Guest Post: Preparing Accordingly II

Tyler Durden's picture

Submitted by TF Metals Report

Preparing Accordingly II

A frequent topic here has been the ongoing and still-building food
inflation crisis. The MSM is just now awakening and beginning to discuss
the implications. By the time the great unwashed become fully aware of
the magnitude of this problem, it will be too late. You, my dear reader,
still have time to prepare.

As you know by now, the endless money printing by our inept and foolish
"leaders" is causing prices to rise in all things dollar-denominated.
Economics 101 teaches us that more dollars chasing a static supply of
goods leads to an increase in price. Eventually, these rising input
costs are passed along to the consumer in the form of cost-push
inflation. This insidious monster is the most painful of economic
afflictions as rising costs are not met with commensurate rises in
wages. The pain to the consumer is great and often brings about social
unrest and upheaval. We will surely discuss this phenomenon in greater
detail in the days ahead. For now, I wanted to give you charts on some
items that we don't normally follow here, just so you can grasp the
dimension and scale of that which lies ahead.

First up is the primary commodity index, the C.R.B. Here is the current makeup of the index:

Energy Crude Oil, Heating Oil,
Natural Gas
17.6%
Grains Wheat, Corn, Soybeans 17.6%
Industrials Copper, Cotton 11.8%
Meats Live Cattle, Lean Hogs 11.8%
Softs Coffee, Cocoa, Sugar
Orange Juice
23.5%
Precious
Metals
Gold, Silver, Platinum 17.6%

And here is a weekly chart:

When
did the index really take off? Last July. Why then? That's when the
realization was made that QE2 was coming. Will it continue rising? As
long as QE continues? Will QE ever end? No. It can't.

First up, coffee. Coffee is a great cost-push example. For now,
companies like Starbucks are trying to absorb some of this rise in price
by slashing margins and other internal "controls". They can't can't
keep this up forever, though, so soon your latte is going up in price. A
lot. Interestingly, SBUX has risen about 30% since July. Does that add
up for you? Me, neither.

OK, now, here's where the real problem is: Corn and the other grains.
 The dispshit shills, LIESman, Krugman et al , can wax prophetic all
they want about the minimal impact these higher prices will have on the
consumer. You can draw three conclusions from this:
1) They are all profoundly stupid, almost to the point of partial retardation.
2) They are criminally negligent in their lack of basic economic education.
3) They are deliberately misleading people in the hopes of maintaining the ponzi as long as possible.

I'll let you decide which is true. I know which one I believe.

Back to corn. Look at this chart:

This near 100% move has occurred in the offseason. What happens if we get a little drought in the American midwest this summer?

What the shills fail to recognize is the interaction between
agricultural commodities. In this case, its the relationship between
corn, cattle and hogs. You see, if you're a rancher or a pig farmer,
your primary input cost is feed. (Ever heard of the term "midwest
corn-fed beef"?) When feed costs double, your first move as you attempt
to control costs is to sell some of your stock. As those cows and pigs
come to market, their presence has the same impact as any other increase
in supply...a temporary suppression of price. Yet, even in this
environment, look at a cattle chart:

And look at hogs:

The
only thing that has kept cow and pig prices from rising at the same
rate as the grains is this temporary increase in supply. Replacement
rate of a herd or barn is usually not much more than 1:1 so it follows
that all of the excess supply currently in the market will lead to a
commensurate drop in supply later this year. Add less
supply to increased demand (due to QE) and you get explosive price
increases. So, not only are the grains significantly more expensive,
protein is, too. Not good. Not good at all.

Thus the phrase: Prepare Accordingly. The time is now. We're already
seeing, in other parts of the globe, what hungry, desperate people are
willing to do. This will continue and get worse.
Prepare yourselves.
Prepare your families.
Prepare your friends.
Consider things through to their logical conclusions.
Be ready for any and all eventualities.

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Snidley Whipsnae's picture

Something I noticed about the 'new' Folgers... The first cup after brewing tastes about normal. Second cup about 1/2 hr after first is definitely very down hill.

A different experience from say ~ 5 yrs ago.

