This is what will stop Bernake and his inflation quest

[gates]

Directly ties in with Denningers ticker on the subject...

http://intotheashes.imva.info/breaking-news/hunger-starvation-to-visit-humanity

[Eric Bryant]

Aren't we still scheduled to be discussing deflation?

I just can't wait to see what happens to food prices once fuel gets pricey again and we start getting all those shipping "surcharges". Should be a ton of fun.

[gates]

Well- we have deflation in the durable goods sector - namely housing - it kills the banks as you know - but BB has been hard at work trying and stop that, unfortunately the law of unintended consequences has caught up with poor Ben - instead of all that money being used to prop housing prices the banks have decided to use it to speculate to widen the spread by pumping up the stock market and to Bens horror that money has ALSO been finding its way into the commod mkts - grains have been on a tear for awhile now - we have all seen what has happened to PM's - so Ben decides to double down and threaten QE2 and the Dollar gets HAMMERED which drives the commods even higher - if he actually carries through with it we might just get that $100-$150 oil then we're off to the races...

[alant]

From the linked article:

Today we have the simultaneous events of income deflation and food inflation, two high-speed express trains coming down the tracks at each other, plus a financial crisis colliding with staggering crop losses that are cutting deeply into available planetary food reserves.

Okay, so here's the deal - by food now, everything else after prices fall.

What with all the crop failures you might expect there to be ethanol shortages causing/contributing to rising fuel prices. Either that or they keep making ethanol while the amount of US raised corn in the global food supply drops drastically.

The San Joaquin Valley water situation is just part of a much larger water rights fight. We can't keep pumping the same amount of water to California, Arizona and Nevada forever, the aquifers are going to go dry. Throw in oil shale and natural gas fraking (hydraulic fracturing) and we have a real mess.

http://www.eoearth.org/article/Aquifer_depletion
For fossil aquifers—such as the vast U.S. Ogallala aquifer, the deep aquifer under the North China Plain, or the Saudi aquifer—depletion brings pumping to an end. Farmers who lose their irrigation water have the option of returning to lower-yield dryland farming if rainfall permits. In more arid regions, however, such as in the southwestern United States or the Middle East, the loss of irrigation water means the end of agriculture.
. . .
In the United States, the USDA reports that in parts of Texas, Oklahoma, and Kansas-—three leading grain-producing states-—the underground water table has dropped by more than 30 meters (100 feet). As a result, wells have gone dry on thousands of farms in the southern Great Plains. Although this mining of underground water is taking a toll on U.S. grain production, irrigated land accounts for only one-fifth of the U.S. grain harvest, compared with close to three-fifths of the harvest in India and four-fifths in China.

Maybe the next big war will be over water?

Neither article said when civilization will come to an end due to our inability to make wise and timely decisions. Shouldn't they include that part?

[gates]

You have VERY little understanding of Macro economics Bill!