re: "SPLAT!!!"

LC Subotai Bahadur, Lord Pao An at The Anti-Idiotarian Rottweiler ("HQ of the Rottweiler Empire. An Affiliate of the VRWC.") assembles some information and does a little forecasting.

Money quote(s):

"The Dark Times are no longer a matter of if; but rather of when, how long, and how bad. The Great Depression is now one of the best-case scenarios. It IS going to get hungry out there. “Out there” meaning outside our own homes."

Not to get all "survivalist-compound" on you, but keep reading.

"We have been watching the mayhem in Tunisia, Egypt, and around the Third World with more than a little emphasis on the Ummah, the Muslim world. There are riots in the streets, and general unrest. Most of it caused in large part by the rise in the price of food."

As food prices rise, those on the margins get squeezed past the breaking point; leading one "illegal" Tunisian food vendor to self-immolation.

"Our poor, those officially designated by the government, have as high a per capita income as much of the middle class in the rest of the world, and have more and better material goods and in many cases housing than the middle class of the rest of the world.

One of the points where we come out ahead, even our poor, is in the percentage of income and effort that has to be devoted to getting enough food to eat. In this country, we average 10-15% of our income having to be spent on food. For most of the rest of the world; it is 40-60%. There is also a qualitative difference."

"In our country, the primary dietary problem of the poor is acute obesity. In the Third World, there is not a productive agricultural sector and the governments spend a large proportion of their budgets importing food from overseas and selling it to the people at subsidized prices that do not reflect the actual cost at all. Our government interventions into agriculture are designed to keep prices high enough to continue to encourage continued high volume production by our agricultural sector. We produce enough food to feed our own, fatten our poor, and usually export enough to feed much of the world. And we do it with less damage to the environment than pretty much all the rest of the world.

Now let us consider those rough figures about the cost of food in the family budget. If food prices rise 10% in this country, that means that the total cost of food out of the family budget goes to 16 ½%. Not pleasant, but bearable. We have enough leeway in income to adjust things to make it work. Cutting back on Starbucks and a few other optional purchases more than covers it without touching other necessities. In the Third World, a 10% price increase can mean the food portion of the budget goes to 2/3 of their income; and there is not much other leeway."

"The supply of food is not fixed. It is shrinking.

Aside from the deliberate policy of currency inflation by all the major economic powers [which raises all world commodity prices], there is an actual shortfall of food grains. There are 5 major producers/exporters of food grains that cover the shortfalls in food production around the world.

Russia/Ukraine, Canada, Australia, Argentina, and the United States. Russia/Ukraine has embargoed food exports due to crop failures [drought and fires] so they can hope to feed their own people. Canada’s wheat crop is down 12% below normal due to flooding. Australia has floods and storms in the east and crop destroying droughts in the west. Argentina does not have that great a surplus. And the United States is using 1/3 of its grain crop to make energy inefficient moonshine to burn instead of using it for food.

That is why the governments of Third World countries that can afford it are buying up food grains as fast as they can and are paying a premium for it. And this is not because of any sense of responsibility for those people. It is to avoid being literally torn to pieces by a mob. There is no longer the slack to maintain the subsidies, so food prices are rising. Hungry people who are subjects, and not citizens with alternate means of getting at the government,* will turn to violence fairly immediately."

* I.e., fair and democratic elections, independent judiciaries, rule of law not men, &tc.

"Hunger and inflation are major factors in what is happening in Egypt, both as triggers, and in limiting the riots [people have to stop and find food for their families, as the government food distribution system broke down right smartly]. There is no solution to what is happening there that will come from either a change of government, or some form of the old Nassarite system holding on. Population pressure, and the economic chaos caused by worldwide inflation and a shortage of food grains mean that no matter if things settle down under the Supreme Military Council, eventually it will fall apart. There is not going to be a Constitutional Convention at that point. At one or another interation, the Muslim Brotherhood or a like group is going to end up in charge."

The writer does, in his post, offer some constructive suggestions (not quoted here) as to how the global food shortage may be alleviated by unilateral action of the U.S.

"1/3 of the winter wheat crop in China has been lost to drought. More, maybe all, may be lost.
Think about that for a moment, because there are some pretty dire consequences.

China has made food self-sufficiency a key policy goal since 1949, except for politically caused famines. It has succeeded pretty well up till now. China avoids massive grain imports most years. It just failed."

Bear in mind also that rising incomes in China have led to a more Western type diet among the growing middle class. After all, if you can afford it, why eat like your peasant forebears if you don't have to.

As any honest political scientist (or intelligence analyst) will tell you, it's not downtrodden peasants who make successful revolutions; it's dissatisfied middle classes with rising (and frustrated) expectations.

"China is NOT going to suffer a major famine now if the Chinese government can help it, because over a billion hungry Chinese are going to remember how certain dynasties ended if they do. And the Chinese government can afford to buy the food from overseas. China has a huge trade surplus with us. They have dollars coming out the south end of the northbound dragon. They will bid whatever it takes to secure food supplies. The amounts of both money and grain will be horrendous. And the world price will go up. And up. And up. And the supply of grain available for purchase by the rest of the world is going to go down. And down. And down. It is going to get damned hungry out there in the world. And hungry people do not have much patience."

"We will not be exempt. Food prices will rise. We will be competing with foreign bidders for our crop, which is as it should be. That will be good for our farmers. And we do produce enough for ourselves, if we are allowed to. The only way to limit the food price increases would be to do like Russia, and embargo food exports. That will put Malthus on steroids and increase the bad results elsewhere."

&

"Another possible consequence. China will be using dollars to buy a huge amount of food. They also buy the worthless script that we call Treasury Securities. What if they use the money they buy Treasuries with to buy food; or if they start selling our Treasuries to pay for food. The reduced demand for Treasuries means that government interest costs skyrocket and the shell game is over." (Emphasis in original.)

This last possibility has had me concerned since the Egyptian protests started and I became aware of the food shortage problem. I've since read (can't remember where) that China has already begun selling T-bills and its Japan that's picking up the slack.

I can't confirm it, I definitely read it online (so it must be true) rather than anywhere governmental, but it is worrisome.