Tuesday, December 29, 2009

Germans lose faith in political system

A poll shows that the German public now has less faith in their political system than at any other time since World War II, mainly due to the financial crisis.

The survey conducted by Bertelsmann Foundation found on Sunday that about 70 percent of those questioned did not feel that they could count on their political and business leaders, or the education system and the social welfare network.

Nearly fifty percent of respondents said they have reservations about representative democracy as a political system.

“Even the social market economy is far from being seen as positively as it once was,” opinion researcher Peter Kruse said of Germany’s system of free markets with a strong social safety net.

The loss of faith is believed to be mainly due to what Germans see as their government’s inadequate attempt to revive the slumping economy.

The poll also shows that the EUR 8.5 billion (USD12.2 billion) tax relief package passed by parliament this month has unsettled Germans at a time of record public debt.

The Occupied West Bank Latroun Villages

New security regulations put in place after last week's terrorist incident aboard a Northwest Airlines jet are going to make flying into the U.S. difficult, boring, and unpleasant, at least for a little while.

First, the good news: Virgin America and Southwest confirmed that new regulations don't seem to affect domestic flights. So laptops, Live TV, and other distractions are still A-OK if you're flying within the USA.

The problem comes for folks flying into the USA from elsewhere. According to rules quoted on Gizmodo, you can't hold anything in your lap or access your carry-on bags for the last hour of a flight, and any in-flight communications equipment, including live TV and Internet, must be turned off for the entire duration of the flight. Airlines have so far interpreted this to mean that you can read an analog book, but not use a laptop during that final hour. It's unclear whether this prohibits iPods or other gadgets that could be stored in a pocket rather than a lap.

But wait! It gets worse! JetBlue confirmed to me this morning that because they can't unravel their Live TV system from the rest of their in-flight entertainment, they're turning off all in-flight entertainment on flights from foreign countries into the U.S. That means no movies for the whole flight (although you can use your laptop, except for the final hour). They're working on a solution to allow for movies on flights into the U.S., they said.

JetBlue only flies relatively short international routes, mostly to and from the Caribbean. We haven't heard details from any longer-haul carriers who don't have live TV integrated into their entertainment systems.

Fortunately, reliable airline analyst Chris Elliott says that several of the security bulletins involved expire on January 1, which means that this draconian regime may be short-lived.

For a full guide to the new security regulations - independent of gadgets - check out Frommers.com.

UPDATE: Updated. JetBlue now says they've returned Live TV and entertainment to all of their flights. Wow, things change fast.

This post originally appeared on Gearlog.

George Carlin - Airport Security and Terrorists

Click this link ...... http://www.youtube.com/watch?v=3G6URhJTvVg&feature=player_embedded

荷蘭‧炸美客機不遂案‧軍警調查是否有同黨

(荷蘭‧阿姆斯特丹)荷蘭軍警發言人週一(12月28日)指出,當局正在調查試圖炸毀美國客機的尼日利亞男子穆達拉德圖,是否有同黨。

有目擊者聲稱,他們在案發當天,在荷蘭阿姆斯特丹機場曾看見穆達拉德圖與一名年約50歲、身材高、穿著體面的男子一起。

據指出,這名男子與穆達拉德圖交談,並協助他在毋須護照情況下,登上西北航空253班機。

調閱閉路電視錄影找線索

荷蘭軍警發言人表示,現階段並無證據顯示穆達拉德圖還有其他同黨,但軍警及反恐部門將會調閱閉路電視錄影帶及其他可能找到的線索。

但他補充,穆達拉德圖不可能在沒有出示護照的情形下,獲准登機。

嫌犯出院羈押監獄

襲擊不遂卻導致身體3級燒傷的穆達拉德圖,週日(12月27日)已出院,並被羈押在距底特律80公里的一個聯邦監獄。

穆達拉德圖上週六被美國司法部以企圖炸了毀美國客機罪名正式被起訴,一旦罪名成立,可能被判處最高20年監禁以及被處以25萬美元的罰款。

他在尼日利亞的家人週一發表聲明稱,穆達拉德圖在國外上學期間,便中斷了與家人的聯繫,其銀行家父親2個月前還曾向尼國安全機構尋求幫助,希望能夠找到兒子,讓他回家。

聲明說:“當我們仍在等待調查結果時,卻聽到了那個令人震驚的消息”。

新加坡‧大使館車撞死男子‧家婆勸退婚媳婦說不

(新加坡)大使館車撞死人追蹤,家婆要媳婦去申請婚姻無效,囑咐她退婚改嫁,展開新生活,但媳婦堅持承認婚姻關係,更表示自己雖沒行婚禮,但已簽字注冊結婚,生是唐家人,死是唐家鬼。

