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Bloomberg's "Chart Of The Day" Warns Of Coming Surge In Wheat, Corn Prices

Tyler Durden's picture


Now that the Chairman's new mandate is not to prevent disinflation but to generate inflation, he may soon be patting himself on the back... but for all the wrong reasons. As the Bloomberg chart of the day indicates, the world may very soon see a surge in wheat and corn prices, pushing such staples as bread and corn flakes through the roof. The reason, in addition to Bernanke's flawed monetary policy: "bad weather and a shortage of farmland threaten to create supply shock waves." As the chart below shows the price of a basket of grains and palm oil has risen almost 50 percent since the 50-day moving average passed through the 100-day line. On the two previous times this occurred the past decade, prices about doubled or tripled over the following two years before peaking. In other words, if history is any indicator, we may see a quadrupling of input prices from here as the last "food inflation" bubble is recreated. Are double digit prices for a loaf of bread in the immediate future for what will soon be a hungry US middle (what's left of it), and not-so middle class? Quite possibly. Luckily, all their stock gains should more than offset this upcoming price shock. Or not.

More from Bloomberg:

Drought in Russia and other parts of Europe, excessive rains in Canada, dry weather in the U.S. and flooding in Pakistan prompted the UN Food and Agriculture Organization to pare its harvest estimates. The agency forecast a 37.4 million metric ton shortfall in grains production for 2010, which would be the first deficit in at least three years. Global production of grains will be 2.216 billion tons this season, compared with demand of 2.254 billion tons, the FAO said last month.

“Our main concern is the low level of stocks,” Abdolreza Abbassian, secretary of the trade markets division of the agency’s Intergovernmental Group on Grains, said in a phone interview from Rome. “We don’t have enough buffer in the event of a major shortfall in production next year.”

After October and November saw a series of basic staples opening limit up on the commodity exchanges, it appears that the recent brief respite of price moderation may soon be coming to an end:

Wheat futures surged to the highest in almost two years on Aug. 6 after the worst drought in at least half a century slashed grain harvests in Russia, prompting livestock feed users to switch to corn. Demand for that grain rose as a result, while dry weather threatened to curb yields in the U.S., the world’s largest producer, and hamper planting in South America. Corn prices have risen about 70 percent since this year’s June 7 low.

“These are symptoms of having tight markets for nearly all the major food crops, the result of which is that whenever any of them has a problem, you will see spillover with the others,” Abbassian said. A further boost in demand “could find the stocks at even a tighter situation. That could really send shock waves throughout the sector, starting with corn.”

As to what this means for retailers who will be even more hard pressed to find ways to squeeze every penny out of margins, and not pass through costs, just look at the rather unfortunate case study of GAP, which filed for bankruptcy a few short hours earlier.


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Mon, 12/13/2010 - 01:00 | 801014 Everyman
Everyman's picture

And here comes the price inflation.

Mon, 12/13/2010 - 02:29 | 801086 dukeness
dukeness's picture

Comes?  It's been here since May.  Print On, Brother Ben!

Mon, 12/13/2010 - 04:03 | 801127 morph
morph's picture

You can't make iPads and TV's out of wheat.

Mon, 12/13/2010 - 08:11 | 801208 snowball777
snowball777's picture

You can't sell them with margins to people who spent all their money on eats either.

Mon, 12/13/2010 - 10:19 | 801359 Young
Young's picture

Considering the amounts of food fat ass people in the west consume, this is what's gonna start a war... That or the lack of rare earths to produce iWhatthefuckevers...

Mon, 12/13/2010 - 11:32 | 801500 DaveyJones
DaveyJones's picture

you should work in marketing

Mon, 12/13/2010 - 12:45 | 801682 tamboo
tamboo's picture

au contraire, this one even has a camera, usb, and multitasking!

Mon, 12/13/2010 - 07:18 | 801185 Sudden Debt
Sudden Debt's picture


Mon, 12/13/2010 - 07:31 | 801190 LMAO
LMAO's picture

"Chart Of The Day" Warns Of Coming Surge In Wheat, Corn Prices

"And here comes the price inflation"


All of this must be extremely good news for the "foodstamp(ede)" programm and the people who are paying for it, or am I missing something?


Mon, 12/13/2010 - 08:49 | 801236 Turd Ferguson
Turd Ferguson's picture

Good morning, Mr. Cost.

Hello, Mr. Push.

Btw, I'm all over wheat. Have been for a while. Not even discussed yet is the drought in the winter wheat belt of central NE, western KS, Western OK and into TX. Some places have been 4 weeks with no measurable precip. Very cold and very dry means very bad yield in the spring.

Mon, 12/13/2010 - 08:53 | 801242 Calmyourself
Calmyourself's picture

Is not possible, RNR told me there is no inflation as printing money is not inflationary.. So there..

Mon, 12/13/2010 - 09:34 | 801277 jdrose1985
jdrose1985's picture

It's supply and demand. The article rightfully and plainly states that it is due to crop conditions.


Mon, 12/13/2010 - 09:49 | 801303 Calmyourself
Calmyourself's picture

Thats why gas is over $3.00, supply and demand, lots of driving to do in three feet of snow..

Mon, 12/13/2010 - 12:59 | 801722 flattrader
flattrader's picture

If you think simple supply and demand are at work, you are deluded.  Crop conditions is the cover trader use.

Try manipulated supply and demand.

Read what Goldman Sach did to food prices during the last bout of food inflaton.

No problem with starving the world's poor.

It's deja vu all over again.  Only this time it will be the middle class here in addition to the poor and working poor here and abroad.

