Archive for May 2008
The Ticking Credit Card Time Bomb
by Peter Schiff, Euro Pacific Capital | May 9, 2008
For those holding out hope that the American economy can miraculously avoid a long and deep recession consumer credit is often viewed as the wonder drug that can cure all manner of economic ills. As such, this week’s report showing $15 billion growth in consumer credit was widely heralded as proof of America’s economic strength and resilience. However, we are now suffering the after effects of too much debt, and our salvation cannot be found in more of the same.
Food Shock
by Jennifer Barry, GlobalAssetStrategist.com | May 9, 2008
As an American, I’ve taken for granted that I can get just about any food I want at the supermarket. In fact, the number of choices are dizzying. I never really thought about the tenuous chain between myself and my food. Less than 1% of the U.S. population is employed in agriculture, and 40% of these farmers are 55 or older.1 The chain of transportation that brings goods to the stores is tenuous and depends on a few key railways and truck drivers. Supermarkets could experience spot shortages if the proposed trucker strike gains momentum or more drivers quit the business.
Rich countries like the U.S. used to store extra food in case of emergencies. Many grain elevators were built in the Great Plains after World War II for this purpose.2 This stockpile reduced the volatility of food prices. When prices rose, the government released some grain into the market. When costs were low, the Department of Agriculture would support prices by purchasing surpluses. Excesses of wheat, milk, and butter were exported, given away or even destroyed for lack of demand. After the passage of the 1985 farm bill, the USDA divested itself of grain stocks and other foodstuffs.
What happens in the U.S. agricultural markets has a great impact on the rest of the world. America is the “Saudi Arabia” of grain as it is the largest exporter. The U.S. supplies 70% of the world’s corn, and it has little 2007 crop surplus of soybeans and wheat left to sell.3 Many poor countries depend on imports of these staples to feed millions of their hungry citizens.
Ron Paul advisor Peter Schiff’s economic forecast
4/28/2008
Punjab reaps a poisoned harvest
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/7366899.stm
The governments of many poor nations are alarmed at the rise in food prices. There are even problems in the Indian region of Punjab, where science once seemed to have found answers for a hungry world.
The Green Revolution made the Punjab, India’s richest farmland
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The first thing Satpal Singh sees when he walks out of his bedroom door in the morning is a gleaming tractor, without a speck of mud on it.
It is given pride of place and washed down before being put away for the night in its garage built into the middle of his house.
This is a sign of the wealth that has made this the richest farmland in India.
In Mr Singh’s front yard, half a dozen cows chew contentedly on a maize-based mix, processed in his own machine in the corner.
But behind this idyll serious questions are being asked about farming practices in Punjab, which have consequences for the looming crisis in world food supplies.
