On today’s show we are talking about resilience in our daily lives. This past weekend my home city of Ottawa Canada has a line of summer thunderstorms come through the region. It was a few degrees warmer than usual and a bit on the humid side. By mid afternoon the sky had darkened . Then all the cell phones started chiming a severe storm alert in unison.
Then suddenly this wall of wind hit thrashing the trees in all directions. Frankly, I’m surprised that the trees were left standing at all.
Naturally we lost power. After the storm subsided we drove around the city looking for a restaurant that had electricity. There were vast areas of the city with no electricity and a few intersections that did have power.
Let’s be clear. What happened is an inconvenience. We might be days without power. We have no internet connection at home and the local cell tower has exhausted its battery backup.
We will probably lose the content of our freezer in this extended power outage.
We rarely even think about food insecurity let alone plan for that risk.
But this year 2022 is a year like no other. We are emerging from two years of global pandemic and that feels awesome. But at the same time we have a devastating war raging in Europe. Crops that needed fertilizer this year didn’t get it.
Agricultural problems can’t be solved with money. If you and I were stranded on a desert island and if I have a case of bananas and you have $1M in cash, I’m rich and you are hungry irrespective of how much cash you have.
Food and fuel security are at the foundation of our western society. They are so foundational that they are taken for granted.
We talk about affordability when it comes to housing. The basic rule of thumb is that housing should not exceed 30% of household income.
We don’t even calculate the percentage of food as a fraction of household income. But there are parts of the world like the Philippines where for major portions of the population food makes up 70% of household income. A 10-20% increase in food price here in North America is an inconvenience and for some households it’s a problem. Nobody wants to pay $2 for a head of lettuce, or $5 for Broccoli. But if food makes up a large percentage of your household expenses, you don’t have much tolerance for inflation before your very survival is threatened.
We are already seeing social unrest in Peru, and Sri Lanka. The unrest was enough to force the resignation of the prime minister.
The food shortages that are forecast for later this year will be like watching a train wreck in slow motion.
I feel like I need to emphasize that I’m not a pessimist. If you have been following this show for a while you will know that I predicted the pandemic before it was mainstream news. I predicted the surge in inflation before the official reports. I predicted the fall in lumber prices before they happened. And I predicted the fall in the stock market. But with any of these predictions, it’s hard to know the precise timing. You can be prepared, or you can be surprised.