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A Surge in Food Prices Is Hurting Developing Economies
Even a short spasm of food inflation can be damaging for the world’s poorest, who are rarely more than a few meals away from hunger. So the current spike in food prices, examined in detail by several of my colleagues, should be setting off klaxons everywhere.
The cost of food imports, which feed four-fifths of the world, is expected to rise to $1.7 trillion this year, according to the United Nations’ Food and Agriculture Organization. The burden is not distributed equally: The bill for emerging economies will jump by more than a fifth, compared to a 6% increase for wealthier countries. And remember, food represents a far larger portion of domestic spending in developing countries, which have been disproportionately hit by the Covid-19 pandemic.
The consequences? Lives are quite literally at stake, and those who endure chronic food shortages often suffer awful long-term damage to their bodies and minds. Even worse, food shortages can lead to to violence and political instability.
Bonus Economics Reading: Any way you cut it, inflation in the U.S. is the highest it has been in nearly two decades. — John Authers
Americans Are Not Ready to Borrow — Yet
The good news for U.S. banks is that consumers are beginning to spend more with their credit cards, spurred by a mix of government pandemic aid, pent up demand and a rebound in employment and incomes. The less-good news: The spending hasn't translated into loan growth. As Connor Sen points out, people still have plenty of cash left over from their pandemic savings.
Besides, the kinds kinds of purchases that usually require borrowing — homes and used cars, for instance — are currently in short supply, and people are inclined to wait rather than pay inflated prices. More than likely, then, the demand for loans will remain subdued until well into next year.
Bonus Economics Reading: Biden’s antitrust policy should be guided by the consumer welfare standard, not an antipathy toward Big Tech. — Michael R. Strain
The SEC’s Finally Putting SPACs Under Scrutiny
In a first, the U.S. Securities and Exchange Commission is suing a special purpose acquisition company and its merger target for allegedly misleading investors. There will be more such actions: The SEC has no love for SPACs, and will enforce the letter of the law against them. But, as Matt Levine digs into the case against Stable Road Acquisition Corp. and Momentus Inc., he notes that the very nature of SPACs and their mergers can make it tricky to tell who misled whom.
Another area of potential confusion, Chris Bryant points out, is the role of banks that advise SPACs and their merger targets — and sometimes, both.
Bonus SPACs Reading: How a British newspaper company is using SPAC money to become private again. — Alex Webb
The British government’s decision to remove most of its remaining Covid-19 restrictions ignores the alarming data on the spread of the delta variant. For all of Prime Minister Boris Johnson’s optimism, cases and deaths are spiking. That’s why Mark Gilbert will not be celebrating England’s “Freedom Day.”
Bonus Irrational Covid Policy Reading: Why Republicans are turning against vaccines. — Jonathan Bernstein
A central bank digital currency is a solution in search of a problem. Crypto innovation is best left to the private sector. — Tyler Cowen
An index to capture the performance of the entire market is as realistic as Monty Python’s Holy Grail. — Aaron Brown
Any way you cut it, inflation in the U.S. is the highest it has been in nearly two decades. — John Authers
A carbon tax on imports that don’t meet the European Union’s climate standards is a good idea. — Chris Bryant
As with hydroxychloroquine, high hopes for Ivermectin as a Covid cure owe more to politics than to science. — Faye Flam
Can a $4 million donation help the Winklevoss twins offset the carbon footprint of their Bitcoin holdings? — Liam Denning
The walkout staged by Democratic legislators in Texas is a political maneuver dating back to America’s founding. — Stephen L. Carter
If Biden thinks American democracy is in peril, he must do more than talk tough on voting rights. — Romesh Ponnuru
Keeping the squeeze on Cuba will not bring democracy to the island. — Clara Ferreira Marques
Apple’s big order for iPhones could be about prudent supply-chain management, rather than increased demand. — Tae Kim
As iPhone users say ‘No’ to tracking, Facebook Inc.’s advertisers are beginning to worry.
After its vaccine for Covid-19, Moderna Inc. is hoping to use mRNA against the flu, Zika, HIV and even cancer.
Is that new Damien Hirst creation an NFT or a piece of art on paper? For $2,000, you get to decide.
Lab-grown foie gras? Oui, says the French government.
There’s charcoal, there’s charcoal… and then there’s $21-per-pound charcoal.
There really should be more luxe cars for tall people.
Notes: Please send fedoras and dunce caps to Bobby Ghosh at email@example.com.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Bobby Ghosh is a Bloomberg Opinion columnist. He writes on foreign affairs, with a special focus on the Middle East and Africa.
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