GLENN: From Radio City in Midtown Manhattan, hello, you sick twisted freak. Welcome to the program. Third most listened to show in all of America. My name is Glenn Beck. Here's the headline. "Food Rationing Confronts Breadbasket of the World." It's from the New York Sun today. Mountain View, California is the dateline. Many parts of America long considered to be the breadbasket of the world are now confronted phenomenon food rationing. Major retailers in New York and areas of New England and on the West Coast are limiting purchases of flour, rice and cooking oil as demand outstrips supply. There's also anecdotal reports that some consumers are hoarding grain stocks. No, they don't know anybody who's hoarding it. I do know people who have prepared. I do know people who, you know, right now might be going, hmmm, maybe I should stock up on some food. And then there are people like Stu who still say they are crazy.
STU: I have plenty of food.
GLENN: I know you do. You can last -- you said you can last --
STU: We had a big argument about this last week.
GLENN: Stu said, I can live a day just on ketchup and jelly. And I'm like, you could, you could probably last a little longer than that. Kids, it's time for ketchup.
STU: This is such a bizarre argument out of you. You talking about going to survival mode, yet you are planning your food out like you are eating at an American buffet.
GLENN: No, not in survival -- I get into survival mode, I personally get into -- by the way, I have counted extras because I know there are dopes like you that haven't done it.
STU: Like me? It will be me.
GLENN: No, I won't be you. Lisa will be welcome at my house. You will be eating all of those ketchup, ketchup packages that we have. You'll be saying, oh, look who got duck sauce again.
STU: I'm just saying that's a last resort.
GLENN: No, it's not.
STU: I'm saying ketchup should count as calories that you have. Although I would say for me it's a last resort, it would take a long time for me to get to ketchup.
GLENN: At a Costco Warehouse in Mountain View, California yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy. Where's the rice, said an engineer from Palo Alto. You should be able to buy something like rice. This is ridiculous.
The bustling store in the heart of Silicon Valley usually sells four or five varieties of rice to a clientele largely of Asian immigrants, but only about half a pallet of Indian-grown Basmati rice was left in stock. A 20-pound bag was selling for $15.99. You can't eat that every day. It's just too heavy, said a healthcare executive from Palo Alto who grumbled as his son loaded two sacks of the rice into his shopping cart. We only need one bag but I'm getting two in case a neighbor or a friend needs it. They seem to be headed for disappointment as most Costco members were only being allowed to buy one bag. Moments earlier a clerk dropped two sacks back on the stack after taking them from another customer who tried to exceed the one bag cap. "Due to the limited availability of rice, we are limiting rice purchases based on your prior purchasing history," a sign above the dwindling supply said.
Shoppers said the limits had been in place for a few days, and that rice supplies had been spotty for a few weeks. A store manager referred questions to officials at Costco headquarters near Seattle, who did not return calls or e-mail messages yesterday. An employee at Costco store in Queens said there were no restrictions on rice buying but limits were being imposed on purchases of oil and flour. Internet postings attributed some of the shortages at the retail level to bakery owners who flocked to warehouse stores when the price of flour went up from commercial suppliers. The price doubled is what it did. The curbs and shortages are being tracked with concern by survivalists who view the phenomenon as a harbinger of more serious trouble to come. It's sporadic, it's not every store but it is becoming more commonplace, blah, blah, blah, blah, blah.
An intelligence, a former army intelligence officer -- is that his only credit? Why is he in the story? There have been many stories about worldwide shortages that encourage people to stock up. What most people don't realize that supply chains have been changed so inventories are very short. But even if people increased their purchasing by 20%, all of the store shelves would be wiped out.
This is why I said don't panic. There's no need to panic. If you just know what's coming up, I said earlier on the program, on February 11th I told you, February 11th this year I said wheat prices and all these prices have not gone up yet but they're going to because futures have gone up 40% and there are shortages that are going to be felt all around the world. And soon they will be felt here. Well, now here we are. What is it, April 21st. And what I told you on February 11th has now happened. And it's most likely only going to get worse from here. So don't panic. Don't go out and buy, you know, everything you can get your hands on. Just go and stock up on food or ketchup packages.
