World food inflation is smashing down on the world’s populations as prices rise precipitously in the face of increasing shortages and absurd monetary policies. Prices are rising everywhere. It is not millions but billions of people who must tighten their belts because they have no choice but to eat less. Billions of people on our planet have no discretionary funds so they just cannot afford the increased prices. They have to get by with less to eat. They have no choice.
Things can get so bad that people will not be able to buy foods at any price because they simply will not be available because they have been bought up by someone else. I am not talking about your neighbor here who just happened to beat you to the supermarket this morning. Imagine if China pulls out a $100 billion out of its almost bottomless pockets and purchases grain to feed its billions? Why wouldn’t they, after all, spend increasingly worthless paper on a mountain of food?
Below you will see that this is a real threat because of the drought that is going on there. Other governments are already stockpiling food staples in an attempt to contain panic buying, inflation and social unrest. There is nothing pretty about this quickly evolving food catastrophe and with each week the story only becomes gloomier.
The price of wheat is up 78.13 percent over
the past 12 months and still going higher.
Everywhere we turn we see dramatic climate events taking their toll on crops. The cold weather experienced across much of the U.S. in early February made its way deep into Mexico and early reports estimate 80-100 percent crop losses, which are having an immediate impact on prices in U.S. grocery stores with more volatility to come. As a result, prices on cucumbers, zucchini, peppers, tomatoes and asparagus are set to explode in the states if in fact there will be much of any of these vegetables available at all.
Storms in China’s far western Xinjiang flattened or damaged
about 100,000 homes, and more than 15,000 head of livestock
were killed by the cold front that set in on the 16th of January.
“Minimal rainfall or snow this winter has crippled China’s major agricultural regions, leaving many of them parched. Crop production has fallen sharply as the worst drought in six decades shows no sign of letting up.” A severe drought has persisted in China’s northern territories for several months. In Hebei province, the farmers haven’t seen any rain for five months. What is going on in China has global breadbasket implications. So dire is the situation becoming that, “If the weather turns warmer and there is still no rain, then we will not be talking about lower agricultural production, but rather zero production, because the seedlings will all be dead,” reported one Chinese official. Wheat prices in Chicago jumped nearly two percent on the 8th of February when the United Nations’ food agency issued a rare alert that China’s crop was in trouble.
Record-breaking snowfall pounded South Korea’s east coast last Saturday when waist-deep snow stranded hundreds of motorists on highways and destroyed dozens of houses. The roofs of dozens of houses, livestock sheds, vinyl greenhouses—even a bowling alley—collapsed under the weight of the snow. According to the Gangwon Regional Meteorological Administration, the two-day snowfall in the area reached 43 inches (110 cm) in Samcheok, 39 inches (100.1 cm) in Donghae, 22 inches (56.3 cm) in Daegwallyeong mountain pass, and 17 inches (42.8 cm) in Sokcho.
Before Korea was hit it was Vietnam. After enduring a freezing cold with temperatures in mountainous areas dropping to – 4° C, northern Vietnam is undergoing another fresh cold snap. The record low temperature this year had frozen over 7,000 buffaloes and cows to death in more than 12 northern mountainous provinces, said Deputy Head of the Livestock Breeding Department Nguyen Thanh Son.
The location has been changing week by week but its one place on the planet after another being hit with agriculturally destructive weather patterns. Global food production and supply are being beaten down just as financial and monetary inflation also takes hold.
Financial-Sourced Causes of Price Increases
“Nasty weather in key agricultural markets around the world has savaged the global grain crop, meaning worldwide supplies can’t help but be squeezed. Australia, for instance, is experiencing additional flooding in areas that were already battered by the torrential rains of November, December and January. And as if the supply-related increase in agricultural commodities wasn’t enough, there’s also the U.S. dollar—and the so-called “race to the bottom”—to contend with. Make no mistake: The endless devaluations in the greenback are having a worldwide impact on agricultural commodity prices. Since commodities are priced in dollars, these devaluations translate into higher prices for grains and other food-related commodities,” writes Jack Barnes.
The Federal Reserve is printing money almost limitlessly now to extend the life of the United States government that is addicted to increasing debt and deficits. They are injecting money (debt) at a furious pace producing stacks of fine quality paper with colored ink. This blatant act of self-preservation is striking hard at the lower and middle classes around the world who have to pay higher and higher prices for their food, which on international markets is denominated in dollars. The day of reckoning for the dollar inches closer every day, as the Fed issues more Treasuries and floods the market with more devalued paper. Inevitably, this will cause prices to rise faster and faster as the value of U.S. currency drops further, pushing food prices up and up the side of a steep slope. The world is paying for American debt in terms of high food and energy prices.
So, the present tragedy is going to be compounded by too much money chasing the availability of food. Even in America, if you are not financially independent, the odds are good that someday you could be waiting in line to feed yourself and your family. It’s a mistake, even at this early point, to take this delicious-looking bread for granted.
We are not allowing yet onto our collective radar screens exactly what we are facing in the months and years ahead. The world is still looking normal for the “haves” but those who have less feel the avalanche of climbing food prices. We are only at the very beginning of a crisis that has “going to get much worse” written all over it.
- Rains May be ‘Too Late’ for China’s Wheat Areas, Forecaster Says (businessweek.com)