Lord Koos's picture

I have a close friend who is in the gourmet coffee business.  He now imports directly from the farmers in central America and Africa on a fair-trade basis.Since he's cut out the middle man hopefully he won't have to raise prices as much, or as quickly.

GreenSideUp's picture

Thanks for this.  I thought it was just my taste buds.  

gwar5's picture

There's still deals out there. I got 60 lbs gourmet coffee @1.75 lb.

I don't think it will last very much longer.

300lbs meat during the holiday specials when they were practically giving it away.

 

topcallingtroll's picture

A huge freezer is the way to go.  For less than 100 bucks a year in electricity ( I think it is less than 50 but I am too lazy to look it up), you can store huge amounts of food bought in bulk, or when your neighbor grew too many tomatoes and zuchini.    Go to the slaughterhouse and buy half a pig and split it with your friends or just have a TEOTWAWKI pig roast with some home brew.  The carniceria or mexican grocery stores will have bulk meat items also.  even Sams has cheap tubes of hamburger, so buy 50 pounds at a time and freeze it.

Mad Mad Woman's picture

We bought a new chest freezer 2 months ago & filled it up. Buying meats & frozen stuff only on sale to re-stock. We even put up some shelves in basement & have stocked a bunch of canned goods we use. Bought lots of coffee and sugar. We're thinking about buying a couple of chickens in the spring, building a little pen in the one corner of the yard for them. Fresh eggs!!

hardcleareye's picture

Freezer's only work if you have electricity or fuel for a generator.  Learn how to can and dehydrate you food along with your freezer.

I have 23 hens and one noisy rooster, not alot of eggs right now, but that will change once the weather warms up.  Egg custard pie... suffles... fresh egg nog... I give my over production in the summer to the local food bank.

Back Yard Chicken is a good resource.

http://www.backyardchickens.com/

Xibalba's picture

Love me some Turd!

Henry Chinaski's picture

FiveBucks $ixBUX $evenBUX...

sabra1's picture

do what i've done, go to startrek.com and buy a replicator! best thing i've ever bought!

cossack55's picture

American Preppers Network

Get some.

Mr Lennon Hendrix's picture

Stocks are pricing in expectations.  Expectations say people will pay more for there lattes.  For this reason, commodities will continue to rise.  People need to eat and they will continue to buy these products.  This leads to people spending their dollars on paper assets.

Once all currencie is spent on commodities, then people will want to move back into the dollar all at once.  Smart monie will move to gold.  The dollar will lose its grip on reality, and it will be overbought.  People will try to move into other fiat currencies, but to no avail.  The last place everyone will run will be physical precious metal bullion.

Lord Koos's picture

Most Americans have a long way to go before they are spending 50% of their income on food like much of the world does.  That might be close to where we end up & it's not going to be pretty watching spoiled people facing reality.

dick cheneys ghost's picture

how about the drought in china? thats got to put pressure on just about everything.

Atomizer's picture

Turd Ferguson is the man!!

Old comedy piece. Enjoy

Hitler Finds Out Turd Ferguson is Posting to His Blog.

Henry Chinaski's picture

Excerpt from my letter to the editor pubished in August 2009 when the national debt was $11.7 trillon. Now it is 21% higer, or 14.1 trillion.  I conclude that it is being done deliberately to bankrupt the country.

We are running out of money and simply cannot afford bigger government.  In the past several months, the federal deficit has ballooned completely out of proportion to the available resources, resembling a bubble.  Recent economic events have proven that this is not sustainable for individuals, businesses or financial systems.  It is not sustainable for government either.

Who will bear this tax burden created by massive government spending?  What will this tax burden do to our individual liberty, standard of living and national security?  Continued reckless deficit spending can only result in an inevitably worse crisis, with greater hardships, down the road. Government cannot create the prosperity that we so desperately need right now.  Prosperity can only be restored if our elected leaders work toward solutions that are grounded in the principles of individual liberty and responsibility. 

cxl9's picture

Prosperity can only be restored if our elected leaders work toward solutions

I think we need fewer "solutions" from our glorious leaders.

Milestones's picture

The solution is getting rid of our "glorious" problems.      Milestones

DosZap's picture

Henry, just now figuring that out are we?