And I'm sure they'll have a hand in rising gas prices, just as the article indicated their past involvement.

Mon, 12/13/2010 - 13:00 | 801723 flattrader
flattrader's picture

If you think simple supply and demand are at work, you are deluded.  Crop conditions is the cover trader use.

Try manipulated supply and demand.

Read what Goldman Sach did to food prices during the last bout of food inflaton.

No problem with starving the world's poor.

It's deja vu all over again.  Only this time it will be the middle class here in addition to the poor and working poor here and abroad.

And I'm sure they'll have a hand in rising gas prices, just as the article indicated their past involvement.

Mon, 12/13/2010 - 12:10 | 801590 Red Neck Repugnicant
Red Neck Repugnicant's picture

RNR told me there is no inflation as printing money is not inflationary.. So there..

Don't distort my argument.  That is NOT what I said.

For the 50th time, I said QE2 is not a money printing policy.  

Mon, 12/13/2010 - 12:14 | 801603 DaveyJones
DaveyJones's picture

you could always take your ball and go home

Mon, 12/13/2010 - 01:01 | 801015 Everyman
Everyman's picture

Food, Bitchez!

Mon, 12/13/2010 - 01:25 | 801044 DoChenRollingBearing
DoChenRollingBearing's picture

Paper food: DBA and CORN

Buy real food too.  I am also looking at water treatment options.

Don´t forget the gold and silver which will likely be tradeable for food.

Guns & ammo to protect your real assets.

Mon, 12/13/2010 - 01:39 | 801057 flacon
Mon, 12/13/2010 - 05:33 | 801153 Lets Hang Parliament
Lets Hang Parliament's picture

You are assuming the water company will still be pumping?

Mon, 12/13/2010 - 09:41 | 801290 tmosley
tmosley's picture

Best get yourself a well, AND solar panels to run the pumps.  I did.  Feels good, man.

Mon, 12/13/2010 - 07:22 | 801187 ReeferMac
ReeferMac's picture

Got the same unit!.

With my generator, battery back-ups, and booster-pump setup, I can make potable water w/o the utilities.

Mon, 12/13/2010 - 08:40 | 801231 papaswamp
papaswamp's picture

Hopefully you have a wind and solar generator....gas will run out first. Also gas generators are noisy and say...I have a generator and fuel. 

Mon, 12/13/2010 - 10:19 | 801357 -Michelle-
-Michelle-'s picture

That's why we ultimately decided against purchasing a generator.  The one thing I'd want a generator to run would be our a/c and that would require a huge amount of fuel anyway. 


Mon, 12/13/2010 - 10:35 | 801395 Calmyourself
Calmyourself's picture

Dig hole, place the genny level with ground with over head cover, railroad ties, knock almost all DB's off..  Good for running well to fill two 55 gallon water barrels upper floor gives pressure to lower.  Pex fittings to copper, faucets work..

Mon, 12/13/2010 - 11:52 | 801545 hedgeless_horseman
hedgeless_horseman's picture

I don't mind repeating myself:

Simple Pump:

It is in the same casing as my electric pump, about 10 feet above the submersible, a couple hundred feet down.  I can charge our pressure tank by hand, or by solar.  Make sure to add a faucet at the well head, too.

Mon, 12/13/2010 - 17:46 | 802742 flattrader
flattrader's picture

I would think that if water and electric utilities are not operating, after a very short time you'll be fair game for scavengers.  Unless your property is fully defensible and your firepower significant, it's only a matter of time before you're found and goodbye to solar panels and gennie.

Think about going mobile.  Sawyer water filters are good if you're on the move.  High capcity and can be back flushed for cleaning.

Having the ability to run your own pump is good only if there is an extended outage or if the cost of electric rises significantly---and that's about all.

Any long term, wide scale disruption of power either signals a breakdown civil order and/or a natural disaster...Hopefully, the latter.  Sometimes people will pull together until infrastructure is set right...somtimes.  I've seen it go both ways.

Mon, 12/13/2010 - 08:25 | 801216 Lndmvr
Lndmvr's picture

Build a still and learn to use it. Clean water from any source, just need a heat source, wood when all else fails. Some corn and potatoes and you can have something to drink and run the car, or generator, or tractor. BTW, older gas tractors are looking better than diesel everyday.

Mon, 12/13/2010 - 10:51 | 801432 High Plains Drifter
High Plains Drifter's picture

Yeh and you can go blind too.


Mon, 12/13/2010 - 03:41 | 801116 dark pools of soros
dark pools of soros's picture

Atkins Diet Bitchez!!

Mon, 12/13/2010 - 07:49 | 801198 nmewn
nmewn's picture


Mon, 12/13/2010 - 09:07 | 801251 Mad Max
Mad Max's picture

And what do you think those steers and chickens eat?

Mon, 12/13/2010 - 09:23 | 801266 Uncle Remus
Uncle Remus's picture

Each other?

Mon, 12/13/2010 - 09:41 | 801291 tmosley
tmosley's picture

Grass and bugs?

Mon, 12/13/2010 - 04:21 | 801130 Devore
Devore's picture

We'll find out soon if you can eat fiat money.

Mon, 12/13/2010 - 09:36 | 801279 jdrose1985
jdrose1985's picture

No, not when it can't be found.

Mon, 12/13/2010 - 01:05 | 801019 palmereldritch
palmereldritch's picture

For some reason I have this song stuck in my head

Mon, 12/13/2010 - 01:58 | 801070 Oppressed In Ca...
Oppressed In California's picture

And when I hear that song, I think of this movie:

Elwood: What kind of music do you usually have here? 