這起車禍發生在上週二(15日)凌晨3時10分,死者唐國威在武吉班讓,被羅馬尼亞大使館的車子撞倒,送院2天後宣佈腦死。

後來,唐國威家人在聖誕節當天,作出痛苦抉擇,拔掉唐國威的維生儀器。

死者妻子楊天妮(31歲)表示,他們原本將在梭羅島和吉隆坡各擺一次喜酒,機票都已經訂好了,但無奈發生車禍,導致兩人陰陽相隔,家婆曾經叫她申請婚姻無效,但她卻不答應。

“我不願意申請婚姻無效,國威是我的丈夫,永遠都是我的丈夫。即便是我以後改嫁,國威還是我的第一任丈夫。””

楊天妮表示,丈夫遺體火化後,原本婆家說要將骨灰撒大海,方便她隨時隨地祭拜,可是她勸家人打消念頭。

“如果骨灰撒落大海,他會很寂寞孤單,骨灰帶回吉隆坡,會有家人陪伴他。我想他比較希望跟家人在一起。”

楊天妮說,她只跟婆家要了丈夫的手提電腦作留念,因為電腦裡有兩人無數的合照。

針對這起案件,警方發言人受詢時說,調查工作仍在進行,目前還未逮捕任何人。

蜜月、生兒、開店一切計劃皆成空

死者妻子受訪時表示,她12月11日生日,丈夫為給她一個驚喜,神神秘秘地訂了民丹島旅遊配套,帶她去那邊慶祝生日,也算是度蜜月。

死者妻子也說,夫妻兩人,已作好生兒計劃,打算婚後生1子1女,女兒的名字都取好了,叫“蘇菲”。

她表示,兩人原本還打算,未來回去梭羅島開店賣火鍋,沒想如今一切都成空。

她說,自己為丈夫所做的最後一個決定,就是讓他穿著禮服入殮。

據瞭解,羅馬尼亞大使館人員並沒有到醫院慰問過家屬。

摯友傷者是砂拉越人

唐國威(30歲)重創腦死,聖誕節拔管安詳離世,他的摯友黃威豪身心受創,無法接受事實,情緒大變,令家人十分心酸。

一輛羅馬尼亞大使館的汽車在12月15日凌晨,不知何故竟連闖兩個紅燈,分別將三名路人撞倒,然後絕塵而去。3名被送院的傷者,包括剛注冊結婚的新郎唐國威(30歲)、新郎24歲的好友黃威豪以及一名18歲的馬來族男子。

來自砂拉越的黃威豪及他的家人,週一(12月28日)下午首度開腔受訪。

黃威豪的姐姐黃女士(30歲,會計)說,“弟弟共動了2次頭部的手術,整個人昏昏沉沉,一直到聖誕節前2天才比較清醒。他不停追問我們,為甚麼他身邊的好朋友都來看他,唯獨國威一直沒有出現?”

指國威在門外等他

她說,弟弟2年多前來到新加坡工作時認識唐國威,兩人親如兄弟。唐國威腦死後,她們不敢說出真相,只說國威在睡覺。週日(12月27日)晚上,弟弟忍住痛,從床上死命爬起來,說要去找國威。

中國‧查出1180億違規資金‧67高官被對付

(中國‧北京)中國國家審計署週一(12月28日)透露,今年共查出2347億元人民幣(約馬幣1180億令吉)違規資金,67名高級官員被“處理”。

審計長劉家義在年度全國審計工作會議上表示,今年1月至11月,全國審計和調查9萬9000個 單位,完成審計2萬多名官員的經濟責任,查出違規問題金額2347億元(人民幣,下同),其中,由官員直接責任造成的違規問題金額106億9000萬元, 損失浪費問題金額163億元。

今年的審計也成功為國家財政追回521億元。

審計後,共231人因審計發現問題被移送司法和紀檢機關,其中包括67名“領導官員”。

不過,另一方面,去年9月因“三鹿毒奶粉事件”下台的多名官員近日紛紛復出其中,前國家質檢總局局長李長江以全國“掃黃打非”工作領導小組專職副組長職務,重出江湖,令不少網民質疑所謂“問責制”形同虛設,學者也擔憂有負面影響。

中國‧百車連環撞13死18傷

(中國‧江西)中國江西九景高速公路週一(12月28日)發生百餘輛汽車在鄱陽湖大橋上連環相撞的嚴重交通事故,造成至少13人死亡,18人受傷。

事發在週一早上,鄱陽湖大橋上有百輛汽車連環相撞,6人當場死亡,20多人受傷。鄱陽湖大橋從湖口往九江方向路段超過一公里的路面一片狼藉,大小車輛雜亂撞到一起,部份轎車衝入大貨車車底,也有大貨車衝出護欄,車頭完全扭曲。

事故發生後,現場一度排起車龍,傷者被送到九江各大醫院搶救。

警方初步調查後表示,當地持續2天的雨雪天氣,迷霧低溫令橋面結冰,是造成事故的主要原因。(法新社照片)

中國‧地鐵五號線剛通車‧廣州樓宇下陷

(中國‧廣州)中國廣州地鐵5號線剛剛通車,立即傳出地鐵工程導致樓宇下降事故!

發生地陷的小區是海平閣和粵康閣,地處廣州大道中地鐵5號線五羊屯站A出口,樓層高26層。

一家地產公司門店的地面陷裂較為明顯,粗略估算,下陷有5厘米左右,在側面牆體也有裂縫,需要兩塊鐵塊固定。

海平閣業主張先生表示,地鐵施工導致他們的小區樓層下陷、路面毀壞、下水排污管道堵塞。

律師孟先生指出,廣州城市房屋安全鑑定顯示,海平閣屬一般性損壞房屋,並未嚴重影響房屋的使用。

地鐵一名工作人員透露,對海平閣的路面施工需要與業主們達成一致協定。他們已和業主代表開會協商,會按照正常的程式,把包括路面毀壞、下水排污管道堵塞等所有問題一併解決。

廣州地鐵五號線週一(12月28日)正式通車,這條新線全長32公里、設有24個車站,從東至西橫貫市區,並且首通黃埔區,將有助改善區內交通嚴重擠塞的問題。

美國‧“也門是明日戰爭”‧美闢第3反恐戰線

(美國‧紐約)繼阿富汗和伊拉克之後,美國已悄悄在也門開闢第3條反恐戰線!

美國聖誕節炸機未遂事件的疑犯穆達拉德圖,供稱在也門接受“基地”組織訓練,令世人開始關注,這個中東國家已成為另一個恐怖主義溫床。

美國須先發制人

白宮承認也門是反恐戰新目標地點,發言人吉布斯表示:“我們已在伊拉克逐步撤退,現在焦點放在巴基斯坦和阿富汗……但那些安坐洞穴的人,正用一切方式在巴基斯坦還有也門和索馬里,準備對本國發動更多襲擊。”

參議院國土安全和政府事務委員會主席利伯曼毫不諱言:“伊拉克是昨日戰爭,阿富汗是今日戰爭,如果美國再不先發制人,也門將是明日戰爭!”

他週日(12月27日)在電視節目上透露,美國已在也門加派人手,包括特戰部隊、陸軍綠扁帽特種部隊及情報員。

秘密派駐戰地特工

《紐約時報》週一報導,美國其實早在1年前便已悄悄地將反恐戰線,由阿富汗和伊拉克拉開至也門,成為美國反恐的隱蔽戰場。

報導引述美國中央情報局(CIA)前高官說,美國去年已秘密派出有反恐經驗的戰地特工,同時,還出動最機密的特戰突擊隊前往也門,對當地安全部隊展開反恐訓練,以對付“基地”組織。

據悉,未來18個月,五角大樓還將出動特種部隊和投入超過7000萬美元(約馬幣2億4000萬令吉),訓練及裝備也門軍隊、警員和海岸防衛隊。

巴基斯坦‧宗教遊行暴亂‧市長吁冷靜‧自殺襲擊逾33死

(巴基斯坦‧卡拉奇)巴基斯坦連續數日發生爆炸事件,南部商業大城卡拉奇週一(12月28日)舉辦什葉派宗教遊行時又遭自殺式炸彈襲擊,造成至少33人死亡,逾60人受傷,進而引發暴亂。

事發後,對襲擊事件感到憤怒不已的什葉派回教徒,今日(週二,12月29日)在卡拉奇放火燒燬房屋和數十輛汽車泄憤,還有民眾朝空中開鎗。

電視直播遊行過程

卡拉奇市市長穆斯達法呼吁民眾保持冷靜,並稱攻擊警察和醫護人員只會讓恐怖份子得意。

當地時間週一早晨,一名自殺式襲擊者在紀念阿舒拉節遊行開始時引爆了炸彈;阿舒拉節是什葉派回教的重要節日,人們在這一天紀念先知穆罕默德的外孫侯賽因遇難。

當時,巴國電視台正在實況直播遊行過程,因此整個爆炸過程都被拍了下來。

根據電視台畫面,千人遊行隊伍走在街頭,突然一名自殺客引爆身上的炸彈,造成許多人血肉橫飛。事發後,救護車來回穿梭,現場民宅陷入一片火海,路旁汽車更被燒的只剩骨架,整條街滿目瘡痍,宛如人間煉獄。

總統指极端份子作亂

巴基斯坦總統扎爾達里發表聲明稱:“看來極端份子正準備蓄意將打擊武裝份子的戰爭轉變成宗教衝突,讓人們內部自相殘殺。”

