Good Morning Real NEO - Steep Oil Prices and Food Shortages Will Likely Spark Deadly Riots This Year

Submitted by Norm Roulet on Mon, 01/24/2011 - 04:55.

Good Morning Real NEO - something to think about over a good meal... "Steep Oil Prices and Food Shortages Will Likely Spark Deadly Riots This Year."

That's from TomDispatch - "A Regular Antidote To The Mainstream Media"... a project of The National Institute... "Dedicated to Free and Independent Press".

Perhaps the mainstream media has covered this... "we’ve entered the age of resource revolts and there’s no turning back"... "From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: the prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world."

Ready for more war... we all need to change many things about how we live just to reduce some of the horror of this, in years to come. For this year, full horror show:

Tomgram: Michael Klare, Resource Revolts
Posted by Michael Klare at 4:03pm, January 23, 2011.

He was a poor 26-year-old trying to eke out a living and help pay for his sisters' schooling.  He met the deep corruption of the Tunisian regime face to face in the most everyday and humiliating way -- in the form of bribes he couldn’t afford just to keep his little stand open and the power of a bureaucracy to shut him down on a whim.  In frustration, in protest, he doused himself with paint thinner and burned himself to death (though it took days for that death to come).

His name was Mohammed Bouazizi; he came from the town of Sidi Bouzid, which you’ve never heard of; and his is a terrible story.  Now, he’s known across the Middle East as the man who started the Tunisian revolution and will undoubtedly go down in history -- along with Thich Quang Duc, the Buddhist monk who calmly seated himself in a Saigon street in June 1963 and started a political firestorm by immolating himself to protest a repressive American-backed South Vietnamese government; and Jan Palach, the Czech student who did the same in Prague’s Wenceslas Square in January 1969 as a response to the Soviet invasion of his country.  In all three cases, others followed their painful example.  In all three cases, sooner or later it ended badly for the powers-that-be.

Across the Middle East today, immolations are on the rise and nervous American-backed autocrats are listening to the rumbling from below, like the Egyptian demonstrators already reportedly chanting, “We are next, we are next, [Tunisian dictator] Ben Ali, tell [Egyptian autocrat Hosni] Mubarak he is next.”

In his act, however happenstantially, Bouazizi combined two crucial things that ensure the upheavals he began won’t be restricted to Tunisia.  At his little stand, he sold fruit, and to die, he used a petroleum-based product.  Basic foods and fuel are experiencing startling price rises globally.  Behind the Tunisian events, like recent riots in Algeria, Jordan, and elsewhere, lie the rising cost of things that people can’t do without.  In Algeria, young rioters torching buildings were also chanting, “Bring us sugar!”  As Michael Klare, TomDispatch regular and author most recently of Rising Powers, Shrinking Planet, points out, we’ve entered the age of resource revolts and there’s no turning back.  (To catch Timothy MacBain's latest TomCast audio interview in which Klare discusses what rising food prices mean globally, click here or, to download it to your iPod, here.) Tom

The Year of Living Dangerously 
Rising Commodity Prices and Extreme Weather Events Threaten Global Stability
By Michael T. Klare

Get ready for a rocky year.  From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: the prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world.

It’s not surprising then that food and energy experts are beginning to warn that 2011 could be the year of living dangerously -- and so could 2012, 2013, and on into the future.  Add to the soaring cost of the grains that keep so many impoverished people alive a comparable rise in oil prices -- again nearing levels not seen since the peak months of 2008 -- and you can already hear the first rumblings about the tenuous economic recovery being in danger of imminent collapse.  Think of those rising energy prices as adding further fuel to global discontent.

Already, combined with staggering levels of youth unemployment and a deep mistrust of autocratic, repressive governments, food prices have sparked riots in Algeria and mass protests in Tunisia that, to the surprise of the world, ousted long-time dictator President Zine al-Abidine Ben Ali and his corrupt extended family.  And many of the social stresses evident in those two countries are present across the Middle East and elsewhere.  No one can predict where the next explosion will occur, but with food prices still climbing and other economic pressures mounting, more upheavals appear inevitable. These may be the first resource revolts to catch our attention, but they won’t be the last.

Put simply, global consumption patterns are now beginning to challenge the planet’s natural resource limits.  Populations are still on the rise, and from Brazil to India, Turkey to China, new powers are rising as well.  With them goes an urge for a more American-style life.  Not surprisingly, the demand for basic commodities is significantly on the rise, even as supplies in many instances are shrinking.  At the same time, climate change, itself a product of unbridled energy use, is adding to the pressure on supplies, and speculators are betting on a situation trending progressively worse.  Add these together and the road ahead appears increasingly rocky.

Breadbaskets without Bread

Let’s begin with food, the most important and volatile of these commodities.  Food prices declined in October 2008 after the onset of the global financial crisis, but that seems to have been an anomaly.  The December 2010 index of global food prices compiled by the U.N.’s Food and Agricultural Organization (FAO) hit a record 215, one point higher than in the spring of 2008.  (In that index, based on a “bundle” of food staples, a baseline of 100 represents average prices in 2002-2004.)  In fact, some food products, including sugar, cooking oils, and fats, are now trading substantially above their 2008 levels; others, including dairy products, grains, and meat, are inching perilously close to record levels.

As 2011 begins, food experts fear that, within months, prices for key staples will climb above the 2008 threshold and stay there, causing extreme hardship for poor people around the world.  “We are at a very high level,” said a worried Abdolreza Abbassian, an economist at the FAO.  “These levels in the previous episode led to problems and riots across the world.” 

Of particular concern to Abbassian and his colleagues is the rising cost of corn, rice, and wheat, the staple crops of billions in many of the poorest countries.  According to the FAO, by the end of 2010 international corn and wheat prices were already approaching their 2008 peak levels (about $260 and $340 per metric ton, respectively).

Analysts attribute the rise in grain prices to growing demand in both developed and developing nations, along with a number of cataclysmic weather-related events and speculation by investors.  An extreme drought and fierce fires last summer destroyed a large percentage of the wheat crop in Russia and Ukraine, while heavy flooding in India and the inundation of 20% of Pakistan damaged significant parts of the grain output of those countries. At the same time, unusually hot and dry weather suppressed production in a number of other key farming areas.

What makes the picture look so worrisome today are indications that the severity and frequency of extreme weather events appear to be on the rise.  In the past few weeks alone, several such events point the way to serious supply problems ahead.  Most significant has been the unprecedented rainfall and flooding in Australia that put an area more than twice the size of California largely underwater, significantly disrupting wheat cultivation there.  Australia is one of the world’s leading wheat producers.  Unusually dry conditions in the American Midwest and Argentina have also hinted at future problems in grain and corn output.  It’s still too early to predict the size of this year’s grain and corn harvests, but many analysts are warning of a shortfall in supplies, along with sky-high prices.

Mainstream analysts and government officials are loathe to attribute this traffic jam of extreme weather events to global warming.  Huge variations in rainfall can be normal, especially in places like Australia that are susceptible to El Niño/La Niña ocean-temperature oscillations, and politicians are fearful of assuming responsibility for a problem as massive as climate change.  But climate change theory has long suggested that the warming trend -- 2010 tied 2005 for the warmest year on record and nine of the 10 warmest years have come in the last decade -- will be accompanied by an increase in the frequency and severity of storms.  It’s hard to escape the conclusion that recent events, including those Australian floods, are tied to rising global temperatures.

The Energy Crisis Returns

Soaring food prices are being driven as well by speculative investments and the rising price of oil.  Partly in response to the diminishing value of the dollar, some investors are sinking their money into food futures (along with gold and silver) as a speculative hedge.  At the same time, the price of oil is edging toward the $100 mark, making it increasingly profitable for farmers to switch from growing corn for human consumption to growing it for the manufacture of ethanol, which in turn reduces the amount of farm acreage devoted to staples.  Oil would have to fall below $50 per barrel to make the cultivation of corn as a food product competitive with ethanol production -- and that’s not likely to happen.  So even if more corn is produced this year, less will be available for food purposes and the price of what remains is bound to rise.

The precipitous rise in oil prices has startled the experts.  Not so long ago, the U.S. Department of Energy (DoE) was projecting a price range of $70-$80 per barrel in 2011, but as the year began oil was already trading above $90 a barrel and some analysts predict that it will reach $100 before the year is out.  A few are even talking about the $150 barrel and gas prices at the pump of $4 or more.  If prices climb above $100, global consumer spending could take another nosedive.

“Oil prices are entering a dangerous zone for the global economy,” says Fatih Birol, the chief economist for the International Energy Agency (IEA).  “The oil import bills are becoming a threat to the economic recovery.”

As with food, the rising cost of oil is a product of growing demand, insufficient supplies, and speculative investments.  According to the most recent projections from the IEA, daily global oil consumption in 2011 will average 87.4 million barrels, an increase of about two million barrels from the first quarter of 2010.  Much of the extra demand is coming from China, where a newly-minted middle class is buying automobiles at a record clip, as well as from the United States, where previously cautious consumers are slowly returning to pre-2008 driving habits.

