Food Inflation - Beef Breaks $4 Pound First Time
Jeffrey C. Borneman | September 17, 2014
The MDEF™ Investing strategy is simple: Own companies that will thrive as the pivot of DEMAND takes place. Consumer DEMAND is a fickle thing, and as Inflation rises (for too many reasons) consumers must face the choice between "needs" and "wants." Investors must ask: Where will future capital rotate?
Ground beef is becoming a luxury protein for some Americans. The Inflation in beef prices to record levels is also becoming a self-perpetuating cycle. The less beef sold, the smaller the herd. The smaller the herd, the higher the price due to sheer scarcity.
In just the past five years, beef prices have risen a staggering 88.1% and by this July, according to the Bureau of Labor Statistics, "the average price for a pound of ground beef had been $3.884 per pound—which was the record price up to that point. From July to August, the average price jumped 12.9 cents, an increase of 3.3 percent in one month," reports CNSNews.
As Inflation is rising here in the States, Food Inflation in particular is becoming a substantial burden to many other countries as discussed here. The situation in Russia is of particular concern as US and EU sanctions have sent the ruble into a tailspin Ordinary Russians said the weakening ruble was putting the squeeze on their finances.
"The purchasing power of our ruble is dropping. It means I will rest less, work more and have worse medical care. I don't know what's behind this fall but I very much don't like it. Nearly all my money now is spent on food and utilities," she told AFP.
Investors take NOTE: " ... money spent on food and utilities ... ". Average citizens of the world do not have the luxury of opting for the newest iPhone when Food and Energy costs are destroying their standard of living. Americans have repeatedly been told that Inflation is the key to recovery because a prolonged period of Deflation is unacceptable (contact me for a detailed explanation of this point).
There are market sectors that will always be in high DEMAND regardless of economic conditions. As the economy continues to contract and Inflation continues to rise, capital will rotate into areas of secure DEMAND and sound investor returns.
If you want to know more about how the MDEF™ Investing strategy is positioned in this, or other geopolitical possibilities, please contact us directly.
Although the overall Consumer Price Index dropped by 0.2 percent in August, the price index for food rose 0.2 percent.
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By: of CNSNews Article Date: 2014-09-17