Letter Re: More on the Emerging U.S. Grain Shortages

Jim:
I was told by a local LDS Bishop’s storehouse that the church is out of white wheat and will no longer be providing it because they buy it and it’s simply too expensive right now on the open market. The wait time for [hard] red [winter] wheat orders is 3-to-4 weeks. Another LDS cannery in Utah is also out of several items that they typically have on hand. Get your food storage while you can. – Junior

Odds ‘n Sods:

A friend of ours is an investment banking consultant. He is currently engaged is raising cash to help salvage an ailing hedge fund. He said that he predicts that the vast majority of US hedge funds will go under in the next year. “The pressure from margin calls and [individual investor] redemptions will be unstoppable.” Of the nation’s top 150 hedge funds, he said, “nearly all will cease to exist in their present form.” He added that there are perhaps 12 hedge funds that are not publicly traded that might be spared the ignominious demise of their brethren.

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Greenleaf [Idaho] residents prepared for almost any disaster. (A hat tip to Bret for sending us this.)

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Our correspondent in Brazil, “The Werewolf”, mentioned that the archives of Cooper’s Commentaries, (previously known as Gunsite Gossip) are still available for free download.

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The Canadian Jericho Ranger Lady sent this: Financial markets turmoil stirs economists’ memories of 1929 crash

Jim’s Quote of the Day:

“The moment the idea is admitted into society that property is not as sacred as the law of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If ‘Thou shalt not covet’ and ‘Thou shalt not steal’ were not commandments from Heaven, they must be made inviolable precepts in every society before it can be civilized or made free.” – John Adams, A Defence of the Constitution of the United States Against the Attacks of M. Turgot, 1787

Note from JWR:

Our first post today is a guest editorial from economist John Mauldin, with permission from the author. John is the editor of the weekly Outside the Box e-newsletter. I highly recommend it. Subscriptions are free!

Guest Editorial: Honey, I Vaporized My Customers, by John Mauldin

By now, everyone knows that the subprime crisis started with non-existent lending standards which resulted in the large numbers of foreclosures we are seeing today. Those foreclosures will be rising throughout the year. We are not near anything like the top of the rising number of foreclosures. Ben Bernanke said last July that losses from the subprime would be in the $100 billion dollar range. True confession. I think I wrote six months earlier that it would be $200 billion. I point that out to make the point that I am an optimist by nature. The latest “bidding war” number for the amount of total losses is about $500 billion from Goldman Sachs, and a neat $1 trillion from uber-bear Nouriel Roubini.
Add in hundreds of billions from losses which are piling up in other credit markets and you can easily get to $1 trillion in losses which are going to have to be eaten by all sorts of financial institutions, without being all that pessimistic.

Banks are being forced to reduce their loan and margin books in order to get the necessary capital required by regulatory authorities. Plus, credit is now more expensive as risk premiums rise from absurdly low levels in what more than one authority called a “new era of finance.” Turns out it was just normal old era greed.
It is not just the mortgage market. It is commercial mortgages, safe municipal bonds, credit card debt, student loans and a host of credit that is under fire and cannot find a buyer at what should be a realistic price.

We should not be surprised at the lack of liquidity in the credit markets. We have essentially vaporized 60% of the buyers of debt in the last six months. The various alphabet of SIVs, CLOs, CDO, ABS, CMBS, and their kin that were the real shadow banking system are either gone or on life support. It took decades to build these structures and it is not realistic to think we can replace them in six months. This is going to take some time.

And time is what the Fed has bought this week by offering to take AAA mortgage paper and swap it for T-bills. They will start with $200 billion on offer. Remember you read it here first that that number will be increased and increased again. From the markets initial euphoric response, you would think the problems have been solved and banks will once again start lending. Sadly, this is probably not true.

This is similar to the action by the bank regulators in 1980, when nearly every major bank had losses that were greater than their capital on Latin American loans which had defaulted. The Fed, with a wink and a nod, allowed the banks to carry these worthless loans on their books at full face value. It took six years before they started to actually write them down. But without that measure, every major bank in the US would have gone bankrupt. And technically, they were for several years. But the Fed action simply bought the banks time to re-liquefy. It was the right thing to do.

This week’s action by the Fed is essentially the same thing. It buys time. This 28 day auction will be around for a long time. If the banks had to write down the potential losses on their AAA Fannie Mae paper and other similar assets, it could have brought the banking system to its knees. Eventually, we will get a market clearing price for all this paper, but the key word here is eventually. We are going to see foreclosures and losses for another 18 months. It is going to take a long time to know exactly what the losses will be.

