Jerry Jackson

Posts Tagged ‘Inflation’

20 Signs That A Horrific Global Food Crisis Is Coming

In Activism, Economics, Human Rights, Society, World News on April 17, 2011 at 11:27 am

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In case you haven’t noticed, the world is on the verge of a horrific global food crisis. At some point, this crisis will affect you and your family. It may not be today, and it may not be tomorrow, but it is going to happen. Crazy weather and horrifying natural disasters have played havoc with agricultural production in many areas of the globe over the past couple of years. Meanwhile, the price of oil has begun to skyrocket. The entire global economy is predicated on the ability to use massive amounts of inexpensive oil to cheaply produce food and other goods and transport them over vast distances. Without cheap oil the whole game changes. Topsoil is being depleted at a staggering rate and key aquifers all over the world are being drained at an alarming pace. Global food prices are already at an all-time high and they continue to move up aggressively. So what is going to happen to our world when hundreds of millions more people cannot afford to feed themselves?
Most Americans are so accustomed to supermarkets that are absolutely packed to the gills with massive amounts of really inexpensive food that they cannot even imagine that life could be any other way. Unfortunately, that era is ending.
There are all kinds of indications that we are now entering a time when there will not be nearly enough food for everyone in the world. As competition for food supplies increases, food prices are going to go up. In fact, at some point they are going to go way up.
Let’s look at some of the key reasons why an increasing number of people believe that a massive food crisis is on the horizon.
The following are 20 signs that a horrific global food crisis is coming….
#1 According to the World Bank, 44 million people around the globe have been pushed into extreme poverty since last June because of rising food prices.
#2 The world is losing topsoil at an astounding rate. In fact, according to Lester Brown, “one third of the world’s cropland is losing topsoil faster than new soil is forming through natural processes”.
#3 Due to U.S. ethanol subsidies, almost a third of all corn grown in the United States is now used for fuel. This is putting a lot of stress on the price of corn.
#4 Due to a lack of water, some countries in the Middle East find themselves forced to almost totally rely on other nations for basic food staples. For example, it is being projected that there will be no more wheat production in Saudi Arabia by the year 2012.#5 Water tables all over the globe are being depleted at an alarming rate due to “overpumping”. According to the World Bank, there are 130 million people in China and 175 million people in India that are being fed with grain with water that is being pumped out of aquifers faster than it can be replaced. So what happens once all of that water is gone?
#6 In the United States, the systematic depletion of the Ogallala Aquifercould eventually turn “America’s Breadbasket” back into the “Dust Bowl”.
#7 Diseases such as UG99 wheat rust are wiping out increasingly large segments of the world food supply.
#8 The tsunami and subsequent nuclear crisis in Japan have rendered vast agricultural areas in that nation unusable. In fact, there are many that believe that eventually a significant portion of northern Japan will be considered to beuninhabitable. Not only that, many are now convinced that the Japanese economy, the third largest economy in the world, is likely to totally collapse as a result of all this.
#9 The price of oil may be the biggest factor on this list. The way that we produce our food is very heavily dependent on oil. The way that we transport our food is very heavily dependent on oil. When you have skyrocketing oil prices, our entire food production system becomes much more expensive. If the price of oil continues to stay high, we are going to see much higher food prices and some forms of food production will no longer make economic sense at all.
#10 At some point the world could experience a very serious fertilizer shortage. According to scientists with the Global Phosphorus Research Initiative, the world is not going to have enough phosphorous to meet agricultural demand in just 30 to 40 years.
#11 Food inflation is already devastating many economies around the globe. For example, India is dealing with an annual food inflation rate of 18 percent.
#12 According to the United Nations, the global price of food reached a new all-time high in February.
#13 According to the World Bank, the global price of food has risen 36% over the past 12 months.
#14 The commodity price of wheat has approximately doubled since last summer.
#15 The commodity price of corn has also about doubled since last summer.
#16 The commodity price of soybeans is up about 50% since last June.
#17 The commodity price of orange juice has doubled since 2009.
#18 There are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less and the world was already on the verge ofeconomic disaster before this year even began.
#19 2011 has already been one of the craziest years since World War 2. Revolutions have swept across the Middle East, the United States has gotten involved in the civil war in Libya, Europe is on the verge of a financial meltdown and the U.S. dollar is dying. None of this is good news for global food production.
#20 There have been persistent rumors of shortages at some of the biggest suppliers of emergency food in the United States. The following is an excerpt from a recent “special alert” posted on Raiders News Network….
Look around you. Read the headlines. See the largest factories of food, potassium iodide, and other emergency product manufacturers literally closing their online stores and putting up signs like those on Mountain House’s Official Website and Thyrosafe’s Factory Webpage that explain, due to overwhelming demand, they are shutting down sales for the time being and hope to reopen someday.
So what does all of this mean?
It means that time is short.

