Mon 21 Apr 2008
Is it even within the realm of possibility that America could face food shortgage in her future?
The short answer is yes.
There was a story this weekend in the NY Sun about the appearance of some food shortages in a couple of regions in the US. I believe this is a harbinger of what’s to come. There are several contributing factors to why this possible.
Traditionally, there has been enough food for everyone on the planet. That is changing. The world is bumping up against maximum capacity in many commodities. Oil is a primary one. I am not saying the world is out of oil. I am saying that the world has tapped most of the easy fields. There is plenty more oil available, but it is getting more and more expensive to extract. There is only so much out available that is easy to get to.
The same with mines. There is only so much ore that easy to mine. There is more ore available, but it isn’t economically feasible at todays prices to mine.
The net of what I have just stated is that there is a finite supply at any given price. The higher the price, the more supply can become available.
This also applies to food. There is only so much available. In the past, the US has experienced a very strong currency. We could be top bidder for the world’s commodities. That is changing. The value of the dollar has been sinking for the past few years. Other countries will be able to out bid the United states for precious commodities. China has been going around the globe the past 2 years doing exactly that.
This trend will continue. As the US continues to print more and more money, and water down the value of its currency in the process, the US will find itself with less and less ability to be top bidder in the battle to buy enough resources.
The above story is just the beginning of a very shocking change for America. As a country we have overpsent for decades, and now we are just starting to have to face reality.
It will be a painful process. Protect yourself.