目前還沒有組織聲稱對週一的自殺式爆炸襲擊負責。

巴國內政部長馬立克呼吁什葉派回教取消接下來2天內擬舉行的宗教遊行。

什葉派回教徒在巴基斯坦是少數派,他們時常遭受遜尼派極端組織的攻擊。

新加坡‧兒子要娶“牛老婆”‧母親寧賠2000訂金反對婚事

(新加坡)兒子要娶老婆,母親只因女方生肖屬牛而堅決反對,寧可賠上2000元的訂金,也不要“牛媳婦”。

一名47歲的電腦技術人員,遲遲找不到對象,最後通過一家婚姻介紹所要娶24歲的越南姑娘,並繳付2000元的訂金。但母親看到未來媳婦的照片和資料後,臉色一沉,要兒子放棄這名越南姑娘,原因是女方生肖屬牛。

原來,男子的72歲母親屬牛,已經過世的父親屬虎,兩人婚後相處不好;更糟的是,男子的姐姐和姐夫也是牛虎配,婚姻同樣有問題,老母親因此認定“牛虎不相配”,為免兒子步母親和姐姐後塵,所以堅決反對娶“牛媳婦”。

命理學家:批算八字較準確
單看男女生肖太籠統

命理學家說,生肖是否相沖、合不合得來,各可分6種。

新加坡命理學家游龍子解釋,中國古代較相信人的生肖是否匹配,因為他們相信每個生肖都有他們所屬的個性,有些比較剛烈,有些則比較柔和。

“單看生肖,命理學上分為‘六沖’和‘六合’。所謂的‘六沖’,就是老鼠沖馬、牛沖羊、老虎沖猴、兔子沖雞、龍沖狗,以及蛇沖豬。這主要是因為它們生肖的排列來定,相隔6個位的生肖就會相沖。”

而所謂的“六合”,則是老鼠配牛、虎配豬、兔配狗、龍配雞、蛇配猴和馬配羊。

但游龍子也強調,單看生肖來決定一對男女是否匹配是很片面,也太籠統了。若要慎重其事的話,就應該連同男女雙方的生辰八字一起批算比較準確。

生肖八字相輔相成

生肖相沖的夫妻可以很恩愛甜蜜,生肖相合的伴侶也可能成為怨偶。

游龍子說,他遇過不少例子,有生肖相沖但八字“乾淨”的夫妻和睦共處,也看過生肖明明是“六合”的伴侶一直吵架。後來進一步批算生辰八字後,才發現了問題的症結。”

他說,八字裡有“魁罡”的人,性格比較剛烈。此外,八字裡有“陰差陽錯”或“孤辰寡宿”的男女,以及八字裡有“孤鸞”的女子,這些人的婚姻較有波折。

“八字是一個人出世後與生俱來的。如果踫到男女雙方生肖‘合’但八字‘沖’的話,通常我都會勸性格較剛烈的一方放軟態度,以維持婚姻。”

民俗學家:牛虎不相沖
婚姻不合或源自命格

民俗學家魏錦文受訪時說,就生肖而言,牛、虎其實並不相沖,男子的母親和姐姐出現的問題,也有可能是命格造成的。

他說,命格也就是生辰八字。“這些都可能造成婚姻不協調,甚至導致離婚。”

魏師傅表示,要化解命格相沖的問題不難,只要在新娘出嫁時,用一把紅傘為新娘遮陽就行。

“方法很簡單,只是很多不曉得。在華人傳統裡,紅色代表大吉大利,‘傘’和‘閃’音近,用它為新娘遮陽,問題就解決。”

BBC: al Qaeda Does Not Exist

Click this link ...... http://www.youtube.com/watch?v=mztfFdpd1Rk

America's most wanted: doctor found living in tent on Mont Blanc

• Missing man faces fraud trial after five years on run
• Fugitive lived on tinned food and melted snow

Mark Steven Weinberger arrested

Mark Weinberger, a plastic surgeon wanted by the US since 2004 for healthcare fraud, pictured in Italy. Photograph: Gruppo Carabinieri Di Aosta/EPA

On 21 September 2004, Michelle Weinberger woke up on the 79ft powerboat that she and her husband, Mark, owned as it rocked gently in the waters of a marina on the Greek island of Mykonos.

"I put my hand on his side of the bed, and I remember feeling it empty," she later told the US television channel NBC. Weinberger leapt from bed in alarm to find that her husband had vanished, taking with him his passport and money he had stashed secretly on board.

It was the beginning of a five-year flight from justice that ended this week even more strangely than it began, almost 6,000 feet up in the Italian Alps. Two officers of the paramilitary Carabinieri, led by a mountain guide, trudged up to the southern slopes of Mont Blanc to find one of America's most wanted fugitives living in a tent. He was surviving in temperatures as low as -18C on dried and tinned food and snow he melted on a portable stove.