I think the losses on many of the various forms of debt have been marked down way too far by the various derivative markets. (I would hasten to add this does not include the subprime markets, as many of those assets are going to zero.) I doubt the loss in a lot of the debt paper will be nearly as much as the current credit default swaps prices indicate. For instance, some municipal bond debt is priced for 10-15% losses, when losses of less than 0.5% are normal. When there is a buyers strike, prices fall, and sometime to quite low levels. In the fullness of time, the price of these bonds will rise back to “normal” levels. There is a reason Bill Gross is buying municipal bonds by the train car load. Many are simply at the best prices we will see in my lifetime.
But if that debt is now on a bank’s capital books, they have to write it down to the latest mark-to-market. The Fed’s move simply allows the banks to move what will eventually (or maybe the better word is should eventually) be marked back to reasonable values. It avoids a crisis today.

The next crisis? I read a very chilling piece from Michael Lewitt this morning. He speculates on what if the rumors were true that Bear Stearns is basically bankrupt. Bear is in the “too big to fail” category. They are at the heart of the chain of Credit Default Swaps which run like fault lines throughout the world’s financial system. If Bear were allowed to collapse, it would simply cascade throughout the world so fast it would truly make the current level of the credit crisis seem small potatoes.

So, why can I be so sanguine? Because the regulators (the Fed and the SEC) would step in and whatever large bank was failing would be merged or bought very fast. Liquidity and assets would be provided. The Fed and the rest of the world’s central banks get that we are in a crisis. They will do what is necessary. Those of us sitting in the cheap seats in the back of the plane may not like it, as it will look like a bailout of the big guys who caused the problem, but you have to maintain the integrity of the system. A hedge fund here or there can go, but not one of the world’s premier banks.
I wrote the above paragraphs on Thursday, and sure enough, the NY Fed and JP Morgan stepped in to bail out Bear. This will not be the only time or bank. The regulators may have been asleep, but the depth of this crisis has awakened them.

But this is a boost for my contention that we will be in a Muddle Through Economy for a long time. This latest Fed actions simply draw out the time over which the market will correct. But that is a good thing, as a too swift, dead drop correction could spawn a very deep recession, destroying vast amounts of capital, which would take much longer to come out of.

Letter Re: Forever Postage Stamps as an Inflation Hedge

Sir;
You have written favorably of the US Postal Service Liberty Bell (“Forever”) stamps. Short history: The US Post Office Department was reorganized and became the US Postal Service effective July 1971. Employees of the Post Office then became employees of the Postal Service, but saw no changes in their paychecks. They looked the same.

More recently, the Postal Service has likely accumulated significant cash from selling the “Forever” series. The government’s pledge is that the stamps will henceforth be honored as postage without supplement……no more adding one or two cent stamps’ postage (or more) to the already purchased forever stamps.

However, whether the stamps would retain value, as “forever” status should the US economy plunge is untested. As we anticipate a crisis when we would doubt the value of Federal Reserve Notes, why would we stock up on “forever” stamps? Couldn’t the Postal Service be “repatriated” back into the US Post Office or into another government entity, and the already issued “Forever” stamps be then no longer honored? Or at a minimum the public be required to again add supplemental postage? These pre-purchased “Forevers” could just end up being a loan or a donation to the US Government. – KA

JWR Replies: While I hardly consider them an investment, I do consider Forever stamps a good inflation hedge. The vagaries of government edicts are impossible to predict. It is indeed possible that an Orwellian decree will issue forth from the District of Columbia, stating that “the word forever no longer means forever.” This is just a risk that anyone holding Forever stamps will have to take. I think that it is more likely that at some point in the inflationary future the USPS will simply mandate that postage stamps can only be used one at a time, for postage, rather than allowing them to continue to be cashed in or applied to other transactions–such as purchasing USPS money orders, or recharging postal meters. Congress might also someday make secondary bulk sales or barter of un-cancelled postage stamps illegal.

For now, however, I still consider Forever stamps a good inflation hedge. OBTW, I was recently told by my local postal clerk that regulations have changed, and henceforth I cannot pre-pay the rental on my post office box for more than one year in advance. This will of course leave me vulnerable to rental rate increases. But presumably, I can set aside a stack of Forever stamp booklets that I can use for future post office box renewals. There is more than one way to skin a cat.

