| In The News #1 >> | ||
>> TITLE These are Truffling Times Economically Lead Story-Dateline: >> SUMMARY Bad weather in Europe this summer, a drought coupled with a heat wave, threatens to wipe out as much as 70% of the truffle crop and seriously reduce the production of most other agricultural products. Economists expect a spike in food prices that will boost inflation by about a fifth of one percent. While most of Europe is facing weather induced inflationary pressure, Germany, Europe’s largest economy, is battling deflation. The prospects of deflation would typically push the European Central Bank to lower interest rates to stimulate demand, yet inflationary pressures elsewhere will likely cause interest rates to remain unchanged. What about the truffles? The gourmet fungi will soon skyrocket in price. The French Federation of Truffle Cultivators forecasts prices to top their previous high level of approximately $265 a pound. The president of a regional truffle farmers union believes the price could easily exceed $500 a pound. Meanwhile truffle farmers attempt to water oaks to stimulate growth of the finicky fungus, continue train their truffle sniffing dogs, and pray for the drought to end. >> Talking it Over and Thinking it Through
>> Thinking About the Future Perhaps one of the more interesting challenges highlighted by this article is the difficulty in coordinating and managing a single European economy comprised of otherwise independent countries. Different regions of Europe will simultaneously experience different levels of inflation (or even deflation). Similar problems arise in the U.S. with various states and/or regions of the country experiencing different economic situations. However, we tend to view ourselves as U.S. citizens, instead of Nevada citizens or California citizens. Time will tell whether or not the European economy will be able to succeed in economic unification and no longer be separate economies for the member nations.
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