I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here's the bad news: They may actually accelerate.

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Haha  - yeah, right   |2008-06-21 05:51:54 If you really think there's going to be food shortages, why are you investing in paper? You do realize that mutual funds are just like FRNs--useless garbage that they can print out of thin air. Seriously, walk the walk, don't talk it. Reply | Quote 0   0

the Editor  - re: yeah, right   |2008-06-21 13:13:08 Haha wrote: If you really think there's going to be food shortages, why are you investing in paper? You do realize that mutual funds are just like FRNs--useless garbage that they can print out of thin air. Seriously, walk the walk, don't talk it. good point Reply | Quote 0   0

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