UN: FOOD PRICES SOARED MOST ON RECORD LAST MONTH, +13%

Food prices worldwide rose 13% last month, the most on record. And looking at data like this — one has to accustom oneself to a brave new world of need and want and perhaps tumult. If you fuck around with our iPhones — we might get irritated. But when you fuck around with our food — we will kill you, or so goes the mantra paraphrased by me to suggest food shortages and inflation is a key driver of civilian discord.

UN agency says food prices rose by 13% last month, the fastest pace ever recorded.

We have been here before, rapid inflation was enjoyed in the late 70s and into the 80s — until the Fed crushed it with mind boggling interest rate hikes.

Fed Funds/Inflation rate

Under a scenario, such as now, where interest rates are still under 1% and inflation at 7% and climbing — one has to assume, at least based off historical precedent, rates will be raised to match inflation if not exceed them. Are we looking down the barrel of 7% interest rates, for fucks sake? Imagine trying to service the US debt of $30 trillion+ with rapidly spiraling higher rates. Imagine the housing market with mortgages at 15%.

Today KR caught up upgrade at BofA citing them as a winner in the inflation trade.

BofA Securities’ Robert Ohmes notes, “Our new $75 PO (based on 18x) reflects rising potential for upward EPS revisions as accelerating food inflation drives sales upside while KR’s expense structure is contained by $1bn targeted cost savings, & the cycling of COVID costs.”

Aside from grocers, I would imagine all commodity plays would also garner appeal during a rapid inflationary period. But it’s going to be hard, as governments actively meddle to suppress prices with controls in order to keep the status quo going.