The big problem with inflation is that people get low blood sugar when they are hungry, and soon their moods turn sour. I know this for a fact because if breakfast or brunch or lunch or coffee break or dinner or any snack is five minutes late, I involuntarily turn into a screaming monster from hell demanding to know who stole my food and vowing bloody revenge. I can only imagine the anger when hunger is caused because someone can’t afford to buy food!
This “inability to buy food” is one of the problems with inflation, and that ugliness is now here, as we read from Bloomberg.com that “The World Bank in Washington says 33 nations from Mexico to Yemen may face ‘social unrest’ after food and energy costs increased for six straight years.” Hahaha! No kidding?
World Bank chief Robert Zoellick says, “Thirty-three countries around the world face potential social unrest because of the acute hike in food and energy prices”, and that since 2005, “the prices of staples have jumped 80%”.
Like what? Like corn and wheat, which are making the news by rising like crazy, and the latest food emergency is that “Rice, the staple food for half the world,” is now double the price of a year ago, and a fivefold increase from 2001. Yikes!
100% inflation in the price of rice in one year! And 500% in seven years! Yikes again! No wonder that Jody Clarke at MoneyWeek.com reports that “Since January 2005 the average price of a loaf of bread in the US has risen 32%. Overall, US retail food prices rose 4 % last year, the biggest jump in 17 years, says the US Department of Agriculture. Meanwhile restaurant owners have been even harder hit, with wholesale price increases of 7.4%. That’s the biggest jump in nearly three decades, according to the National Restaurant Association.”
And worse yet for us alcohol-besotted worthless lushes out here, heroically keeping bartenders and comely barmaids gainfully employed year around, the price of hops, an integral ingredient in beer making, has soared from $4 a pound to $40.
The Marketbasket Survey, conducted by the American Farm Bureau Federation, says a basket of things like bread, milk, eggs and pork chops will cost you $3.50, or 8.9%, more this year than last. Both a five-pound bag of flour and a dozen eggs are up over 40% since January 2007.“
And speaking of pork and yummy pork products, there is a pig crisis in Britain because the government mandated that pig farmers institute some reforms to make the rearing process more humane, and that means that “Costs rose and farmers fled the sector. The U.K.’s breeding herd has fallen to about 425,000 – half the size it was in 1990. Now, soaring feed prices have tipped the industry into crisis.”
And food prices, and the resultant anger, are rising around the world, as we glean from a reader of George Ure’s Urbansurvival.com who has been using the Google search engine for references to “food riots.” He has submitted these returns:
“278 on the 22 Mar 08
289 23 Mar
330 24 Mar
380 26 Mar
970 02 Apr
1330 05 Apr
1698 07 Apr 08″
Mr. Ure has some data of his own; “Meantime, the word ‘shortage’ is hanging around 33,000 hits a day, up from the 11,500 a day” back when he first started tracking it back March 15th, 2006.
Larry Edelson at MoneyandMarkets.com says, “Over the past eight years, the price of food worldwide has increased 75%; the price of wheat has gone up a dramatic 200%.”
And regardless of what idiots at the Federal Reserve or their toadying hangers-on say, inflation in prices follows inflation in the money supply, which brings up the terrifying fact that it is all going to get worse and worse, as from Bloomberg.com we read that “Federal Reserve officials signaled the central bank will keep lowering interest rates because financial markets remain distressed even after the fastest reduction of borrowing costs in two decades”, which goes along with another Bloomberg article that reported, “New York Federal Reserve Bank President Timothy Geithner said capital markets are still ‘substantially impaired’ and policy makers and financial industry leaders must ‘act forcefully’ to stem the crisis.” Translation: You ain’t seen nothin’ yet.
Too bad it will be all for naught, as Jason Hommel of the silverstockreport.com is exactly right that “the Fed is doomed. Printing more will not work. Printing less will not work. Printing nothing will not work. All the inflation of all the years from 1913 until now is beginning to crash down on our heads, and it will keep crashing until it stops.”
I am not even from this planet, and I understand that something has to keep going “until it stops”, but when will that be? The answer, says Mr. Hommel, is simplicity itself: “Until bonds start paying more each year than gold is going up each year.”
So what does one do about the collapsing economy? Nothing! You can’t do anything! Your only freaking hope is to not get into this kind of mess in the first place! Ergo, the Constitutional requirement that only silver and gold can be money, which brings up chartoftheday.com, from whom we get the Quote of the Day, which reveals how we can prevent the damned Federal Reserve and the Congress from destroying us with inflation. It is Ludwig von Mises himself who states, “The gold standard makes the money’s purchasing power independent of the changing ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence.”
And as a guy who is not excellent in anything, I can still recognize it in something that keeps us from being destroyed by inflation. And so when it comes to gold, if you ain’t buyin’, prepare for dyin’.
Editor’s Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter – an avocational exercise to heap disrespect on those who desperately deserve it.
The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning and other fine publications. Click here to visit the Mogambo archive page.
Posted Friday, 11 April 2008
The Mogambo Guru Lives!
Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.