STU: Don't make fun of me after that story.
GLENN: Ketchup packages, you could make soup out of those. A little water and ketchup package and you've got soup. Sounds good, doesn't it, Dan?
STU: I wasn't going to try to call you out on this but you brought it back to the ketchup packets. You are talking about they give the -- the evidence in this story, unless there's more that you didn't give, is a store, a Costco that will only let you buy one type of rice and only -- and a guy who wants to buy two because he might need to give it to someone and then they are saying that the stocking, the problem with the stocking comes from people who are buying more than they need, which is what you are telling people to do.
GLENN: No, no, no. No, no.
STU: That's the evidence you've given us.
GLENN: No, it's not. No, it's not.
STU: And not to mention only in America will we be hearing stories about, oh, we only have one of the four types of rice in 20-pound bags that we usually have and we can only buy one 20-pound bag at a time.
GLENN: I'm not saying that -- you can relax. I'm not saying that you are going to have to break out the ketchup packets.
STU: I've got all the ketchup I need. I'm totally relaxed.
GLENN: I know that, and I'm not saying that you are going to have to do that. Why did I say a year ago or whenever it was, six months ago to buy shoes? If you happened to go and you see shoes for your kids and you know you are going to have to buy shoes every year because their feet grow and everything else and you happen to see them on sale, why did I say go buy shoes for the next couple of years? Why did I say that? Come on, Mr. Ketchup man.
GLENN: No. I said because inflation is coming. Deflation of your dollar and inflation is coming. So it will be harder. Right now you see something on sale, grab it. Grab that coat for next year if it's on sale, go grab that coat and buy it because next year not only will you have to get the nonsale price but your dollar will most likely be less and inflation is going to go up. So you are going to be able to protect yourself by buying things in advance before things get really bad. This is just another sign of things getting more expensive and harder to find.
STU: Your premise isn't necessarily bad here. I'm just going to argue with the fact that that article is not a sign of --
GLENN: No, no, it's not just --
STU: It's anecdotal -- to me it is.
GLENN: Yes and no. If it was just that -- if this was the only thing, yes. But let me give you this one that just came out from Ghana. The UN chief warned Sunday that the world must urgently increase food production to ease skyrocketing prices and set up a task force threatening to destabilize the developing nations. There is a serious rice shortage and a serious wheat shortage all around the west of the world.
STU: I'm not buying stock in really well fed people in Ghana, that's for sure.
GLENN: No, hang on, Stu.
STU: That's not my investment strategy.
GLENN: Why did I bring this up on February 11th? Do you remember what that story was? That was on the front page of the New York Times and it was not anecdotal. What was that story?
STU: Wheat futures.
GLENN: It was wheat futures, yes.
STU: It was wheat futures.
GLENN: Yes, it was. The story was for the first time -- you are right. The story was wheat futures. Buried in the story was the fact that for the very first time the United States was going to import wheat. That's the first time we've ever done that.
STU: Yeah, and that's something that we agree on, bad policies.
GLENN: So if we're importing wheat to feed our own people here, that's not good if the rest of the world is now starving and scrambling for wheat. China is scrambling for wheat and rice. It's happening in the Middle East as well. It's happening in Africa. If everybody is scrambling for wheat and we ourselves have to import wheat to be able to survive, we're the breadbasket. There's a significant problem coming our way because as the rest of the world needs wheat, the demand will go up, the prices of wheat will go up. That's why -- and I know it's anecdotal in this one story -- that's why when the price of flour doubled, bakeries went out. Because I grew up in a bakery. I mean, that's exactly what the bakers are doing. They are like, oh, jeez, the price of wheat is going up, the price of flour is going to go through the roof. I don't think any baker is actually thinking there's going to be a shortage of it. What they are thinking is I'm not going to be able -- nobody's going to buy my muffins if they are muffins because wheat is so expensive. So they go out and they buy a bunch of wheat so they don't have to incur the cost. That's exactly what I'm telling people to do now. Don't go out and panic. Don't go out and say, "We're all going to starve to death." Go out and buy food now at this cost. Don't go out and buy like crazy. Don't put yourself in debt. You should have been doing this over the last few months or years of just slowly buying a little more than you need. But now I believe the clock is ticking, things are speeding up, the price of things are going to go up. And if you don't -- if it's not because of wheat, it will just be because of what -- and this is one thing that you and I both agree on the economy. Inflation must go up.
Let's see if you remember this conversation because I think I remember it and I think you agreed with me. The lower you make the interest rate, at some point you have to do it on the other side because you've so debased the money -- this is what Paul Volcker did in the 1980s. You so debase your money that at some point you have to drive that interest rate up to be able to balance it back out. That's what the Fed does. They lower it and raise it to fight, okay? So they are going to have to raise that interest rate.
So when that happens, money is going to become very, very scarce and it's because of inflation going up. So you're going to have high interest rates and high inflation. Well, that's not going to help things.
STU: But if you raise the interest rates, the point of that is to lower inflation.
GLENN: Yes. But you have to do it dramatically. And one of the problems that we're having right now is that there's not enough money out there for the banks because the banks are holding onto it.
You also have the other thing. Forget about the fact that we're making ethanol. Forget about the fact that we have $1.8 billion every year that our tax dollars are going to to stop farmers from farming on land. Forget about that. How do you expect to grow wheat when everybody's growing corn? How do you expect to grow these things when farmers have to spend so much money on the tractors because of oil? I'm anxious to see who we have on tonight because I said this morning when I got up and I saw that oil was $118 a barrel, where -- at what point do we start to see the real effects like we're seeing in the airline industry? Right now everybody's saying, oh, the airlines are going to be fine, the airlines are going to be fine. Well, I talked to an expert on the airline industry last week, week before last. Guy who's been studying it forever. And he said, you know, a lot of people don't understand these jets were never designed to be profitable at $100 a barrel of oil. They can't make a profit at $100 a barrel of oil. That's not what these jets were designed to do. These jets were designed in 1960s and 1970s. This isn't what -- they weren't designed for $100 a barrel. So at what point do the airlines have to say, okay, we've really got to jack up rates? At what point and how high does that rate have to get? And at what point do you say, well, it's not worth me flying anymore because I can't afford to do it? And what does that do to the economy? What does that do to the airlines? What does that do to shipping? What does that do to the truckers? We already have truckers who have been in Washington who have been saying we're going to go out on strike. Well, the reason why the truckers haven't gone out on strike us because most of them can't afford to do it because they are barely holding their head above water. Truckers, you tell me. How much does fuel have to cost before your system collapses? How much does it -- how high does oil have to get before the airlines say we can no longer afford to stay in business? How long before these things spiral out of control before the government says, well, the airline is too important to go out of business? The truckers, it's too important for them to not go out of business. And the government rushes in yet again to save the day. How long before they say the farms are too important to go out of business? They've already done it, but they've been playing it the other direction.
Remember, the reason why there was such a food shortage during the Great Depression is because of the policies of the federal government getting into the food business. We burned crops. We destroyed crops trying to keep food prices high, high enough so people could grow it. And what did we create? Starvation and bread lines. What are we doing today? We're working on global frickin' warming with ethanol that doesn't work and we're the first in our -- in the history of the world to burn our food supply, to the point to where we're importing wheat. It's a giant cycle. It's a giant circle that you can't find the beginning and you can't find the end and if you can't find the beginning or the end, you don't know where the exit is. You know what? There's no need to hoard food, there's no need to panic. All you have to do is be aware and see what's coming, and you can see all of the signs now starting to fall into place. Go out and make sure that your family has enough ketchup packages to survive anything that might come.
STU: Don't forget about the importance of relish.
GLENN: And you know what, don't forget about your dog, either. Don't forget about -- I mean, you dog can't live on ketchup packages.