Claire: Oh, we got both kinds. We got country *and* western. 

Mon, 12/13/2010 - 08:14 | 801209 snowball777
snowball777's picture


Mon, 12/13/2010 - 09:39 | 801289 Winisk
Winisk's picture

The best way to herd any animal is to provide the easiest path to where you want them to go and keep them moving.  Don't let them stop and think. 

Mon, 12/13/2010 - 01:08 | 801021 flacon
flacon's picture

I got mine here:

I'm thinking about buying the rest of my life's worth of food and storing it. Screw the supermarket! (and Monsanto)

Mon, 12/13/2010 - 01:08 | 801022 RobotTrader
RobotTrader's picture

Weimar right around the corner it seems. No wonder stocks are skying.

Mon, 12/13/2010 - 01:19 | 801036 Golden monkey
Golden monkey's picture

But but, Benny the monkey is a powerful man. His friends in D.C. will help the poor sheeple with price control and free soup.

And there will be no Cubana style scarcity. I know it, because Benny knows it. Benny and the black monkey control everything.




Mon, 12/13/2010 - 01:24 | 801042 JimmyTheHand
JimmyTheHand's picture


"No soup for you!!!"

Sorry, read your post and it reminded me of the soup Nazi on Senfield.

Mon, 12/13/2010 - 02:19 | 801083 Golden monkey
Golden monkey's picture

History proved the Führer was a stupid man.The same will apply for Bernanke.

Got silver? Double soup for you, bitchez!

Mon, 12/13/2010 - 07:04 | 801179 AnAnonymous
AnAnonymous's picture

The US are already at starving the rest of world. They are going to use that natural event to enhance their effort.

Nobody will  be close to know starvation in the US (save the usual suspects who are used to dieing from famine in the US, no matter what) as Bernanke, in a smithian approach, will use the US population as an army of glutoons to increase pressure on food prices.

Instead of that, check your positions on every commodity long contract you hold as many, many countries in the world will have to sell even more of their future to overcome the starvation operation led by the US.

Classical US business style, you should know the drill by now.

Mon, 12/13/2010 - 09:38 | 801287 jdrose1985
jdrose1985's picture

How sad and true at the same time. Just thinking about it last night. Basically the top eliminating the non performers. Eventually it will reach the USA as yield extraction becomes impossible from any place.

Mon, 12/13/2010 - 12:56 | 801710 AnAnonymous
AnAnonymous's picture

I dunno. It has little to do with performing. On the contrary.

That's a free market economy and production is put on the market. Producers have to buy it back. As their production is priced in USD, they stand no chance in any bid contest against the US. No matter how performing they are, the US can cover with a better bid because the US does not pay for USD.

It is impossible to win an auction against the US on commodities.

Mon, 12/13/2010 - 01:10 | 801024 Oh regional Indian
Oh regional Indian's picture

The commodity Complex. So easy to bunch everything in the Complex. Yet, within said complex are so many variable "goods" and "bads", some dependent on other "goods" in said "complex", others stores of "value", yet others slaves to "price".

The master stroke, if there is such a thing when innovation met finance was forcing false arbitrage into "goods" that should have only responded to natural demand/supply constraints.

When this complex complex crashes, it will end up leaving milk being flooded onto dry plains and wheat stocks being bunt to "support" "prices".

Apologies for all the " " but those words are loaded.

Financial innovation, meet your bastard spawn.


Mon, 12/13/2010 - 01:14 | 801027 flacon
flacon's picture

it will end up leaving milk being flooded onto dry plains and wheat stocks being bunt to "support" "prices".


Gotta love Keynesianism. "Making the world poorer, one Ivy-League economics degree at a time".

Mon, 12/13/2010 - 01:54 | 801067 Oh regional Indian
Oh regional Indian's picture

Too true flacon.

Key-nsianism, the key that never worked and never will.

Won't stop the establishment from shoving it in and turning, turning, turning it though.


Mon, 12/13/2010 - 03:40 | 801115 Seer
Seer's picture

Nixon administration, Sec of Ag Earl Butz- "Get big or get out."  And thus started the BIG push for BIG Ag.  FAIL!

Mon, 12/13/2010 - 08:23 | 801214 snowball777
snowball777's picture

""He no playa the game, he no maka the rules." - Earl Butz, 1974, of the Pope's anti-"population control" stance.

"I'll tell you what the coloreds want. It's three things: first, a tight pussy; second, loose shoes; and third, a warm place to shit." - Earl Butz, 1976

Never one to waste his 1st amendment rights, that Earl.

Mon, 12/13/2010 - 01:11 | 801025 JLee2027
JLee2027's picture

I love how Tyler keeps calling Helicopter Ben "The Chairman", aka a communist.

Mon, 12/13/2010 - 01:36 | 801054's picture

You ain't gonna make it with anyone anyhow if you go carryin' pictures of Chairman Ben.

Mon, 12/13/2010 - 05:52 | 801159 Itsalie
Itsalie's picture

wow, The Bernank lasted only 4 weeks. That was the best sounding imho

Mon, 12/13/2010 - 07:33 | 801192 sushi
sushi's picture

Seems appropriate for a nation where the state inspects your genitals to make sure they do not blow up and where the right pocket buys buys debt from the left pocket and pays with worthless electrons. I'm waiting for the Chairman's little red book.

Mon, 12/13/2010 - 08:27 | 801217 Widowmaker
Widowmaker's picture

Wait until your pee pee shows up on you tube because of security deregulation.

Book it.

