Inflation, for instance, has been on a steady rise in several countries while the average earnings of most people around the world remain depressed and has seen prices going up for even the most basic of needs. When the general price level rises, each unit of currency buys fewer goods and services which also reflects an erosion in the purchasing power of money, a loss of real value in the internal medium of exchange and unit of account in the economy.
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| A service station displays its gasoline price in Washington, D.C., March 1, 2012 |
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| Another gas station sign, under the same company, is seen in Washington, D.C. on March 30, 2012 (29 days later) |
In an article written last October in the NY Times, it was reported that global prices for meats, dairy products and cereals had resumed rising. Food prices are rising in 2012 because of high gas prices, which themselves are caused by high oil prices. Like I said in the introduction, a great domino effect. DEFRA, the UK government department responsible for policy and regulations on the environment, food and rural affairs, said that in the last five years food prices in the UK have increased “considerably more” than in the rest of the European Union. To read more about that, click HERE.




