Because of communication technology (which Target Health Inc. is deeply committed to), the world has become a true 21st century community, where everyone is affected by every action on the planet.  The crisis in Egypt and the rest of the Middle East influences all of us, in one way or another.

To better understand the causes of the ongoing, serious chaos in the Middle East, we’re posting some comments on the state of the world economy, as one contributor to global unrest.

Did you know that world food prices have reached an all-time high?  And, that climate change is highly relevant to the success or failure of world wide crops

Did you know that nearly half of Egyptians live on $2 a day?  This is so near the edge of subsistence living, that when global food prices go higher, which they have, what else can anyone do, but rage and riot.

And how does all of the above, affect health (which Target Health Inc. deals with on a daily basis), and especially world health?  Scroll down to the video from Davos 2011, on Raising Healthy Children.

Roubini: Oil, Energy, Food Prices a Risk to Stability

Nouriel Roubini says sharp rise in commodity prices threatens global stability. He blames recent unrest in Tunisia, Egypt, in part on food, energy costs. Roubini says China, US, eurozone all face economic challenges this year

By Bryon Jones for CNN

Roubini says sharp rise in commodity prices threatens global stability.  He blames recent unrest in Tunisia, Egypt, in part on food, energy costs.  Roubini says China, US, eurozone all face economic challenges this year

(CNN) — Rapidly rising oil, energy and food prices pose a serious threat to global stability, leading U.S. economist Nouriel Roubini has warned.

Speaking at the World Economic Forum’s 2011 annual meeting in Davos, Switzerland, Roubini said the global economy was a “glass half-full and a glass half-empty”, with some signs of recovery.

But he told there were still “many things that could go wrong” in the coming year.

Asked to pick what he considered the biggest new threat, Roubini — who earned himself the nickname “Dr Doom” for his pessimistic predictions during the economic crisis — highlighted the large increase in commodity prices.

Roubini: Jobs a problem for years

He said the rapid rise “could be a source of political instability, not only economic and financial fragility.”

Where on earth is the economic growth?

“What has happened in Tunisia and is happening right now in Egypt, but also the riots in Morocco, Algeria, Pakistan are related not only to high unemployment rates and to income and wealth inequality, but also to the very sharp rise in food and commodity prices.”

Egypt cracks down on protests

Roubini, an economics professor at New York University’s Stern School of Business, said the world had seen only too recently the effects a spike in commodity prices could have.

“When oil reached $148 a barrel in the summer of 2008, that was the tipping point for the global economy, it led to the global recession – it was not just the effect of Lehmann [Brothers],” he said.

“That rise in oil and commodity prices led to a significant negative effect on income and spending in the US, in Europe, in Japan, in China and in India — in all the net commodity importers.”

Roubini told CNN the U.S. the eurozone and China would all face tough challenges over the coming year.

In the U.S. he said growth of around 3% was likely, but that unemployment would remain high. In addition, “the housing economy is already double-dipping and prices are falling, we have the state and local government problem and the federal deficit problem.”

The social and political backlash against austerity and reform is going to become worse, because people don’t see light at the end of the tunnel
–Nouriel Roubini

Earlier in the day, Roubini told a panel at the WEF that countries on the periphery of the eurozone were still at risk, because of a continuing lack of economic growth, which he warned could lead to further social unrest.

“If you’re not going to have economic growth, the social and political backlash against austerity and reform is going to become worse, because people don’t see light at the end of the tunnel.”

He said China had spent too long putting off dealing with its economic issues, and could face a reckoning this year — with implications for the rest of the world.

“China’s been behind the curve in terms of monetary tightening – they’ve done it too little compared to what they should, and the risk is now inflation might get out of control.

“Because they don’t want to lose competitiveness and trade and exports… they’re pushing the problem down the road, and then when inflation really rises they’ll have to tighten much more,” he said.

“Every time China tightens, the effect on equity markets, not just in China and Asia, but globally, is significant.”

Noriel Roubini (Davos 2011) – Global Economy

Davos 2011 – What is the New Economic Reality?