 I conclude that it is being done deliberately to bankrupt the country.

Mad Mad Woman's picture

I agree with you on that they are deliberately trying to bankrupt the country. But first the Bernank is not done giving away all the money to the elites. And Congress isn't done dismantling all social safety nets. But they all better keep watching over their shoulders, because when shit hits the fan a lot of the masses going to come looking for them and it won't be pretty.

cxl9's picture

You give the masses far too much credit. American quality of life and standards of living have been declining gradually, but choppily, for decades and the American people have not done anything to hold their leaders accountable. They rush back and forth like a frenzied animal, electing politicians who variously and cynically promise to turn back the clock and undo the inevitable economic consequences of the global tectonic shifts and bad policy that have got us here. This process will continue - a la the boiled frog - until it is far too late to do anything. The American people will not riot until the welfare checks bounce, and that's not happening anytime soon. Eventually when oil is no longer settled in dollars anymore, the currency will collapse. Then you may see riots. That day could be decades away, though.

Lord Koos's picture

This is precisely Bernanke's job - to make the coming crash a long, slow ramp down rather than series of sudden catastrophic events.  

hardcleareye's picture

In one of the earlier post on ZH today (or a link in a post) I noted the significant decrease in the US debt held by the banks.

Banks don't care if sovereign debt is defaulted on so long as they are not exposed to the loss and do not have to take a major hair cut. 

Perhaps the TPTB are anticipating a US sovereign debt default in the near future.

buzzsaw99's picture

@ Turd sez: The only thing that has kept cow and pig prices from rising at the same rate as the grains is this temporary increase in supply...

This I agree with this part, but as for QE increasing demand color me dubious. Higher feed costs which can't be passed along result in herd liquidations. That is the time to buy. This is a bubble eCONoME. Buy stuff that is cheap, stock up ahead of time. the people here saw this coming and still they bitch, bitchez! You-all should be gloating. I got me a $400 big screeen and some $4.99/lb ribeyes the other day. What did you bitchez do, whine about the price of yak cheese in mongolia? Bitchez.

kaiserhoff's picture

49 cents/lb. friers at the local Lowe's Food Store. Bawk, Bawk, Baaawk!

buzzsaw99's picture

Well, that's more like it.

goldfish1's picture

I'll go vegetarian before I eat either tyson

garbage or chinese chicken.

topcallingtroll's picture

One bitchez per post please.

StychoKiller's picture

What, is this some sort of tariff on posts now? :>D

razorthin's picture

demand for the underlying speculative derivative - absolutely.  that's just money parking away from the dollar and paper assets.  the commodity itself?  probably not, save for precious metals.

hardcleareye's picture

Got my freezer full, making beef jerky in the dehydrator as I type and pulled out my Grandma's (circa 1900) recipe for canned stew meat (easy to make and very convenient for beef barley soup or stew). I use a 14 qt jar canning pressure cooker instead of a water bath on a wood cook stove.  Good eating to be had at my table...

Everybodys All American's picture

I want to know why we put up with guys like Ben Bernanke. Clearly this is going to lead to a revolt if this inflation continues. These guys can talk the tepid CPI horse hockey all they want because it does not compute to what we all know is going on with prices. Remove food and fuel and presto no inflation. wtf. Bernanke needs to be stopped before it is too late. This guy in days gone by would be laughed out of the room with this approach to fighting the credit crisis. It is truely etraordinary to watch unfold.

Mad Mad Woman's picture

Extraordinary & sickening to watch. It's feeling like we are on the Titanic and we just hit the iceberg & all life boats are filled & gone already by the elites, leaving just us poor folk on the deck.

topcallingtroll's picture

Here are some fun things to do.  I have a group of people that play rambo survivalist every once in a while and we make dinner from what we can forage from the country or the city.  The amount of free food out there is simply huge.

If you are in a city you can do yourself and everyone else a favor by buying large rat traps and baiting for pigeon.  Even on a ledge in an urban high rise you can keep yourself in protein indefinitely.  Old pigeon is pretty good.  Tenderize it, marinate it, and make a stew or a stir fry.  Pull just the breast off to simplify dressing the bird.  there isn't anything else anyway.  I am sure there is a youtube video somewhere demonstrating de-breasting a dove.  Same thing.   Takes five seconds.

