For a large part of the world's population, the price of rice will be a more meaningful inflation indicator than any official consumer price index

John Robertson

PortfolioDirect

For a large part of the world's population, the price of rice will be a more meaningful inflation indicator than any official consumer price index. Faced with a rising price for a dietary staple, wealth erosion and damage to individual purchasing power will be become readily apparent.  Unsurprisingly, the correlation between rice and gold prices has been strong historically.  Now, with the price of rice having fallen to early 2008 levels, the incentive to look to gold for protection will have diminished.  As a quasi currency, the gold price is the consequence of the entire suite of global macroeconomic variables but the price of rice (as a proxy for cost of living pressures in many communities with a history of using gold as a convenient store of value) is one prop no longer available.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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