Effect of Food Inflation in the U.S. vs the World

Zero Hedge – A Tale Of Two Inflations: Why US CPI Is Flawed And Why Bernanke Will Maintain ZIRP As Revolutions Rage:

For all those wondering why the Federal Reserve will likely never hike rates on the basis of undisputed surging food and energy prices, here is the reason: in the US, the food component as a percentage of overall CPI is 7.8%. In China it is 31.4%. In India 47.1%! The US CPI, therefore, is a completely irrelevant metric when it comes to measuring the one factor that has been responsible for two revolutions already year to date. In other words, if food prices were to double, US CPI would go up by 7.8%, while in China it would grow by nearly 50%.

And as you see revolutions in Egypt, Tunisia, and elsewhere realize that food inflation has a larger effect there than here. But we’re feeling it here, too. Just not to the same degree. Those countries are the canaries in the coal mine.