Fed Expert: How to Fix the Food Crisis Now

[Hemidakota]

Food prices are soaring worldwide. Yet policymakers are not effectively fighting the increases.

In fact, they are probably just making things worse.

So argues Vincent Reinhart, former director of the Fed's Division of Monetary Affairs, writing in The Wall Street Journal.

Reinhart, now a resident scholar at the American Enterprise Institute, cites four forces driving up food prices in developing countries such as China, India, Vietnam, Egypt and Indonesia.

Evidence that the U.S. economy is now slipping into recession has become overwhelming. However, your finances do not have to be a victim.

These economic forces were last at work in the 1970s, according to Reinhart, when food prices also rose quickly and over a long period.

Here's what's fueling the increases, in Reinhart's opinion, and here's what he suggests to counteract them.

First, monetary policy is in overdrive.

The current real interest rate of 2.25 percent — the nominal rate minus inflation — is less than the consumer inflation rate.

A "negative” interest rate stimulates business investment and makes global investors less inclined to support the dollar in monetary markets.

This occurred last in the mid-1970s, boosting demand and driving up food prices.

Second, simultaneously, the dollar fell against foreign currencies, and economic growth was stifled. The result was the dreaded stagflation effect — rising prices in a slowing economy.

Exchange rates in disarray is another inflationary factor, Reinhart says.

A disparity in the movement of various global exchange rates — some too little, some too much — aggravates the problem.

For instance, rates are not moving enough in oil producing and emerging markets such as China, India, Korea and Saudi Arabia, which set rates roughly in accord with the U.S. Federal Reserve.

The result in these booming economies is inflation. The remedy, of course, is a readjustment of rates to reflect specific economic conditions, country by country.

In nations whose currencies float freely, such as in Europe and in Canada, the dollar declines against them, and the price of food — and anything else denominated in U.S. dollars, like oil and minerals — goes up.

Policymakers, maintains Reinhart, have capped exchange rate movements, adding to inflationary conditions in their own economies.

Thirdly, clumsy government intervention also fuels food inflation, says Reinhart.

Not to belabor the obvious, but U.S. government encouragement of ethanol production — an inefficient and too-costly enterprise, contend analysts — has boosted corn prices to double that of three years ago.

Consequently, the price of corn-fed livestock goes up, the price of substitute grains goes up, and other by-products of corn and grains also rise. As guru investor Jim Rogers notes, even clothing gets more expensive, as cotton farmers plant grain instead and textile mills run short of cotton.

The remedy is simple enough, Reinhart says. Cut subsidies to corn producers. This would ripple throughout the global economy as a model for other nations to copy.

Finally, Reinhart writes, runaway oil prices are a major inflationary factor.

In the 1970s, OPEC cut back on production, driving up prices for crude and gas. Today, expanded demand keeps prices rising, with the cost of crude now four times what it cost in 2001.

The Asian labor force spends the bulk of their income on food, and agriculture is a heavy user of petroleum fuels. That makes common foods there — rice, grains, pork and poultry — more costly.

Reinhart proposes no specific solution to the oil problem. That one will have to wait until widespread use of alternate energy sources become a reality — or the world’s economies contract dramatically, cutting demand.

Credit: Moneynews.Com

[JcDean78]

On the money. Ethonol is killing us. We need more drilling, more refining, and nuke energy. Even if we turned out and did that today, it would be 5-6 years before we would be able to see the impact and by then things will be much worse.

[Hemidakota]

I agree. Corn should remain one of our staple consumer products and not to be used as a fuel source.

If our output is cut dramatically as shown in California over the last four years with no purpose but to create an artificial demand, drilling for more oil is not going to help. As to OPEC putting more crude for the global markets, at this point we need to do away with the gambling Future markets which is driving the speculation soothsayers.

It has nothing to do with the older supply and demand model, which has worked for years, pure greed is the real intent since the world manufactures now are turning to other means beside oil for energy.

Cold Fusion does work....Nuclear Fusion does work....Magnetic propulsion does work....coal always work….Neutron Fusion does work....on so forth. So many other sources we can derive energy from.

[NeuroTypical]

Cold Fusion does work....

Source please? Last I heard, this was a flop.

LM

[Hemidakota]

Would Toyota Corporation hire the same guys if it was a flop and moved them to Paris and give them a multi-million lab space?

[NeuroTypical]

Would Toyota Corporation hire the same guys if it was a flop and moved them to Paris and give them a multi-million lab space?

