Famine in America?

[Update 1-30-2009: I suspect that with Congress about to arbitrarily print another trillion or so dollars, the dollar bubble is about to burst and inflation is about to get really bad.]

If you've been watching food prices at your local retailer, you know that inflation is happening. Those paying attention to commodities probably realize that prices of food will likely double or triple in the coming months. Are you ready for that?

It's seriously scary, but it's not the end of the world... maybe just the end of the world as we thought we knew it. The USA's about to go on a crash diet. Why is this happening?

The New York Times ascribes the rise in grain prices to global supply problems coupled with rising demand in the developing world, and those certainly factor prominently. There is, however, much more to the story, some of which has barely begun to unfold.

(Before continuing, an aside: How can we blame supply problems on Nigerians who have developed a taste for bread when we Americans, 6 percent of the global population, consume so much of the world's bounty? If it weren't for our thoroughly disgusting meat habit -- and I say this as someone who enjoys the occasional steak -- there would be bread aplenty for everyone.)

Back on track...

Yes, supplies are tight. Drought in Australia seriously crimped production, and weakness in the U.S. dollar has begun to wreak havoc with trade. Huge grain producers Russia, Ukraine, China, and Argentina have all recently placed restrictions on grain exports. Think about that. Those countries are restricting the trading of food for money. That's because money is becoming worthless, probably because, as old Chief Seattle pointed out, you can't eat it.

Meanwhile, demand is burgeoning, but it's not just Nigerians. There is some degree of hoarding going on. The rise in commodities is largely attributable to big capital shifting from shaky financial schemes to solid assets. Don't blame the capitalists, though. Blame the Nigerians because now they like bread.

Free trade is all well and good... until one side doesn't want what the other side offers. At that point, you can throw all your theories about comparative advantage right out the window. If I don't want to trade my grain for your money, you've got a problem if you need my grain more than I need your money. You've got an even bigger problem if you have no military advantage over me, which you assuredly do not after your ill-advised misadventure in Iraq, which gave me the opportunity to beef up my military as you actively degraded your own... but I digress... (sorry, the stupidity of the Bush administration just pisses me off. Call me old fashioned, but I liked America the Global Good Guy better than America the Bully. I also liked America the Reliable Financial Steward better than America the Profligate Borrower... but, you know, maybe I'm just an old square.)

Even as more powerful countries are able to protect their own people by restricting their own grain exports, America is pretty much being forced to dump our grain on the world market because we're free traders and all that. Besides, we owe everybody in the world way more than we can ever pay back. American grain exports are projected to rise 23 percent this year, to $101 billion. Well, hey, at least it will help alleviate the trade deficit, right! That won't help us much when we're paying ten bucks for a bagel, though.

Speaking of which, WTF do we do now? The ten-dollar bagel (and worse) is not that far away now.

I don't know what to do, but you might want to forgo the chemical lawn application this spring -- those dandelion greens are pretty nutritious, and bugs are supposed to be full of protein.