After that put the global financial crisis is over, and took many of the economies of the world the way to recovery, it seems that we are now preparing to enter into a new crisis as a result of inflationary pressures around the world. Has taken the price of oil to rise to levels not commensurate with the nature of the current phase through which the global economy, as well as the returned global food prices to levels before the global financial crisis, after falling in the wake of that crisis, as well as the presence of additional inflationary pressure due to the high prices other commercial goods as reflected on the levels of spending in all parts of the world, but what is inflation? The factors behind the current wave of inflation in the world?
Known economists inflation that''the continuing rise in the general level of prices', and this definition, brief, we find that there are two conditions for judging the existence of inflation, the first is that the rise in prices continues, higher prices during the month or two, for example, is not inflation, but called by the word''high''prices, while the second condition is that this rise in the 'general level of prices', ie the prices of most goods and services purchased by consumers, and not a requirement that all prices rise during inflation, it is possible to drop some prices , however, say that there is inflation, and inflation effects of many the most important effects on the decline in the purchasing power of consumers, particularly those with fixed income, eg those working in government or retirees, and lower investment spending because of the climate of uncertainty associated with inflationary pressures, and the redistribution of income to the disadvantage of Layers limited income.
Sources of inflationary pressures faced by the world today can be divided into three sources: the high prices of oil and other trade goods, and high prices for food at the local and global, expansionist
economic policies pursued by most countries in the world today as a result of the crisis. Interest rates are negative in most countries in the world today, and many emerging economies in the world is now working according to its potential energy, and then facing the risks of economic overheating, which requires it to deal with the consequence that the results of the inflationary pressures. For example, the high degree of overheating of the Chinese economy due to the significant growth in credit, which was caused by government policies aimed at the rapid exit of the economic crisis, but this exit was at the expense of rapid growth in prices, as well as high property prices and stocks.
Returned food prices to rise to levels that eventually became threatening food security in many countries of the world, particularly poor countries, where people spend part of their budgets on the arrogance of food, as individuals spend up on food in developing countries to more than 50 per cent of the Total spending in many cases, compared to 15 per cent maximum in developed countries, and unfortunately, the projections are currently available to indicate that due to the low levels of investment in the agricultural sector, the increase in global production over the coming decades will be at rates lower than those for the world in the past ten years, reflecting the decline in growth rates of world agricultural production, which constitutes a threat for the world of food, according to the expectations of the Food and Agriculture, the food prices will intensify in the current year, increasing inflationary pressures on the global level.
Inflation caused by rising food prices will not only lead to decline in the purchasing power of individuals in developing countries, but will lead to multiple effects other most important threat to political stability in many countries, and as that can lead to the overthrow of democratically elected Governments, even if the applicable policies is correct. For example, forced the rice price crisis suffered by the world before the global financial crisis, Prime Minister of Haiti Jacques''Edward''Alexis to step down, despite the fact that the crisis was a global crisis. As well as the expected high levels of poverty in the world, in particular for the most affected areas, where it exceeds the price of food capacity membranes for the poor and where they are spending the bulk of the income on goods necessary for life, which is a setback for efforts to reduce poverty at the global level, and often accompanied by Rising food prices spread of malnutrition and diseases associated with it, as the high prices also means eating fewer meals, or eating meals in a way inappropriate. For example, resulted in the recent rise in food prices before the crisis to cause injury to some one billion people worldwide disease of malnutrition. So that the problem of many agricultural commodities that they are not bringing in the consumption basket of the final consumer, for example, is difficult to bring rice, wheat, corn, other products, which increases inflationary pressures in the event of a shortage of supply of such commodities, and finally, the persistence of high food prices will create a financial problem for the countries that provide intensive support to keep food prices within the reach of the poor, especially bread.
Recent developments in the area of inflationary pressures experienced by the world refers to the complexity of the relationship between rising oil prices and rising food prices. The continued rise in oil prices leads to increased pressure in the world to switch to biofuels Bio-fuel, which increase its appeal with the high oil prices, which exceeds the price is one hundred dollars, and biofuel is ethanol produced from any crop that contains starch or sugar in essential, and it is added to gasoline in automobiles at rates ranging from 10 to 20 per cent, but it can raise that figure to more than 80 per cent if they amended the method of manufacture motors cars, and consider many of the producing food to biofuels as a fuel the future, as increasing investments in this area clearly, which means that most of the increase in food production in the future will be directed towards the conduct of cars, and not towards the provision of food for man.
