WSJournal Says "Start Stockpiling Food!" 700 Club Says "Ditch the Dollar Now!"

[stephendare]

http://online.wsj.com/article/SB120881517227532621.html

Load Up the Pantry
April 21, 2008 6:47 p.m.

I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here's the bad news: They may actually accelerate.

The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.

The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too

[Ocklawaha]

Oh hell Stephendare, the USA is the second largest EXPORTER of rice in the world 6.7 Million tons. I'd say any food shortages are in someones head. However, we are all... that is global... just one nature hic-up from famine or disaster. Volcanic winters, Gama rays, Ozone, Methane or various natural gases, meteor... you name it. ARE YOU READY? As we have been saying for 2000 years, "the end is near, don't get caught dead without your program!"

http://www.youtube.com/watch?v=xJoSsrqPm10&feature=related
WARNING THIS IS A GRAPHIC MUSICAL PRESENTATION OF MY POLITICS!
With thanks to the Great Curtis Mayfield and the producer.

Ocklawaha

[Midway ®]

The typical supermarket has a three day supply of food on hand, and nothing in "the back room" because there is no "back room". One glitch in the supply chain and you'd better learn how to catch (and cook) squirrels, or go hungry.

[whitey]

this is not about supply or shortages, it is about profit.  and the desire to make real money off of the starvation of the eastern countries.

Another New World Order conspiracy from stephendare, the night wouldn't have been complete without one.

[RiversideGator]

As commodity prices continue to recede on a rising dollar and the belief that Fed rate cuts are finished:

Oil Falls Third Day as Dollar Gain Limits Appeal of Commodities

By Christian Schmollinger

April 25 (Bloomberg) -- Crude oil fell for a third day as the dollar's gains against the euro curbed investor appetite for commodities as an inflation hedge.

Oil is set for its first weekly decline since March 21. The dollar climbed on expectations the Federal Reserve may stop cutting interest rates. Gold, wheat, silver and corn prices also dropped.

``The stronger dollar means that we see people taking profit here,'' said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. ``People seem to think that the steep drop in interest rates is over. If everybody starts rushing for the exits you could easily see a $10 drop in oil prices.''

Crude oil for June delivery fell as much as 62 cents, or 0.5 percent, to $115.44 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $115.96 at 11:25 a.m. Singapore time.

Oil reached a record $119.90 a barrel on April 22 after the dollar touched an all-time low against the euro. The dollar traded at $1.5698 per euro at 10:40 a.m. in Singapore from $1.5682 yesterday, when the U.S. currency rose 1.3 percent.

``The dollar is affecting all commodities,'' said Mark Waggoner, president of Excel Futures in Huntington Beach, California. ``People are thinking that maybe the bottom is in because the Fed may not lower rates. People looked at crude oil and said let's unwind some positions, let's take some profits.''

http://www.bloomberg.com/apps/news?pid=20602013&sid=a_SGVOWFJ3GA&refer=commodity_futures

[RiversideGator]

Meanwhile gold, Stephen's investment of choice, is down significantly from its peak:

Gold Trades Near Three-Week Low in Asia as Euro, Oil Decline

By Feiwen Rong

April 25 (Bloomberg) -- Gold traded little changed near a three-week low in Asia as oil's decline and the dollar's gain versus the euro reduced the appeal of the precious metal as a hedge against inflation.

Interest in bullion as an alternative asset waned as crude- oil futures fell for a third day from a record $119.90 a barrel reached on April 22 and the dollar headed for its biggest weekly gain in more than a month against the euro.

``Downside momentum was gained as exchange-traded funds offloaded holdings as the dollar strengthened and oil receded,'' Walter de Wet, head of commodities research at Standard Bank Group Ltd. in Johannesburg, said in a report yesterday.

Bullion for immediate delivery traded at $886.47 an ounce at 9:01 a.m. in Singapore, less than $3 above yesterday's intraday low of $883.59, the lowest since April 2. Gold is 14 percent below the March 17 record of $1,032.70. Silver was also little changed today at $16.74 an ounce.

http://www.bloomberg.com/apps/news?pid=20602013&refer=commodity_futures&sid=aYBx6RO7PsvE

[RiversideGator]

The dollar and commodities have had an inverse relationship.  As the dollar sank, commodities rose.  Commodities were used as a hedge against inflation and dollar weakness caused by the Fed increasing the money supply.  Add to this the speculators driving up the prices and you have another speculative bubble in commodities a la the dot com and real estate bubbles.  Commodities look like they are now beginning to come back to Earth.

Dollar Set for Biggest Weekly Advance Against Euro Since March

By Kosuke Goto and Stanley White

April 25 (Bloomberg) -- The dollar headed for its biggest weekly gain in a month against the euro and a second winning week against the yen on increasing speculation the Federal Reserve will stop cutting interest rates.

The U.S. currency held near a two-week high versus the euro as the extra yield two-year German government bonds pay over similar-maturity Treasuries narrowed to the least since March 24. The yen weakened against the Australian dollar as falling expectations for exchange-rate swings encouraged investors to add to holdings of higher-yielding assets funded in Japan.

