My Aunt who’s in Connecticut said they are limiting the amount of rice you can buy at Cosco. A similar case occurred in a supermarket here in Israel not long ago. Oil prices are surging. China and other producers are restricting the export of grains in order to ensure domestic food supply.
The world has become so needy and accustomed to exhausting energy sources, natural resources and commodities. Even though it is a stretch to say that the living outnumber the dead (the current world population outnumbers the combined historical world populations), however way you compute it. Still, more people are alive today than have ever lived before at any given time.
Therefore, there are far greater considerations as to supply of goods that haven’t been taken into account. 100 million people have already been put in danger by the current situation. We used to think this situation will not affect us. Many people feel that at the western countries, one can always pay more and get what he want. So maybe we will have to pay for food what we do now for gold?
Well, maybe. But maybe the now “poor” countries will realize that their gold is worth them their lives, and simply won’t sell it.
Possible Conclusions: Buy commodities, Live in Asia, Develop alternative energy sources (conserving energy is not nearly enough – we will use it all up sooner or even sooner), stock up on food, what else?
July 8, 2008 at 2:11 pm
1. Buy commodities – maybe, but owning them won’t let you *have* them. All you get is futures which increase the amount of money you put in them, but the buying power of the money gets lower as demand for commodities goes up. (right?)
2. Live in Asia – also maybe. Inflation in china is going up, they definitely don’t have all the energy sources they need, maybe if you live right next to a rice paddy; but then you might get hit by a flood.
3. Stock up on food – seriously?
July 8, 2008 at 6:02 pm
Well I did exaggerate re some of the conclusions, I’m not sure these are *the* conclusions, but they definitely are *possible* conclusions, and we definitely must think of *a/some* conclusion/s.
1. Commodities – a. I meant you can profit on the way up, which will give you some more cash to spend on the expensive grains you eventually need to buy. b. Also, if you have a lot of capital, you actually can own forwards, futures and other contracts which eventually will mean that you indeed WILL own the underlying commodities, which will enable you to survive amidst the crisis.
Note that these are individual solutions (therefore the comment re demand though true isn’t relevant).
2. True, but if you are in the middle or upper class in Asia your situation is very good nonetheless, without having the need to actually raid the crops.
3. Well, stocking up for a year or two won’t really help, because this problem will persist for much more than that. But if one were to stock up on serious quantities of grain, then theoretically, personally one won’t have a problem.
Note that I don’t plan on pursuing any of these solutions.
Again, these are all individual solutions; the world will need better and global ones.