Posted on 01/16/2011 3:54:15 PM PST by blam
Positioning For A Food Riots Economy
by: Kevin McElroy
January 16, 2011
On Monday I wrote something that caused my coworkers to look at me even more sideways than usual.
I said, “I think we can expect the words “food riot” to enter the American lexicon sometime in the next 18 months, and I don’t say that flippantly.” Just to be clear, “lexicon” is a fancy word that means vocabulary – and “food riot” is a phrase that refers to a group of angry, hungry, violent people who destroy property because they feel (among other things) that food prices are too high. And yes, to answer any questions from the peanut gallery in my office, I do believe we’ll see food riots in these United States of America sometime in the next year and a half.
I’m belaboring this point because I want to be crystal clear with this prediction, not because I especially like making predictions. Quite the opposite, actually – I detest making predictions because it’s so easy to be wrong on the scope, specifics, time-frame, location, etc. In that vein, if I am wrong about this prediction, it will probably be a matter of my timing rather than anything else.
But where am I getting these crazy ideas? Let’s take a look at an interesting chart from the folks over at shtfplan.com:
This chart shows us that food stamp participation has risen sharply – with no signs of slowing since early 2008. Currently, over 42 million Americans rely on food stamps – or 1/7th of the entire population. Okay, so the very fact that more people are on food stamps isn’t cause for alarm. But what it means is that 14% of people in the United States already can’t afford to feed themselves – and that number is rising. I don’t know what number of people it would take to break the camel’s back. The number already seems ludicrously high.
The other side of the coin is that food prices are rising too – for three simple reasons:
* The first reason is just plain old bad luck. Bad weather around the world, including heat waves in Russia last summer and flooding in Australia right now, continues to put a crimp in global
food stocks.
* The second reason is sustained levels of higher energy prices. Oil is a vital input to most food production in the developed world. Higher oil prices necessitate higher food prices.
* The third is a global currency devaluation race. Trillions of newly minted dollars will increasingly find themselves competing with trillions of yuan, yen, euros, etc. to buy an
already diminished supply of food.
Perhaps the most common response to these facts is to say something like, “wow that’s scary!” But fear is something that children feel when they don’t know how to deal with a situation, or they don’t understand something.
I’m a grown man and for that reason, I don’t fear these trends. I am preparing myself and my family for the likelihood that these trends will continue down the same inevitable path. You won’t see me in a food riot, because I’ve been positioning my portfolio for survival and maybe even profit during the times to come.
Don’t wait for the Government to start talking about this problem. By then, it will be far too late. Start protecting yourself today, if you haven’t already. Here’s what I’m doing:
I regularly buy physical gold and silver. I’ve stopped paying much attention to the price, though I do try to buy on dips if at all possible. (Both are in a dip right now!)
I’ve been buying durable food goods like rice, beans, pasta, flour, salt, etc. It’s impossible to buy “enough” of this stuff, but a 6 month supply isn’t too difficult to amass. I recently bought a bunch of different fruit and vegetable seeds. We don’t have much of a yard, but seeds are cheap and if stored correctly they remain viable for a while.
I also own shares of blue chip companies that will probably continue to be profitable no matter what happens. I'm continuing to buy shares of precious metal miners, oil exploration companies, and other commodity-based securities.
You’ll notice that none of these things is really “crazy” to own, even in boom times. In the event that I’m 100% wrong, and everything’s going to be A-okay-terrific, I can use or sell all of these different assets, and probably not take too much of a bath.
Sounds like it’s going to be Black Friday everyday at the local supermarket. Those stampedes aren’t going to be fun.
We are a net exporter to other countries so I view this as their problem.
Still, if people don’t have at least a month worth of food stored then they are just plain dumb.
In our house we are very well set on this issue.
bttt
For more than 50 years the Federal Governments “Cheap Food for Consumers”, more commonly called “The Farm Program”, has kept our food surpluses at mountainous levels and food prices at levels lower than ever known in the entire history of the world.
There may be a blip, for a year or two, but we are destined to suffer the rest of our lives with the cheapest, the best, food mankind has ever suffered.
Prepping is now even on Popular Mechanics!
Rise of the Preppers: Survivalists Get a Makeover
snippet..
“As a truck driver hauling produce and food up and down the West Coast, Tom Martin knows first-hand how vulnerable the U.S. food supply is to disruption. “I know what our supply chains are like,” he says. “I know grocery stores rely on just in time services; they only have three days worth of food in any grocery store.”
In a disaster, that food will be gone in less than a day, and if you don’t have food stored up, you’ll be stuck, says Martin, who is one of a growing number of “preppers,” or people who are prepping for large-scale disaster. The American Preppers Network, an online forum Martin started in 2009 that quickly grew to 4000 members in nearly all 50 states. “
Seems that most urban people are gonna hurt the most.
Probably.
bookmark
“Food” for thought, don’t bother storing food unless you have the means of protecting it.
I’m working on a plan that uses ethanol extracted from gasoline to make into corn.
I’ve seen how they shop. A single medium sized bag of groceries every other day. Basically what they can carry on public transportation.
I shop by the truckload and garden for the year.
I’ve got a 35 gallon sealed plastic tote in the garage full of dry beans, peppers and tomatoes. Next year I hope to triple that.
“I’m working on a plan that uses ethanol extracted from gasoline to make into corn.”
You better have some place to put all of that water.
Very true. That's why you need to store copious amounts of lead too, and make sure delivery systems are in top working order.
Add the so-called Food Safety Act to the list of culprits. I continue to believe that the real intent of this bill was to drive the local producer out of business. Control of the food supply by FedGov and crony capitalists (the latter I refuse to consider to be true capitalists).
LOL.
How Many U.S. Senators Does It Take To Screw A Taxpayer?
[snip]
"The true cost of the ethanol boondoggle is hidden from the public. The mandates, subsidies and tariffs take place out of plain view. The reason blenders (and gas stations) will pay the same for ethanol is because they can sell it at the same price as gasoline to consumers. A consumer will pay the same for ten gallons of E10 as for ten gallons of gasoline even though the E10 contains a gallon of ethanol. Consumers pay the same for the gallon of ethanol for three reasons. (1) They don't know there's ethanol in their gasoline. (2) There is often ethanol in all the gasoline because of state requirements, so they have no choice. (3) They never know the ethanol has only 67% the energy of gasoline and gets them only 67% as far. The result is that drivers always pay much more for ethanol energy than for gasoline energy, simply because they pay the same amount per gallon. When gasoline prices are $3.00 per gallon, Joe Six-pack pays $4.50 for the same amount of ethanol energy."
This is a good calculator for how much food you really need to have.
http://lds.about.com/library/bl/faq/blcalculator.htm
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