Rising Prices Widen Gap Between Rich and Poor
By Wolfgang Reuter
Der Spiegel
Central banks flooded the world with cheap money for years, helping the rich get richer. Now inflation is on the horizon, threatening to make the poor even poorer.
The stock markets are harbingers of economic hardship. Each stagnation, downturn and recession goes hand-in-hand with falling stock prices, often even a market crash. The biggest crashes have names: Black Friday in 1929, or Black Monday in 1987.
But sometimes a spike in prices signals that the worst is yet to come. Axel Weber -- president of Germany's central bank, the Bundesbank, and a member of the European Central Bank (ECB) governing council -- is well aware of that possibility. For some months now, he has been watching the steep gains in international securities indices, especially on the commodity futures exchanges, with growing concern.
For instance, the price of spring wheat, which is traded on the Minneapolis Grain Exchange, has jumped from $5.50 a bushel (about 35 liters) in May to $9 today. A year ago spring wheat was selling for only $4.60 a bushel, a little more than half the current price.
Within the last year, the prices of corn and soybeans have increased by up to 70 percent in key trading markets. The prices of many metals, lumber, rubber, wool and other raw materials used in the manufacture of consumer goods have also been rising steadily for months. Other data and price developments also suggest that hard times may be ahead. Besides, the price of oil keeps hitting new record levels.
(Continued here.)
Der Spiegel
Central banks flooded the world with cheap money for years, helping the rich get richer. Now inflation is on the horizon, threatening to make the poor even poorer.
The stock markets are harbingers of economic hardship. Each stagnation, downturn and recession goes hand-in-hand with falling stock prices, often even a market crash. The biggest crashes have names: Black Friday in 1929, or Black Monday in 1987.
But sometimes a spike in prices signals that the worst is yet to come. Axel Weber -- president of Germany's central bank, the Bundesbank, and a member of the European Central Bank (ECB) governing council -- is well aware of that possibility. For some months now, he has been watching the steep gains in international securities indices, especially on the commodity futures exchanges, with growing concern.
For instance, the price of spring wheat, which is traded on the Minneapolis Grain Exchange, has jumped from $5.50 a bushel (about 35 liters) in May to $9 today. A year ago spring wheat was selling for only $4.60 a bushel, a little more than half the current price.
Within the last year, the prices of corn and soybeans have increased by up to 70 percent in key trading markets. The prices of many metals, lumber, rubber, wool and other raw materials used in the manufacture of consumer goods have also been rising steadily for months. Other data and price developments also suggest that hard times may be ahead. Besides, the price of oil keeps hitting new record levels.
(Continued here.)
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