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Friday, January 21, 2011

Food costs rising

I did a double post today, check out the previous post (click)

There are signs food prices are rising not just in America, but around the world.

In America, General Mills, Kraft And Kellogg Hike Prices On Selected Food Products. Granted this is really a non-story, since it is indescribably small impact.

But in an economy that has 9.5% official unemployment, and 15%+ unofficial, having food prices rise is directly opposite of what classic deflation-ists say can happen.

Further, there have been food riots

Oh yea, just to really get a nice topic of conversation on food problems, the bee population is taking a hard nose dive. This is unprecedented and critical for food production.

Americas desire to avoid pain by printing trillions of dollars and flooding the world with US cash is a big contributor to accelerating food problems couple that with food production issues. Ben Bernanke, is in fact exporting death across the world. Luckily for me living in the USA, it has helped me maintain my lifestyle. But that isn't the point, this will not resolve well. We are going down a very nasty path, and its full steam ahead.

I stated back in 2008, as resource inflation grows, Americans income will have increased amount spent on resources. What I failed to realize is in the process poorer countries will get crushed, since they do not have as much disposable income to handle the increase in resource costs.

Marc Faber explains why as resource prices increase, western countries should fare better then developing nations. I think this spells disaster for international co-operation in the years to come.

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