In September of 2009, I predicted that supermarket
prices would rise as the commodity wholesale price
of butter used to manufacture processed foods would
be manipulated by a cartel consisting of insider
dairy producers and members of congress. At the time,
butter was trading on the Chicago Mercantile Exchange
for $1.17 per pound.
Official government figures report that there is
no inflation and that prices remain stable. If you
shop in a supermarket, you know differently. How
can the lies continue, as the purchasing power of
our dollar continues to shrink?
How has my butter prediction done?
Yesterday (June 17, 2010), just nine months after
my Notmilk column, butter was trading for $1.64
cents per pound. That represents an increase of
greater than 40 percent!
Here is the column I wrote on September 11th, 2009:
____________ _________ _________ _________ _________ _
Although inflation is that dirty “I” word which
politicians and economists equally fear, inflation
is the ultimate remedy for America’s current financial
woes, and that cure will all begin on Friday morning
with dairy leading the way.
Friday, September 11, 2009 will be day one. One year
from today after America’s cost of living has increased
by ten to twenty percent due to increased food costs,
consumers will be able to mark September 11, 2009 as
the beginning day of America’s greatest economic
collapse, and subsequent recovery.
It all revolves around dairy, and here’s why.
************ ********* ****
HEADLINE: September 10, 2009 – National Milk
Producers Federation (NMPF) Press Release
NMPF urges congressional leaders to direct $350
million toward the purchase of cheese claiming
that such subsidy “would enhance dairy farmer
income by $1.3 billion several months.”
************ ********* ****
Rather than allow natural events to equalize the disparity
between profits and losses in the milk industry, congress
has allowed itself to be bought so that favorable new
laws coupled with enormous subsidies have rapidly acted
to dramatically raise the wholesale price of milk making
dairy farmers the sole beneficiaries.
How will such piracy change America?
Walk through your supermarket and read the labels on
processed foods. A majority of food items include one or
more milk products on their ingredient lists. Even while
dairy farmers allowed themselves to go broke this past
year and invested millions of dollars to bribe members
of congress to enact legislation, dairy food processors
were smart enough to react to the market and raise
prices so that their bottom lines were not affected.
Such is the nature of free and honest commerce.
As a matter of fact, profits have never been higher
for dairy distributors and processors.
This time around, the wholesale price increases will be so
rapid and dramatic that processors will react again with
overnight price increases. The must do so to break even,
and their goals are to do a lot better than just break even.
Their reactions will break the banks of many consumers.
The cost of bread and cake will rise. The cost of
processed cereal will rise. The cost of a cup of coffee
and everything else containing lactose and whey and
casein will go through the proverbial supermarket roof.
This is trickle up economy, and as the cost of basic
foods and commodities rise, the cost of labor and fuel
and everything else will rise to.
The economic illness that America is about to experience
and the suffering which follows will be unprecedented,
but good things are down the road to recovery. As
inflation raises the prices of everything, so too will
the values of homes rise. In the “magic” 1980s,
fortunes were made when home prices doubled in just
a decade. A typical hundred thousand dollar home
with a $50,000 mortgage became a two hundred
thousand dollar home with a $50,000 mortgage. How
easily money was made by what I call artificial equity.
Multiply that example by tens of millions of homes
and you see the effect that inflation will have to
create new “paper” wealth.
The inflationary avalanche will bury many people in its
wake. Once the avalanche begins, it will be too late to
alter the wake of destruction. Few will stop to consider
that every avalanche begins with just a single snowflake.
It the coming economic avalanche, the snowflake is
represented by dairy.
On Friday, September 11, 2009, farmers will begin to
see the end to their recent price collapse by celebrating
ten to twenty percent increases in the payments they
receive for their milk. That is the beginning. Take a deep
breath and jump feet first into the murky waters of a
black lagoon, and don’t let that creature who resides
there grab onto your legs.