Report: World food prices to jump
"The last time the world experienced such food price increases was in 1973 to 1974 ... but today the situation is completely different. For one, the climate risk and climate change situation has increased, the climate vulnerability has increased," von Braun told reporters in Beijing.
I wouldn't be so sure the situation today is completely different. What is it about 1973 to 1974 that rings a bell? Oh yeah, now I remember. There was an oil crisis in 1973, the world was very much into hoarding hard assets, and we were preparing for one of the worst recessions the United States has ever faced.
October 28, 1974
The Year That the Building Stopped
The moves now in prospect seem unlikely to do much more than keep the housing slump from getting still worse —if they accomplish even that. Fundamentally, the industry is caught in a terrible dilemma. It is peculiarly vulnerable to inflation; housing is the pressure point at which soaring costs of land, labor, materials and maintenance all converge. But housing is even more vulnerable to federal efforts to fight inflation by restricting the supply of credit, because both home builders and buyers rely so heavily on borrowed money. And a continuing squeeze on credit by the Federal Reserve Board—though a slightly less brutal one than was in effect during the summer—remains central to the Administration's whole anti-inflation strategy. "In this fight against inflation, we end up being the fist," says a Chicago contractor, "and let me tell you, there are a lot of bruised knuckles around." Adds Atlanta Builder Charles Sheron: "The country is in a recession; the housing industry is in a depression."
That is not much of an exaggeration. Housing has always been a boom-and-bust business; builders tend to put up too many homes when money is available, operating not on careful demand estimates but on blind faith that there will always be buyers. This year there are not, and 1974 could almost be called the year the building stopped. In January 1973, housing starts ran at an annual rate of almost 2.5 million, a high point in a succession of three unusually fat years for the industry. Since then, starts have plummeted to an annual rate of about 1.1 million, the lowest level in almost five years. The current collapse already is more than twice as bad as the industry's last bust—in 1969, when home building dropped off 25% in 12 months while the new Nixon Administration fought to get the Viet Nam inflation under control—and is worse than the 37% slide that followed the outbreak of the Korean War in 1950.
Q3 GDP Tracking: Around 3%
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From BofA:
Since our last weekly publication, our *3Q GDP tracking estimate is
unchanged at 2.6% q/q saar*. [Oct 11th estimate]
emphasis added
From Goldm...
2 hours ago
4 comments:
I couldn't believe the lack of selection at my Ralph's Select Market." Not 15 min ago I went to "splurge" on 1.2-1.4lbs of good beef. There was no good beef. Seriously. This was so weird. v Okay, there was good beef. It was the crappy bits of the premium part of the spectrum. There was "7" bone with the bone for instance at more than $11/lb. WTF? Chicken was still cheap. 88¢ for breasts.
I see a storm.
I went to my local QFC late last night and found quite a selection of relatively cheap food. Everything I wanted was on sale (which is not necessarily a coincidence, since I tend to seek out sales).
That being said, I do think that the inflationary food storm is coming, eventually. I'm not so sure it will interact well with the deflationary storm also brewing.
I only bought $30 worth of stuff. It wasn't like I was in serious hoarding mode. What did the checker tell me? I paraphrase from memory.
I can't buy right now. I don't have any money until Thursday. That's payday.
No kidding. Needless to say, I had a rather somber drive home.
That's okay. I don't have any money the day AFTER payday. The saddest thing is how little you get in that bag for your $30. I've found that if you live on tortillas and beans, you actually get enough to make it through til payday. Might give that a try ;)
Teri,
I suspect rice and beans are going to be increasingly popular. Fortunately, I love rice and beans already.
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