Mon, 12/13/2010 - 08:28 | 801218 snowball777
snowball777's picture

Well that...and he's the chairman of the Fed Reserve corp.

Or are you trying to say that all leaders of corporate boards are commies at heart?


Mon, 12/13/2010 - 01:16 | 801031 JimmyTheHand
JimmyTheHand's picture

I'm new to studying all of this mess, but this seems like a good trigger for stagflation right? I read the definition of it on wikipedia if someone is curious why I ask the question.

My gut tells me that the definition of stagflation is a sound one, yet it is not the sum of all of our problems.

Buy the dips (in silver) bitchez :)

Mon, 12/13/2010 - 01:43 | 801059 flacon
flacon's picture

IMHO this is less to do with traditional economic malaise and more to do with the ratification of the destruction of the world reserve fiat currency. 

Jim Rickards- Gold Standard is Plan B and Revalue Gold at $5000+ (Dollar is Collapsing)

Mon, 12/13/2010 - 01:45 | 801064 Shameful
Shameful's picture

Problem is that I'm guessing the amount of gold the US has claim to is closer to 8 tons then 8000.

Think about it. If you were the Fed and criminal government would you leave the gold there but then do no audit? Or would you walk it out the backdoor knowing that you will eventually blow up the system. After all he who has the gold makes the rules.

Mon, 12/13/2010 - 02:49 | 801094 gwar5
gwar5's picture

Rickards favors an audit of US gold in his latest interview 12-12-2010 with German website, Chaostheorien. He says if the gold is there, there should be no problem. In addition regarding a monetary emergency, Rickards says:

"Right now it (gold in the USA) is at the Federal Reserve Bank of New York, which is an independent agency. So it would be good for the United States to, in fact, commandeer the gold and move it (to) exclusive U.S. government control, away from the Fed, probably at West Point, because we have a good large gold vault there and good security."

Rickard's previous talk of commandeering German gold caused some heartburn among some Germans (he soothed those concerns in this interview), but it was very interesting that he mentioned the US government should commandeer gold away from any control by the Federal Reserve. Regarding the amount of gold being held, he says he takes them (The FRBNY) at their word, but says conducting an audit would be prudent and if the gold is there it should not be an issue. 

Mon, 12/13/2010 - 04:28 | 801134 Isotope
Isotope's picture

I think that it should be audited yearly, with different independent observers every year.

As our various LEO's and prosecutors would say to the proles, "What's the problem if you haven't got anything to hide?"

Mon, 12/13/2010 - 08:30 | 801221 snowball777
snowball777's picture

Trust, but verify!

Mon, 12/13/2010 - 09:10 | 801253 Thomas
Thomas's picture

The current estimated reserve, even if it exists, is equivalent to that of Microsoft. It ain't a lot of gold. Of course, if Rickards has his way...

Mon, 12/13/2010 - 04:31 | 801135 Hephasteus
Hephasteus's picture

I can audit the fed right now. How much gold and silver are the cash4gold and coin shops bringing in? There's your audit.

I'd say america has about 100 tons of gold max. It's gotta be more than 8 tons just from the fake shells. If his math is 8000 tons 1.3 trillion m1 = $5000 gold. Then with the faking on both ends you are probably looking at 3 trillion m1 against 100 tons of gold. Even if its only 2.3 trilion against 1000 tons of gold. It's a fucking nightmare.

As I've said and always said we have to go through a 4x to 5x devaluation just to get back to we're fucked lie our asses off fill this shit hole with corruption. Honesty is miles away heading in the wrong direction. Which is why millions if not billions will be leaving and won't be giving change of address notifications.

Mon, 12/13/2010 - 09:12 | 801254 Thomas
Thomas's picture

Our stash is pure gold clad.

Mon, 12/13/2010 - 12:19 | 801182 AnAnonymous
AnAnonymous's picture

Problem is that I'm guessing the amount of gold the US has claim to is closer to 8 tons then 8000.


It is probably larger than 8,000 tons. If anything, it is under-reported.

In a closed currency system(limited amount of currency), a mediocre player holding the largest share of the currency always ends up with aggregating the other shares.

Better to keep your hand faces down in this context, casting doubts that you might have much less than you actually do.

This way, the other players think they can take you on, keep building up their amounts.

Once they have concentrated enough, reveal that you are over what you stated. It is too late for them as you will get their shares sooner than later.

That is what gold bugs are doing: gathering gold for the bigger players to collect from at the least effort.

Mon, 12/13/2010 - 01:25 | 801045 Johnny Dangereaux
Johnny Dangereaux's picture

Food is Insurance you can Eat.

In the Grains, one only has to look at what we call "Old Crop" vs. "New Crop"  In Corn, July is basically the last of the Old Crop. Right now, the Premium to Dec Corn/New, is about +60 cents. Soybeans are signaling an even tighter situation for next summer, at this point. July Beans/Old crop, are +95 cents over November/New Crop.  In Soy Oil, the July, in the last week, has gained on the Dec by close to +1/2 cent a pound...or 1%.... I hate the word, but that's "backwardation" for you. from Wiki----"A market that is steeply backwardated — i.e., one where there is a very steep premium for material available for immediate delivery — often indicates a perception of a current shortage in the underlying commodity."

Follow my Grain Market twits!----@tradeglobex---- I am proud to say, ZH does!

Mon, 12/13/2010 - 01:43 | 801060 Shameful
Shameful's picture

Super. God I hope food doesn't break new highs. Not only is this bad for the US, but a hungry world is a world that is a lot less friendly in general.

It would probably break China from the peg. Hungry people are much harder to passive. And to think people thought Zimbabwe Ben couldn't pull it off.