At a time when the oil industry is experiencing declining rates of output at many existing oil fields and finding it ever more difficult to add production, even two million extra barrels per day can be a daunting challenge (and greater demand is expected in the coming years).  In the United States, for example, much hope was placed in oil exploration in the deep waters of the Gulf of Mexico and offshore Alaska, but in the wake of the BP disaster, this seems like a forlorn prospect.  Production in Mexico and the North Sea, two bright spots of recent years, is facing a sharp decline, while other key producers, including those in the Middle East, are struggling to maintain current output levels at existing fields.

Many energy analysts believe that the world is at (or will soon reach) peak oil -- the moment when global petroleum output achieves a maximum sustainable daily rate and begins a long-term, irreversible decline.  Others contend that higher levels of output are still possible.  Whatever the truth of the matter, at this moment the oil industry is finding it increasingly difficult, and ever more costly, to boost output above current levels.  This, combined with insatiable demand, is driving prices skyward.

Under these circumstances, speculators are again being drawn into the oil market as a rare sure bet.  Such speculators helped push oil prices to a record $147 per barrel back in 2008, but fled the market when prices crashed as the American economy headed to a meltdown.  Now, they’re coming back.  “Hedge funds and private investors are buying up financial instruments tied to the price of crude, and thereby helping push up oil prices,” the Wall Street Journal reported in late December.

Most analysts are expecting a price surge this spring or summer when American motorists hit the road.  “We will have a spring rally that will take us to between $3.10 and $3.50 a gallon for gasoline at service stations in the United States,” predicted Tom Kloza, chief oil analyst at the Oil Price Information Service.

The rising price of gas will, in turn, hurt consumers just as they show signs of opening their wallets again.  No less worrisome, oil-importing countries like the United States, Japan, and many in Europe will face soaring bills for fuel imports, further enfeebling economies already suffering from profound weakness. 

According to some calculations, oil prices added another $72 billion to America’s mammoth balance-of-payments deficit last year.  Europe had to cough up an additional $70 billion for imported oil and Japan $27 billion.  “It is a very telling story,” says the IEA’s Fatih Birol of recent oil-price data.  “2010 rang the first alarm bells and 2011 price levels could bring us to the same financial crisis times that we saw in 2008.”

Rising food prices leading to riots, protests, and revolts, mounting oil prices, mammoth worldwide unemployment, and a collapsed recovery -- it looks like the perfect set of preconditions for a global tsunami of instability and turmoil.  Events in Algeria and Tunisia give us just an inkling of what this maelstrom might look like, but where and how it will next erupt, and in what form, is anyone’s guess.  A single guarantee: we haven’t seen the last of resource revolts which, in the coming years, could reach an intensity we scarcely imagine today.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet.  To listen to Timothy MacBain's latest TomCast audio interview in which Klare discusses what rising food prices mean globally, click here or, to download it to your iPod, here.  A documentary movie version of his previous book, “Blood and Oil,” is available from the Media Education Foundation.

Copyright 2011 Michael T. Klare


Does the world produce enough food to feed everyone?

Number of hungry people in the world

925 million hungry people in 2010

No one really knows how many people are malnourished. The statistic most frequently cited is that of the United Nations Food and Agriculture Organization, which measures 'undernutrition'. The most recent estimate, released in  October 2010 by FAO,  says that 925 million people are undernourished. As the figure below shows, the number of hungry people has increased since 1995-97, though the number is down from last year. The increase has been due to three factors: 1) neglect of agriculture relevant to very poor people by governments and international agencies; 2) the current worldwide economic crisis, and 3) the significant increase of food prices in the last several years which has been devastating to those with only a few dollars a day to spend. 925 million people is 13.6 percent of the estimated world population of 6.8 billion, . Nearly all of the undernourished are in developing countries. 

Number of hungry people, 1969-2010

Source: FAO

The FAO estimate is based on statistical aggregates.  It looks at a country's income level and income distribution and uses this information to estimate how many people receive such a low level of income that they are malnourished.  It is   not an estimate based on seeing to what extent actual people are malnourished and projecting from there (as would be done by survey sampling). [It has been argued that the FAO approach is not sufficient to give accurate estimates of malnutrition (Poverty and Undernutrition  p. 298 by Peter Svedberg).] 

Undernutrition is a relatively new concept, but is increasingly used.  It should be taken as basically equivalent to malnutrition.  (It should be said as an aside, that the idea of undernourishment,  its relationship to malnutrition, and the reasons for its emergence as a concept is not clear to Hunger Notes.)

