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Thursday, February 3, 2011

Food prices rise record 3.4 percent in January

Whether it is the USA (and western countries) massive currency printing campaign or my theory of world population wage rising will drive resources to the moon, we are seeing effects now.

According to the Food and Agriculture Organization (FAO), world food prices rose a record 3.4% in January. At this break neck speed, we will see much civil unrest.

For graphs and more information, check out Reuters and blog Zero Hedge post.

We need deflation, and fast, to keep the net purchasing power intact for 2011. For example, if prices rise 12% in 2011, then deflation hits, we'll need quite a bit of price dropping to ensure fixed income can keep up.

100 * 12% = 112.
112 * -10.7% = 100
So to keep up with inflation, need to keep under a 4% difference.

I actually have no clue how this plays out, hence my call to hedge resources with safer investments.

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