Commodity Trade Mantra

Posts Tagged ‘Food Prices’

If This Continues, You May Need Armed Guards On Food Trucks

There are now 49 million Americans dealing with food insecurity & this will only get worse as food prices go even higher. It is now not too hard to imagine desperate people holding up food trucks & robbing grocery stores in order to feed themselves and their families. We may see soon armed guards on food trucks, if this continues.

QE: Quantitative Easing or Questionably Effective

If you were a member of the top 5 – 10% & had a large investment in the stock market, you have increased your nominal net worth, thanks to the levitating wonder of “printing money” via QE – Quantitative Easing. However, if you were in the bottom 90%, then the wonders of QE did not “trickle down” to you, except as higher prices.

The U.S. Fed And It’s Secret Piggy Bank

The Fed has announced using “Reverse repos” as a new tool to manage monetary policy. Its just a way the Fed soaks up cash from financial institutions. The Fed is the “borrower,” swapping its Treasuries for banks’ cash. You might call it opposite of quantitative easing: Reverse repos drain money from the financial system.

Still Think the Fed Isn't Fueling Inflation? Check Out This Chart

One camp reckons the reason why inflation is muted is that the Fed largesse has flowed into asset bubbles rather than goods and services, and proponents of this view make a good point: since little of the Fed largesse has trickled down to the to bottom 99.5%, it can’t exerting much pressure on consumer prices.

World food prices rose in the first quarter of the year for the first time since their all-time high in August 2012, driven by rising demand in China, drought in the U.S. & unrest in Ukraine. According to the World Bank, internationally traded food prices increased by a sharp 4% led by wheat and maize, up 18% & 12%, respectively.

Why Are Food Prices so High? Because We're Eating Oil

Regardless of what we eat, we’re actually eating oil. Not directly, of course, but indirectly, as the global production of tradable foods relies on mechanized farming, fertilizers derived from fossil fuel feedstocks, transport of the harvest to processing plants and from there, to final customers.

Gold – Fertile Ground for Sarcastic Analysis

Sarcastic Analysis: Gold prices must go down for all the reasons given herein. Things are good, actually improving, and gold is headed down to about $400 per ounce. Gasoline & food prices have been steadily increasing for the last 15 years, (actually for 100 years), but they are almost certain to go back down next month.

RBI may keep Interest Rates Elevated on More than Estimated Inflation

While economic growth has almost halved to below 5% for the past 2 years, the worst slowdown for India since the 1980s, retail inflation has been averaging around 10%. Adding to inflation woes are damaged crops from recent non-seasonal heavy hail and rains & a possible El Nino weather threat.

When A Stock Bubble Goes Horribly Wrong And Hyperinflation Results

When A Stock Bubble Goes Horribly Wrong And Hyperinflation Results – Could the same be true of Europe? A challenge that’s perhaps most visible in the Eurozone is how best to balance dispersed, country-specific debt issuance against more centralized authority over monetary policy.

India Seems To Be Sliding From Bad To Worse

India’s Sensex stock market is down 11% in the last 3 weeks to 11 month-lows, Rupee at an all-time record low of 63 / US dollar and bond market has imploded from a 7.1% yield in May for the 10 Year to 9.25%

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