The United Nations just issued numbers on food inflation that contradicts Federal Reserve Chairman Ben “BS” Bernanke’s assessments. “Hunger Games” may not be just a movie much longer.
The UN food agency reported Friday that food prices are “rising again.” Old BS just began QE3 precisely because there was no movement in the economy and a little inflation couldn’t hurt anything as America needs inflation to reduce the real size of its current $16T national debt, much like the Wiemar Republic needed inflation to be able to pay its WWI debt.
To be fair, Bernanke doesn’t count the cost of food or energy, in his assessment of inflation. Only the poor people on Main Street have to do that. Having most of your meals served at the expense of the Federal Reserve or political sycophants or lobbyists would give one the opinion food costs are not important but most people don’t have that luxury.
Food has already reached a six-month high and is near levels not seen since 2008, at which time the food riots dotting the Middle East and North Africa led to the “Arab Spring.”
President and founder of Earth Policy Institute and author of “Full Planet, Empty Plates” Lester Brown told the Daily Ticker, “The term ‘food unrest’ will become part of our daily vocabulary.” (1) In the old sci-fi movie “The Running Man” the government ordered one of its soldiers to fire on people rioting for food. That time could be here soon.
This situation will be a mere reflection of the imbalance between human food supply and global demand for sustenance. The American drought, already affecting corn and soybean prices, has hit the world’s breadbasket with a decidedly wicked punch just as the increase in annual population is reaching 80 million. The current political atmosphere that puts an emphasis on producing more ethanol to attack greenhouse gases, only adds to the supply pressures, meaning supply cannot meet demand.
The demand side of the equation will rise putting even more strain on the supply side just when supply is having the toughest year in almost two decades. Also causing a strain is the number of people moving into a “grain intensive” diet (about 3 billion now.) Brown noted, “Rising affluence has affected diets. Putting meat, milk and eggs on the table has eclipsed population growth as a major factor on food prices.”
The American drought wouldn’t be nearly as devastating except for what has happened elsewhere. Russia, the Ukraine, and Pakistan (the world’s 3rd most populous country) have also been suffering from drought.
“Grains, world-wide, are stagnating,” said Brown. “Prices are rising daily.”
In some countries, a growing number of families now face foodless days. The UN report said the requests for food assistance from the organization have reached an all-time high.
This situation coincides with a continued downgrade by the USDA’s projection for this year’s yields.
In its weekly crop report today, the USDA reported “additional deterioration”. Supply of corn in good to excellent condition dropped to 48%, a full 14% decline from last week’s report. (2)
This was supposed to be a banner year for corn production this spring with more corn planted than at any time since the Great Depression. But the best laid plans of mice and men…
Corn prices continue to surge. So will your cost of plastics, many food items and the effect on the production of ethanol will drive gasoline prices higher. Everything that has any part made with corn byproducts will rise sharply.
But cheer up, America. Dumb monkey BS has seen no inflation, heard no inflation and speaks of no inflation so he prints paper money at a reckless pace to keep the dollar stable. Hah! Just one more reason old BS has got to go.
“I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man.”–Thomas Jefferson
(1)–Daily Ticker, Oct. 5, 2012, Food is the New Oil and Land the New Gold”
(2)–www.usda.gov, Oct.8, 2012, Report: Corn Projections Fall