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With bread prices on the rise, politicians feel compelled to intervene. And every intervention falls upon the crops like a cloud of locusts.

Last Friday, the price of rice spiked by 10% as governments moved to corner the market. Three billion people, many of them with very marginal incomes, eat rice every day. The price of rice rose 50% in the last two weeks, causing Thai farmers to sleep in their fields to protect their harvests...while the Philippines posts armed guards at its graneries.

Vietnam, India, Kazakhstan and China have all restricted foreign sales. The exporters are coming under pressure to export less in order to lower prices at home. The importers, meanwhile, have no choice but to try to get as much of it as possible, as soon as possible, in order to head off shortages.

Result? A run on rice.

India's trade minister warned hoarders: We will not hesitate to take strong measures... But of course, hoarding is exactly what a smart family should do. Most likely there will be runs on other commodities too...starting with a run on real money itself.

People will want something real...something sure...something with which they can freeze their savings for the future to buy rice without having to worry about it doubling in price two weeks later. This something needs to be instantly priced and easily traded, taking only a little space to store large quantities of wealth.

That something, traditionally, is Gold.

Bill Bonner is founder and owner of Agora Inc., one of America's largest consumer newsletter publishers. Editor of free The Daily Reckoning email now read by more than 500,000 worldwide he is also the author of three best selling investment books, most recently Mobs, Messiahs Markets (John Wiley, 2007).

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