Updated March 17, 2020 - a Breakout we have and BREAKOUTS point to Hyperinflation: ALL commodities flash BUY signals!
A BOTTOM, BEAR TRAPS and the bullish wedges are coming alive and result in dramatic price rises...is this the beginning of the HYPERINFLATION? Remember the years and months preceding the Weimar Hyperinflation...EXACTLY the same scenario we had as we have today (July 2015)
So as Agriculturals go, so goes GOLD!
Authorities have, because of stupid mismanagement, eliminated the natural forces which normally correct for food shortages and are therefore making the present situation worse than it would have been without intervention. Additionally, Goldman Sachs & Co. could have RIGGED prices in this sector.
"Can you believe that some stupid-petty-government-officer in Brussels is deciding about the Agricultural sector in the EU?!"
People KNOW food is getting extremely expensive. Anybody doing some shopping also knows that $ 1 for one tomato is no exception and when the price for a food item goes up from $ 1 to $ 1.20 this is, in fact, a 20% increase.
Volcanic activity and eruptions are a predominant factor for bad crops. This will add fire to food prices going up as a consequence of monetary inflation. Expect to see politicians blame speculation and Global Warming for the direct consequence of their own stupidities (killing the goose with the golden eggs). Expect more social unrest as FOOD becomes EXPENSIVE! + 150% year to year or FOOD has become VERY EXPENSIVE and will become even more expensive in 2011! Since 2004 agricultural prices have gone up by 267% when expressed in Dollars and 215% when expressed in Euro.
Agricultural commodities traditionally suffer during depressions - until Hyperinflation starts...Agricultural products are Low Order Consumer Goods! - and the dramatic rise we have now is an indicator we're going to see a lot more inflation soon.
Agricultural products are LOCG (low order consumer goods). 2009 proves the price action of 2008 was a Bear Trap. September 3, 2010, we have a CLEAR fresh breakout! There is no doubt this will have a serious impact on the cooked official inflation figures. The price of Agricultural products fluctuates in a different way compared to the price of other commodities as a shortage in supply can and is adjusted a lot faster. Farmers automatically plant more crops when prices go up. Miners most of the time need 5 to 7 years to adjust production. The price of crude oil is also important for farming as it affects the exploitation price (fertilizers are also oil derivatives).
Especially in Europe (just like at the time of the USSR), the stupid politicians made that the cost of food (pork) has become cheaper than the cost of feeding the pigs. Such is not only the result of political intervention but also one of the effects of Fractional Reserve banking and the creation of fiat money out of thin air...
|CORN - Breakout & Uptrend
||WHEAT - Breakout & Uptrend
||SOYB - Breakout & Uptrend
||Sugar - Breakout & Uptrend
|Note: Agriculturals (except sugar) have broken out !!!
Over the last year, a large number of food commodities have broken long-term inflation-adjusted downtrends. This suggests that while characteristically volatile and subject to weather events, most food commodity prices can be expected to sustain levels above their historical norms during corrective phases.
The FOOD factor is (like energy) very important for Society. A shortage of food or expensive food has historically always resulted in major shifts in society. Belgian became independent in 1830 (there was a depression at that time) and the driving forces behind the French Revolution were the agricultural disasters of 1770-90. [ remember the people standing at the gates of the King's palace in Versailles complaining there was no food for the children...and Marie-Antoinette telling them that in this case, they should eat Cake. Today is no different]
The situation in North-Africa and the Middle-East is a direct consequence of expensive food. Those countries feel the pain more as their fiat currencies have been traditionally weak ones because of the mismanagement by their Rulers.
|1830||Tempo famine in Japan, expensive food in Europe|
|1870||Taipan famine in China: 60 million die|
|1879||Famine in Ireland|
|1916||Winter famine in Rusland|
|1921||Famine in Rusland: 1/3 of the population dies|
|1941 - 1946||Famine in Rusland & Persian Gulf|
|1947||Russian famine: 1.5 million people die|
|1959-1961||Chinese famine: 43 million die|
|2009||Zimbabwe food crisis thanks to Mugabe|
|2012||Hyperinflation in Iran|
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