Parenthetically, I should mention that I still gratefully accept donations of Forever stamps, in lieu of 10 Cent Challenge contributions. My mail forwarding address is still:

James Wesley Rawles
P.O. Box 303
Moyie Springs, Idaho 83845

Note: We live at an isolated ranch. The address above is just a mail forwarding address. We maintain this intermediate address to ensure our privacy. Our mail and packages are picked up and forwarded to us roughly twice a month, by a very trustworthy friend. Be advised that there may be as much as 20 day delay before I receive your mail. Thanks for your patience, and many thanks for your support of SurvivalBlog!

Odds ‘n Sods:

J. Ross sent us some serious Gloom und Doom: Fed Heads Back to the Well, Will It Run Dry?

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Trevor flagged this piece at WND: Fed abandons dollar in new round of rate cuts–Reacts to fall of investment giant Bear Stearns, Carlyle Capital Corp.

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Mark recommended the rifle muzzle brakes made by OPS. We have had the muzzles of all of our .30 caliber bolt actions threaded 1/2-28. That is the same thread used on many flash hiders (such as AR-15, M4 and AR-10.) Our preferred flash hider is the Vortex Model 3068, made by Smith Enterprise. You can keep a muzzle brake installed in the present day, and switch to a flash hider if and when times get inimical. Have your rifles threaded and keep both devices handy. The later Vortex flash hiders are also compatible with the SEI Direct Connect sound suppressors, if you don’t mind all the paperwork and expense associated with a Class 3 transfer. ($200 Federal Transfer tax, in the US.) Safety Note: If you own any .30 caliber rifles, be absolutely sure that you have all of your muzzle brakes and flash hiders drilled for proper clearance of .30 caliber bullets. If you were to attach an unmodified .22 caliber Vortex to a .30 caliber rifle, it could cause a tragic accident!

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SF in Hawaii suggested a great article on desert expeditions that should be required reading for anyone that expects to ever do any off-road driving, even in temperate climates.

Jim’s Quote of the Day:

“The first information survival skill we all need is the ability to decode propaganda and demythologize the highly commercialized and entertainment-based U.S. culture. Psychologists politely call it ‘resistance to enculturation.’ Writer Ernest Hemingway had a less elegant term: ‘cr*p detecting.'” – Karl Albrecht, article in Training and Development magazine, February 2001.

Hedge Fund Redemption Suspensions–Tax Bills are Adding Insult to Injury

You’ve probably read about the seven Hedge Funds controlling $5.4 Billion have been forced to liquidate or suspend redemptions in the past month. Many of their investors had been leaving their full principal intact, quarter after quarter. In many many cases they want to continue to “let it all roll”, so they then used other funds to pay the tax bills on their hedge fund earnings. But now, with redemptions (cash outs) halted, not only will they lose most or all of their principal, but they must also pay the 2007 income tax on the “gain” for the calendar year. What a bitter irony.

I know one couple that has 2/3s of their net worth tied up in very well-known and long-established a hedge fund. Despite the dramatic and unprecedented collapse of the global credit market, this couple is in denial that the value of their fund could ever decline. Despite my repeated urgings, they have now missed their opportunities to cash out, though two quarterly redemption windows.

Back in September and October of 2007, I warned specifically about the ability of hedge fund managers to suspend redemptions without notice. This is now exactly what is happening, on a grand scale. I often say that markets are alternately driven by greed and fear. Now, the fear index is clearly rising. But many of the investors that still stubbornly hang on to their greed-driven investments are about to pay the piper. And then some extra tax, on top of that.

Five Letters Re: Battle Rifle Recommendations for a Californian

Mr. Rawles:
One way that U.S. citizens can still get M1 Garand rifles at reasonable prices is via the DoD‘s Civilian Marksmanship Program (CMP).

M1 Garands are available starting at $445 + shipping. (I believe the Field Grades to be best choice for practical use rifles–$495)

M1 Carbines are available for $419 + shipping and up. [JWR Adds: I do not recommend M1 Carbines, because they are chambered for an anemic cartridge. The .30 US Carbine is not a reliable man stopper!]

.30-06 military surplus ammunition in clips, bandoleers and sealed cans, for $200 per case of 768 rounds.

Requirements: Proof of citizenship, proof of age, proof of membership in a CMP affiliated club, proof of participation in marksmanship training activity and NICS check. Rifles can be shipped right to your doorstep by the CMP.

Additionally, the Appleseed Program that you advertise on your site normally provides certificates for proof of marksmanship activity to Appleseed participants if requested. Membership in the RWVA (the Appleseed Program’s parent organization) satisfies the “affiliated club” requirement, and participation at an event exposes one to the techniques and tools needed for becoming a better rifle shooter. Appleseed has been to Corona, California, and will be in other locations.

