As is already well known, inflation has begun to spread throughout the financial markets and world economy.

As you can see, commodities of all kinds are soaring. You’ll note, in particular, that agricultural commodities have been top performers, trailing only Silver in price appreciation. However, this performance is even more significant when you consider that it occurred in half of the time period measured above.

 

Indeed, Agricultural commodities were laggards during most of QE 1. It was only when the Fed introduced QE lite in August ’10 and QE 2 in November ’10, that Agricultural prices began to explode higher: 

 

 

As you can see, The Rogers Agricultural index only broke above its multi-year resistance level after the Fed indicated it was going “all in” on its reflation efforts with QE lite.

 

This in turn has resulted in riots and revolutions worldwide. Already we’ve seen this occur in Tunisia, Algeria, the Ivory Coast, Egypt, Libya, Bahrain, Iran, and now Saudi Arabia. We’ve also seen the start of this in China.

 

The primary driver of these situations has been higher food prices. Food accounts for 50% of spending in many emerging markets. With food prices hitting record highs and going higher, many folks are literally starving. As a result, they’ve become violent and are moving to overthrow the elites in control of their countries.

 

This situation is a stark warning of what’s to come in the US. While many believe  the US is immune to this kind of disorder, ZeroHedge recently noted  that the US has a similar wealth gap to most emerging markets:

 

The reasons the US hasn’t been gripped by riots are the following:

 

1)   The security nets (food stamps, welfare, etc) continue to keep lower income Americans afloat… for now.

 

2)   Food in the US is so processed that increases in agricultural prices don’t pass through as rapidly into higher food prices.

 

Neither of this will last much longer. Regarding #1 [1], the US Government is broke. In fact they’re so broke than an aid to Nancy Pelosi (who I can’t stand) has revealed that the US Government might actually shut down at some point in the near future.

 

As for #2 [2], commodities will be spiking even higher once the following is digested by the markets:

 

This is the weekly chart for the US Dollar. As you can see, we have just broken the multi-year trendline. What does this mean? That the momentum that maintained the US Dollar from the 2008 lows has been BROKEN.

 

It is literally now “do or die” time for the US currency. If the US Dollar does NOT rally HARD right now… then we’re triggering the massive H&S pattern in short course and on our way to a 50% devaluation:

 

 

Get Ready Now!

 

Graham Summers

 

 

Report Card on Obama's First Two Years  By K.E. Campbell  Two years ago today, President Obama was inaugurated as president of the United States.  Are you better off today than you were two years ago?  Numbers don't lie, and here are the data on the impact he has had on the lives of Americans:   January 2009 Current % chg Source           Avg. retail price/gallon gas in U.S. (regular conventional) $1.83 $3.104 69.6% 1 Selected commodities:              Crude oil, European Brent (barrel) $43.48 $99.02 127.7% 2      Crude oil, West TX Inter. (barrel) $38.74 $91.38 135.9% 2      Natural gas, Henry Hub, $ per MMbtu $4.85 $4.48 -7.6% 2      Gold: London (per troy oz.) $853.25 $1,369.50 60.5% 2      Corn, No.2 yellow, Central IL $3.56 $6.33 78.1% 2      Soybeans, No. 1 yellow, IL $9.66 $13.75 42.3% 2      Sugar, cane, raw, world, lb. fob $13.37 $35.39 164.7% 2 Consumer Price Index (for all urban consumers) 211.1 219.2 3.8% 3 Producer Price Index:  finished goods 170.3 183.0 7.5% 3 Producer Price Index:  all commodities 171.0 189.9 11.1% 3 Unemployment rate, non-farm, overall 7.6% 9.4% 23.7% 3 Unemployment rate, blacks 12.6% 15.8% 25.4% 3 Number of unemployed 11,616,000 14,485,000 24.7% 3 Number of fed. employees, ex. uniformed military (curr = 12/10 prelim) 2,779,000 2,840,000 2.2% 3 Real median household income (2008 vs 2009) $50,112 $49,777 -0.7% 4 Number of food stamp recipients (curr = 10/10) 31,983,716 43,200,878 35.1% 5 Number of unemployment benefit recipients (curr = 12/10) 7,526,598 9,193,838 22.2% 6 Number of long-term unemployed, in millions 2.6 6.4 146.2% 3 Poverty rate, individuals (2008 vs 2009) 13.2% 14.3% 8.3% 4 People in poverty in U.S. , in millions (2008 vs 2009) 39.8 43.6 9.5% 4 House price index (current = Q3 2010) 198.7 192.7 -3.0% 7 S&P/Case-Shiller Home Price Index: 20 city composite (curr = 10/10) 146.4 145.3 -0.8% 8 Number of properties subject of foreclosure filings, in millions 2.82 2.87 1.7% 9 DJIA (12,403 on 6/3/08, date BHO clinched Dem. nomination) 7,949 11,825 48.8% 2 NASDAQ (2,480 on 6/3/08) 1,441 2,725 89.1% 2 S&P 500 (1,378 on 6/3/08) 805 1,282 59.2% 2 Global Dow 1,356 2,153 58.8% 2 U.S. rank in Economic Freedom World Rankings 5 9 n/a 10 Consumer Confidence Index (curr = 12/10) 37.7 52.5 39.3% 11 Present Situation Index (curr = 12/10) 29.9 23.5 -21.4% 11 Failed banks (curr = 2010 + 2011 to date) 140 164 17.1% 12 U.S. dollar versus Japanese yen exchange rate 89.76 82.03 -8.6% 2 U.S. money supply, M1, in billions (curr = 12/10 preliminary) 1,575.1 1,865.7 18.4% 13 U.S. money supply, M2, in billions (curr = 12/10 preliminary) 8,310.9 8,852.3 6.5% 13 National debt, in trillions $10.627 $14.052 32.2% 14           Sources:         1 - U.S. Energy Information Admin.         2 - Wall Street Journal         3 - Bureau of Labor Statistics         4 - Census Bureau         5 - USDA         6 - U.S. Dept. of Labor         7 - FHFA         8 - Standard & Poor's/Case-Shiller         9 - RealtyTrac         10 - Heritage Foundation and WSJ         11 - The Conference Board         12 - FDIC         13 - Federal Reserve         14 - U.S. Treasury