Mon, 12/13/2010 - 02:03 | 801075 Dingleberry Jones
Dingleberry Jones's picture

We still have a long way to go until we even hit decade highs in commodity grain prices.

We didn't have massive, broad market inflation when grain prices skyrocketed in the beginning of the 2000s to the peak in late 2008.

No need for everyone to panic.

Mon, 12/13/2010 - 12:02 | 801567 DaveyJones
DaveyJones's picture

the cost of fuel and fertilizer and weather will continue to climb prices

Mon, 12/13/2010 - 02:11 | 801079 Cardinal Fang
Cardinal Fang's picture

Anyone know what tickets to the circus are going for lately?

PT Barnum would be proud.


Mon, 12/13/2010 - 08:40 | 801232 snowball777
snowball777's picture

You ever try getting liability insurance for a trapeze artist, sword-swallower, and elephants?


Mon, 12/13/2010 - 02:14 | 801082 mt paul
mt paul's picture

let them eat 


each other...

Mon, 12/13/2010 - 08:50 | 801237 Turd Ferguson
Turd Ferguson's picture

Soylent Green is people! Its people!!!

Mon, 12/13/2010 - 12:14 | 801598 hedgeless_horseman
hedgeless_horseman's picture

And so was some of the furniture.

Mon, 12/13/2010 - 03:07 | 801097 Rusty Shorts
Rusty Shorts's picture

Yeah, we are headed into a deflationary depression, a place where only food matters ,, and some form of shelter.




Mon, 12/13/2010 - 03:11 | 801101 AUD
AUD's picture

I think harvest estimates are going to be well pared here in Australia too. The most rain in at least two decades in the wheatbelt, water everywhere. I've heard a good portion of the crop is now stockfeed.

Won't help prices fall that's for sure.

Mon, 12/13/2010 - 03:24 | 801108 Id fight Gandhi
Id fight Gandhi's picture

Soon are poor will be our food. Soylent green.

Mon, 12/13/2010 - 05:56 | 801160 gloomboomdoom
gloomboomdoom's picture

667<<< "once in a lifetime, never to be seen again," event.

The planners are always ten years ahead of you.

The sheeple are always ten years behind.

Nothing else is coming...

Mon, 12/13/2010 - 03:28 | 801111 dehdhed
dehdhed's picture

silver's exploding higher right now, took out that heavy resistance at 29

Mon, 12/13/2010 - 03:37 | 801112 dehdhed
dehdhed's picture

aud/usd still painting that inverse h/s started around nov 11th, if it gets nears parity again it will have broken out and target 1.03

Mon, 12/13/2010 - 03:42 | 801117 dehdhed
dehdhed's picture

kind of comical but it looks like to contain silver they're slamming aud/usd right now.(last 20 minutes)  smells like desperate measures to me

Mon, 12/13/2010 - 03:45 | 801118 StychoKiller
StychoKiller's picture

Someone(s) in Hong Kong REALLY wants the Ag!

Mon, 12/13/2010 - 03:37 | 801114 Rusty Shorts
Rusty Shorts's picture

" the ship must be sinking "

 - Muhammad Ali

Mon, 12/13/2010 - 12:02 | 801573 hedgeless_horseman
Mon, 12/13/2010 - 03:52 | 801124 mt paul
mt paul's picture

golden waves 

of grain 



Mon, 12/13/2010 - 04:30 | 801133 gloomboomdoom
gloomboomdoom's picture

Fundamentals are near perfect in this market. Equities are as cheap as I have ever seen them. I had a great year. Currently hard and long the dollar.

Ben is = alpha. Owned all the doomers and DEAD-wrong bears. I want to kiss him on the lips . Jams another 600 billion up your hindenburg asshats.

How does it feel folks? No Recession where I live. Parking lots were jammed. Busiest season in years. It's great! (I am on team America). Middle class familes walking out with happy kids. Cheap consumer goods is an America tradition. BETTER GET USED TO IT!

America is great folks. You would be suprised how easy and managable it is to live off 20 grand a year. (I make $10 a hour).

I proud to be in American where at least I won't have to live through a Great Depression!

Mon, 12/13/2010 - 06:12 | 801162 ZackLo
ZackLo's picture

Don't drive with a blindfold it's dangerous.

Mon, 12/13/2010 - 06:22 | 801164 gloomboomdoom
gloomboomdoom's picture

believe me, it is scary enough as it is to keep me off. *junk* btw.

I love the doom on this site (entertainment), but this time the doom is off.

QE2 is a bluff

"By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so"
- Ben S Bernanke 2002

Mon, 12/13/2010 - 06:40 | 801168 ZeroPower
ZeroPower's picture

If you think QE is only a 'threat' then i suggest you look into the proof i.e. POMO. 

Mon, 12/13/2010 - 07:10 | 801181 taraxias
taraxias's picture

The sad thing is that a lemming like you who believes that the FED will fix everything made money this year despite your ignorance.

Sad, but true.

Mon, 12/13/2010 - 07:15 | 801184 ZackLo
ZackLo's picture

I'm just saying be careful. I hope you have some Pm's as a hedge...Oh and I've read the speech...If we broke up the big banks in 2008 or early 09 then we would have had a sustainable rally based on real growth...Deflation (or disinflation) helps input costs so companies that aren't monopolies can borrow and take the place of incompetent borrowers but in a fractional reserve fiat system it gets nasty on the up and down side so I can see where he's coming from when big oligarch 500 companies start going belly up people get "scared?" as if they're isn't thousands of more competent people in the industry to buy the assets at a mark down to put those same people back to work...