``We have started to see a bit less panic in the U.S. and that also translates to expectations that the Fed rate cuts might be coming close to an end,'' Naomi Fink, a strategist in Tokyo at Bank of Tokyo Mitsubishi UFJ Ltd., Japan's second- largest, said in an interview with Bloomberg Television. ``We probably should be seeing a bit less support for euro-dollar.''

The dollar traded at $1.5698 per euro at 11:45 a.m. in Tokyo from $1.5682 in New York yesterday and $1.5817 on April 18, heading for a gain of 0.8 percent this week. The dollar may rise above $1.50 by year-end, Fink said. The U.S. currency held at 104.22 yen from 104.26 yen yesterday and 103.67 yen a week ago. Japan's currency was at 163.67 per euro from 163.45 yesterday.

Japan's currency fell to 98.10 against the Australian dollar from 97.97 as rising equity markets boosted confidence in higher-yielding assets. The Nikkei 225 Stock Average climbed 1.9 percent. In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher rates, earning the spread. The risk is that currency swings erase those profits. Japan's 0.5 percent benchmark interest rate compares with 7.25 percent in Australia.

Risk Appetite

The dollar may extend gains against the yen as a decline in measures of volatility suggests increased appetite for risk, according to Citigroup Global Markets Inc. analysts led by Tom Fitzpatrick wrote in research note dated yesterday.

Implied volatility on dollar-yen options expiring in one month with a strike price near current levels fell to 12.4 percent today from 24 percent on March 17, the highest since January 1999. Traders quote the gauge of expectations for future price swings, as part of pricing options.

``The largely straight-line rally in dollar-yen from March 17 came concurrent with the broader stabilization in risk appetite,'' according to the research note. ``This could open the door to additional short-term yen depreciation.''

The dollar may rise to 108.62 yen provided it breaks above 104.95 yen, the report said. First resistance at 104.95 yen is near the dollar's Jan. 23 low, and second resistance at 108.62 yen is the currency's Feb. 14 low. Resistance is a level where sell orders may be clustered.

Rate Outlook

The yen was little changed after a government report showed Japan's consumer prices rose the most in a decade. Core consumer prices climbed 1.2 percent in March from a year earlier, the statistics bureau said in Tokyo today.

The Dollar Index traded on ICE futures in New York, which tracks the U.S. currency against those of six trading partners, rose to as high as 72.610 today, the highest level since April 3. It dropped to a record of 70.698 on March 17. The U.S. currency fell to $1.6019 on April 22, the lowest level since the euro's 1999 debut. It traded at $1.9741 against the British pound from $1.9740 and was at 1.0344 versus the Swiss franc from 1.0355.

The dollar rose as durable-goods orders excluding transportation equipment increased more than forecast in March, signaling parts of the U.S. economy are weathering a housing slump.

Flattening Curve

Futures on the Chicago Board of Trade showed an 18 percent chance the U.S. central bank will hold the target lending rate at 2.25 percent on April 30, compared with no chance a week ago. There's an 82 percent likelihood of a cut to 2 percent. Two-year German government bonds yield 1.48 percentage points more than similar-maturity Treasuries.

The dollar is likely to be supported against the yen as the Treasury yield curve is flattening, showing growing expectations for the Fed to pause its rate cuts, according to BNP Paribas SA, France's largest bank. The yield curve is a graph that charts the yields of bonds with different maturities.

The extra yield 10-year Treasuries pay over two-year notes narrowed to 1.44 percentage points today from an almost four year-high of 2.08 percentage points on March 6.

``The flattening yield curve comes in line with the Fed getting more concerned about the inflation outlook,'' BNP Paribas analysts led by Hans-Guenter Redeker wrote in a research note yesterday. ``We expect the dollar-yen to remain bid.''

Investors should buy dollars with a target of 105 yen and an selling order at 103.20 yen to limit losses, the report said.

Euro and Oil

The euro weakened against the dollar yesterday as the Munich-based Ifo institute said its German business climate index, based on a survey of 7,000 executives, fell to 102.4 this month, from 104.8 in March.

European Central Bank President Jean-Claude Trichet told reporters at a conference in Frankfurt yesterday that he is concerned the euro's surge may hurt the economy. The euro has appreciated 7 percent this year against the dollar on speculation inflation and higher fuel prices will discourage the ECB from lowering borrowing costs from 4 percent.

The euro versus the dollar has had a correlation of 0.96 with the price of crude oil over the past 12 months, according to data compiled by Bloomberg. A reading of 1 would mean they move in lockstep. Crude for June delivery rose to a record $119.90 on April 22 and dropped to $115.95 a barrel today.

``Dollar weakness had boosted speculative investment in oil,'' said Michiyoshi Kato, a senior vice president of currency sales in Tokyo at Mizuho Corporate Bank Ltd., Japan's third- largest bank by assets. ``Higher oil then had further prompted dollar-selling and euro-buying. This is reversing now.''

The dollar may move between $1.5630 and $1.5760 a euro today, Kato forecast.

A 1 percentage point increase in the euro's real exchange rate reduces growth in the region's exports by 0.6 percent within a year, according to a note this month from Deutsche Bank AG, the biggest currency trader.