For other options, the Lee-Enfield is probably the best bolt action battle rifle–the mag capacity, speed of loading with stripper clips, and rapid bolt manipulation minimize the usual bolt gun limitations. The No. 4 with the aperture sight is easiest to shoot well, especially with older eyes. Just get plenty of stripper clips, a decent sling that can be used as a shooting aid (USGI web sling–the one with the buckle and adjustment slide, not the “silent sling”), some spare parts (pins and springs mainly, Lee Enfields are pretty easy to repair), and maybe a Lee Loader in .303. The rimmed cartridge is easy to reload and can even be reloaded with black powder and cast lead bullets for really long term use.

Thanks for your web site, and God Bless. – SoM

 

Hi Jim,
I’m in California, and I absolutely feel the pressure your writer feels. I abide by the law, for fear of it. My choice for an MBR is the PTR-91.
I can get it in a “California Legal” configuration. It has what is called a “bullet button” installed. This is a replacement mechanism for the mag release, that requires an included tool to operate. Since California defines an assault weapon and a rifle with a detachable box magazine. [Under the California law], a fixed magazine is defined as one that requires a tool to remove. This arrangement works just fine. My rifle is a fixed magazine weapon, and therefore may have all the evil features I wish to install, without limit. No one can remove the magazine without the proper tool. And, it is not on the list of banned weapons. It’s not even close to that problematic AR-series and AK-series ban language (which no longer applies to off-list lowers. But that’s still something [that California] law enforcement has yet to learn.)

[To keep legal] you must never have the magazine detached from the rifle and still have the trigger assembly installed. Fortunately, the butt stock and trigger assembly fall into my hands. Make sure the mag stays in the rifle until the rest has been removed. It’s a pain, I know, but less so than an arrest. To make it easy for myself: I leave the mag in place, and load it through the ejection port. My mag has been pinned by the reseller so as to accept only 10 cartridges.

The PTR-91 can be found for $1,100 – $1,240, depending on options.[They comes with a] brand new H&K carrier, bolt head, and flash hider. – Randy in Central California

 

Hello Mr. Rawles.
I too, am a California resident. For the longest time I wanted to own an AR-15 only to be let down by the [California 1999] “Assault Weapons” ban.

Recently I found out I can indeed own a legal AR-15. In the text of the ban, there is a list of names that are forbidden. However, there are now several manufacturers making AR15s and their lower receivers are not on that list. These receivers are legal to own as they are not “listed”. Some people are calling said receivers “off list lowers” .

The California definition of an assault weapon lists the criteria as:
12276.1
(a) Notwithstanding Section 12276, “assault weapon” shall also mean any of the following:
(1) a semiautomatic, centerfire rifle that has the capacity to accept a detachable magazine and any one of the following:
(a) pistol grip that protrudes conspicuously beneath the action of the weapon.
(b) thumbhole stock.
(c) folding or telescoping stock
(d) grenade launcher or flare launcher.
(e) flash suppressor.
(f) forward pistol grip.

Since your typical MBR is going to be a centerfire, there’s no way to change that. However, you CAN change the “detachable magazine” or “pistol grip” feature.

There are two options if you want to remove the pistol grip. The U-15 stock, or the Monster Man Grip. This eliminates any question of the pistol grip and it’s “pistol style grasp”. This will allow you to have a detachable magazine. However, please understand that your rifle must be “featureless”. Adding D, E, or F will make it an assault weapon (seeing that it’s already 1) centerfire and 2) possessing the ability to have detachable magazines).

If you’d like to keep your pistol grip, there’s the option of “fixing” the magazine (meaning not detachable without the use of tools). One well known option is to weld your magazine to the receiver and feeding it via stripper clips. This can be an expensive, irreversible solution.

Instead, you can buy a magazine lock kit (known as a “bullet button”) that will convert from “detachable” to an “attachable” magazine rifle. This type of mag lock uses a tool (an allen wrench, a cartridge, a screwdriver, etc) to detach the magazine, but will accept the magazine without any complications. A list of various “bullet buttons” (and its cousins) can be found at ColdWarShooters.net.

Bullet Buttons are made for a variety of firearms, including AKs, AR-15s, HKs and from other sources, FALs. Should you choose this route, your magazine must be limited to 10 rounds as anything more will be illegal.

