Tuesday, November 9, 2010


Here's a piece from F.T. suggesting that we can expect higher food prices soon, on account of bad weather.

Now this brings back memories of the cold war era, when no amount of covering up could hide the fact that the usual state of grocery shelves in the Soviet Union was: Empty. Being unable to hide the fact, the Russians would blame the recent bad weather. This led to jokes about the Soviets ability to control the weather as they had had up to 70 years, depending on when you heard this joke, of "bad weather".

Yesterday I saw a graph showing the change in price of several commodities, from soybeans and corn to silver and gold. Today, of course, I can't find it. Rates varied, but the average for the past year was in the 8-10% range. Looks like that there "global cooling" is really hitting us hard.

Or it could be that the governments fiscal policies are causing the money to become worth less and less. Quantitative Easing is highfalutin economist speak for paying your debts by printing more money. Unfortunately, this has the effect of making the money worth less, and since prices go up much faster than your paycheck, the effect is equivalent to a big tax increase.

Looks like it's going to be a long cold winter. La Nina, or QE2?

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