California Drought Spreading

Chris Carrington

The US Drought Monitor is reporting that 58% of California is now affected by a crippling drought, and that it is spreading at an unprecedented rate.

The agency has five levels of alert with ‘exceptional drought,’ the current level in California, listed as the most serious.

The LA Times reports:

How Many People Will Go Hungry When The U.S. Dollar Ponzi Scheme Collapses?

Dees Illustration

Market Bust

The U.S. Dollar which is not really even a dollar but rather a "Federal Reserve Note" is nothing more than a mirage in the desert.  Federal Reserve Notes are just that, Notes.  What is a Note? It is a formal piece of paper that says one person owes another money, in this case the Federal Reserve.

But what are they going to pay you back with? More Notes of course. And what makes these notes valuable? Nothing more than the belief of the people who use them.

And how are these notes created? Quite simply they are borrowed into existence. This means that Money is just debt. So if all of the debt were to be repaid tomorrow, there would be no more "official Money". FIAT PONZI CURRENCY NOT BACKED BY ANYTHING EXCEPT HOPE.

Eating Off the Grid (Video)

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World Bank: Food prices have entered the 'danger zone'

Food prices have entered the "danger zone", threatening to condemn a generation to extreme poverty and malnutrition, the World Bank has warned.

Wikimedia Commons image

Philip Aldrick
Telegraph

Robert Zoellick, World Bank president, said food prices are at “a tipping point”, having risen 36pc in the last year to levels close to their 2008 peak. The rising cost of food has been much more dramatic in low-income countries, pushing 44m people into poverty since June last year.

Another 10pc rise in food prices would push 10m into extreme poverty, defined as an effective income of less than $1.25 a day. Already, the world’s poor number 1.2bn.

Mr Zoellick said he saw no short term reversal in the damaging effect of food inflation, which is felt much more in the developing world as packaging and distribution accounts for a far larger proportion of the cost in the advanced economies.

Asked if he thought prices would remain high for a year, Mr Zoellick said: “The general trend lines are ones where we are in a danger zone… because prices have already gone up and stocks are relatively low.”

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5 Easy Ways to Protect Yourself From Food Inflation

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7 Reasons Food Shortages Will Become a Global Crisis

Activist Post 

Food inflation is here and it's here to stay.  We can see it getting worse every time we buy groceries. Basic food commodities like wheat, corn, soybeans, and rice have been skyrocketing since July, 2010 to record highs.  These sustained price increases are only expected to continue as food production shortfalls really begin to take their toll this year and beyond.

This summer Russia banned exports of wheat to ensure their nation's supply, which sparked complaints of protectionism.  The U.S. agriculture community is already talking about rationing corn over ethanol mandates versus supply concerns. We've seen nothing yet in terms of food protectionism.

Global food shortages have forced emergency meetings at the U.N. Food and Agriculture Organization where they claim "urgent action" is needed.  They point to extreme weather as the main contributing factor to the growing food shortages.  However, commodity speculation has also been targeted as one of the culprits.

It seems that the crisis would also present the perfect opportunity and the justification for the large GMO food companies to force their products into skeptical markets like in Europe and Japan, as recently leaked cables suggest.  One thing is for sure; food shortages will likely continue to get worse and eventually become a full-scale global food crisis.

Here are seven reasons why food shortages are here to stay on a worldwide scale:


1. Extreme Weather: Extreme weather has been a major problem for global food; from summer droughts and heat waves that devastated Russia’s wheat crop to the ongoing catastrophes from 'biblical flooding' in Australia and Pakistan.  And it doesn’t end there.  An extreme winter cold snap and snow has struck the whole of Europe and the United States. Staple crops are failing in all of these regions making an already fragile harvest in 2010 even more critical into 2011.  Based on the recent past, extreme weather conditions are only likely to continue and perhaps worsen in the coming years.

2. Bee Colony Collapse: The Guardian reported this week on the USDA's study on bee colony decline in the United States: "The abundance of four common species of bumblebee in the US has dropped by 96% in just the past few decades." It is generally understood that bees pollinate around 90% of the world's commercial crops.  Obviously, if these numbers are remotely close to accurate, then our natural food supply is in serious trouble.  Luckily for us, the GMO giants have seeds that don't require open pollination to bear fruit.

3. Collapsing Dollar: Commodity speculation has resulted in massive food inflation that is already creating crisis levels in poor regions in the world. Food commodity prices have soared to record highs mainly because they trade in the ever-weakening dollar. Traders will point to the circumstances described in this article to justify their gambles, but also that food represents a tangible investment in an era of worthless paper.  Because the debt problems in the United States are only getting worse, and nations such as China and Russia are dropping the dollar as their trade vehicle, the dollar will continue to weaken, further driving all commodity prices higher.

4. Regulatory Crackdown: Even before the FDA was given broad new powers to regulate food in the recent Food Safety Modernization Act, small farms were being raided and regulated out of business.  Now, the new food bill essentially puts food safety under the direction of the Department of Homeland Security where the food cartel uses the government to further consolidate their control over the industry. Militant police action is taken against farmers suspected of falling short on quality regulations. It is the power to intimidate innocent small farmers out of the business.

5. Rising oil prices: In 2008, record oil prices that topped $147 per barrel drove food prices to new highs.  Rice tripled in 6 months during the surge of oil prices, along with other food commodities.  The price of oil affects food on multiple levels; from plowing fields, fertilizers and pesticides, to harvesting and hauling.  Flash forward to 2011:  many experts are predicting that oil may reach upwards of $150-$200 per barrel in the months ahead.  As oil closed out 2010 at its 2-year highs of $95/bbl, it is likely on pace to continue climbing.  Again, a weakening dollar will also play its part in driving oil prices, and consequently, food prices to crisis levels.

6. Increased Soil Pollution: Geo-engineering has been taking place on a grand scale in the United States for decades now.  Previously known in conspiracy circles as 'chemtrailing,' the government has now admitted to these experiments claiming they are plan "B" to combat global warming.  The patents involved in this spraying are heavy in aluminum.  This mass aluminum contamination is killing plants and trees and making the soil sterile to most crops.  In an astonishing coincidence, GMO companies have patented aluminum-resistant seeds to save the day.

7. GMO Giants: Because of growing awareness of the health affects of GM foods, several countries have rejected planting them. Therefore, they would seem to need a food crisis to be seen as the savior in countries currently opposed to their products.  A leaked WikiLeaks cable confirms that this is indeed the strategy for GMO giants, where trade secretaries reportedly “noted that commodity price hikes might spur greater liberalization on biotech imports.” Since GMO giants already control much of the food supply, it seems they can also easily manipulate prices to achieve complete global control of food.

The equation is actually quite simple: food is a relatively inelastic commodity in terms of demand. In other words, people need to eat no matter how bad the economy gets.  Thus, demand can be basically measured by the size of the population. Therefore, as demand remains steady while the 7 supply pressures outlined above continue to worsen, food prices will have only one place to go -- up, up, and up.

As international agencies scramble to find "solutions," their energy may be just as well spent on questioning if this famine scenario is being purposely manipulated for profits.  Regardless, the average person would be very wise to stock up on food staples as an investment, and frankly to survive the worsening food crisis.

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Wheat-Crop Quality in Australia's Queensland Is Hurt by Rains, Growers Say

Wendy Pugh
Bloomberg

More than half of the wheat crop from Australia’s Queensland state may deteriorate to feed grade following heavy rain, tightening milling-quality supplies and potentially helping to extend a rally in prices.

“There is a lot of downgrading of quality because of the persistent wet weather,” Wayne Newton, grains president of Brisbane-based farm group Agforce, said today. The northern state may produce 1.6 million metric tons in all this season, according to a September forecast from the government.

Wheat surged 7.2 percent yesterday on concern that downgrades and delays to the crop from Australia, the fourth- largest shipper, may curb supply of high-quality grain. There was “a little bit of panic” in the market, according to Austin Damiani, a floor broker at the Minneapolis Grain Exchange.

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Tighter food supplies, high prices to persist

Svetlana Kovalyova
Reuters

World food prices are set to remain high in 2011/12 with supplies tightening and demand running strong, the United Nations' food agency economist told Reuters on Wednesday after a new jump in prices.

"The chances of prices to remain high and extremely volatile well into 2011/12 are stronger than ever," FAO's economist Abdolreza Abbassian told Reuters in a telephone interview.


Food prices rose in November on the back of surging sugar and strong gains in cereals and oils.

That was despite the lack of fundamentals which could have justified the rises and also a stronger dollar, which usually sends agricultural commodities prices lower, Abbassian said.

"That shows that there is tremendous market sentiment in favor of high and perhaps still rising prices," he said.

Agricultural commodities demand remained strong, triggering an increased use of reserves and fuelling concerns about tighter supplies next season, especially because the level of new plantings situation in producing countries remained unclear, he said.

