” he said, referring to the price spike. “I think it is going to continue for some time.”

Read moreWorld Bank Expects More High Food Prices

Food prices to rise for years, biofuel firms say

LONDON – Staple food prices will rise for some years, but should eventually fall to historical averages as harvests increase, biofuel company executives said on Thursday.

Soaring demand for better quality food from rapidly industrializing emerging markets such as China, supply shortages, increased demand for biofuels, and a surging appetite for food commodities by investment funds, have combined to push prices of basic foods higher and higher in recent months.

Stephane Delodder, managing partner of Netherlands-based consultancy iFuel Corporate Advisory, told a conference the problem of rising food prices would persist for some years.

Market forces should eventually help rebalance supply and demand, especially in markets which are not highly regulated, but this could take some time.

“(It could be) a few years at most before the situation returns to normal,” Delodder said.

He said grains and oilseed futures markets, which have corrected down recently after meteoric rises, may already be signaling that supply will rise as farmers raise plantings.

Read moreFood prices to rise for years, biofuel firms say