This week's spot rate is all about inflation. Friday I was listening to Bloomberg Radio's On The Economy where they interviewed Jagdish Bhagwati a professor at Columbia University. I greatly enjoyed Professor Bhagwati's description of the current food inflation problem. He says that with the lack in global food production and increased food inflation, in order to bring down food prices we need to increase production and "to provide new agricultural productivity. That means we've got to bite the bullet with all these worries about Frankenstein foods, because Frankenstein is only potential whereas the Grim Reaper is here and now." What Professor Bhagwati means is that we need to embrace the use of genetically modified foods (Frankenstein) to feed the world today, and not let the Grim Reaper (the dearth of food and rising prices) starve out our population; better save people with something that may or may not cause harm than knowingly let people die. I thought this way of viewing the problem was amusing and insightful, hope you do to.
The Billion Prices Project is a project led by two MIT professors who are trying to capture daily inflation fluctuations. They are using a basket of millions of online products to determine what the inflation rate is in a variety of countries. It is worth noting that the United State's official inflation rate is significantly below that of the Billion Prices Project's. The link is posted below.
Have a great week.
