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97 comments on Food Price Inflation

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mcgowanmc on December 17, 2007 - 11:22am Permalink | Subthread | Comments top

"We have a huge amount of room to eat more cheaply by eating less processed food and less meat."

http://news.bbc.co.uk/2/hi/americas/7106726.stm

New York hunger levels 'rising'
The shelves at Food Bank are empty (Pic: Food Bank)
Food Bank is unable to meet demand, with shelves empty
Over 1.3 million people, one in six New Yorkers, cannot afford enough food, with queues at soup kitchens getting longer, anti-poverty groups say.

The CRB and the Baltic Dry Indexes are the sinquo non
for grain, fiber, metals, and energy.

http://www.investmenttools.com/futures/bdi_baltic_dry_index_bdi_crb.htm

12/13/07 Since cumulative wheat sales have reached an amazing 89.6% of the USDA forecast as compared to 66.7% on average, there is now talk, that stocks will at some point be wiped out and the US may be forced to curtail or embargo further sales.

These charts will compliment yours.

Inflation is theft, IMHO and Americans have been
impoverished by it.

They'll realize that over the Holidays.

We have zero room for error now.

James Kunstler-

"Some other differences this time around: in the background is a "real" economy of depleting natural resources (oil, soils, aquifers, etc) and the systematic disassembly of an industrial manufacturing infrastructure. In the 1930s, many people could return to family farms and get by, even with little money. Today there are far fewer family farms."

Finally, thank you for your interest in food and fiber,
Stuart.

And a quote:

"Selling a soybean contract short is worth two years at the Harvard Business School - Robert Stovall."

http://sixtythirtyten.com/

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alan on December 17, 2007 - 9:51pm Permalink | Subthread | Parent | Comments top

Found this at your link, it brings a little perspective to the "record" prices

Image Hosted by ImageShack.us

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ThatsItImout on December 18, 2007 - 2:51am Permalink | Subthread | Parent | Comments top

alan,

Once more, the late 1970's mirror works....it is ASTOUNDING.

You can look at the historical charts on wheat, corn, copper, tin, bauxite, oil, natural gas, propane, almost all the metals and you see exactly the same top in the late 1970's....I graduated high school in that period and it seemed like the Western economies were FINISHED.

So what is yet to fall into place?
The stock market: It is still due for a serious correction. That is not doomer talk, it just makes sense....the markets have weathered the dot com crash, the 9/11 attack, the Asian bond crash, the runup of energy prices....so do we assume the market is now exempt from normal rules? I wouldn't bet on it.
My guess is that we should see a 9500 point Dow sometime in the next couple of years....but what will cause it?
Interest rates: They MUST go up. contrary to popular belief, they are still very, very low, and need to rise to perhaps 10% for at least a short time.

The fundamentals of the U.S. economy are at least as good as any nation in the world (certainly MUCH better than the fundamentals of the E.U. or China)

What we are seeing is a currency/curve, pure and simple, and we are doing what we have always done with the Fed, trying to stick our finger in the dike.

This cycle could go another 3 to 4 years, and then, just as in 1982, when all the "little guys" and weak players have been shaken out, on one sunny day without warning, the markets will take off, the economy will begin what could be an astounding expansion with new efficiency technologies pouring into every corner of the U.S. economy, and pity the pour swine who got shaken out of everything he or she had.....they will not have the cash to enjoy the rebound.

It's an old story....you can't time the market. But it can sure time you.

RC

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Pitt the Elder on December 18, 2007 - 6:42am Permalink | Subthread | Parent | Comments top

The stock market: It is still due for a serious correction. That is not doomer talk, it just makes sense....the markets have weathered the dot com crash, the 9/11 attack, the Asian bond crash, the runup of energy prices.

It depends what you mean by "weathered". The markets have gained basically nothing in the last 7 years (S&P, which is the broadest measure; DJIA is up ~50%, but Nasdaq is down ~50%). When compared to 8% historical growth, that means the stock market is down 42% from where we'd expect it to be, which is pretty severe.

Comparing to the 70s, the markets fell about 45% from Aug/00 to Sept/02, vs. 45% from Dec/72 to Sept/74. Five years after the bottom, the market was up 1% in Sept/07, vs. down 7% in Sept/79 (it wasn't until Jul/80 that it reached up 1%). Both had oil problems and a 10% correction in their fifth year after the low point, oddly enough.

So if the 70s are a good analogy - and the behaviour of the stock markets is surprisingly similar - then the markets should be due for a good run. I personally wouldn't push the comparison that far, though.

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mcgowanmc on December 18, 2007 - 10:36am Permalink | Subthread | Parent | Comments top

Yes. I've noticed/noted that, as well.

This "deflation" of grain prices along with
gasoline (I'm sure the chart would look similar)
has been the "lid" on price pressure.

Note the "crush" in pricing occurs with Volker and the
15% interest hikes in 81.

And also note the breakout occurring this year.

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97 comments on Food Price Inflation

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