 

Does anybody remember seeing the picture on cnn of the duck with an arrow in it's neck that they finally caught and took to a vet?  Everyone blamed a thrill seeking teen.  More than likely it was an urban survivalist practicing his trade.  However pistol cross bows are likely to get you fined.  A better way is to take some softened corn or some bread crumbs and tie a hook to a fishing line, then go out and feed the ducks and haul  one in!

Also check out Food Not Bombs.  For an adventure in slumming they usually announce on the internet where they are feeding people.  Go hang out under the bridge and try the fare.   The really cool thing isn't the food, but that extreme leftist chics are usually pretty loose.  Go dumpster diving with them for kicks some day.

P.S.  If you do try the large rat trap on a window ledge to catch pigeons in NYC be sure to tie the rat trap to something stable.  The pigeon is likely to fall off the ledge and take your trap if you don't!

Playing TEOTWAWKI games is a lot of fun!  In the middle of Memphis by the park near the zoo there is a swampland.  Ignore all the guys who are trying to solicit you (don't worry ladies.  they are only after other guys), and find the paw paw trees and the mushrooms that grow there (pigs ears, oyster types mostly).  I can't believe poor people in the middle of the city don't know where the paw paw trees are.

There are more raccoons in the suburbs than in the forests.  However I haven't gone that far yet.  it is an acquired taste to put it nicely, but hunger is the best sauce.

MachoMan's picture

If you're in memphis, I think the better advice would be to get the fuck across the river rather than dilly dallying with mushrooms.  [the smart people already left].

Cindy_Dies_In_The_End's picture

Um, yeah do that faux survival stuff in Camden or Philly and see how ya make out there.

 

Godspeed, buddy.

Fish Gone Bad's picture

The other day I took a look in a dumpster outside of Costco.  It had a 20 pound bag of Yukon Gold potatoes that had started to sprout.  I dug the bag out and planted the potatoes around the back acreage.  Did the same with onions I found a few years ago and they keep sprouting up.

A Nanny Moose's picture

LOL "I smell varmint puntang...."

Watched Anthony Bordain do a show in Egypt (pretty sure it was Egypt) about flying rats being some sort of cheap delicacy. They are plentiful, cheap, and an easy target.

Fast forward to today; The entire last 3 weeks I've envisioned some industrious people in Egypt, armed with slingshots, stalking flying rats at the closest statue/fountain, to sustain the "troops."

I am trying to imagine a similar scenario playing out in American. Beyond Ted Nugent, and some present company, I keep coming up blank. Hope I am wrong, but I think many will eat dog food, and blame others for their misery.

Confused's picture

I dont' even know where to begin. 

oddjob's picture

How the fuck did you go from calling for complete devestation in the Precious Metals Markets to that post?....that's some fucked up shit.

Yits and the Yimrum's picture

+100  if you have a recipe for pigeon stir-fry, that would be a big hit

I'm into orchards, maple syrup, organic greens, and new ideas are always welcome on ZH

nice, original post! 

Snidley Whipsnae's picture

I spread dry dog food on the patio at night for the raccoons. Some nights I have as many as 30 raccoons at once, many are mothers with off spring in tow.

They are like having a bunch of clowns for entertainment.

Funniest thing is one mother that lies on her back, puts about 1/2 dozen pieces of dry dog food on her belly, and slowly eats while looking up at the stars. Is she contemplating the meaning of existence? Is she simply glad to get a break from constantly hearding her six off spring?

They are very smart and outstanding trainers of people.

Lord Koos's picture

I'm sure glad you don't live in my neighborhood.  People around here don't care for raccoons in their gardens.

DosZap's picture

top,

 The really cool thing isn't the food, but that extreme leftist chics are usually pretty loose. 

 

The ones with teeth, and HIV?

centerline's picture

Speechless... with a smile.  I'll never look at the squirrels in my back yard the same again.

Lord Koos's picture

Urban survivalist or hungry immigrant.