Spending money on researching new technologies is not the same thing as "Cold Fusion does work". The answer to your question is yes, if they think maybe someday it might not be a flop.

LM

[Hemidakota]

They were hired for one purpose - COLD FUSION. Not only that, Green [first name escapes me at the moment], who started Byte Magazine, did a simplified version of Cold Fusion experiment in his house and he claimed it worked, You have to Goggled that one. It been awhile the last time I played with this topic. My only interest was why Toyota hired them immediately after the discovering.

Where they are now, I cannot say.

[Hemidakota]

It was Wayne Green....

[JohnBirchSociety]

Cold Fusion would be great, the answer to all energy needs....

Of course, in an industrial sense, we already have the answer to any conceivable current or future demand for electricity...it's called Nuclear Power.

Did you know that Nuclear Power is the safest form of energy ever used in the United States? Safer than Wind or Solar...

There is an excellent book on the matter "The Health Hazards of Not Going Nuclear"...

As for transportation (cars), there is no viable alternative to petrol (the pie-in-the-sky ideas currently floating around are not viable)...

The Earth is creating, by some estimates, more crude oil everyday than we consume...we just need to drill for it...same with natural gas...

Solar is a good solution for homes / buildings that receive a lot of sun-light, like here in Central Coast California...

The energy crunch is an artificial construct of a relatively small group of people who are manipulating the market to their advantage...

If we had real money, and a free market (we have neither), there would never be an energy problem...

[MorningStar]

My friend is in panic mode and about to go spend $1000 on food storage. That's a shame. It would've gone a lot further if they had done that a couple years ago. I think I'll get my fishing license. We might actually catch something and it will be fun to do as a family. We definitely don't have a year supply. We don't have a place to store that much food.

[JohnBirchSociety]

Panic is the antithesis of the Gospel.

We are to prepare, and preparation takes work, sacrifice, commitment...

But, it is a sign of the times, when a lot of people who are usually just ignorant dupes, begin to wake up to a "sense of their awful situation".....unfortunately, it is too late for them, for the most part....

[MorningStar]

They're going to extremes. They've been making good progress with their food storage, but they believe we're going to go into a depression and that the government is going to stage a pandemic, pretend the food supply is low, and that they will have people trade their guns in for food. They think it's a conspiracy to get everyone's guns. Also, they said that the government is going to train the military to start putting people in camps who are "standing up for their rights". They have a friend with 15 guns, they want to move out into the country, they think people are going to be killing others for food, and she called me frustrated today because no one believes what she and her husband are telling them. I don't believe what they believe and I don't think their theories are helpful to anyone.

[JohnBirchSociety]

Well, some facts:

1) Paper currency ALWAYS collapses. No exceptions, no way around it. It is a historical fact. We have paper currency (Fed Notes) and they are collapsing. When that happens (and I'm not predicting when) we'll wish we were in the Great Depression, because that would be a better time to live in...

2) When the collapse happens, people will be killing each other for food...

This being said, I don't think the government is manipulating "shortages" in an effort to confiscate weapons (ironic, isn't it, that a "Bircher" doesn't agree with a Conspiracy Theory?)...

What the Government / Federal Reserve IS doing, is debasing our currency by printing it as fast as the presses will run...This will drive prices through the roof, etc...

I think we are in the beginning of the final economic cycle that will end in total collapse of our currency and anarchy (or close to it)...

What is interesting to me is the prophecy that the Elders will save the Constitution, yet, frankly, most LDS people have no clue whatsoever about what the Constitution even says...

These are trying times, for sure, but no need to panic...

[MorningStar]

I wouldn't kill people for food. I would go down to the river and kill some ducks if I had to though.

Weren't there some recent talks that mentioned food storage not being so much for ourselves to live on for a year, but possibly to share to avoid chaos? I've met other people who think they should have guns as part of their emergency kit, but I don't recall any talks that suggest we should have guns.

[Moksha]

2) When the collapse happens, people will be killing each other for food...

Need to get out that old food dehydrator then for making Soylent Green. Don't forget the chili powder and salt, if you want to make it southwest style.

[JohnBirchSociety]

I wouldn't kill people for food. I would go down to the river and kill some ducks if I had to though.

Weren't there some recent talks that mentioned food storage not being so much for ourselves to live on for a year, but possibly to share to avoid chaos? I've met other people who think they should have guns as part of their emergency kit, but I don't recall any talks that suggest we should have guns.