But seriously, their is alot more developed countries thrown into the mix then other times in history....remember may 6th? and china is a currency revaluation from being a super power...The world is starting to not revolve around the united states...we can play the funny money games but, look at the soviet union when they had their "famine" grain exports were at all time highs...think of an ocean...the water washes up back and forth making an erosion line....each little edge of the wave making a crisp line intricate line of individuality..then the tide comes in and whipes everything out. the feds the tide.....the economy is alive consisting of trillions of transactiong on and off the books...price signals for the most part give each individual participant it's signal to participate based on skills and savings...savings are gone man and replacing them with cheap credit off the number pad on a keyboard isn't going to change that...

didn't junk you buy the way

Mon, 12/13/2010 - 09:45 | 801296 jdrose1985
jdrose1985's picture

You believed the biggest lie ever sold. Hopefully your exit timing is exquisite.

Mon, 12/13/2010 - 10:15 | 801315 ZackLo
ZackLo's picture

how so? oh I left out removing fractional reserve banking and strict capital audits and commodity currencies..also  allocated risk capital accounts if banks want to lend. let the market decide the currency. I suppose you rather a monopoly on forcing people to work?

Mon, 12/13/2010 - 06:19 | 801165 Dismal Scientist
Dismal Scientist's picture

'Equities are as cheap as I have ever seen them'...

You've not been around very long, have you ? Equities are 'cheap' at the end of bear markets, when noone wants to touch them, and world class businesses trade on single digit PE multiples. Right now, they are trading on peak margins, brought about by drastic cost cutting. They will only look 'cheap' on forward multiples if sales grow strongly and operating leverage kicks in.

As for the Nasdaq multiples, don't get me started etc. Come on, you're a bull and thats fine, just give us a better rationale why...

Mon, 12/13/2010 - 06:45 | 801171 ZeroPower
ZeroPower's picture

I believe his reasoning is:

"Parking lots were jammed. Busiest season in years."


Unfortunately, the Christmas season is a very biased indicator of spending. Perhaps if one asked how much people are spending compared to previous years, we could get a reasonable answer to this bull/bear on retail issue.

Mon, 12/13/2010 - 07:08 | 801180 Dismal Scientist
Dismal Scientist's picture

'The mass of men lead lives of quiet desperation', is the Thoreau quote. I quite agree with you that Xmas season is a terrible indicator, because this is when the mass of people spend regardless of their circumstances, often to put aside the quiet desperation feeling for a while.

We would learn something if we knew how deep the discounting will be compared to previous years, just so retailers can shift inventory. Q4 margins will give a feeling for how much more costs there are to cut, to offset what I am betting is heavier than ever discounting. Am also betting regional differences will be more pronounced this year than usual.

Mon, 12/13/2010 - 09:29 | 801268 UGrev
UGrev's picture

In 2009, I spent around $500.00. I got one "entertainment" type gift for each of my boys and the rest of their gifts were clothes or things they needed as they are young and still growing. I also got my wife 1 entertainment gift and other gifts which were also "need to have" items (i.e. items used to can food).

Now, that was just what I spent. My wife spent something similar. This year, we've spent about $640 between the both of us. Again, the bulk on clothes and necessary items. Any "toys" I purchased were educational toys (only) this year (i.e. how to build electrical circuits for my 7 year old).

So not only are we spending less, but the purchases are increasingly less frivolous (I like hands on labs for the kids). It's been going down about 40-50% each year as I don't bother to spend any money on trumped up x-mas, bullshit, hype. More of my money has been going to sustainable living items and PM's like how my grand parents used to do it not so long ago.

I also told my parents to not buy anything for my children that they couldn't eat or use in the course of their daily life. I told my brothers not buy gifts for us AT ALL this year (again). For the past 4 or 5 Christmases, we've not bought anything for our nieces and nephews or brothers/sisters. We rarely even buy them birthday gifts. It's all such bullshit.  

Shit.. I spent 2 hours going through the lights we put away last year, replacing all the bulbs that were bad using an extra string of lights that I had from the year before. I could have gotten a whole new, working set, from the store for 5 bucks and I didn't even do that. 

To give a little perspective.. while some of you are taking 1,000 troy oz of silver, I can ONLY buy 10oz a month on what I make. I'm not poor, but I'm certainly, probably, more representative of the Joe Sixpack than the guy who can drop coin on 1,000oz of Ag and think little of it. 

Good luck folks, and remember your humanity because it's easy to lose. 

Mon, 12/13/2010 - 10:29 | 801378 -Michelle-
-Michelle-'s picture

We're spending a tad bit more than last year, but only because there were a few more kids added this year.

Our gifts to our adult siblings and the one remaining parent between the two of us are gift bags of blankets, photo books, candles, and homemade candy and cookies.  The kids are all getting small things, $10 or under.  We'd thought about doing silver, but it's getting a bit pricey and we've got 14 kids to buy for.

For our own children, they each get three presents. If that was enough for Baby Jesus, that's enough for them.

Mon, 12/13/2010 - 11:03 | 801446 Blankman
Blankman's picture

"It's all such bullshit" yet you still put up christmas lights? A wee bit of a contradiction don't ya think?

Mon, 12/13/2010 - 07:51 | 801200 ViewfromUnderth...
ViewfromUndertheBridge's picture

I do not believe for a moment you are who you say you are or are doing what you say you are doing...but for all those happily ignoring tail risks Denninger has two good posts this evening...

On corporate leverage which gives pause to your concept of value;


Here is what your friend Ben is doing , does that in any way look sustainable?

