This is still all related to inflation. In the U.S. Food prices had the largest jump since 1974. Granted there are many reasons for this, but why just Food that had the largest jump in price? Not cell phones, not cars, not TVs, but Food. There is an underlying cause.
Food and energy both had a large jump. The prices in consumer products are lagging as compared to oil, because they were made with last summer's oil. We see the prices in food rise quicker, in part, because nearly everything that we eat takes a great deal of energy to transport from where it is grown, to where it is processed, to where it is sold. We
will see prices rise in consumer goods if the current oil price maintains it's present levels.
That is a reasonable and logical stance:
My position is:
Because of Quantitative Easing (devaluing of the Dollar) by the FED, speculators in the market new of a quick way to make money. People's money won't be able to buy as much, but what must they buy if they have to buy less. (Food). So through the commodity market they speculate the demand for food will rise. There speculation causes the Food price to rise over other products. The Price of Oil surly plays a part in it as does transportation costs.
But Speculators try to predict the future: The smart money says people will have a hard time coming and the demand for food will go up. So far, they are correct. But if they are proven correct, that food out weighs other products for a length of time there is a double edge effect. It will cause great inflation in Food Prices (the absolutely worse place to have inflation) You can deal with inflation in Cars, TVs, Power, Cell Phones, etc... You can not deal well with inflation of food prices.
There is a way of telling which one of our arguments is correct.
Under my theory and model. The following will occur:
Food Inflation, followed by general product Inflation, followed by Increased Food Inflation, which is followed by Non-Necassity Product Deflation.
Basically a split will occur. Necessary products will Inflate in price while Non-necassary products will initially inflate followed by a relatively quick deflation in price.
I really hope your position is the correct one, but I must explore mine.
I tend to think the speculators got it right. If money buys less, speculate the food prices up, to increase profits, which will lead to other products becoming less desirable and decrease in price. Which will lead to more companies going out of business, more unemployment, less money to keep other businesses in the market, etc....
I think the world is on the edge of a very unstable cliff and unless managed properly, the fall that must come will hurt many more than it needs to do. Other countries separately in the past have had depressions, I think we are on the verge of our first "global" depression.