Stagflation Has Returned And Food Prices Prove It
Food inflation in the United States has averaged 4% since April, similar to the beginning of the stagflation of the 1970s.Agriculture prices bottomed out as food inflation peaked in June. Now wheat, soybeans and corn prices are on the rise, which means food inflation is about to worsen.This is not due to supply shortages, as producers are short a record number of corn and soybean contracts. Plus, in gold terms, these commodities are at record lows.What is happening is that dollar positions are being exited internationally and countries are hoarding food commodities instead. Soybeans are locked in backwardation despite the harvest already being completed.This could worsen considerably once the next bailout bill passes, as dollar positions get liquidated around the world.
Seekingalpha · 11/03 15:36