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.
I'd posit one additional, and rather ironic, major reason for the escalation of food prices: increasing prosperity in the developing world. Peasants (are we still allowed to call them "peasants," or is that now politically incorrect?) in China and India, among other places, while still poor by our standards, are increasingly able to eat more calories, especially in the form of meat, than in years past. With more grain going to animal feed rather than directly to food products, grain products increase in price.
Answering your question via “The Restaurant at the End of the Universe” by Douglas Adams...
The management consultant gave him a look that only a lungfish could have copied.
“Fiscal policy ...” he repeated, “that is what I said.”
“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn’t grow on trees you know.”
“If you would allow me to continue ...”
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.
“But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut.”
Murmurs of alarm came from the crowd. The management consultant waved them down.
“So in order to obviate this problem,” he continued, “and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and ... er, burn down all the forests. I think you’ll all agree that’s a sensible move under the circumstances.”
The crowd seemed a little uncertain about this for a second or two until someone pointed out how much this would increase the value of the leaves in their pockets whereupon they let out whoops of delight and gave the management consultant a standing ovation. The accountants among them looked forward to a profitable autumn.
Bury em. Dig a hole, then cover the hole with either dirt or straw and you can use them all year long.
I cant remember if we used to layer them with straw or not now... Of course there is a lot of kinds of insulation a person could use now days.
You need to keep them in the dark and steady temp.
bump for later
One other thing we used to do..we used to dry green beans. Simply hang them up and dry them out and leave them on the line.
Kinda tuff, those dried beans. Used them in stews and such. The stew would stay on the wood stove till it was all gone. The whole pot might be on that stove for a week and mom would keep adding things to it during the week. That was for lunch. We always had quartered potatoes for supper and any meat and tater left overs were put into the stew pot and kept hot on the cool side of the stove.
We were never sick like now. Of course until us kids would come home from school with the measles and mumps and all that. Not one kid today would survive doing what we did back then.
bump your post.
Women and minorities.
Root crops is right. The last thaw we had I dug up the last of my carrot in the blowing snow. Got 22 gallons of carrots and left many in the ground because I was to cold and they were to small.
This guy missed a few points. Our oil prices are higher because democrats won't let us drill for our own oil and be self sufficient and not at the mercy of OPEC. Furthermore we are burning food instead of eating it. I guess he never heard of (corn) ethanol.
My concern is 1) the structural integrity of my single story abode if I buy any more lead, and 2) will I have enough lead?
Another thousand assorted rounds scheduled for delivery next week.
Concrete test underway.
The corn used for ethanol is yellow dent field corn used mostly for animal feed. The spent mash after distillation is still pretty good animal food, so not much lost. We eat sweet corn and white corn.
That being said, it’s still a dumb idea at todays oil prices.
Reason food in the US is cheap is that we eat oil. Oil gets expensive, food gets expensive. And it will.
Live on a sailboat. Keep it in seaworthy condition. Equip it with a water maker. Stock 6 months worth of food at all times. Carry fishing gear and hunting tools and know how to use them.
Paranoid?
Nope. Just ready to sail for the deep South Pacific or Alaska at any time. Going anyway. Might as well be prepared.
Sweet corn (yellow, white, bi and tri colored) is mostly eaten from the cob, but is also canned and frozen.
It is doubtful that there will be a lot of excess food in dumpsters when we get to severe shortages and/or prices that make normal grocery buying prohibitive.
Still, I think most yellow dent is animal feed, and the point about the spent mash is my main issue. Do you know the actual percent of yellow used for human food vs. animal?
Well, I was just thinking that the liberal elites like Barry, Harry and Nancy are going to have to throw their garbage somewhere.
/imo
We are not burning food instead of eating it. We both burn it and eat it, as the US consistently grows far more corn than it consumes.
LOL, now if you could figure out how to make water into wine you won’t have a food problem.
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