Best of the Week
Most Popular
1.UK House Prices BrExit Crash NOT Likely Despite London Property Market Weakness - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit Implications for UK Stock Market, Sterling GBP, House Prices and UK Politics... - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - Nadeem_Walayat
7.UK Interest Rate Cut to 0.25% Imminent and More QE Money Printing - Nadeem_Walayat
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.The Stock Market is Reading it Wrong! - Chris_Vermeulen
10.Breakouts Galore in Gold and Silver - Jordan_Roy_Byrne
Free Silver
Last 7 days
Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - 28th July 16
FOMC Interest Rates and Their Impact on the US Economy - 28th July 16
The State Of The Economy - 28th July 16
Elliott Wave Crash Course - 3 Ways the Elliott Wave Principle Enhances Your Trading - 28th July 16
Japan's "Helicopter Money" Play: Road to Hyperinflation or Cure Debt Deflation? - 27th July 16
Monetary Zika - The Insidious Nature of Credit Expansion - 27th July 16
Gold and Pork Bellies - 27th July 16
Silver Is Insurance Against The Worst Part Of This Depression - 27th July 16
Don’t Buy The SPX Hope Stock Market Rally! - 27th July 16
Bitcoin $650 Still in Play - 26th July 16
Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - 26th July 16
The Forex Markets Are Getting Exciting! - 26th July 16
Underpriced Silver Is the “Rip Van Winkle” Metal - 25th July 16
Declines in Multiple Market Indexes - 25th July 16
Retailers Are Doomed as Most Americans Are Too Poor to Shop - 25th July 16
Here’s One Currency That Could Go to Zero - 25th July 16
Stock Market Top is Expanding - 25th July 16
Silver Manipulation – Because They Needed the Eggs - 25th July 16
Silver Market COT Stuns: What's Going On Here? - 24th July 16
Gold Demand Remains Stable During Sector Weakness - 24th July 16
Sernova, Diabetes and Haemophilia - 24th July 16
Russia: Tensions, Turmoil, and Western Hubris - 24th July 16
Soybean Commodity Price to Soar Again - 23rd July 16
SPX Stock Market Uptrend Continues - 23rd July 16
Gold And Silver – Debt Addiction Will Carry Precious Metals Higher, Guaranteed - 23rd July 16
Pokemon Go - How to Play, First Use, Balls, Stops, Catching Pokemon's... Great Excercise! - 23rd July 16
7 Signs That the Gold Market Remains Resilient - 23rd July 16
Basic Income in The Time of Crisis - 23rd July 16
Silver Bull Faces Correction - 22nd July 16
The Serious Warning No One’s Talking About - 22nd July 16
Stock Market Insight from Greed, Volatility, and Put/Call Ratio - 22nd July 16
What Will Happen To the Stock Market When Interest Rates Rise? - 22nd July 16
How to Escape the World’s Biggest Ponzi Scheme - 22nd July 16
Addicted to Debt - We Can’t Borrow from the Future Anymore - 21st July 16
Not Everything Is Bullish for Gold - 21st July 16
Don’t Get Sucked Back Into the Stock Market - The Big Picture Hasn’t Changed - 21st July 16
Silver – Caught Inside - 21st July 16
Forex: "The Markets Are Getting Exciting!" - 20th July 16
China Economic Troubles - Is Kyle Bass Finally Getting His Revenge? - 20th July 16
Why Lithium Will See Another Price Spike This Fall - 20th July 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

U.S. Food Prices 2013: Jeremy Grantham Warns of Coming "Dystopia"

Commodities / Agricultural Commodities Aug 08, 2012 - 06:04 AM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticleBen Gersten writes: The U.S. Department of Agriculture (USDA) on July 25 issued a report warning every American that U.S. food prices in 2013 will rise 3%-4% -- but that jump is just the start of a frightening long-term trend.

The warm weather in the winter months gave farmers hope for a great crop production this year, but a crippling U.S. drought now covers around 60% of the continental United States. The water shortage has killed crops, pushed corn prices higher, and will eventually make its way to your local store shelves.


But according to famed analyst Jeremy Grantham, the looming U.S. food price increase in 2013 is just the beginning, and the reasons go far beyond the current drought.

Grantham, the founder of Boston-based institutional money manager GMO LLC, in his July 2012 quarterly letter to investors wrote a report entitled, "Welcome to Dystopia! Entering a long-term and politically dangerous food crisis."

Grantham explained that rising U.S. food prices have more to do with soaring population growth than this summer's water shortage.

"We are five years into a severe global food crisis," Grantham wrote, "that is very unlikely to go away."

U.S. Food Prices Rise with Population

Grantham explained that as the world's population rises, global demand for resources will rise exponentially; it's a mathematical certainty.

"The general assumption is that we need to increase food production by 60% to 100% by 2050 to feed at least a modest sufficiency of calories to all 9 billion+ people, plus to deliver much more meat to the rapidly increasing middle classes of the developing world," wrote Grantham.

Even today, the average American is responsible for 32 metric tons worth of food, water, minerals, and energy from the environment every single year - and that's just one person.

Given the interconnectedness between food, oil, and water there is no question prices in all three will rise as the population continues to grow. Grantham points out that you can't grow food or develop water sources without energy which is why higher food prices and rapidly rising oil are tightly linked.

"Even if we could produce enough food globally to feed everyone satisfactorily the continued steady rise in the cost of inputs will mean increasing numbers will not be able to afford the food we produce. This is a key point that is often missed," Grantham said.

Over time, Grantham said food shortages "will threaten poor countries with increased malnutrition and starvation and even collapse."

So the long summer drought which currently consumes almost 65% of the contiguous U.S. states is just a preview of what can happen as wheat and corn crop shortages escalate in severity.

Grantham warned, "Any price increase from here may cause social collapse and a wave of immigration on a scale never before experienced in peacetime. Another doubling in grain prices would be catastrophic."

Grantham's predictions have been discussed for years. That's why some of our Money Map Press experts joined a team of researchers to look into the effects of global population growth on our resources.

Turns out, Grantham is dead on.

"We've uncovered a catastrophic pattern in our nation's food system," said Chris Martenson, an economic expert and one of the team's members. "One we believe could soon hasten a world food crisis -a chain of events that could lead to massive food inflation, even riots."

The pattern Martenson identified affects the entire global economic system. It's eerily similar, he explains, to the kind of pattern you see in a pyramid scheme, one that escalates exponentially before it collapses - with little notice.

For a look at this pattern that could crush Americans, click here.

Source :http://moneymorning.com/2012/08/08/dividend-stocks-dont-fall-for-these-high-yield-traps/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife