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Food shortage is next, inflation to go to 'the moon,' gold will rebound - Todd Horwitz

Kitco News

(Kitco News) - "We are probably going to have a food shortage next year based on what's going on with Russia and Ukraine, because those two countries supply 30% of the wheat crop," predicted Todd 'Bubba' Horwitz, Chief Market Strategist at "Mother nature is not cooperating in the United States, following Australia and Brazil both having bad planting seasons. Inflation is going to the moon; we are only in the early stages of it."

Horwitz discussed inflation and the gold market with David Lin, Anchor at Kitco News.

"We already have supply chain issues, so retailers are having a big problem making money, because they are not getting enough goods to sell," Horwitz stated.

Horwitz explained that food and energy are our number one expenses barring an emergency or if we need something replaced in our homes. "If you have food and energy prices going to Pluto, people must decide how much they can drive versus how much they can eat. We are paying so much more at the pump," Horowitz emphasized. "Oil was $30 a barrel after the election, but now it's about $100 a barrel."

"All these prices are going much higher, especially anything that has to do with wheat, soybeans or corn, because those prices are also exploding," Horwitz continued.

Speaking about a possible food shortage next year, Horwitz noted, "If mother nature doesn't cooperate, and so far, she is not, there's going to be a food shortage. It may not affect Canada or the United States, because those countries will be able to pay more for food. But it will impact many of the poorer countries. You can bet there will be a war in Egypt, because they need Russian wheat for the bread they consume."

Regarding why gold is not acting as a hedge against stock market declines and inflation now, Horwitz stressed "Gold is never a hedge against equities. That is a misnomer. Gold is a hard asset, it's a hard asset commodity that is under some pressure here. Remember where gold just was. It was under $1,800 an ounce. It's now up almost to $1,900, and it's close to $2,000," he explained.

Horwitz said he has a bullish outlook on gold prices.  "I think gold will find a bottom, and it will do what it always does. It will rise in time. We cannot look at markets from second to second based on what they are benchmarked against, or what's going to drive them. Right now, you have a little bit of panic going on and everyone is selling."

"I think gold will reach new highs this year. I also expect to see silver make a nice run. I don't think silver is going to reach new highs of $50 an ounce, but I do think silver will go above $30," Horwitz added.

In this inflationary macro environment, Horwitz pointed out that people are looking for places to invest their money. "I am a big believer in buying gold. I think you must be able to buy what you can afford, then store it or take delivery," he said. "I think paper gold (paper certificates used in place of physical gold) is what caused a lot of these bigger swings. There's not enough gold in the world to cover all the paper that's out there. I would never own paper gold if I was looking for a long-term protective investment."

For more on the gold market and inflation, please watch the full video above.

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