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Rice May Triple in 18 Months as Supplies Tighten, Duxton's Peter Forecasts

Chanyaporn Chanjaroen
Bloomberg

Rice, the staple food of more than three billion people, may as much as triple in 18 months as flooding in exporters including Thailand tightens supplies and demand climbs, according to Duxton Asset Management Pte.

“Rice will blow out the stocks,” said Ed Peter, chief executive officer, who co-founded the company last year with Managing Director Desmond Sheehy. Both worked at Deutsche Asset Management and the Deutsche Bank AG unit owns 19.9 percent of Duxton, while Peter, Sheehy and staff own the rest. Duxton, based in Singapore, invests in farmland, Asian stocks and wine.

Peter’s forecast, in an interview on Nov. 29, would put rice at more than the peak during the 2008 food crisis, which triggered social unrest in poorer states. Wheat and corn also surged that year, while record oil prices boosted fertilizer costs. Kiattisak Kanlayasirivat at Novel Commodities SA, which trades rice, said farmers can replant quickly as floods recede.

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How the U.S. Government Guaranteed the Coming Global Food Crisis

Steve Sjuggerud
Market Oracle

Porter Stansberry with Braden Copeland write: Over the last several years, I've written constantly on the growing likelihood of a global currency collapse.

The governments of Europe and the United States have accumulated debts so large they can't ever hope to repay them, except with currencies whose value will be inflated away by money-printing.

That's led me to recommend inflation hedges like railroads, gold, silver, and various forms of energy. Owning these "real assets" is the single best way to protect yourself from the inflationary crisis. But make sure you don't forget the most important inflation hedge of all: food.


If you've been reading the financial press for the past few months, you know the prices of vital food commodities are soaring. The price of corn is up 47% since this summer. Soybeans are up 30%. Wheat is up 43%.

I expect this trend of higher food prices to continue for years as the U.S government intentionally debases the dollar while lying to you the whole time about wanting a "strong currency." (Make sure to read our essay hereabout this great lie.) There's also a good supply/demand case to be made for owning agricultural assets. Let's start with the largest crop in the United States, corn...

In 2009, U.S. farmers grew 39% of the world's corn – 307.4 million metric tons. The crop was worth $48 billion. Our corn exports totaled $8.7 billion.

Most harvested corn in the U.S. is used to feed livestock – 43% of 2009 production. Almost as much (41%) was used for food, consumer, and industrial products (toothpaste, adhesives, cosmetics, starches, sweeteners, oils, beverages, industrial alcohol, fuel ethanol, etc.). The remainder was exported. The U.S. sent most of its corn to Japan, Mexico, and South Korea.

The second-largest corn grower, China, produced 165.9 million metric tons, or half the U.S. production. The European Union was a distant third, harvesting 62.7 million metric tons. Brazil checked in fourth, at 51 million metric tons.

In 2009, a severe drought in China killed millions of bushels of corn. Stockpiles dwindled to alarming levels as the government sold corn to keep the price from rocketing higher. Into 2010, the situation hasn't improved. The Chinese have become net importers of corn for the first time in 16 years. Experts predict China will require 6 million to 8 million metric tons of corn this year.

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New Food Crisis Looms

Food Aid Pakistan -Athar Hussain/Reuters

Toni Johnson
Council on Foreign Relations

The world experienced a major food crisis in 2008 that led to civil and political unrest from Bangladesh to Haiti and added millions more to those suffering from malnutrition. Though prices have dropped somewhat, some analysts say the crisis never totally ended. With prices rising dramatically in 2010, the world could be on the brink of a new crisis.

While food prices remain below their 2008 highs, "they're a lot higher than they were before 'the food crisis of 2008' took hold," says financial journalist Addison Wiggin (Forbes), noting that wheat, corn, and sugar prices are up more than 50 percent since the beginning of the year. Farm commodity expert Don Coxe argues the first major crop failure in 2011 is all that's needed to "have a full-blown food crisis," one potentially worse than 2008.


In a November report last week, the UN's Food and Agriculture Organization (FAO) sounded the alarm over skyrocketing food prices, predicting the world's food import bill (PDF) could be more than $1 trillion in 2010. The FAO says that food stocks are high enough to avert a new crisis but that predictions that cereal yields in chief producing countries will decrease in the coming year are driving prices up much faster than they rose in 2008.