For years, many “doom and gloomers” have been yelling and screaming that a food crisis is coming.
Well, up to this point there hasn’t been much to get alarmed about. Food prices have started to rise, but the truth is that our stores are still packed to the rafters will gigantic amounts of relatively cheap food.
However, you would have to be an idiot not to see the warning signs. Just look at what happened in Japan after March 11th. Store shelves were cleared out almost instantly.
It isn’t going to happen today, and it probably isn’t going to happen tomorrow, but at some point a major league food crisis is going to strike.
So what are you and your family going to do then?
You might want to start thinking about that.
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QE is the End of America as We Know It

In Activism, Economics, Human Rights, Police State, Society on March 21, 2011 at 9:30 pm


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Each time we begin to approach the end of an announced QE period, the nervous jitters of financial markets start to set in. Will Bernanke continue with QE (n+1) or won’t he? Now it’s true that professional traders live and die by their ability to front run rumor and perception, but for long term investors who fret over such decisions, it demonstrates a fundamental lack of understanding of what QE really is. To put it succinctly, QE is an economic deal with the Devil. Once it is begun in earnest there can be no turning back. It must be played to its ultimate conclusion.In Bernanke’s 2009 interview on 60 Minutes, he suffered a momentary lapse into honesty and stated that Quantitative Easing was effectively money printing. So why then the complicated euphemism of Quantitative Easing? Because that is what modern central banking sponsored economics is all about – the intentional obfuscation of otherwise simple economic principles to cause the eyes of normal people to glaze over. Once accomplished, the central bankers (and their financial community brethren) are able to pursue policies that greatly benefit themselves but are devastating to everyone else. .
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Long term investors who worry about whether QE will continue clearly recognize the fact that everything is now correlated to the Fed’s balance sheet. What they don’t understand is how QE is related to the larger economic cycle and its mission of preventing economic recessions.
Keeping the tent inflated
Sometimes physical analogies are the most helpful in understanding complex relationships. Let’s think of the economy as a large inflated tent. The extent of the tent’s inflation is the health of the economy. Under normal economic conditions the tent is fully inflated. In the course of time, events take place that cause the need for a correction to the economic system. New technology can come along which obsoletes old industries, bad investments and debt must be liquidated etc. When this happens a free market economy will correct itself. Capital tied up in failed industries will be reallocated and invested in new businesses. New jobs will ultimately be created and people will go back to work. Of course this reorganization takes place over time and this is what a recession is – a healing process for the economy. In our tent we can think of this as a tear that forms in the fabric. While this hole is being repaired, air escapes and the tent begins to sag a little. The extent of the drooping is the extent of the recession. Once fixed, the tent and the economy go back to normal.
QE is a wholly different method of keeping the tent propped up. It does not repair the hole, but rather attempts to keep the tent inflated by pumping more air in than is escaping through the hole. This is the new money being created and pushed into the economy to offset the credit destruction in the banking system. This is a dynamic process that must be maintained. The catch is that the hole doesn’t just stay a fixed size. The tear begins to lengthen allowing greater amounts of air to escape. The economic tent begins to sag until the volume of air being pumped in is increased to overcome the outflow. This is why QE can never end. To stop now, with such a large hole, would result in a severe and frightening recession. The tent would lose a tremendous amount of air in the time it takes to make such an extensive repair.This process continues until eventually the hole is so large that the tent collapses around the massive flow of pumping air. This is the ultimate fate of money printing as policy – a currency crisis – the endless flow of new money loses purchasing power faster than it can be created. We are left with an inflationary depression in which savings are decimated and the standard of living of most Americans is dramatically lowered.
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QE is economic central planning
When an institution such as the Federal Reserve is allowed to create as much money as it wants and do with it whatever it pleases, without any oversight or transparency, then the free market and its self correcting mechanisms no longer exist. How can capital from failed business and banks be reallocated to more efficient uses when these institutions are bailed out and not allowed to fail? Prices and interest rates are the nervous system of a free market economy. They are the feedback mechanisms that direct all of the individual participants to behave in the most productive and efficient manner. There can no free market when prices and interest rates are de-linked from supply and demand. We are now a centrally planned economy run by our central bank.


