Drought, High Oil Prices is a combination for disaster

Drought and High Oil Prices will give the next 12 months a hard time.

The Jasmine Revolution is probably stirred by high food costs.

The current drought in the USA is well known to all, but if it continues for another year, crop prices will hit all food supplies as corn is a key ingredient for meal feed of pigs and chickens.

The only possibilities that the drought can be pacified are below:

• Rain is forthcoming in the next few months
• The Ethanol mandate is suspended temporarily as it is mandated by law in the USA 40% of production must be converted as fuel.

There are reports that North Sea oil production has peaked and will fall in 2013, is this the reason or pending QE3 for the recent spike in oil prices?

High oil prices will crush EU economies hard since euro has fallen 10% already and if input prices are even higher, with their reduced income because of high food and fuel prices, demand in everything has to fall.