The best part about these options is that you are legally allowed to own what would otherwise be an “assault weapon”, and if you move to a gun-friendly state, they are 100% reversible.

Should you plan to build an California-legal AR-15 (or AK, HK, FAL, etc) then please refer to this PDF chart to ensure it is legal.

For more information about the above options, check out the CalGun Forums.

I hope this information is useful to law-abiding Californians. – Jason

 

Hi James:
I enjoyed reading SurvivalBlog this morning as usual. In reading your response to the question of a MBR for California, I thought I would chime in as we still have a number of fairly good options here in the PRK.

The M1A is the obvious choice, and while expensive, they can sometimes be had used for a very good price. Detachable mags, in California are sadly limited to 10 round mags, unless you actually owned those higher capacity mags prior to the 2000 PRK ban.

DSA makes several California compliant fixed 10 round mag FAL rifles which use stripper clips, and after market kits are available to convert a normally configured FALs to fixed mag/stripper clips configuration. There are probably thousands of FAL variants in California sitting in safes, which have had the pistol grip (and flash suppressor) removed to make them California compliant but shooting an FAL without the pistol grip is a bit awkward. MonsterMan Grips make a grip which makes off list lower AR-15 and AK types California compliant, and they have promised to make a similar grip for the FAL. I am planning on using an old thumb hole butt stock and filling in the thumb hole to make a close-to-normally configured FAL which will be California compliant, and will allow me to continue to use my 20 round FAL mags.

I went to a California gun show a few weeks ago – my first in many years, and was surprised at the plethora of California compliant ARs, AKs, FALs, and other weapons thought to be non-existent in the California market. I also saw a number of M1 Garands for less than your $900 market price. I thought I paid a lot for my 7.62 NATO Garand all those many years ago, never realizing what a deal it would really turn out to be. Keep up the great work, and sage advice.- Eric P.

Jim-
You mentioned the FN49 rifle as a possible MBR.
I just purchased a Yugo SKS ($199) plus four 20-round magazines (at $10 each) and 1,000 rounds (at $177) via the Internet. Even if I have the trigger re-worked, the springless firing pin replaced, custom stock installed, I’ll still be way under the least expensive FN49. In fact I could buy 2 SKS for the FN49 price. It’s a good rifle out to 300 yards and perhaps more if the rifleman has the skill set. In my suburban environment, it would be untypical for me to be shooting even out to 300 yards. So, does my SKS pass muster? – Bob

JWR Replies: Since they are chambered in an intermediate power cartridge with a rainbow trajectory, I consider the SKS a poor second choice to a full power rifle such as an M1A, M1 Garand, or FN49.. And though an SKS might suffice, but why risk your life depending on something that is second best? An FN49 combines great penetrating power with a flat trajectory, allowing effective defensive shooting out to 400 yards. With the exception of the Argentine Navy variant (with detachable magazines), the rate of fire for an FN49 is not as fast as an M1A, HK, or FAL, but it is close.

For those that don’t mind the paper trail associated with getting an M1 Garand through the CMP, read the eligibility requirements.

And for those that want to jump through the flame-filled hoops of a “complaint” semi-auto rifle in California, I agree with Eric P.’s advice on getting an FN-FAL or L1A1 and equipping it with a stripper clip top cover. These are quite fast to reload. Further, if anyone in California has owned a 20 round magazine since before Dec. 31, 1999 and they have resided continuously in California since before that date, then that magazine can be legally possesed, but not inserted in a semi-auto rifle that has any of the “evil” features.

With all that said, keep in mind that the legalistic contortions of California’s so-called “Assault weapons” ban skirt the real issue, which is freedom. If you love liberty, vote with your feet and get out of that Mickey Mouse state, post haste!

Jim’s Quote of the Day:

“The argument for liberty is not an argument against organization, which is one of the most powerful tools human reason can employ, but an argument against all exclusive, privileged, monopolistic organization, against the use of coercion to prevent others from doing better.” – Friedrich August von Hayek (1899-1992), Nobel Laureate of Economic Sciences 1974

Note from JWR:

The high bid in the current SurvivalBlog Benefit Auction lot is now at $210. This auction is for four items: a MURS Alert Base station, a MURS Alert Hand-held transceiver, an earbud, and a Kaito KA-1102 AM/FM/Shortwave. These radios were kindly donated by the owner of Affordable Shortwaves and MURS Radios. If you aren’t familiar with the Dakota Alert infrared perimeter security system, take a few minute to look at the Dakota Alert web site. These alarms are very reliable and versatile. I often recommend them to my consulting clients–especially those that plan to have lightly-manned retreats. You can easily set up multiple detector/transmitter sensors to provide 360 degree perimeter security for a large area. Instead of just a generic alarm, they will let you know which sensor was tripped, via a computer-generated voice message to a radio that you can carry on your belt. (Such as “Alert, Zone Two.”) The same radio can be used for point-to-point voice communications, on the little-used MURS band. The three radios have a retail value of $210. The auction ends on April 15th. Please e-mail us your bids, in $10 increments.