I think guns are good to have, but you're not going to be able to kill everyone...

There's just not enough of "us" to feed "them" to put any dent in a food crisis...

[drjme]

They're going to extremes. They've been making good progress with their food storage, but they believe we're going to go into a depression and that the government is going to stage a pandemic, pretend the food supply is low, and that they will have people trade their guns in for food. They think it's a conspiracy to get everyone's guns. Also, they said that the government is going to train the military to start putting people in camps who are "standing up for their rights". They have a friend with 15 guns, they want to move out into the country, they think people are going to be killing others for food, and she called me frustrated today because no one believes what she and her husband are telling them. I don't believe what they believe and I don't think their theories are helpful to anyone.

>>>Stupid asterisks keep appearing. help pls?

This is a vision John Taylor saw of events that are still to come. From the journal of Wilford Woodruff (Dec 16, 1877).

This is a vision John Taylor saw of events that are still to come. From the journal of Wilford Woodruff (Dec 16, 1877).

I went to bed as usual at about 7:30PM. I had been read*ing a revela*tion in the French lan*guage. My mind was calm, more so than usual if possible, so I composed myself for sleep, but could not. I felt a strange feeling come over me and apparently be*came partially uncon*scious. Still I was not asleep, nor ex*actly awake, with dreary feeling. The first thing that I recognized was that I was in the tabernacle of Ogden, Utah. I was sit*ting in the back part of the build*ing for fear they would call on me to preach, which however they did, for after sing*ing the second time they called me to the stand.

I arose to speak and said that I did*n't know that I had anything es*pecially to say, ex*cept to bear my tes*timony of the Latter-day work, when all at once it seemed as if I was lifted out of myself and I said, "Yes, I have something to say and that is this: Some of my brethren have been ask*ing, "What is be*coming of us? What is the wind blowing?" I will answer you right here what is coming very shortly."

I was then in a dream, im*mediately in the city of Salt Lake, and wandering around in the streets and in all parts of the city, and on the doors of the houses I found badges of mourn*ing and I could not find a house but was in mourning. I passed my own house and found the same sign there, and I asked the ques*tion, "Is that me that is dead?" Someone gave me the an*swer, "No, you will get through it all."

It seemed strange to me that I saw no person in the streets in all my wan*dering around the coun*try. I seemed to be in their houses with the sick, but saw no funeral proces*sion, nor anything of the kind, but the city looking still and as though the people were praying. And it seemed that they had controlled the dis*ease, but what the dis*ease was I did not learn; it was not made known to me. I then looked over the country, north, east, south, and west, and the same mourning was in every land and in every place.

The next thing I knew I was just this side of Omaha. It seemed though I was above the earth, and look*ing down upon it. As I passed along upon my way east I saw the road full of people, mostly women, with just what they could carry in bundles on their backs, trav*eling to the moun*tains on foot. I won*dered how they would get through with such a small pack on their backs. It was re*markable to us[?] that there were so few men among them. It didn't seem to me as though the cars were run*ning, the rails looked rusty and the roads aban*doned; and I have no con*ception of how I traveled as I looked down upon the peo*ple.

I continued east by the way of Omaha and Council Bluffs, which were full of disease. There were women every*where. The state of Illinois and Mis*souri were in a tumult, men killing one an*other, women joining the fight*ing, fam*ily against family in the most horrid manner.

I imagined next that I was in Wash*ington and I found desola*tion there. The White House was empty and the Halls of Congress the same, and everything in ru*ins. The people seemed to have left the city and left it to take care of itself.

I was in Baltimore. In the square where the Monument of 1812 stands in front of the Char*les Hotel. I saw dead piled up so as to fill the street square. I saw mothers cutting the throats of their own children for their blood. I saw them suck it from their throats to quench their own thirst and then lie down and die. The water of Che*sapeake Bay was stagnant, and the stench arising from it on ac*count of their throw*ing their bod*ies into it so terrible, that the very smell carried death with it. I saw no man ex*cept they were dead or dying in the streets and very few women. Those I saw were crazy and in an ugly condi*tion. Everywhere I went I beheld the same sights all over the city; it was terrible be*yond description to look upon.

I thought this must be the end; but no, I was seemingly in an instant in the city of Philadel*phia. There eve*rything was still. No living soul was there to greet me. It seemed the whole city was with*out any inhabi*tants. In the south of Chestnut Street and in fact everywhere I went, the putrefaction of the dead caused such a stench that it was impos*sible for any living thing to breathe, nor did I see any living thing in the city.

