CRISISBOOM

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.

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