Asians driven to extreme poverty by commodity bubble

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

Apr 27, 2011 (LBO) – Rising food prices from a global commodity bubble could push 64 million people in developing Asia into extreme poverty, the Asian Development Bank said adding to rising concerns about the effects loose US monetary policy. Many such central banks also create their own inflation, adding to inflation generated by the anchor reserve currency.

ADB said production shortfalls, bad weather along with a weak US dollar were driving prices up. Some food producing countries have also imposed export bans.

US money printing has weakened the dollar and pushed up commodity prices including food, energy, base and precious metals not seen since the last commodity bubbles in 2008 and 1980.

Gold went over 1,500 US dollars an ounce this month, and silver topped a record set in 1980 amid the second ‘oil shock’ and commodity bubble which was tamed after then US Fed chief Paul Volcker pushed interest rate close to 18 percent.

In 1971 when the US went off the gold standard during the first ‘oil shock’ and commodity bubble even the United States banned exports of key foods such as oils during the time of President Nixon who was deficit spending with loose monetary policy.

Such policies included in what was labeled the ‘Ni