CRYIN' IN MY BEER

A bit of a side note here. I bought a case of beer on Friday as is my normal practice. I drink Milwaukee's Best, not because it's my favorite but because I can afford it and I enjoy a few beers on the weekend with my friends.

The price of the cheap beer jumped 10% over the last week, going from $10 a case to $11. Soon I won't be able to afford beer, either. Maybe if I start to listen to our government and their constant claims that inflation is running at about 1-2% I won't have to pay as much. But I doubt it. Fantasy seldom reflects reality and it certainly won't change it.

FOOD COSTS RISE ALONGSIDE USE OF FOOD STAMPS

"April 22, 2010

U.S. Food Inflation Spiraling Out of Control

The Bureau of Labor Statistics (BLS) today released their Producer Price Index (PPI) report for March 2010 and the latest numbers are shocking. Food prices for the month rose by 2.4%, its sixth consecutive monthly increase and the largest jump in over 26 years. NIA believes that a major breakout in food inflation could be imminent, similar to what is currently being experienced in India.

Some of the startling food price increases on a year-over-year basis include, fresh and dry vegetables up 56.1%, fresh fruits and melons up 28.8%, eggs for fresh use up 33.6%, pork up 19.1%, beef and veal up 10.7% and dairy products up 9.7%. On October 30th, 2009, NIA predicted that inflation would appear next in food and agriculture, but we never anticipated that it would spiral so far out of control this quickly.

The PPI foreshadows price increases that will later occur in the retail sector. With U-6 unemployment rising last month to 16.9%, many retailers are currently reluctant to pass along rising prices to consumers, but they will soon be forced to do so if they want to avoid reporting huge losses to shareholders.

Food stamp usage in the U.S. has now increased for 14 consecutive months. There are now 39.4 million Americans on food stamps, up 22.4% from one year ago. The U.S. government is now paying out more to Americans in benefits than it collects in taxes. As food inflation continues to surge, our country will soon have no choice but to cut back on food stamps and other entitlement programs.

Most financial experts in the mainstream media are proclaiming that the recession is over and inflation is not a problem in the U.S. Unfortunately, they fail to realize that rising food and gasoline prices accounted for 58% of February's year-over-year 3.85% rise in retail sales. NIA believes price inflation is beginning to accelerate in many areas of the economy besides food and energy, and all increases in U.S. retail sales this year will be entirely due to inflation."
National Inflation Association

FOOD PRICES ABOUT TO SKYROCKET

Here's an investment tip for you; food. Don't buy stocks or worry about investing in the commodities market, just buy food. Look for sales of food with long shelf life and buy it. Put it in the basement.

You've got to eat. And in the end, this is what is going to cause food to hyper inflate compared to the rest of the economy.

Most things you can put off buying. But not food. They've got you on this one. The great thing though is that this is an area that you can control. Plant a garden and buy food now while it's still relatively inexpensive. Get a deep freeze and get your meat from local producers. It's better for you and cheaper. Learn to preserve your food.

Do it now, while you have time. I am convinced that the easy, year 'round availability of cheap food that we have grown so accustomed to is going to become a thing of the past.

"Falling production in commodities from rice to milk is bad news for just about everyone except investors.

Rice may surge 63 percent to $1,038 a metric ton from $638 on Philippine imports and a shortage in India, a Bloomberg survey of importers, exporters and analysts showed. The U.S. government says nonfat dry milk may jump 39 percent next year, and JPMorgan Chase & Co. forecasts a 25 percent gain for sugar. Global food costs jumped 7 percent in November, the most since February 2008, four months before reaching a record, according to the United Nations Food and Agriculture Organization."

Bloomberg