The report notes countries such as Pakistan, devastated by flooding this summer, and many least-developed countries are expected to feel rising food prices the most; it argues more should be done to understand the implications of commodity market speculation on food prices. "A key lesson of 2008 is that volatile global financial markets can result in food commodity price speculation that has dire consequences for the world's poorest," notes CFR's Laurie Garrett. But others say that it was export restrictions, panic buying, and hoarding (JakartaPost) that precipitated the 2008 crisis.

Some countries are already beginning to respond. Russia announced in October it would continue its ban on grain exports for another eight months, a measure put in place in August following the severe drought and wildfires that decimated crops in the country this summer. China, experiencing the worst food inflation since 2008 (SydneyMorningHerald), announced last week it would cap prices on grains, edible oil, and sugar. And the EU is contributing 40 million euros to stabilize Pakistan's food prices.

As global food demand increases, experts say more should be done to bolster agriculture production in least- developed countries and reduce agriculture trade barriers. "Looking beyond the immediate crisis, the United States and other developed countries must renew long-neglected investments in agriculture.

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The Food Inflation Nightmare Is About To Hit 40% Of The World's Population

Waverly Advisors

Gregory White
Business Insider

Overnight, the threat of further Chinese tightening multiplied as a result of food price inflation. A basket of 18 key vegetables saw their prices increase by 62.4%, year-over-year, in the first 10 days of November.

But just how likely is Chinese tightening?

Waverly Advisors feel that it is now a near certainty, based on the political realities within China.


The fact that Premier Wen Jiabo chose a supermarket as the location for a press appearance to comment on anti-inflationary measures today indicated how seriously Beijing is taking the potential disruptive impact of rising cost at the cash register.

But this isn't just a Chinese problem. 40% of the world's population, found in China, India, and Brazil, is seeing their food prices skyrocket as a result of price inflation. Note India's has actually decreased, but remains close to double digit territory.

Here are the 25 countries that will get slammed in a food crisis

RELATED ARTICLE:
The 5 Best Countries to Escape America's Decline


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Secret Walmart Survey Shows Inflation Already Here

John Melloy
CNBC

There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart.

A new pricing survey of products sold at the world’s largest retailer [WMT 54.13    -0.21  (-0.39%)   ] showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate.

The “inaugural price survey shows a small, but meaningful increase on an 86-item grocery basket,” said Patrick McKeever, MKM Partners analyst, in a note. Most of the items McKeever chose to track were every day items like food and detergent and made by national brands.

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Global Grain Reserves Diminish, U.S. Stockpiles in Worse Shape

Holly Deyo
Millennium Ark

Domestically the price of meat, milk, sugar and eggs is already taking a huge upward jump. If the root cause were a single issue, it might be absorbable or at least less damaging. However, multiple factors are hiking food prices and they are only expected to climb.

What's Happening to Our Food?

Small farmers are losing livestock and dairy cows to the economy because they can't afford the uncertainty and animal upkeep. Less production means the price of beef, milk, cheese and anything using these foods all compete for supplies.

Remember the half-billion egg recall in August? It's forced wholesale egg prices to rise nearly 40%. Consider every food that includes whole eggs and egg products. Snowballs roll downhill and so do price increases from producer to wholesaler to store to consumer.

Another story largely escaping notice is a lack of feed for turkeys. Despite Internet rumors that a turkey shortage exists, it's only their food. However, this Thanksgiving you'll either pay a premium or do without.
Stan and I usually roast a turkey about every 10 days, not just at holiday time. They're easy to fix, leaner than many proteins and cost less per pound. However, that scenario has changed.

In 2009, a surplus of gobblers from the preceding year dropped prices as low as 40 cents/pound. This year wholesalers will pay more than double for this year's Thanksgiving birds and pass the increase onto consumers.

Besides dairy, grains have taken hits globally and the majority of processed foods require these indispensable ingredients. For example, corn syrup (oops, now the P.C. term is corn sugar) is in nearly every product that needs sweetening. From soft drinks to canned fruit to cereal, baked goods and desserts – the majority use corn sugar. Less obvious uses of corns syrup include yogurt fermentation, thickening agent for cottage cheese, yogurt, sour cream plus a ton of sauces like BBQ, teriyaki and tomato-based products; spice enhancer and tomato acidity cutter. It also sneaks into sausages and lunch meats as a stabilizer, binder and flavor enhancer.

Not only are grains consumed directly as cereals and are the backbone of breads, all baked goods, pastas and tortillas, they are a huge filler ingredient in most packaged foods, whether for human or pet consumption. On food labels, corn or wheat usually ranks toward the very top of the list. Animals also directly depend on these crops as feed.

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