America’s Mountain of Debt: The Good, the Bad, and the Ugly

Collectively, Americans have accumulated a mountain of public and private debt in the past 20 years. The essential nature of all debts is that they someday must be repaid. Debts can be broken down into three categories:

The Good. This is debt with low fixed interest rates, secured by tangible assets that have value that exceeds the amount of the loan. Everything is copasetic as long as the borrowers have a steady cash flow and can make their payments

The Bad. This is debt that is either insufficiently secured, or that has a nasty contractual surprise waiting, such as an adjustable interest rate reset date, or a balloon payment date.

The Ugly. This is the call loan. It can be called at any time, for any reason.

An interesting thing happens when an economy heads into a deep recession. Credit tightens, and assets begin to lose value. The quality of debt drops. Employees get laid off in large numbers and installment credit delinquencies and then defaults soar. In very rough terms the following plays out:

Good Debt starts to resemble Bad Debt,
Bad Debt starts to resemble Ugly Debt, and
Ugly Debt becomes Hideously Ugly Debt.

Hedge fund managers are in some ways like high states poker players. The risks are large, but so are their potential rewards. Well-managed hedge funds make gobs of money in good economic times, when there are stable–or at least trend-predictable–interest rates. They apply leverage, often as much as a 30-to-1 ratio, to make their profits. They make most of their money by borrowing short but lending long. Again, this works fine in good economic times with stable interest rates. But when interest rates fluctuate wildly, hedge funds can run into trouble. Periods with an inverted yield curve can be the most perilous.

The collapse of the subprime mortgage bubble signaled an end to a decade of debt-driven good times. Almost overnight, liquidity dried up.

Now we are entering some very scary times. Bankers are getting margin calls. The only way that they can meet those call demands is to call in loans that they have made. So, at present, the bankers are making margin calls of their own: They are calling their loans made to hedge funds (among other borrowers). This is putting many hedge funds in an impossible situation. Many hedge funds will collapse.

There is an old saying on Wall Street: “A one million dollar debt keeps the borrower up at night, worrying. But a one hundred million dollar debt keeps the lender up at night, worrying.”

Exceptional times like these will result in some huge write-downs and write-offs. The only good news is that many assets will lose a lot of value. Everything from vintage cars to vintage wines, to grand estates will drop precipitously in price. Desperate for cash, the holders of those assets will be offering them at fire sale prices at the bottom of the market. If you are one of the few people with extra cash in your pocket, you will be able to pick up some tremendous bargains. (OBTW, the firm J.P. Morgan just did exactly that. They just inked a deal to buy troubled Bear Stearns for 2 cents on the dollar from its value of just one week ago.)

Letter Re: Galloping Bulk Food Prices

James,
Just a quick report on what I’ve learned about buying bulk grains and beans.
We have a local bulk food depot. I called to place an order. The guy checked with his wholesaler for prices, then called me back. He was aghast. He said everything was up around 25% since he had placed his last order two weeks ago. And up about 100% since the first of the year. The reason, the wholesaler reported, was demand from folks stocking up. The wholesaler was sold out of many items. Then I called an Amish bulk food store about an hour and a half away. Same story. (Yeah, I wondered about the Amish answering a telephone, too. Apparently the rules are flexible.)
Well, finding the prices a bit high, even for 50-pound bags (like 61 cents a pound for red wheat, 93 cents a pound for black beans, 53 cents a pound for white rice), I decided to check out the local “budget” supermarkets. Surprise, surprise. They were less expensive. Sometimes by a lot. For example, Sav-A-Lot had black beans for 70 cents a pound. ALDI had long grain white rice for 39 cents a pound. A further surprise, even Kroger’s beat the bulk food prices. Of course, these things may change when the supermarket’s wholesalers have to replace their stocks.
I’ sure things vary from region to region, even city to city. But, as always, caveat emptor. One shouldn’t assume that sources that should be cheaper actually are. And prices are unlikely to be any cheaper in our lifetimes than they are this afternoon. Best wishes, – Dr. Jack