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But here’s the really insidious part of QE that almost no one in the general public understands: A free society cannot exist independent of free markets. There is a disequilibrium that occurs between the two and over time one will win out over the other. And so here we are, stuck in a decaying economic system that prevents resources from being used in their most efficient manner. We simply can no longer compete with freer markets in other parts of the globe. We are saddled with the weight of central economic planning much like the old Soviet Union was. There will be no recovery and no rush of new jobs created. We will live under the burden of a burgeoning Federal government that operates completely independent of the will of its citizens. It is now beholden only the money manufacturers at the Federal Reserve and will spend money as fast as Bernanke can add zeros to its account.The problems we are experiencing have been a long time in the making. They began in earnest in 1913 with the formation of the Federal Reserve. It’s taken several generations for the Federal government and its central bank to usurp the world’s monetary system and as such few have noticed. But what’s different now is that we have hit the knee in the curve, the point at which events start to accelerate dramatically as we approach the end of the line. Those who understand QE realize that America as we knew it is already gone. Over the next decade the rest of America will become painfully aware of that fact as well.

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European Economics Preview: ECB Set To Hold Interest Rates

In Economics, World News on February 4, 2011 at 4:36 am

via Flickr”]The powerful European Central Bank [ E C B ] i...

Interest rate decision from the European Central Bank and retail sales and service sector PMI figures from the eurozone are due on Thursday, headlining a busy day for European economic news. All times in ET. Major economic reports released on Wednesday were mostly negative. Eurozone producer price inflation sped up in December, while Standard & Poor’s cut the Irish Republic‘s credit rating. Elsewhere, the UK’s construction sector rebounded in January. At 2:00 am, French economy minister Christine Lagarde is due to hold a news conference on France’s G20 agenda. The Irish Republic’s services PMI index for January is due at the same time from Markit. At 2:15 am, Switzerland is scheduled to release trade balance data for December. A trade surplus of 1.8 billion francs was recorded in the prior month. Consumer and producer price inflation figures for January are due from Turkey at 3:00 am. The annual rate of inflation in consumer prices is predicted to ease to 4.6% from 6.4% in the previous month. At 3:15 am, Spanish services PMI data for January is due from Markit.French services PMI for January is due at 3:50 am, with economists predicting the preliminary score of 57.1 to be retained. At 3:55 am, German services PMI for January is out, with the flash estimate of 60.0 expected to be confirmed. Eurozone services PMI for January follows at 4:00 am, with the preliminary reading of 55.2 expected to be left unrevised. The composite PMI is also forecast to be unrevised from its preliminary estimate of 56.3. At 4:30 am, the January services PMI for the UK is due. Economists expect the index to rise to 51.3 from 49.7 in December. Spain is scheduled to hold an auction to sell two- and five-year bonds around the same time, through which it hopes to raise upto 4 billion euros. At 5:00 am, Eurostat is due to release eurozone retail sales figures for December. Sales are forecast to rise by 0.5% on a monthly basis and by 0.2% on an annual basis. Romania’s central bank is due to announce its interest rate decision simultaneously. Economists expect the base rate to be kept unchanged at 6.25%. At 7:00 am, the Czech central bank is due to announce its rate decision, with analysts expecting the repo rate to be retained at 0.75%. The ECB announces its rate decision at 7:45 am. No change is expected to the key rate of 1%, despite inflation jumping past the bank’s target. ECB President Jean-Claude Trichet holds a press conference following the interest rate announcement at 8:30 am. Read more here.



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