Children are the most visible victims of undernutrition.  Children who are poorly nourished suffer up to 160 days of illness each year. Poor nutrition plays a role in at least half of the 10.9 million child deaths each year--five million deaths.  Undernutrition magnifies the effect of every disease, including measles and malaria. The estimated proportions of deaths in which undernutrition is an underlying cause are roughly similar for diarrhea (61%), malaria (57%), pneumonia (52%), and measles (45%) (Black 2003, Bryce 2005). Malnutrition can also be caused by diseases, such as the diseases that cause diarrhea, by reducing the body's ability to convert food into usable nutrients.

According to the most recent estimate that Hunger Notes could find, malnutrition, as measured by stunting, affects 32.5 percent of children in developing countries--one of three (de Onis 2000). Geographically, more than 70 percent of malnourished children live in Asia, 26 percent in Africa and 4 percent in Latin America and the Caribbean. In many cases, their plight began even before birth with a malnourished mother. Under-nutrition among pregnant women in developing countries leads to 1 out of 6 infants born with low birth weight. This is not only a risk factor for neonatal deaths, but also causes learning disabilities, mental, retardation, poor health, blindness and premature death.

Does the world produce enough food to feed everyone?

The world produces enough food to feed everyone. World agriculture produces 17 percent more calories per person today than it did 30 years ago, despite a 70 percent population increase. This is enough to provide everyone in the world with at least 2,720 kilocalories (kcal) per person per day (FAO 2002, p.9).  The principal problem is that many people in the world do not have sufficient land to grow, or income to purchase, enough food. 

Disrupt IT

NEO "site"... MUST be RIOTING...oh by golly..GEE WIZ!...

Oh....just... WHY CAN'T WE ALL JUST ....GET ALONG?  Where are the rules at, so," I" know, just what is Right and just what is Wrong to do here.  This is my first time on a site...and mind you...there are plenty of them, to choose...but, I choose, THIS SITE.... the variety of everyone, from here there and everywhere and from around the world, their information, their "personality"and "their great way to put "it" into word, so creatively in their own way. Everything is GREAT...but, every, now and then, SOMEONE has to get "Their big spoon OUT...and stir up the>>>....The first thing I heard this morning WAS THEY WERE RIOTING IN EGYPT...I come to our site...and Bullets start...and ping ping...and Uh WAR...Good night... All around the world and in NEO...I have had enough WAR for today. Tommorrow WILL most defintely be brighter.

gas prices


Why gas is so expensive, when oil isn't

gas prices, oil pricesPrices at the pump may soon set a record, but analysts say U.S. oil prices and gas prices from 2008 don't reflect the true cost of crude. By steve [dot] hargreaves [at] turner [dot] com, senior writerApril 21, 2011: 7:38 AM ET


NEW YORK (CNNMoney) -- Gasoline prices have been rising for months and are within striking distance of their 2008 all-time high of $4.11 a gallon. But while oil prices are above $100 a barrel, they're still 24% below their 2008 all-time high.

So why is gasoline so expensive, when oil is so far off its record price?

Gasoline prices and taxes by state
Prices at the pump can vary widely among states due to a number of factors. More

The answer is that the price of oil Americans see every day has little to do with the price of gasoline at the pump.

Those prices are for a particular type of oil -- West Texas Intermediate -- that's stored in Cushing, Okla. [/end copy/]

more at link above.


Why gas is so expensive, when oil isn't
Silver is selling at 46.59 OOP'S-#%!# just increased to 46.62 at this moment
and will continue to increase..... Gold is at 1504.00...
The cost of a barrel of oil does not determine gas prices - the value of
silver being traded does....
Everything purchased by the DISCOUNTED Dollar PUBLIC Value - is affected...


Orlando gas station charges $5.69 a gallon video on site and other links

Gas prices hit small businesses


New York and Illinois are over 4.00 presently... I paid over $104.00 to fill my van (3.89) Where is it going to end?? Yuck, Betty


The problem is, America is NOT a Democracy - it is a Republic! As our Founding Fathers established, can we keep it?

That's true! However, they

That's true! However, they said that an individual's creditworthiness depends on lots of variables, many of which could be controlled to one degree or another. And I believe that food inflation is one of the reasons why many people are depending on credit cards they are holding. Besides moving, an individual has no say in how creditworthy the state they live in is. A new analysis ranks all fifty states in order of their creditworthiness. I read this here: Study ranks states for creditworthiness.