- 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.
For further details see:
Stagflation Has Returned And Food Prices Prove It