Food Prices Have Shot Up With the Lehmans 'Ingredient Index'

The Mogambo Guru - Tue 31 Jul, 2007

The current market price of road kill is still a very economical zero, which may explain why it is not included in the Lehman Brothers' ingredients cost index, which "covers cocoa, coffee, oats, tea, soyabeans and milk, among other commodities and which is based on spot rates." This index, in case you were wondering, "rose 14.9% in the first half of the year", which "follows a 16.5% increase in the second half of 2006." Yikes! Prices of foodstuffs are up over 30% in twelve months? Yow! And what is the biggest gainer? "The biggest increase has occurred in powdered milk prices. These have nearly doubled compared with the same period a year ago. Barley prices have also shot up 53%, while corn prices are up 68%." So it is no wonder that people are complaining about prices!

Peter Schiff of Euro Pacific Capital writes, "In current
theory, the excess cash piling up around the world is
like manna from heaven. Don't believe the hype. Liquidity
is merely a euphemism for inflation. Asset prices,
including stocks, are simply rising to reflect the
diminished value of the currencies in which they are
traded. Wealth is not being created, merely re-priced." 

Well, I don't know where Mr. Schiff lives, but around
here, it's not wealth that is being re-priced, but
poverty. As the inflation in the prices of everything
continues to outstrip "income after taxes and
deductions", standards of living are being eroded because
people can't buy as much stuff as they used to; their
relatively static stream of discretionary income has lost
buying power against rapidly rising prices.

For example, from the Financial Times we read that
inflation is finally affecting food, and that Hovis bread
said it was "preparing to raise bread prices for the
second time in six months. The pending increase - which
the company attributed to rising wheat costs - is merely
the latest in a series of price increases food and drink
companies have been trying to pass on to consumers this
year. The series has seen costs of making bread, beer,
yoghurt and chocolate as well as dozens of others
packaged food products become increasingly expensive."
I know what you are thinking. You are thinking, "Who
cares about bread? I don't need no stinkin' bread! I can
eat pizza!", which is wrong, whereas you would have been
correct if you had instead thought "I don't need no
stinkin' bread! I can eat the bodies of dead animals that
I find alongside the highway!"

And indeed you could, as the current market price of road
kill is still a very economical zero, which may explain
why it is not included in the Lehman Brothers'
ingredients cost index, which "covers cocoa, coffee,
oats, tea, soyabeans and milk, among other commodities
and which is based on spot rates." This index, in case
you were wondering, "rose 14.9% in the first half of the
year", which "follows a 16.5% increase in the second half
of 2006." Yikes! Prices of foodstuffs are up over 30% in
twelve months? Yow!

And what is the biggest gainer? "The biggest increase has
occurred in powdered milk prices. These have nearly
doubled compared with the same period a year ago.
Barley prices have also shot up 53%, while corn prices
are up 68%."

So it is no wonder that people are complaining about
prices! And you may be interested to learn the surprising
fact that these afflicted people are, paradoxically, not
the least bit interested in, or appreciative of, being
educated that their inflation problems are all self-
inflicted, as they are the same drooling morons that
elected the Congressional morons that have spent us into
the Hell Of Crushing Debt (HOCD) and allowed the Federal
Reserve to create wildly excessive amounts of money and
credit to make that grotesque orgy of spending possible!

To prove it to yourself, the next time somebody says that
prices are going up and that they are having a hard time
making ends meet, carefully observe their reaction when
you politely and respectfully go up to them and, by way
of education for their benefit, say, "Shut your damned
stupid mouth, you ugly little troll! Your problems are
all self-inflicted, as you are the same drooling 'I Love
Big Government Creating Perpetual Entitlements' moron
that elected the Congressional morons that have spent us
into the Hell Of Crushing Debt (HOCD) and who
conveniently looked the other way while the damnable
Federal Reserve created the money and credit to make that
stupid, bankrupting spending possible! It's your own
fault, you ignorant little commie creep! You committed
economic suicide, and in doing so have economically
murdered the rest of us, you filthy piece of stupid,
greedy, Leftist crap!"

And it is going to get worse as more people get more
desperate, and things get more weird, like John Stepek at
MoneyWeek.com mysteriously using the exact same words as
were used in a copyrighted report from a Mogambo Economic
Truth And News Service (METANS) broadcast, which bravely
reported, "The Mogambo Economic Forecast Institute (MEFI)
reckons that the world will face a dollar supply overload
within the next five years that could send prices
soaring, and coupled with an oil demand overload against
an oil supply deficit, the price of oil will soar, and
the prices of all other things will soar right along with
it, and especially all things imported, and doubly-
especially the aforementioned imported oil, in case you
weren't paying attention the first time I said it."

The report ended with, "And with oil being a prime
ingredient of making and/or moving damned near everything
these days, if you don't think that paying a couple of
hundred bucks for a lousy barrel of oil is going to have
a hugely inflationary effect on all prices, then
congratulations, as you have passed the test! You are
officially stupid enough to send $50,000 in cash to me,
addressed to 'Occupant', in return for which I will pray
that your children do not end up being as stupid as you
are. And remember; cash only!" 

Regards
 
The Mogambo Guru
For The Daily Reckoning 

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