Soaring Food Prices Are Pushing Millions Into PoverIy

Online, May 4, 2011 (Newswire.com) - Dennis Tubbergen is a financial advisor, advisor to financial advisors, author and radio talk show host. In a blog he posted on his website on March 23, 2011, Tubbergen talks about the soaring costs of food, not just in the U.S., but all around the world.

Tubbergen, who is CEO of USA Wealth Management, LLC, a federally-registered investment advisory company, refers to a USA Today article with a similar headline that was published on March 18, 2011. According to the article, in the U.S. the price of corn has jumped 52% in the past year, sugar is up 60%, soybeans have risen 41% and wheat has seen an increase of 24% in the past year. Steak is up about 6.8% and even fruits and vegetables have risen 4.3%.

But for emerging markets where incomes are very low, some 50% of a family's budget could be spent solely on food. According to the lead economist of the World Bank, such families start sacrificing non-food items and then cut back on food. The World Bank's food index claims a whopping 29% increase since January of 2010.

"What the article doesn't address is the role of the U.S. Dollar and U.S. policies in these rising food prices," explains Tubbergen. "In my view, inflation is now the number one export of the United States, due largely to the policies of the Federal Reserve."

Tubbergen goes on to state that in a recent statement, Fed Chairman Ben Bernanke took credit for the fact that the Fed's policies have helped to hold up stock values while at the same time denying that rising oil and food prices are not attributable to these policies.

"That, in my opinion, is ludicrous," argues Tubbergen. "An article published in Barron's on February 4, 2011 agrees with my perspective on this."

An excerpt from the article reads, "Proving Lincoln's adage you can fool some of the people all the time, Bernanke asserted to the credulous D.C. press corps that while the Fed's purchases of Treasury securities played a role in the rise in stock prices since last August, they did not affect the prices of commodities, notably food. Moreover, he rejected the premise that the civil unrest seen in Egypt and Tunisia could be attributed to Fed policy, which the questioner contended was responsible for higher food prices."

In the same article, Bernanke goes on to claim that version two of quantitative easing (QE2) was working as planned.

"If a weaker dollar makes stock values priced in U.S. dollars rise, how can Bernanke say with a straight face that the weaker Dollar does not have that effect on other items priced in U.S. Dollars like food and oil?" questions Tubbergen.

Tubbergen goes on to say, "If the Fed's goal, as the Barron's article states, is to debase the U.S. Dollar to lower unemployment here, the Fed is doing it at the expense of millions of world citizens living on the brink of poverty. Not to mention that a devalued U.S. Dollar hurts U.S. citizens who have made the right choices financially - paid for their home and saved their money. Their savings are now worth less as far as buying power is concerned."

What does Tubbergen see for the near future?

"There are tough choices coming soon," Tubbergen concludes.

Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in the USA Wealth Management Building in downtown Grand Rapids, Michigan. Tubbergen is CEO of USA Wealth Management, LLC and has an online blog that can be viewed at www.dennistubbergen.com. His weekly talk show The Everything Financial Radio Show is simulcast on two Michigan metro stations and also airs to over 600,000 financial advisors, with recent podcasts available at www.everythingfinancialradio.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.