When you see US terms of trade improving suddenly and massively, no doubt a moment for jubilation you would think, then remember that is the confirmation of hyper-inflation, a la Weimar. When the world rejects the dollar, where do you think it will end up?

Good luck.

Mon, 12/13/2010 - 09:30 | 801274 UGrev
UGrev's picture

I had worry on my shoulders before Karl's posts.. after reading those two, I was kind of scared. Math is a mother fucker, isn't it. 

Mon, 12/13/2010 - 11:34 | 801503 RKDS
RKDS's picture

Seriously, where the hell do you live?  It is practically impossible to make it at all, let alone have anything, on $20K in small town Pennsylvania.  I don't exactly struggle on $40K, but there's alot I don't cable TV, a pool, and vacations.  I mean, I get that you're tired of the permabear stuff, I'm just as tired of having to worry about what's around the corner.  I just don't know if you're insane, lying, or sarcastic here.

Mon, 12/13/2010 - 07:26 | 801188 Cash_is_Trash
Cash_is_Trash's picture

Hunger bitchezz

Look at The Kroger, didn't their margins collapse??

Mon, 12/13/2010 - 09:14 | 801256 Tanz der Lemminge
Tanz der Lemminge's picture

Yep - our Kroger store closed their doors a few weeks ago.

Mon, 12/13/2010 - 07:29 | 801189 TooBearish
TooBearish's picture

No worries, Ben has 100% confidence that the FED can tighten in 15 minutes and immediately quash any inflationary forces at work - don't you believe THE BERNANK?

Mon, 12/13/2010 - 07:42 | 801195 Ricky Bobby
Ricky Bobby's picture

Not to Worry, I am sure they are prepared to implement price controls. It's the Full Banana with these maniacs.

Mon, 12/13/2010 - 08:51 | 801239 Turd Ferguson
Turd Ferguson's picture

We're becoming the biggest Banana Republic ever. Maybe there will be a lot of bananas for everyone to eat?

Mon, 12/13/2010 - 09:37 | 801280 Uncle Remus
Uncle Remus's picture

Banana Republic

I wonder how many congresscritters and senators see or hear that from their (nod, wink) constituants?

Mon, 12/13/2010 - 09:47 | 801300 tmosley
tmosley's picture

Nope, just free clothes for everyone, so long as the low grade cotton holds out.

Mon, 12/13/2010 - 12:05 | 801581 DaveyJones
DaveyJones's picture

we already have a Chiquita AG

Mon, 12/13/2010 - 08:06 | 801206 Burticus
Burticus's picture

Now that the breadlines are already longer than in the 1930s depression, with 43 million 'murkins and growing, the central planners accelerate food hyperinflation to starve what is left of the oblivious, apathetic, complascent sheeple to make sure they are too starving poor to revolt.  This will end very badly for everyone, particularly the parasite class, who will end up hanging from every lampost from Pennsylvania Avenue to Wall Street along with their bankster masters.

For now, all we can do is protect ourselves.  In addition to the precious metals - gold, silver, steel and lead - I have stockpiled food, equipment, tools, supplies and a doomsday seed bank for Mad Max Bartertown, including a gravity water purifier.  Next trade will be to go "all in" rope futures, since 3/4 inch Manila hemp should become the ultimate bubble along with gold.

Mon, 12/13/2010 - 08:28 | 801219 MiningJunkie
MiningJunkie's picture

Bears are all "long cash" by way of shorting stocks. Cash is trash because the banksters I.e. Government are all "short cash" because they are long debt. The more they print, the more they have to cover the "short cash" trade. How can you not own silver with the masters of the printing press in need of massive reflation?

Mon, 12/13/2010 - 08:44 | 801223 YHC-FTSE
YHC-FTSE's picture

I've been saying for years that staple food speculation should be withdrawn or at least better regulated - it makes a bad situation infinitely worse. UCL (University of London) did research on this phenomena and found that the recent expansion in food-commodity derivatives lead to large increases in speculative investments pushing prices far higher than predicted by supply and demand effects. 


Reduced purchasing power rather than food availability is a major cause of hunger and malnutrition. The consequences of starving millions of people are so utterly immoral, it makes me sick. 

Mon, 12/13/2010 - 09:29 | 801272 innertrader
innertrader's picture

I continually find it interesting that there are still people on earth who haven't figured out that a FREE market is the best system we have for providing absolutely everything.  SOCIALISM is a complete failure, always has been and always will be.  Therefore, putting the price of grain up gives farmers incentive to produce more, always has and always will!  Prices have been artificially low for decades, due to the FEDs subsidy programs; both for growing grains and for exporting grains.  Particularly to poor nations that can't produce enough food to support their populations.  Anything the FED does concerning spending tax payers dollars is extremely inefficient and directly affects the average tax payer's life style and the debt created will do so for decades.  Soybeans went to $13 in 1972, 38 yrs ago, so how do you like buying soybeans for the same price today?  That is remarkable, but naturally you as a tax payer have subsidized the system to keep prices low.  Most speculators loose money, so let them buy high priced grain from farmers laying off their exposure and taking a profit, I love it!  The world is going to run out of food unless there is a huge incentive to produce it, period!  The market has to be FREE to work properly in the long run and in the long run, we are better off for it.

Mon, 12/13/2010 - 09:52 | 801304 Winisk
Winisk's picture

Hunger and starvation is a good incentive too.

