Why Does Wheat Cost 60% More in China Than On “World Markets?
” I do not have to dive deeper into contorted commodity markets. Eric de Carbonnel does an excellent job keeping us updated on worrisome events like the fact that soybeans trade at a 60% premium to so called world market prices, using Chinese price data. With such divergences turmoil can be seen ahead and latest reports that tea skyrocketed in the UK are an early warning indicator of more food inflation to come. Marketskeptics.com warned already last November that US agricultural production is on the decline. Ongoing Fiscal Insanity Helpless governments will probably do their best in aggravating the crisis. Hooked to debt-spending, declining tax revenues come hand in hand with higher social expenditures due to an aging population amidst steadily rising unemployment. If we see 2009 as the year that was survived thanks to fiscal stimuli, 2010 could become an annus horribilis. Looking at the example of the Bank of England, which printed hundreds of billions of pounds, and now faces an any