Dr Mark Weinberger, a 46-year-old ear, nose and throat specialist, was tonight in a secure ward at the Molinette hospital in Turin recovering from a wound he sustained when he tried to take his own life at the Carabinieri station in Courmayeur, below Mont Blanc.

The US authorities have 40 days in which to apply for his extradition. He faces trial on 22 counts of healthcare fraud, having previously been indicted by a grand jury.

Brought up in a prosperous New York suburb, Weinberger was educated at the University of Pennsylvania and the UCLA medical school. He later worked with one of Chicago's most renowned plastic surgeons before opening his own practice, the Weinberger Sinus Clinic, in Merrillville, Indiana.

The "nose doctor", as he came to be known, met his future wife, 12 years his junior, in 2000. "He just swept me off my feet," she said. "He was the kindest, most gentle man I had ever met."

Weinberger proposed to her eight months later in a Rome piazza while on holiday, and they were married in characteristically ostentatious style in three separate ceremonies in the US and Italy in 2001.

Michelle Weinberger later said she reckoned her husband was earning $200,000 (£124,000) a week, performing between seven and 15 operations.

They owned a house in a wealthy lakeside neighbourhood of Chicago. Mark Weinberger travelled to and from his surgery in a chauffeur-driven limousine. He employed maids, cooks, a personal trainer and a skipper for his boat. Every month, his wife recalled, he would take 10 days off to enjoy his seemingly abundant income, often jetting off to Europe to indulge a passion for idling in the Mediterranean.

The first hint of trouble emerged in October 2002 when a lawyer acting for the estate of a woman who had died of throat cancer filed a complaint with the Indiana department of insurance. The complaint claimed Weinberger failed to diagnose her cancer and instead carried out an unnecessary operation on her sinuses that was paid for by her insurance company.

The lawyer said he was subsequently contacted by dozens of the doctor's former patients who alleged that they too had had surgery they suspected was unnecessary. A similar complaint was filed by a second attorney on behalf of 25 former patients.

As the malpractice suits piled up, Weinberger arranged what he said would be a very special 30th birthday party for his wife. He flew her, her mother and three friends out to the Greek islands and promised her a present that would be "something that only the movie stars have". Before disappearing, he bought her two expensive diamonds.

It was small recompense, though, for what she was about to discover. The unpaid berthing fees on Mykonos alone came to $40,000. Their boat was seized by the Greek authorities. Weinberger's practice owed $5.7m and was eventually auctioned to meet his debts.

But the oddest discovery, and one that perhaps holds the key to his life on the run, was that the doctor had a room at his clinic which his employees dubbed "the scary room". It was crammed with survival gear. And the equipment, including even a water filtration system, had been shipped to Europe before he left.

The fugitive surgeon was sought by the FBI. He featured more than once on the Fox television show America's Most Wanted, and was supposedly sighted as far away as China. His wife continued to defend him after he vanished.

"I hope he's safe, and I still love him," she told the Chicago Tribune in October 2004, adding: "We can relocate. We can live on an island in a hut." The Carabinieri who lifted the flap of Weinberger's tent on Tuesday morning had been alerted to his presence by a mountain guide, an Italian police official said. They did not immediately reveal that they suspected his identity. They said they had used an excuse to convince him to accompany them to Courmayeur and that Weinberger tried to persuade them he just "wanted to live a life in the wild".

After it became clear that they knew who he was, the runaway doctor asked to go to the lavatory. There, he whipped out a tiny knife he had secreted in his underwear and plunged it into his throat. But despite being an expert surgeon, he missed the artery he appeared to be aiming for, and the Carabinieri hustled him away for first aid.

Bolivia: South America's Retirement Paradise

Little-known Retreat Exotically Spiced with a Unique Latin and Native American Flavor A beautiful and inexpensive place without a tourist in sight.

Sound like a dream? It's not. This slice of paradise does exist. Nestled high in the Andes mountains of South America, Bolivia is a little-known retreat exotically spiced with a unique Latin and Native American flavor. Bolivia has a lot to offer…a very low cost of living, unspoiled natural environment, friendly people and a range of climates to suit virtually every taste. Property prices are among the lowest in Latin America and it has the potential to become the world's next great expatriate haven. Bolivia has long been a favorite destination of adventure travelers, yet few mainstream American and European tourists make it to this secretive outpost.

Why? Well, perhaps it's because Bolivia isn't a destination you stumble across by accident. Shrouded by great mountain ranges, it lies hidden between Brazil, Chile, Argentina, Peru and Paraguay. The country's most famous visitors were Butch Cassidy and the Sundance Kid, the American outlaws who fled to South America in the early 1900s - they are said to have had their last stand with the Bolivian army and are buried here. As recent as the 1980s, wise old men in towns throughout the Bolivian highlands could be heard gossiping about the fate of two of America's most notorious outlaws. In Bolivia, myths come thick and fast, and one legend has it that the Incas have an underground network of secret passageways on an island located in Lake Titicaca, which is praised by visitors as being one of the deepest blue and most beautiful bodies of water in the world.

