Tuesday, January 25, 2011

Food inflation and exploding stars...

There's been a meaningful uptick in food prices around the globe over the past few months. For the most part these increases have been modest but some fresh fruits and vegetables have even seen sharp jumps in the US. For example:

Grapes - normally $1.67/lb are $2.67/lb
Strawberries - normally $1.99/lb are $4.50/lb

However, because the average US consumer spends only about 10% of their household budget on food, even a huge 10% jump in prices would only add about 1% to family expenses.

In the developing world this is another story. In China up to 40% of the average family budget is devoted to food purchases (this is somewhat skewed by the fact that for most workers there is no income or property taxes and housing costs are negligible). If food prices jump 10% in China that's an additional 4% off the families bottom line. There have been scattered reports of food prices doubling overnight in some parts of China. If that happened the implications for a society with over 1 billion people living in rural poverty could be dramatic.

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Okay, if this happens expect the lunatic fringe to go even CRAZIER next year.

"According to Dr Brad Carter, senior physics lecturer at the University of Southern Queensland, daylight may be unbroken after the explosion of Betelgeuse.

"This old star is running out of fuel in its centre,’ he remarked to Australian website news.com.au.

‘This fuel keeps Betelgeuse shining and supported. When this fuel runs out the star will literally collapse in upon itself and it will do so very quickly.

‘This is the final hurrah for the star. It goes bang, it explodes, it lights up - we’ll have incredible brightness for a brief period of time for a couple of weeks and then over the coming months it begins to fade and then eventually it will be very hard to see at all."

Two weeks of day light after this star goes supernova? Sounds like a party to me!

Cheers!

1 comment:

Anonymous said...

Keep in mind that the 10% food budget is calculated on the median family income in the $55k range. Meanwhile 49ish% of the entire household population actually makes less than $50k. The sub set median income of these people is aprox $24k @ annum. Subsequently food and energy for 1/2 of our entire population is squeezing them into complete despair. I believe there will be a social consequence when over 50% of the population falls into this catagory of despair. After all isn't that's what democracy demands

SMTF