To contact the reporters on this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net
Last Updated: April 24, 2008 23:12 EDT

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2N1hByXvtcU&refer=home

[whitey]

Meanwhile gold, Stephen's investment of choice, is down significantly from its peak:

Gold Trades Near Three-Week Low in Asia as Euro, Oil Decline

By Feiwen Rong

April 25 (Bloomberg) -- Gold traded little changed near a three-week low in Asia as oil's decline and the dollar's gain versus the euro reduced the appeal of the precious metal as a hedge against inflation.

Interest in bullion as an alternative asset waned as crude- oil futures fell for a third day from a record $119.90 a barrel reached on April 22 and the dollar headed for its biggest weekly gain in more than a month against the euro.

``Downside momentum was gained as exchange-traded funds offloaded holdings as the dollar strengthened and oil receded,'' Walter de Wet, head of commodities research at Standard Bank Group Ltd. in Johannesburg, said in a report yesterday.

Bullion for immediate delivery traded at $886.47 an ounce at 9:01 a.m. in Singapore, less than $3 above yesterday's intraday low of $883.59, the lowest since April 2. Gold is 14 percent below the March 17 record of $1,032.70. Silver was also little changed today at $16.74 an ounce.

http://www.bloomberg.com/apps/news?pid=20602013&refer=commodity_futures&sid=aYBx6RO7PsvE

ever play that fortune cookie game, River?

no matter what the fortune says you add the words "in bed" at the end?

Please note that the article needs to have the words "in asia" added to your analysis.

What on earth does it have to do with here?

The price of gold and other commodities is the same around the world.  So to answer your question it has everything to do with here.

As for the article saying "in asia" that is easily explained by the fact that at this hour those are the only markets that are currently open.

[Steve]

I get all of my reliable news from the 700 Club.

The only thing more accurate is Fox News

[Driven1]

separate is how it is spelled....

gold is the weakest and most at-risk commodity to be in right now IMO...no fundamental demand for it really, like there are for the other "strong" commodities.  financials (not investment banks though) - and only the larger ones (no regional banks even) - are starting to look nicely priced IMO.  also, health care companies look good (not as good as natgas, mining, seed, fertilizer, ag equipment and large banks though).

also, china markets are down 50%  -  for a long-term investor, what better buying signal could you ask for - IMHO?

[Driven1]

from dictionary.com...

No results found for seperate.

from thesaurus.com...

No results found for seperate.
Did you mean separate?

from a google search...

Did you mean: separate 

Now, I'm sure in the world of absolute relativity that some of choose to reside in - where there are no absolute wrongs and rights - separate could be spelled "seperate" or even "kseperate" (where the "k" is silent).  But it is pretty much a cold, hard fact (i know, i know - these aren't accepted in that special world some live in) that it is spelled s-e-p-a-r-a-t-e.

PS - 6th grade spelling bee champion here - when I was in the FIFTH grade.

[RiversideGator]

Here is a chart of recent wheat prices, for example:



Now, notice how prices were pretty stable until Summer, 2007.  Now look at what happened in Summer, 2007?  The credit crisis began and the Fed began cutting rates and injecting tons of money into the system (i.e. increasing liquidity).  This caused traders to perceive that individual dollars are not worth less and, since commodities are priced in US dollars, the prices of commodities began to rise.  At the same time, you had a bear market with the US stock market, the Chinese stock market, and real estate so people have to put their money somewhere.  So, they have been chasing the returns in the commodities markets thereby driving up prices to unsustainable levels which are not based on reality.  There are no food shortages.  There is just a monetary phenomenon here which is now being corrected since the Fed will cut maybe .25% and no more.  Get it now?

[RiversideGator]

Has the population tripled?  Because the prices have nearly tripled.  I just dont see that as sustainable or realistic.  There is no worldwide drought or war or anything else to justify this.  It is a monetary and psychological problem.

[Driven1]

from dictionary.com...

No results found for seperate.

from thesaurus.com...

No results found for seperate.
Did you mean separate?

from a google search...

Did you mean: separate 

Now, I'm sure in the world of absolute relativity that some of choose to reside in - where there are no absolute wrongs and rights - separate could be spelled "seperate" or even "kseperate" (where the "k" is silent).  But it is pretty much a cold, hard fact (i know, i know - these aren't accepted in that special world some live in) that it is spelled s-e-p-a-r-a-t-e.

PS - 6th grade spelling bee champion here - when I was in the FIFTH grade.

Mr. Dare - you asked for my point?  It was simply that you were wrong.  And I would not have made it so stridently if you had not defended your so obviously erred position so fervently.  

RG - remember what a bubble is.  a bubble is a boom that has no fundamentals backing it.  the tech bubble had small internet companies with no provent profits behind it.  the housing price bubble had people with bad credit and incomes that were too low pushing it along.  if you contend there is a commodities bubble, where does the demand fall short of necessitating these price increases?

[Driven1]

separate is how it is spelled....

There are two spellings of this word, driven1.

Like colour and color, grey and gray. organize and organise.

This is the second time that you have interjected this remark.

If you are going to correct other people, it sometimes helps to be right.

WRONG!