Leave your worries at home

Bolivia is one of those countries that seduce you through sheer personality. The colorful bustle of its markets and street vendors, the liveliness of its nightlife, and the charm and friendliness of its people, make it one of the most livable places in Latin America.

Bolivia has a bit of something for everyone: charming old-world colonial towns with great restaurants, museums, and nightlife, as well as slow-paced cozy developments in rural areas near indigenous villages, where hunting, gathering and fishing are a way of life.
  • The climate is another plus. Temperatures in Bolivia range from the mid 60s to the low 80s, with the average being in the mid 70s. Even the hottest days are always tempered by cooling breezes.
  • Bolivia is a republic with a presidential system of government. Its fully democratic, American style system retains the respect of individual rights and freedoms.
  • Bolivia enjoys a remarkably low crime rate, with violent crime being virtually unknown and theft not commonplace.
  • Americans, Canadians, Australians and most Europeans don't need a visa to spend up to 90 days as a tourist in Bolivia and nonresidents may buy property.
  • Live the good life on less than $9,000 a year. Besides the fact that there's no such thing as a rat race in Bolivia, its biggest asset is its cost of living. You can stay in a clean, friendly hotel in the city center for $8 a night (or US$125 per month) where every meal costs less than $3. Groceries are up to 70% cheaper than in the United States or Europe. A routine trip to a good English-speaking doctor will set you back no more than $20. You can take in an American movie for only $2 or get a taxi across town for as little as 80 cents. And you're certainly not going to have high utility bills: Electricity and heating costs average $15 a month.

    Cheap Real Estate

    To give you an example of the costs, here are some properties on offer right now:
    • A 5-bedroom, 3-bathroom, 2500-square-foot home in a wealthy affluent neighborhood with a large garden, a garage, an alarm system, and every modern convenience, for $80,000.
    • A 2-bedroom, 1-bathroom, 750-square-foot apartment with a dining room, a kitchen, central heating, a balcony, and parking, costs $17,000.
    • A 3-bedroom, 2-bathroom, 2,500-square-foot chalet in a quiet neighborhood with a garden and two-car garage going for about $46,000.
  • A 2-bedroom, brand new handicap-accessible home in a charming expatriate development with a private pond and palm tress for only $28,000.
  • A well-groomed lot to build on in the same community for prices ranging from $4,800 to $7,000, with good shopping, the shore and an airport within walking distance.
  • Rentals from $75 per month

    Realtors also offer short and long-term rentals. Such rentals are downright cheap by First World standards. Long-term rental apartments begin at around $75 per month for something small, with houses starting at the $200 mark.

    You could certainly rent a nice two-bedroom apartment in one of the best parts of town for $175 to $350 a month. And you can lease a luxury three-bedroom suburban home would rent for between $275 and $400 per month; homes with private swimming pools start at around $500 monthly. For $275 monthly, you could opt for a two-bedroom apartment with parking, gas, electricity, a telephone, and a housekeeper.

    These deals and many more make little-known Bolivia worth investigating.

    Important Note
    On August 4, 2002, Bolivia's Congress elected Gonzalo Sanchez de Lozada, a U.S.-educated, pro-market former president, to lead Bolivia for the next five years. This is good news for expatriates and retirees, providing the perfect window of opportunity to get in to Bolivia on the ground floor, before tourists start flocking.

    *****2010 Food Crisis for Dummies*****

    If you read any economic, financial, or political analysis for 2010 that doesn’t mention the food shortage looming next year, throw it in the trash, as it is worthless. There is overwhelming, undeniable evidence that the world will run out of food next year. When this happens, the resulting triple digit food inflation will lead panicking central banks around the world to dump their foreign reserves to appreciate their currencies and lower the cost of food imports, causing the collapse of the dollar, the treasury market, derivative markets, and the global financial system. The US will experience economic disintegration.

    The 2010 Food Crisis Means Financial Armageddon

    Over the last two years, the world has faced a series of unprecedented financial crises: the collapse of the housing market, the freezing of the credit markets, the failure of Wall Street brokerage firms (Bear Stearns/Lehman Brothers), the failure of Freddie Mac and Fannie Mae, the failure of AIG, Iceland’s economic collapse, the bankruptcy of the major auto manufacturers (General Motors, Ford, and Chrysler), etc… In the face of all these challenges, the demise of the dollar, derivative markets, and the modern international system of credit has been repeatedly forecasted and feared. However, all these doomsday scenarios have so far been proved false, and, despite tremendous chaos and losses, the global financial system has held together.

    The 2010 Food Crisis is different. It is THE CRISIS. The one that makes all doomsday scenarios come true. The government bailouts and central bank interventions, which have held the financial world together during the last two years, will be powerless to prevent the 2010 Food Crisis from bringing the global financial system to its knees.

