already well known, inflation has begun to spread throughout the financial
markets and world economy.
As you can
see, commodities of all kinds are soaring. You’ll note, in particular, that
agricultural commodities have been top performers, trailing only Silver in
price appreciation. However, this performance is even more significant when you
consider that it occurred in half of the time period measured above.
Agricultural commodities were laggards during most of QE 1. It was only when
the Fed introduced QE lite in August ’10 and QE 2 in November ’10, that
Agricultural prices began to explode higher:
As you can
see, The Rogers Agricultural index only broke above its multi-year resistance
level after the Fed indicated it was going “all in” on its reflation efforts
with QE lite.
This in turn
has resulted in riots and revolutions worldwide. Already we’ve seen this occur
in Tunisia, Algeria, the Ivory Coast, Egypt, Libya, Bahrain, Iran, and now
Saudi Arabia. We’ve also seen the start of this in China.
driver of these situations has been higher food prices. Food accounts for 50%
of spending in many emerging markets. With food prices hitting record highs and
going higher, many folks are literally starving. As a result, they’ve become
violent and are moving to overthrow the elites in control of their countries.
situation is a stark warning of what’s to come in the US. While many
believe the US is immune to this
kind of disorder, ZeroHedge recently noted that the US has a similar wealth gap to most
the US hasn’t been gripped by riots are the following:
security nets (food stamps, welfare, etc) continue to keep lower income
Americans afloat… for now.
in the US is so processed that increases in agricultural prices don’t pass
through as rapidly into higher food prices.
this will last much longer. Regarding #1, the US Government is broke. In fact
they’re so broke than an aid to Nancy Pelosi (who I can’t stand) has revealed
that the US Government might actually shut down at some point in the near
As for #2,
commodities will be spiking even higher once the following is digested by the
This is the
weekly chart for the US Dollar. As you can see, we have just broken the
multi-year trendline. What does this mean? That the momentum that maintained
the US Dollar from the 2008 lows has been BROKEN.
literally now “do or die” time for the US currency. If the US Dollar does NOT
rally HARD right now… then we’re triggering the massive H&S pattern in
short course and on our way to a 50% devaluation:
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