“All over the world, food is causing trouble. Why? Not because there is too much of it or too little, but because it has gone way up in price.Why has it gone up? Well, for one reason, Ben Bernanke and other monetary authorities are pushing more money into the world financial system. The cash has to go somewhere. Much of it seems to be finding its way into the commodities markets – including soft commodities, notably food. In other words, worldwide inflation of food prices is a monetary phenomenon, as Milton Friedman might have put it, not a feature of the weather. But rather than attack the cause of inflation, the authorities are aiming squarely at its consequences.

Of course, there are other reasons for food price increases. There are a lot more people in the world than there used to be. And the new people have to eat too. Since many of these new people are entering the ‘middle class’ they have more money to spend on food, so they can bid up prices. And, typically, they want more meat. It takes more land to produce meat than it does to produce grains – putting further pressure prices all up and down the food chain.”

Thus speaks the proprietor of a newsletter in the business of watching financial trends.