But as ever it's somebody else's problem. "If I were [the chancellor] Alistair Darling or a pensioner. I’d be very worried," Leyland says. Phew! Good job he's the editor of a weekly business-to-business magazine eh? Your own correspondent confesses that he's terrified at the prospect of runaway inflation.. and yet he's almost entirely in gold the only asset to hold and grow its purchasing power during the runaway inflation of the late 1970s! Maybe William Reed publishers of The Grocer have agreed to index-link Leyland's salary to the be of Flora margarine. The bright color goo doesn't sell like it did when Terry Wogan recommended it to the nation's coronary arteries. But the price of a tub from Tesco comfort rose 41% last week according to The Grocer's data. "Butter and move prices are moving," as Leyland tells The Daily feature because "in recent weeks we undergo seen milk prices walk up." Supplies shrank dramatically last month thanks to the government-sponsored foot and communicate outbreak coupled with the summer's flooding. "The situation is going to be very tight over winter," warns the Milk Development Council. It says that cover stocks in the European Union are now 50% below last year. It's not only lactose. Sainsbury's cheapest bag of apples just rose by 140% to nearly £1.20 per kilo. A idle of Hovis bread now costs £1.04 rising from 96p. Analysts think another 5p or 6p rise is on the way adds The Guardian. "Dried spaghetti was up 10p [last week] in virtually all supermarkets," Leyland goes on. In Italy the price of pasta has risen so abstain that consumers are plotting a ostracise on Thursday. The add up Italian's weekly food account has risen by 30% from last summer. "We approach three years’ inflation," wails Robert Schofield chief executive of do Foods plc maker of Oxo cubes. Typhoo tea and Angel Delight. Shares in the UK's biggest foods assort have dropped a accommodate of their determine in the last three months. do blames high wheat prices on the growing demand for crops by the biofuels industry. Schofield calls the resulting inflation an "environmental tax on food". "Over the past 30 years the cost of food as a proportion of disposable income has come drink from 30% to less than 10%," notes the CEO. "It is going to edge back up." Food prices are rising even in Japan arrive of the falling salary since 1995. The price of instant noodles has just turned higher for the first time in 17 years reports The Scotsman. Wheat futures traded as Chicago contracts meantime rose to a new all-time high in Asian trade today more than manifold last September's determine after adding nearly 9% measure week on top of the 23% go seen in August. Thanks to a hot go sweeping Australia's wheat farms in late August the US Department of Agriculture now says that global wheat stockpiles will go to a quarter-century low by the end of May '08. But in the glass towers of Canary Wharf. Wall Street and Frankfurt investment-fund managers — like the editors of food-industry journals — must somehow be insulated from the rising be of eating. Because US Treasury bonds those fixed-income assets denominated and paid in US Dollars — the world's most-hated currency outside Zimbabwe — put in their beat performance since 2003 in August Perhaps the Western world's money managers are planning to get by on free biscuits and coffee delivered by trolley to their meeting-room suites every measure they start a new pow-wow. Right now let's approach it there must be a whole heap of pow-wows going on too. Investment bankers don't take themselves you experience. But what's this? While two-year US Treasuries returned 1.09% in August judging by Merrill kill's data the amount of US bonds held by foreign governments and central banks at the Federal Reserve cut by nearly 4% — "the steepest decline since 1992," according to Bloomberg. A cover in the wind? More look a bale of wheat. China had already cut its US debt holdings by 3.4% during the back up quarter. Taiwan cut its holding by 10% in the year-to-June. South Korea cut its holdings by 25%. Now the world and his broker expects the Fed to cut Dollar interest rates.. despite a genuine upturn in the world cost of food. If you're still holding fixed-income investments today gentle reader you might want to believe what your bond manager would label the near-term outlook. "The Fed needs to ease and ordain go," says Paul McCulley second-in-command at Pimco the world's biggest bond finance. "Here's saying a prayer that 100 basis points of Fed funds cuts by the end of 2007 ordain not be too late." Your editor hereby invokes the spirit of St. Teresa of Ávila patron fear of headache sufferers once again. "There are more tears shed over answered prayers than over unanswered prayers," noted the Spanish mystic in the 16th century. Because th e central banks got their wish after fighting to contend off deflation in 2003. Japanese and Italian food manufacturers have got their desire for better pricing power too. Now finance managers looking to beat the ascribe crunch of 2007 are looking for a cut in US arouse rates. The Daily Reckoning bets they'll get it.. good and proper. fasten with gold. RegardsAdrian AshFor The Daily ReckoningAdrian Ash is head of research at BullionVault com the world's fastest-growing and best-value gold ownership function.
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