On the other hand, it has been seen on the oil price rises it is driving the global inflationary pressures, especially after the inflationary waves that hit the world in the seventies of the last century. However, empirical studies conducted recently indicate that food prices are no less important than oil, but the trends in food prices are having the force of the impact of global inflationary pressures in most of the impact of oil prices. Since 2006 the role of rising food prices on the apparent in global inflationary pressures, so that food prices have become a stronger indicator of inflationary pressures, especially in developing countries where expenditure on food represents a large proportion of total consumer spending.
With the increasing inflationary pressures in many economies in the countries of the world, took the central banks of these countries to resort to raising interest rates and the adoption of restrictive monetary policies to control the continuing rise in prices, however, the evidence suggests that these measures have not succeeded in reducing inflationary pressures . For example, China is struggling for some time to rein in inflation, has raised interest rates four times in a row, but has not yet been able to rein in inflation. In February last consumer prices rose to 4.9 per cent, driven by a rise in food prices by 11 per cent, which represents more than half of consumer spending, and there is fear that trigger inflation in food prices, a political problem in China, among the millions who did not benefit of the fruits of China's growth significant levels of well-being, and has developed the Chinese government's inflation target for this year up to 4 per cent, but observers believe that consumer prices may climb to 6 per cent, with the government's delay to rein in inflationary pressures arising from the process stimulate the Chinese economy out of crisis and credit growth are greater than the target levels.
What remains to China more than the need to raise interest rates before the reflected policy on the general level of prices, but there is real concern to the policy-maker from the effects of these high rates of interest on the economic growth of China, and replaces the monetary policy maker, in China's policy interest rate to control in the rate of the legal reserve in the banks. But China is also currently considering the use of the yuan's exchange rate to fight inflation by allowing the renminbi to appreciate in value so as to ease inflationary pressures are experiencing, but it is certain that such a policy will have effects on external competitiveness to China.
Rest of Asia facing the same pressures, for example, India faces a similar inflationary pressures, the government is trying to reduce the rate of rise in prices, the same as in Russia, Brazil and other South American countries, as well as in Africa. In Europe, the rate of inflation is on the rise in the euro area, the data indicate that the inflation rate in January (January) last an average of 2.4 per cent, despite the low rate of inflation, but there is evidence that prices continue to rise, also took input prices are also rising to alarming levels, while in the United Kingdom, the reports indicate a high rate of inflation to about 4 per cent, which is equivalent to twice the rate of inflation targeted by the Bank of England (central
bank).
Situation in the United States of concern also, although the rate of headline
inflation is still going in the framework of target rates of inflation by the Federal Reserve, where the latest data to higher food and energy prices, and that the increase in producer prices was the highest two years ago, there are some points of of view that suggests that the United States finally presented on inflation, although the Open Market Committee believes that inflation will be accidental. Has indicated the minutes of the Open Market Committee last week that some conservative members of the Committee proposed to discontinue the remaining part of the QE 2 on the basis that the continued adoption of expansionary monetary policy could fuel inflation problem, which also reflects the concern of global
inflationary pressures that could arise quantitative easing program adopted by the Federal Reserve.
The basic problem is that these reservations come in a very critical time, where restore the U.S. economy activity and is recovering in an interesting and, in particular for the U.S. labor market that achieves significant developments in terms of job creation by private business sector, and where falling unemployment rates significantly, with infusions of
cash to play the Fed, according to minutes of meetings of the Open Market Committee of the Federal Reserve, the Committee will continue in the implementation of the program to pump $ 600 billion under the program of quantitative easing 2, according to the proposed plan until next June, and in spite of the clear improvement in the labor market American, as is still seen as the U.S. labor
market with great concern, especially in light of the unemployment rate at very high levels, which reached in March last 8.8 per cent, making it premature to talk about stopping the QE 2, Although many observers felt that the program continues in this manner and under such conditions may lead to the generation of inflationary pressures in the United States, and in the world. Very briefly inflationary pressures spread everywhere in the world today, almost, which indicates that the world takes precedence over new inflationary waves similar to those suffered after 2006 from the last decade.
