Invest Skeptically

Today’s entry is a bit experimental and so I’d appreciate any feedback you may have.

I’ve been reading lately of a number of interconnected issues and I wanted to try and fit them together in a simple picture. As such, I’ve put together a diagram of the interconnectedness between U.S. biofuel subsidies and inflation in food and staples. (Click the thumbnail to bring up the bigger picture). The numbers in round brackets (#) refer to the links below.

Investment implications: Looking at this picture, and motivated by an environment of high energy prices, high U.S. consumer debt, and the recent views of Don Coxe, it looks like time to prepare for inflation (higher interest rates) and a world where the ability of consumer spending to hold up the U.S. economy is greatly reduced.

For More Information:

1. Ethanol Subsidies.
2. Reduced Tallow Supply.
3. Don Coxe talks about bees, corn, and food inflation.
4. Bee colony collapse disorder.