prices and their impact on inflation, the increasing trend is largely due to its own fundamentals, including above all the major growth in emerging countries over the past few years, biofuel development and structural changes in livestock feeding. nevertheless, seasonal factors are also influential ; among them, it is worth mentioning supply shocks from climate hazard and geopolitical conflicts, and the increase in speculative demand to protect against us dollar depreciation and financial asset loss, and inflation. agricultural commodities in my view are more resilient to a recessionary outlook by their lower income elasticity and the relative strong fundamentals of emerging economies, where demand increased substantially. soft commodities accumulate increases ranging from 100 % to 150 % since the beginning of the century with an acceleration in 2007 - 2008 that is leading to historically low stock to consumption ratios. in the cases of soy and corn, where argentina is a world - class producer, demand is consistently outpacing supply due to a hike in demand for food in the emerging world and a growing demand for biofuels in the industrial countries. while supply stays in historically high levels it cannot keep up with the demand forces. just to give you an example, corn inventories are 30 % below the average of the last ten years. the outlook of financial volatility will continue to be a source of speculative demand for commodities as hedge for inflation. in addition, the continuity of monetary policies aimed at reducing reference rates would likewise aid speculative demand for commodities. as the paper points out, food and energy impacted on the acceleration of consumer prices, especially in emerging countries, where foodstuffs have a significant weight in the consumption basket. however, the prices of other goods and services remained relatively contained. insofar as structural factors prevail over temporary ones, food and energy prices would more likely have second - round effects on other goods and services through cost pressures. while by the end of 2007 headline inflation accelerated in close connection with the behavior of core price indices, these second round effects have not materialized yet. food prices can potentially lead to wage demands which, given the stickiness of this component of the cost structure of the private sector, would result in subsequent increases in general level. however the risk is more evident in emerging countries than in developed ones. for example, the average wage in china increased by 26. 9 percent year - over - year in the third quarter of 2007, significantly above the average of the past five years ( 16. 8 percent ) and well above the

’ speeches i would like to close by recalling that during these last few years the bank of greece had to cope with historically unprecedented conditions that required swift decision - making and difficult and delicate handling. the bank responded to these heavy challenges outstretching its capacities, thanks to the hard work, ethos and dedication of its staff. it is to you therefore – members of the family of the bank of greece, who have successfully shouldered a heavy load – that i would like to say a big “ thank you ” and dedicate this book. bis central bankers ’ speeches