“The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’”

President Ronald Reagan

The riots in the middle east are rooted in no small part in the sharp rise in food prices:

But in addition to the apparent revolt against repressive governments, all the experts say the other main cause of unrest is record food prices. For example, former Bush advisor Dan Senor notes that Egypt is the world’s largest wheat importer. Because of skyrocketing prices, Egyptian inflation is now over 10 percent.

So I have to ask this tough question: Is Ben Bernanke’s ultra-easy QE2 money pump-priming partially to blame?

Commodities are priced in dollars, and the Fed has been overproducing dollars for more than two years. Consequently, emerging markets throughout the world — and the food sector in particular — are suffering from rising inflation.

In Dubai’s gulf news, they are pointing out that there is adequate production and the real problem is governmental interference in the markets:

“Global governance is completely adrift, as the outcome of the recent G20 finance ministers meeting in Paris bears out. The French presidency of the G20 has promised to make food price volatility a priority, but one must not raise hopes too much. More likely the G20 will get bogged down in global imbalances and currency issues.

“The problem with food is not production, but distribution and governance.”

While the world’s population has grown by 5 per cent over the last five years or so, production of basic food commodities — rice, wheat, corn, soya, oilseeds, etc. — did so by 10 per cent. But the food crisis, according to Lehmann, emerges mainly from its poor distribution and governance.

“Poor governance means, among many things, that prices are distorted by interventions, subsidies [for ethanol at the expense of corn in the US] and export quotas,” he said. “Yes, we will have more shocks.”

For those in the industry, the food crisis is not even of recent origin. During a trip to Dubai late last year, Frits Van Djik, executive vice-president at Nestle, the world’s largest food company, said: “Since the so-called food crisis started in 2007, all commodities have been impacted at some point or the other.

Whenever government interfere in the markets it is a complete disaster.