I look at the inflation in the prices of
things, and for the oil exporters in the Gulf,
inflation ran to 11.8% last year! Who in the hell
knows what the current figures are? And as bad as
it is in Europe, Bloomberg says, "Russia's
inflation is three times that of any other G8
country," finishing off with, "As for the likes of
Venezuela and Iran, don't ask."
Well, I
don't have to ask about price inflation in the US,
as John Williams of ShadowStats.com has released
his latest reports, and he says that inflation is
running at 10.1%. Yow! We're
freaking doomed!
Deep
in the Mighty Mogambo Chest (MMC) there is a
scream of horror building, which I am sure would
scare the hell out of Justice Litle, of the
Consilient Investor, who suggests, "a cheery
suggestion from Harvard historian Niall Ferguson:
Worry about bread, not oil."
He writes,
"Some people worry about peak oil. I worry more
about peak grain. The fact is that world per
capita cereal production has already passed its
peak, which was back in the mid-eighties, not
least because of collapsing production in the
former Soviet Union and sub-Saharan Africa.
Simultaneously, however, rising incomes in Asia
are causing a surge in worldwide food demand."
I leap to my feet and exclaim, "Higher
demand coupled with monetary inflation? I know the
answer! I know this one! The answer is that rising
demand due to affluence and monetary excesses, but
a falling supply, means higher prices! Much
higher! Much, much higher! That's the way that the
supply-demand dynamic works!
"And what is
worse is that this terrible, terrible news is for
a theoretically stable population that is merely
changing its demand for cereal grains! So now add
that additional demand to a population that is
also growing, and you can see where Malthus was
right; a population that rises geometrically with
a food supply that can expand only linearly means
bad, bad news (BBN)!"
The other reporters
in the audience start snickering at me, saying
things like, "Ha! The Stupid Idiot Mogambo (SIM)
believes in Malthus! What a moron!"
In
response, I will say two things (as they say) "for
the record". With a clear voice I say, "First, all
the other reporters in the audience are morons,
with the exception of that little cutie from the
Globe, who looks so hot that she doesn't need any
smarts, as far as I am concerned. Secondly, the
beneficial Black Swans of amazing new
technological feats that have increased crop
yields so dramatically for the last few decades
were the low-hanging fruit, or 'the exception that
proves the rule'."
With a sudden righteous
indignation and an exaggerated sense of importance
that is probably indicative of some kind of
psychiatric syndrome or something, I hysterically
scream out, "If you stinking, moron buttheads
think that your precious technology will always be
able to increase the rate of traditional food
production faster than the exponential increase in
the population, I say that you are making a big,
big, BIG bet (BBBB) that you can't afford to make.
And even if it were true, why are there shortages
now? Why are global stocks of grains at record
lows? And why are prices of grains up 100% or more
in just a few months, with no end in sight, if
technology was so stinking hot? Huh? How
come?"
I notice that nobody wants to talk
about the failure of the, "promise of agricultural
technology", and so I boldly continue, "And if you
actually think that food production as we know it
can be constantly increased so geometrically that
it offsets exponential population growth, then not
only will I laugh at you - Hahahaha! - but I am
willing to take your money via the commodity
markets as you are proved wrong!
"And your
stupid children are not allowed to date my
children because you are obviously very brain
damaged and it would be a crime against humanity
to participate in the propagation of your
defective DNA, if you even understand what I am
saying, which I doubt because you are so damned
stupid, if you don't mind my saying so!"
Mr Litle looks nervously at me, and
observes, "Neo-Malthusians are a small but vocal
lot; we'd rather not rile them up by expressing
too much distaste."
I say "Damned right!"
and, having made my point, I sit down with a smug
grin of self-satisfaction all over my Stupid
Mogambo Face (SMF), making sure that he sees my
hand slowly reaching under my jacket, like I am
reaching for a pistol, just in case he forgets who
is calling the shots around here, no pun intended.
Mr Litle must have seen the obvious threat
and the bad pun, and admits, "Especially
considering that, in the short run, the grain
markets are backing (the) Neo-Malthusian view." My
"I told you so" grin got a little wider, and I
stuck out my chest like I am such hot stuff.
Then he deflates my whole ego trip when he
says that this is all academic anyway, and we are
freaking doomed, by writing, "Whether Malthus'
ghost is ultimately vindicated or laid back to
rest by technology, the threat of food shortages -
and consistently higher grain prices - is a
fixture of the times."
Or, as The Mogambo
has said so many times, "We're freaking doomed!"
Richard Daughty is general
partner and COO for Smith Consultant Group,
serving the financial and medical communities, and
the editor of The Mogambo Guru economic newsletter
- an avocational exercise to heap disrespect on
those who desperately deserve
it.
Republished with permission from The Daily Reckoning.
Copyright 2007, The Daily
Reckoning.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