    Financial crisis will kick into high gear

    So far the crisis has been driven by the slow and steady increase in defaults on mortgages and other loans. This is about to change. What will drive the financial crisis in 2010 will be panic about food supplies and the dollar’s plunging value. Things will start moving fast.

    Dynamics Behind 2010 Food Crisis

    Early in 2009, the supply and demand in agricultural markets went badly out of balance. The world experienced a catastrophic fall in food production as a result of the financial crisis (low commodity prices and lack of credit) and adverse weather on a global scale. Meanwhile, China and other Asian exporters, in an effort to preserve their economic growth, were unleashing domestic consumption long constrained by inflation fears, and demand for raw materials, especially food staples, exploded as Chinese consumers worked their way towards American-style overconsumption, prodded on by a flood of cheap credit and easy loans from the government.

    Normally food prices should have already shot higher months ago, leading to lower food consumption and bringing the global food supply/demand situation back into balance. This never happened because the United States Department of Agriculture (USDA), instead of adjusting production estimates down to reflect decreased production, adjusted estimates upwards to match increasing demand from china. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed a rise in food prices by ensuring a catastrophe in 2010.

    Overconsumption is leading to disaster

    It is absolutely key to understand that the production of agricultural goods is a fixed, once a year cycle (or twice a year in the case of double crops). The wheat, corn, soybeans and other food staples are harvested in the fall/spring and then that is it for production. It doesn’t matter how high prices go or how desperate people get, no new supply can be brought online until the next harvest at the earliest. The supply must last until the next harvest, which is why it is critical that food is correctly priced to avoid overconsumption, otherwise food shortages occur.

    The USDA—by manufacturing the data needed to keep supply and demand in balance—has ensured that agricultural commodities are incorrectly priced, which has lead to overconsumption and has guaranteed disaster next year when supplies run out.

    An astounding lack of awareness

    The world is blissful unaware that the greatest economic/financial/political crisis ever is a few months away. While it is understandable that general public has no knowledge of what is headed their way, that same ignorance on the part of professional analysts, economists, and other highly paid financial "experts” is mind boggling, as it takes only the tiniest bit of research to realize something is going critically wrong in agricultural market.


    USDA estimates for 2009/10 make no sense

    All someone needs to do to know the world is headed is for food crisis is to stop reading USDA’s crop reports predicting a record soybean and corn harvests and listen to what else the USDA saying.

    Specifically, the USDA has declared half the counties in the Midwest to be primary disaster areas, including 274 counties in the last 30 days alone. These designations are based on the criteria of a minimum of 30 percent loss in the value of at least one crop in the county. The chart below shows counties declared primary disaster areas by the secretary of Agriculture and the president of the United States.



    For a list of Secretarial disaster declarations, see here.

    For a list of Presidential disaster declarations, see here.

    The same USDA that is predicting record harvests is also declaring disaster areas across half the Midwest because of catastrophic crop losses! To eliminate any doubt that this might be an innocent mistake, the USDA is even predicting record soybean harvests in the same states (Oklahoma, Louisiana, Arkansas, and Alabama) where it has declared virtually all counties to have experienced 30 percent production losses. It isn’t rocket scientist to realize something is horribly wrong.

    USDA motivated by fear of higher food prices

    The USDA is terrorized by the implications of higher food prices for the US economy, most likely because it knows the immediate consequence of sharply higher food will be the collapse of the US Treasury market and the dollar, as desperate governments and central banks dump their foreign reserves to appreciate their currencies and lower the cost of food imports. Fictitious USDA estimates should be seen as proof of the dire threat posed by higher food prices, as the USDA would not have turned its production estimates into a grotesque mockery of reality if it didn't believe the alternative to be apocalyptic.

    While the USDA may be the worst offender, the United States isn’t the only government trying to downplay the food situation out of fear. As one Indian reporter writes, governments are lying about the looming food crisis.

    some experts and governments, in full cognizance of the facts, want us not to create panic and paint a picture of parched crops and a looming food crisis. This, they say, would push up food prices unnaturally, lead to hoarding and ultimately result in a situation where many more millions across the world would go hungry. And whether it is the developing world or the developed, it is those at the bottom of the pyramid who are the most affected in such scenarios.

    This leads to a confusing divide between reality and government pronouncements, or even between the perspectives of government departments

    Confusing divide between reality and government estimates

    For months now, the media has been reporting two distinctly, contradicting realities. One of these realities is filled with record crops and plentiful supply, and the other is filled agricultural devastation and ruin. It has been a mad, frustrating experience to read about agricultural disasters and horrendous crop losses in virtually every state combined with predictions of a US record harvest, sometimes in the same article.

