Effects of quantitative easing on food prices Research Paper

Effects of quantitative easing on food prices - Research Paper Example He stated that the United States is the leader and the rest of the countries seem to be trailing the footsteps of us. The more money countries print the higher the prices of goods grow. Thus, if countries want to end the uphill trajectory and the volatility of prices, then they need to turn off the printing presses and let interest rates rise. This statement shows the effect of quantitative easing on prices of commodities including food (Schiff, n.p.). Under normal circumstances, whenever there are quantitative easing, prices for foodstuff will be on the rise, since the money around or being in circulation increases. While the agricultural production, as well as food being manufactured in industries could be the same as it were before, quantitative easing increases the price of foodstuff as it has been commonly believed and in some cases proven that easy money reliably drives up the price. Fredrick Kaufman, writer of â€Å"A Short History of the American Stomach† and an editor to the Harper’s Magazine stated that quantitative easing brings up a new level of volatility in the markets. Because of the introduction of more billions of dollars in the market, food prices have increased because a lot of money in the market means inflation that causes a rise in the price of things. Kaufman argues that it is true quantitative easing has led to increase in food prices he goes further to say that we cannot blame quantitative easing alone because demand and supply, climate change, and speculations are also serious contributors to the volatility in the commodities market (Schiff, n.p.). As money increases and becomes more available so does the prices of food stuff rise and affect people differently because of the differences in the economic status of people, in that society. The poor are affected negatively, since they do not feel the real impact of quantitative easing. Thus, some people have been quoted making statements saying that if only the world was poor and starving masses understood the benefits of  Quantitative Easing, they would perhaps not riot in the streets over increasing  food prices. This shows the real effect of quantitative easing on foodstuff. People must simply be educated to understand the concept of quantitative easing. For instance, the prices of major foodstuff wheat and corn are being towered so are the profits at Goldman Sachs, according to Eric Fry of  the Daily Reckoning. In his article, Eric goes further to say that the passing food problems of the poor people in places that they occupy are a minimal price to pay for the resurgent economic activity in other places. Moreover, if people do not make much money in one place, they cannot send any handouts to other places. This logic seems to inspire Chairman of Bernanke’s QE campaigns. This already is a proof that quantitative easing causes an increase on food prices and hits the poor people with detrimental effects when the prices of foods are raised because they cannot access the money said to be available (Fry, n.p.). The fact that quantitative easing increases food prices also means that it makes the availability of food scarce to many people. Quantitative easing makes the prices of stocks to shoot up and influence people to feel that they have more money, something that makes them spend