Food/Financial Crisis of 2011
by Mark Sircus
February 15, 2011
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.