Chinese Leaders Are Alarmed by Drought


The New York Times, Published: February 3, 2011

HONG KONG — A severe drought in northern China has badly damaged the winter wheat crop and left the ground very dry for the spring planting, fueling inflation and alarming China’s leaders.

President Hu Jintao and Prime Minister Wen Jiabao separately toured drought-stricken regions this week and have called for “all-out efforts” to address the effects of water shortages on agriculture, state media reported on Thursday. Mr. Wen made a similar trip just 10 days ago and called for long-term improvements in water management.

Rising food prices were a problem last autumn even before the drought began, prompting the government to impose a wide range of price controls in mid-November. The winter wheat crop has been parched since then in northern China while unusually widespread frost has hurt the vegetable crop in southern China, and state media began warning a week ago that price controls on food might not be effective.

Some of the driest areas are close to Beijing, which has had no appreciable precipitation since Oct. 23, although there were brief snow flurries on Dec. 29. If the drought lasts another 11 days it will match one in the winter of 1970-71 as the longest since modern record keeping started in 1951, according to government meteorologists quoted by state media..

Particularly hard hit have been Hebei Province, which is next to Beijing and which President Hu visited from Tuesday to Thursday, and southern Shandong Province to the east, which Mr. Wen visited on Wednesday and Thursday. The dirt in farmers’ fields has become bone dry and is easily lifted by breezes, coating trees and houses in fine dust.

Food prices have been rising around the world, a result of weather problems in many countries like the unusual heat wave in Russia last summer. High food prices have been among the many reasons for protests in Egypt and elsewhere in the Arab world.

But even a prolonged drought in China appears highly unlikely to cause acute food shortages. China has spent years accumulating very large government reserves of grain and also has $2.85 trillion in foreign exchange reserves, giving it virtually unlimited ability to import food as long as major grain producers do not limit exports.

When commodity prices last surged in 2007 and 2008, however, at least 29 countries sharply curbed food exports in attempts to prevent domestic food prices from rising as quickly as world prices. And if China does become a large importer of wheat – it imports a lot of soybeans but tries to be essentially self-sufficient in rice and other grains for national security reasons – then it could push up world prices and make it harder for poor countries to afford food imports.

Gary Blumenthal, chief executive of World Perspectives, a Washington-based agriculture trade consulting company, noted that wheat is grown in many countries and said that Chinese purchases would not necessarily result in a sustained jump in already high world prices. “The wheat market can restore any imbalances more readily than perhaps other grains,” he said.

China’s wheat imports have risen to 1.2 million metric tons last year and 893,700 tons in 2009 from just 31,900 metric tons in 2008, according to data from Global Trade Information Services a data company in Columbia, S.C.

But those totals are small compared with global output that according to the Food and Agriculture Organization of the United Nations reached 682 million metric tons in 2009, the most recent year for which figures are available. China accounted for one-sixth of global wheat production that year, which could make a broad failure of the Chinese crop hard to replace immediately.

Higher food and energy prices are spreading to other parts of China’s economy, contributing to broader inflation. Prices rose 4.6 percent last year according to the consumer price index, but Chinese and Western economists say that the index understates the true extent of inflation because of methodology problems. The National Bureau of Statistics has said that it is trying to improve the index.

The government has cushioned the effects of rising food prices by encouraging provinces and cities to raise sharply the minimum wage, which has been climbing 18 percent a year in Guangdong Province in southern China.

Accelerating inflation in China is starting to show up in the prices that American companies pay for imports from China. After years of showing little change a United States Bureau of Labor Statistics index of average import prices suddenly jumped 0.3 percent from September to October, then jumped the same amount in November and again in December.

As many Chinese exporters demand double-digit percentage increases for the renewal of contracts this year, American buyers have delayed signing contracts, producing a hiccup in trans-Pacific trade. Shipping lines are discounting rates and canceling some sailings this spring while waiting for exporters and buyers to reach deals.

But imports from China are equal to only 2 percent of American economic output, so most economists expect inflation in China to have a limited effect on broad price indices in the United States.

Davos 2011 – Raising Healthy Children

Davos 2011 – Redefining Sustainable Development

Davos 2011 – A Social Contract for the 21st Century

Davos 2011 – President William J. Clinton