We’re not crazy…see what the Wall Street Journal said
The following is an excerpt from the Wall Street Journal
Load up the Pantry (April 21,2008)
I don’t want to alarm anybody, but maybe it’s time for Americans to start stockpiling food.
No, this is not a drill.
You’ve seen the TV footage of food riots in parts of the developing world. Yes, they’re a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.
Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.
“Load up the pantry,” says Manu Daftary, one of Wall Street’s top investors and the manager of the Quaker Strategic Growth mutual fund. “I think prices are going higher. People are too complacent. They think it isn’t going to happen here. But I don’t know how the food companies can absorb higher costs.” (Full disclosure: I am an investor in Quaker Strategic)
Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you’ll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.
Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.
Yes, it is time.
Today, find Wednesday’s newspaper and pull out the grocery ads, If you have two grocery stores within a block or two of each other look at both ads. With the price of gas you do not want to run all over town to shop, it won’t save you any money and may actually cost you more than just buying at the regular price. Sit down with your ingredient list from yesterday and see what you can find that is on sale. Don’t go crazy. It is far more important to have a two or three month supply of a balanced diet than a year’s supply of oatmeal. That will get old fast!
I just returned from the grocery store and they had so much on sale today that I use in our favorite recipes. I got six cans of corn, beans, and spaghetti sauces as well as two jars of peanut butter. That was the budget and it is a variety so I feel great. The veggies were 3/$1. I haven’t seen that for a while. Don’t buy anything that is not an ingredient in your 10 favorite meals! We will add the extras in a few weeks. If you haven’t already you may want to purchase rice in a larger quantity, if your family eats it. All forecasts are for the price to keep going up for several months, if not a year, and rice stores well and is a nutritious staple. Sit down now and make a list.
Today establish a budget. You may want to begin with $100. investment and then move on to $10. per week or whatever works for your family. Maybe even think food when you get that government incentive check. The most important part of the plan is to be consistent. Slow and steady does win the race.