Mon, 12/13/2010 - 09:53 | 801306 LawsofPhysics
LawsofPhysics's picture

You got that right.  Even scarier is the fact that over 20% of the fossil fuel we burn this country is done so in order to make fertilizer for 100% of the food (animal proteins included) we eat.  Organic farming does not even register in the big picture folks, sorry.Talk about an unsustainable situation.  There is a natural process for fixing nitrogen into fertilizer, but it is extremely slow.  Why?  Because no matter what God you pray to, it still takes almost 500 kJ per mole of energy just to break the nitrogen-nitrogen triple bond.  Of course we don't teach math, science, and physics anymore in this country.  Maybe if we pray harder, the thermodynamics will change.

Mon, 12/13/2010 - 10:36 | 801398 rwe2late
rwe2late's picture

I continually find it interesting that some people still have not figured out that a “free market” cannot exist in the real world, and can only exist as a concept. Nor does what exists today constitute “socialism”.

The military and financial manipulations, the inequities of power and consequent wealth, the global agribusinesses and petrodollar transportation industries, all preclude the existence of any “free market”.

Mistaken notions predicated on the “free market” and economic “supply and demand” unfortunately result in the rationalizing of food shortages and starvation as an unavoidable “market correction” to set things straight. However, in the context of today, rising prices will not result in food being more widely available, but instead in widespread starvation, despite rising agribusiness profits.

Rising fish prices will not make fish more available as the fisheries are destroyed, nor will rising food prices from agribusiness monopolization and commodity speculation produce more food.

It has traditionally been profitable to privatize, and then rape the planet’s resources, and continues to be so despite the global destruction of habitat, pollution, and profligate waste of natural resources. Pesticides and patented seeds may result in higher profits, but they also cause declining bee and bird populations, loss o fisheries, and bankruptcy of small farmers. A global food crisis is created as formerly self-sustaining regions become subject to the vagaries of global food and transportation industries, biofuel profits, and commodity speculators.

Those who applaud rising food prices in the expectation that good will necessarily follow thanks to a “free market” are mistaken.

Mon, 12/13/2010 - 13:46 | 801887 YHC-FTSE
YHC-FTSE's picture

Look, you read my post wrong. I will repeat it & emphasize where you went off the reservation.

"UCL (University of London) did research on this phenomena and found that the recent expansion in food-commodity derivatives lead to large increases in speculative investments pushing prices far higher than predicted by supply and demand effects. "

"“Derivatives are shadow financial instruments that include forwards, futures, options, and swaps which may be used as insurance – hedging – or for speculation. Speculative purchasing of derivatives can create inflationary pressure, causing particular prices to increase above their real value, by artificially increasing demand. Sometimes, price rises due to speculation cause further speculative purchasing in the hope that prices will continue to rise. A positive feedback loop is created in which prices rise far above the underlying value of the commodity, generating an economic bubble. The price of the good then reaches absurd levels, the bubble bursts, and prices crash.”"

(From UCL:

While this phenomena occurs, millions will be driven to starvation and malnutrition. I am not the only person to say that food speculation should be withdrawn. The UN WFP has repeatedly warned about it.

Why do some people always confuse capitalism with democracy? I advocate neither socialism or capitalism exclusively - I make my money from capital, and my society benefits from stability derived from socialist principles which includes democracy.  I stopped having simplistic views of political and economic philosophies when I started growing pubes. and no, I did not junk you. :) 

Mon, 12/13/2010 - 09:44 | 801294 Bob
Bob's picture

All your foods are belong to us: Psychopathic "investors." 

But a boy's gotta make a livin' somehow, right? 


Mon, 12/13/2010 - 08:33 | 801226 overmedicatedun...
overmedicatedundersexed's picture

we got a  guy posting advice on equity investment and singing the Fed praises..who posts he makes $10 /HR and lives well while buying stocks..harry would be proud.

I bet he's the one buying all those home decorations harry keeps bleating about.

what trolls.


Mon, 12/13/2010 - 09:44 | 801295 LawsofPhysics
LawsofPhysics's picture

Damn that finite planet!  Can we send wall street to Mars? Seems like the only solution.   I did notice that the price for a box of 25 M15 rounds has gone up almost 400% since 2008.  Who are the lead, brass (copper, zinc, some nickel), and gunpowder companies I should be investing in?  Anyone have more information?

Mon, 12/13/2010 - 09:55 | 801309 sbenard
sbenard's picture

I just checked Bloomberg, and the updated their stories to include soybeans, too.

Over the weekend, I scoured the internet for suppliers of food storage companies. Of approximately 20 companies that I found, ALL of them, without a single exception, are experiencing shortages and delays of about 3 weeks.

Mon, 12/13/2010 - 10:32 | 801388 -Michelle-
-Michelle-'s picture

No wheat.  No powdered milk.  No sugar.  No pinto beans.  No quick oats.... When the pearled barley and spelt is sold out, it will be time to hunker down.

Mon, 12/13/2010 - 10:46 | 801423 TexDenim
TexDenim's picture

When bread doubles in price, the "little people" will start to scream for Bernanke's head. And that's when he will say (ta, da) "Let them eat cake!"

Mon, 12/13/2010 - 12:00 | 801561 hedgeless_horseman
hedgeless_horseman's picture

Nope.  The monthly allotments on the SNAP card will just double.  See the beauty?

Mon, 12/13/2010 - 14:27 | 802055 augmister
augmister's picture

THE BLACK SWAN..... NO food.  ....coming to a country near YOU!

Tue, 12/14/2010 - 06:12 | 804071 theprofromdover
theprofromdover's picture


So why did they encourage everyone to switch from grain crops into agri-fuel production?

Is there no limit to central planner stupidity?

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