Next I found myself in Broadway, in the city of New York, and there it seemed the people had done the best they could to overcome the disease, but in wandering down Broad*way I saw the bodies of beautiful women lying, some dead and oth*ers in a dy*ing condition, on the sidewalks. I saw men come out of cellars and ravish the per*sons of some that were yet alive and then kill them and rob their bodies of all the valu*ables they had upon them. Then before they could get back to the cellar they would roll over a time or two and die in ag*ony. In some of the back streets I saw them kill some of their own offspring and eat their raw flesh, and in a few minutes die them*selves. Every*where I went I saw the same scene of horror and de*struction and death and rap*ine.

No car*riages, buggies, or cars were running; but death and de*struc*tion were every*where. Then I saw fire start and just at that moment a mighty East wind sprang up and car*ried the flames over the city and it burned until there was not a sin*gle building left standing there, even down to the waters edge. Wharves and shipping all seemed to burn and follow in common destruction where the "great city" was a short time ago. The stench from the bodies that were burn*ing was so great that it was carried a long dis*tance cross the Hudson Bay and carried death and destruction wherever it pene*trated. I cannot paint in words the horror that seemed to compass me about; it was beyond description of man.

I sup*posed this was the end; but it was not. I was given to understand the same horror was being en*acted all over the coun*try, east, west, north, and south. Few were left alive, still there were some.

Immediately after I seemed to be standing on the left bank of the Mis*souri River, opposite e the City of In*de*pendence, but there was no city. I saw the whole state of Missouri and Illi*nois and all of Iowa, a complete desert with no living being there. A short dis*tance from the river how*ever, I saw twelve men dressed in temple robes, stand*ing in a square or nearly so (and I under*stood it repre*sented the Twelve Gates of the New Jerusa*lem.) Their hands were uplifted in consecration of the ground and lay*ing the corner stone of the tem*ple. I saw myraids of an*gels hovering over them, and saw also an immense pil*lar of clouds over them and heard the angels singing the most heav*enly music. The words were "Now is estab*lished the King*dom of God and his Christ, which shall never more be thrown down."

I saw people com*ing from the river and from the desert places a long way off to help build the temple and it seemed that hosts of an*gels all helped to get material to build with and I saw some of them who wore temple clothes come and build the tem*ple and the city, and all the time I saw the great pillar of clouds hovering over the place.

Instantly, however, I found my*self again in the taber*nacle at Ogden. And yet, I could still see the building go on and I got quite animated in call*ing on the people in the tabernacle to listen to the beautiful music, for the an*gels were singing the same music I had heard be*fore. "Now is estab*lished the King*dom of God and his Christ, which shall never more be thrown down."

At this I seemed to stagger back from the pulpit and Brother Francis D. Richards and some others caught my arm and prevented me from falling. Then I fin*ished so abruptly. Still even then I had not fainted, but was simply ex*hausted.

They I rolled over in bed and awoke just as the city clock was strik*ing twelve

[Hemidakota]

There is still time...remember, we still have two objectives that have not come to pass: 1] boy prophet, and 2] Jewish Temple to be built in Jerusalem.

The alternative replacement for petrol is Plug-N-Play Electric. We have now the battery technology and the know how to place a vehicle like this on the road. Tesla is prime example [with exception not having the latest battery tech] and soon the 2010 Chevy. As long it does not have no connection to the oil companies. lol

[NeuroTypical]

The alternative replacement for petrol is Plug-N-Play Electric. We have now the battery technology and the know how to place a vehicle like this on the road.

The US doesn't have enough coal to make this dream come true.

LM

[Hemidakota]

Why do you think that is an issue? Natural Gas is plentiful.

[JohnBirchSociety]

The US doesn't have enough coal to make this dream come true.

LM

Nuclear Energy is the means to the end of electricity production...

[NeuroTypical]

I'm game. Get to building them reactors. Get moving on the natural gas refineries. I wouldn't mind a plug in car one bit - we just have to understand that the power still has to come from somewhere.

LM

[bcguy]

That is also a problem with people who live in densly populated cities...where to store it.

We do not have that kind of storage space but grow some of our food. ONLY if I could have a lot and a greenhouse on it would I be happy and some what relieved on how to knock down my food bill. We grew lots of lettace last year. Because of the limited sunshine we could not grow much more then tomatoes ect.

Food storage is important. We need to do something to increase our years plus supply.