Notes

The Twin Menaces of Inflation
This week, a storm of bad news gave markets cold feet, leading to Friday's 250-point loss. While website of volatility has been the status quo for stock exchanges worldwide for the higher part of the year-to-date, another factor has caused at the very least as much difficulties for a much larger percentage of the global population: the recent skyrocketing prices in energy and food. Wheat and other cereal prices have significantly more than doubled this season, causing widespread effects which range from speculative overbuying, which exacerbates the issue, to food riots in lots of poor countries. Millions of children around the globe are likely to suffer from malnutrition in coming years if prices stay at or near current levels, in accordance with International Monetary Fund (IMF) estimates.

Part of this unfavorable price increase has been due to shifting ideas about energy consumption and the press towards the use of alternative sources of fuel apart from gasoline: namely, the subsidies issued by many governments of developed countries to change over to ethanol along with other plant-based hydrocarbons, such as that made from palm oil (an especially environmentally destructive process for ecosystems). Since these subsidies and programs have been introduced, farmers tend to be able to make smarter returns by selling their crops to biodiesel companies than to food companies. Until economic incentives change, the supply end is unlikely to supply solutions. For Boarding Facility For Your Pet of the farmers, these developments mean they could make a decent living for the first time in years, and they desperately want to (even if it results in local food shortages sometimes).

While this widespread problem affects consumers all over the world, these micro effects are just half of the story for gas-sensitive American consumers. Energy prices took headlines this year because of speculation and offer concerns from OPEC and South American countries after hitting the psychologically important $100 a barrel mark for the very first time in the third quarter of 2007. Crude prices remain stubbornly above historical trends, even as suppliers contend that output need not increase. Analysts also have projected US gasoline prices to climb above $4 a gallon through the summer, another equally unprecedented number which may be tough pill for consumers to swallow, after the one-two punch of a national housing slump and the global market meltdown.

Should oil suppliers continue to maintain current output levels, demand is eventually likely to contract. However they aren't the only real links in this chain. If oil becomes a less attractive substitute for Americans, oil companies may eventually cost out of your market. Many have already been keeping an exceedingly low profile in recent months. check here play an enormous part in the process, but shrinking sales and looming layoffs will probably raise the pressure towards manufacturing lower-emmission vehicles. However the single biggest mover and shaker would be the government, which has the ability to regulate both inflation (through the FEDs influence on mortgage interest levels) and the move towards more sustainable technologies. The next US president will have the ability to help determine how long the lone superpower continues to expose its Achilles heel, but at some point all eyes will undoubtedly be on the Federal Reserve if inflation once more rears its ugly head.

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