Rice Continues to Explode Higher

We had fun this week in the market - I continue to believe the idea that printing money inflates all assets, including equities to unnatural levels... thankfully it does not cause any ill effects to the rest of the world.

Remember - agflation, food protectionism, social unrest - my 3 themes for this food crisis that is going relatively ignored. Coming to a 2nd or 3rd world country near you. Rice - biggest weekly advance on top of a 50% gain in a previous 2 week period. [Apr 6: Agflation Hits Rice - Prices Up 50% in 2 Weeks] It's all good - Western governments, led by Helicopter in Chief Ben, printing money like mad does not contribute to this. Nope. Nada. Enjoy your grocery shopping this weekend...

• Rice futures rose for a fifth day, recording the biggest weekly advance in at least seven years, on concern export curbs imposed by China and Vietnam will spread as importing nations struggle to meet their needs.
• India and Egypt have curbed sales this year to safeguard local supplies. The gain in rice, as well as energy and wheat, has prompted the United Nations to warn that civil unrest may spread because the poor in Africa and Asia can't afford to eat, and their governments can't fund or find sufficient imports.
• Rice prices today rose to a record for the seventh time this month, and the Chicago Board of Trade raised its daily trading limits after futures rose the most allowed twice this week. Availability of the world's most-consumed grain has decreased as countries restrict shipments in an effort to slow rising food costs and feed domestic populations.
• ``More and more countries will have restrictions on exports,'' Frederic Neumann, an economist at HSBC Global Research, said by phone today from Hong Kong. ``There's some pressure on the Thai government to curtail shipments.''
• The contract gained 13 percent for the week and has more than doubled in the past year.
• China, the world's most populous nation, has started to block or tax some food-related exports to make sure that local supplies remain adequate. The country set a tax on rice shipments at 5 percent this year and started to tax wheat exports at 20 percent.
• The world's fastest-growing major economy announced yesterday that it was increasing the tax on fertilizer shipments to ``control exports'' and damp local prices, according to the Finance Ministry.
• An average household in India spent 32 percent of its income on food last year compared with 6 percent for a household in the U.S., data from the department show. The figure for Indonesia was 43 percent, and 36 percent for the Philippines.

To put into perspective - most homeowners spent 35-40% of their income on their mortgage. Now assume that your mortgage was your food. And your mortgage payment just doubled; just so you can feed your family. Unlike under water mortgages you can't just "walk away" from food...

Listen to those printing presses whirl....keep shoveling those paper dollars into the world system, (and all governments pegged to the USD must also print their currencies to keep their system stable) so we can chase up every hard and soft asset to ridiculous levels... anything to help those NYC bankers. Remember we are at annual pace that for every 5 dollars in your pocket, 1 new one is being created in the US (and this is being replicated worldwide for any government tied to our dollar). Poof.