Chronology of an unannounced inflation
Since the beginning of the pandemic that hit the world, you may have heard “we are facing a food crisis”. The United Nations World Food Program (WFP) on April 12th, 2020 warned of a crisis in food production and distribution on a global scale. It seemed unlikely to talk about what was happening in the international markets in 2019, specifically in August of that year. However, the situation was getting worse little by little,and to put the cherry topping on the pie, is added the printing of paper money to carry out stimulus packages. Likewise, the debt of the United States came to exceed US$ 3 trillion.
The liquidity crisis never told by
In August 2019, the RePo or Repurchase Agreement market suffered a mismatch, which has been called the liquidity crisis of the RePo market. The RePo market is where the Federal Reserve (FED) places its bonds so that they can be repurchased. By then there was an inversion in the curve. Where the bonds placed by the FED paid a better return at 2 years than at 10 years. Therefore, low-risk investors preferred to buy them at 2 years, which resulted in the excessive printing of money by the FED, which, as known by many, is the private “central bank” of the United States.
Do you remember the liquidity crisis of 2008?
When Lehman Brothers ran out of liquidity, the domino continued its course, until generating the liquidity crisis in the subprime market in 2008. At that time, the governments rescued the banks with taxpayers’ money.
Well, the RePo market is where the big money moves. Do you remember the demonstration in Chile due to the refusal of the people to receive a loan from the International Monetary Fund (IMF)? Among its conditions was the rise in the prices of subway tickets… And, added to the economic inequality that already existed in Chile, the people rose to the point of burning the subway considered as the jewel of the city.
Chile was not the only country that had strong protests. Simultaneously, in Ecuador, faced with the refusal of the people to receive another loan from the IMF, the country was divided and rose up in protests.
In 2019, the Pfizer Company was on the verge of bankruptcy, as well as other pharmaceutical companies. The same bad fortune befell Boeing, as well as the European banking giant, the Deustch Bank.
Signs of a food crisis
On April 21st, 2020, the WFP warned that the world was facing an “unprecedented” food crisis. David Beasley, director general of the WFP, told the UN Security Council that even before Covid-19 became a problem, he had already informed world leaders that “2020 would face the worst humanitarian crisis since the II World War”.
Inflation
It is no secret to anyone that inflation is undoubtedly a way of impoverishing society; the amount of US dollars and national currencies that has been printed in recent years has been the largest in the history of mankind, resulting in the highest inflation since 1980. Inflation is characterized by the loss of purchasing power. Broadly speaking,in Costa Rica, we can buy less food with the same colones.
Increase in the price of oil
The increase in oil prices has collateral and unquestionable effects in all industrial sectors, especially in transportation, logistics, and agriculture. Despite the high cost of hydrocarbon prices, due to sanctions with Russia, Western countries have done little to control the excessive increase. Are there interests of global elite to keep oil costs high?
Russia–Ukraine conflict
It is well known that Russia’s operation in Ukraine has led to sanctions against Russia, which has not only created an increase in oil prices, but also in wheat and other crops. As Russia is the world’s largest exporter of these crops, which are not only used for human food but also for animal feed, the crisis is brewing globally.
Therefore, the boycott of Russian products will definitely increase the cost of agricultural production due to shortages. We have already participated in the rationing of one of Ukraine’s main exports, sunflower oil.
Incentives for farmers to stop farming
At the same time, and knowing the global situation of scarcity, the Biden administration in the US is pressuring farmers to allocate farmland to the so-called “Conservation Reserves Program”. Basically, the US state is paying farmers not to farm. Also in states like California, farmers are paid to grow less; this time, in the name of saving water. For its part, since February this year, the United Kingdom also pays farmers up to 100,000 pounds sterling for them to stop working and retire.
Fertilizer shortage
Russia and Belarus are 2 of the world’s largest exporters of fertilizers. Due to the sanctions with Russia, in March of this year, the price of fertilizers reached all-time highs. Added to this is the fact that China –the third largest exporter of fertilizers– has imposed a self-imposed ban on exporting fertilizers, to avoid a drastic rise in food for local consumption.
In addition to this, the American railway company Union Pacific limited the shipment of fertilizers, informing the giant of this industry, CF, that it will have to limit the number of wagons by 20%.
In the words of a CF Industries spokesperson: “This action by Union Pacific couldn’t come at a worse time for farmers. Not only fertilizer due to these shipping restrictions, but additional fertilizer needed to complete spring applications may not reach farmers. By imposing this arbitrary restriction on just a handful of vendors, Union Pacific is putting farmers’ crops at risk, driving up the cost of food for consumers”.
New “bird flu”
The hegemonic media reported in February of this year that a major outbreak of bird flu is taking place in Europe. Therefore, the measures are very similar to the Covid-19 tests. Agricultural production birds receive a PCR test; if positive, these birds are euthanized under the label “death by bird flu”. Through this process, more than 27 million birds have also been killed in the US alone.
In France, on May 2nd, more than 16 million birds were slaughtered by this epidemic. This situation has already caused the price of chicken and eggs to increase drastically in recent months.
Blocked ports
With the novel coronavirus outbreak in China, the country made a decision to close Asia’s largest export port, Shanghai Port. Which has reduced its operations, leaving hundreds of ships unable to dock or load merchandise, due to the confinement in that city. According to the Mundo Marítimo portal, the operations of said port have ceased by at least 50% and may decrease even more.
Destruction of food processing plants
Is all this coincidence? And could the wave of fires in food processing plants that have occurred in the US this year also be a coincidence? During 2021 and 2022, more than 20 have burned down including the Salinas processing plant in California and the meat processing plant in Nebraska.
Bankruptcy in supply chains
Due to the confinements imposed by the World Health Organization (WHO), many of the ports reduced their service capacity; in consequence, it caused delays in the supply of raw material.
To this was added the blockage of the Ever Given container ship in the middle of the Suez Canal, which is a global geostrategic point for the transfer of supplies of all kinds. In fact, it is presumed that more than 13% of world trade passes through this channel.
Below is the unusual route of the Ever Given container ship through the Suez Canal:
In recent days, 2 single-engine aircraft have crashed into two different food processing plants; the first in a potato processing plant in Idaho, while the second collided in a processing plant in Georgia causing one more fire for the list.
At this point, the only thing you could think of is that someone is bothered by the amount of food produced globally. Is it part of what Ida Auken talks about in her writings and that she summarizes as: “Welcome to 2030. I have nothing, I have no privacy and life has never been better”?
Is a new kind of communism being enacted not based on a welfare state but designed by big corporations? Do you want to end private property globally, so that a group of technocrats make the “correct” decisions about what should be done with our land?
There are many coincidences… It will be good for governments to define strategies that lead to food security for their population. What are Central American authorities proactively doing to maintain food security?
