Hedge Farm! The Doomsday Food Price Scenario Turning Hedgies into Survivalists

When the "smart money" begins to buy farm land, you know that something's up.  Here's the key: 

This is happening in part because investors see their play as a hedge against hyperinflation. While the rest of the world uses the current calculation of the Consumer Price Index as a proxy for the cost of goods, some farmland investors are using a different equation, one from 1980. These investors assert inflation should be calculated the way it was before the Boskin Commission's 1996 reworking of the CPI formula-in which case, it would be much, much higher.

"The CPI supposedly today is something like 1.5 percent," says the hedge fund manager. "We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis. It's also not about what it's been over the last 10 years; it's about what it's going to be over the next 10 years."

Yuppies are seeing some of the biggest and fastest price hikes: 

The rising cost of food can be seen even in New York's yuppiest enclaves, where prices are high to begin with. Bloomberg food critic Ryan Sutton has been running a blog called The Price Hike wherein he measures the shifting costs of food at the plate in Manhattan restaurants. Mario Batali's Del Posto is charging 21 percent more per meal since October. Gordon Ramsay at The London? Sixty-nine percent more since last month. Michelin favorite Bouley? Forty percent. The Breslin, at the Ace Hotel? Thirty-three percent. And so on.

The diners at exclusive Manhattan eateries are putting their meals on American Express. In other parts of the world, the reaction is a little more extreme.