    A Reality of record crops and plentiful supply

    The accepted, “official” reality is found in USDA crop and WASDE reports. Here, the United States Department of Agriculture is projecting the largest US soy crop on record, at 3.3 billion bushels, and the second-largest corn crop at 12.9 billion bushels.

    Below are the government’s numbers for US soybean production by state. The USDA is expecting record high soybean yields across the Midwest in 2009, leading to production numbers significantly higher than the 5 year average. The large increase estimated between the August and November also indicates that the USDA doesn’t believe crops suffered much damage during the fall harvest.

    Soybean Production by State and United States


    Production (1000 bushels)


    5 year

    USDA 2009 Estimates


    Average

    Aug

    Nov

    Alabama

    6,114

    14,080

    15,910

    Arkansas

    111,779

    127,300

    128,060

    Delaware

    5,659

    6,392

    7,137

    Georgia

    7,484

    15,360

    14,850

    Illinois

    441,931

    398,200

    420,750

    Indiana

    259,870

    246,600

    249,780

    Iowa

    485,196

    505,960

    486,030

    Kansas

    104,300

    133,000

    156,950

    Kentucky

    49,594

    57,200

    64,860

    Louisiana

    29,624

    35,000

    35,890

    Maryland

    15,670

    15,840

    20,425

    Michigan

    76,587

    73,630

    77,610

    Minnesota

    278,520

    284,000

    298,200

    Mississippi

    59,995

    88,970

    77,040

    Missouri

    193,063

    214,000

    233,200

    Nebraska

    225,809

    227,850

    247,000

    New Jersey

    2,995

    3,060

    3,480

    New York

    8,405

    10,332

    10,836

    North Carolina

    43,882

    56,320

    59,840

    North Dakota

    104,078

    116,000

    115,500

    Ohio

    197,408

    215,260

    219,840

    Oklahoma

    6,793

    8,250

    10,360

    Pennsylvania

    17,720

    20,025

    20,915

    South Carolina

    11,972

    15,930

    15,120

    South Dakota

    135,970

    159,100

    172,200

    Tennessee

    40,616

    62,400

    62,730

    Texas

    5,342

    5,250

    4,485

    Virginia

    16,754

    18,880

    21,460

    Wisconsin

    61,494

    63,570

    66,830

    Other

    1,131

    1,413

    1,982





    US

    3,005,755

    3,199,172

    3,319,270


    Since the United States is the leading exporter of corn and soybeans, producing 40 percent of the global corn crop and 38 percent of all soybeans, the USDA's production numbers have an enormous impact on the global supply/demand picture.

    A Reality of Agricultural Devastation and Ruin

    In this reality, the US farmers have suffered the worst harvest season ever seen. For those who have not been following my blog or developments in the agricultural world, below are a few of extracts, in chronological order, showing the full extent of the devastation experienced by farmers during 2009’s hellish harvest season. (to keep this short, I have limited it to 2 extracts per state)

    [Iowa, June 29]

    "I'd say this year is one of the most unusual years we've had in the last 20 years," said Don Fry, executive director of the Des Moines County USDA Farm Services Agency. "Because it seems like it rains every second or third day, the ground is constantly kept wet. We've heard a lot of reports from people with wet spots turning up in fields that they and their parents ... don't ever remember being a wet spot."

    The combination of constant rain and cool temperatures this spring kept farm fields saturated, making planting difficult and hampering crop growth. Also, frequent rains have rinsed a portion of nitrogen fertilizers from fields and hindered the application of herbicides, all of which cuts into yields, Kester said.

    "This spring has just been a terrible struggle," Kester said. "Anybody that mowed hay within the last three weeks probably lost their hay crop because it got wet."

    [Nebraska, July 3]

    Lethal heat, hailstones as big as baseballs, rain seemingly without end and tornadoes, some reported to be a quarter- to a half-mile wide. After a relatively placid May, Nebraska's weather went from meek to mad in June.

    “I don't know where that switch in the sky is, but it turned on,” said Ken Dewey, an applied climatologist with the University of Nebraska-Lincoln.


    “It rained somewhere in Nebraska every day of the month,” Dutcher said. For 25 of those days, some part of the state got more than an inch of rain; for seven of those days, some part received more than 3 inches.

    The Panhandle received so much rain, damage reports could end up showing that 1,000 miles of roadway were washed out, according to the Nebraska Emergency Management Agency.

    Widespread hail was reported across the state,
    with one rancher telling the National Weather Service that he found dead animals along the road. In the far western Panhandle, it hailed so much that the roads had to be plowed, as hail reached 6 to 8 inches deep.

    According to the federal Farm Service Agency, some 750,000 acres of crops were damaged and a small percentage destroyed.

    [Maine, July 25]

    This has been a bad year for dairy farmers: Milk prices have plummeted and rain has prevented them from getting onto their fields to harvest hay. Fertilizer they applied simply washed away in the rain.


    The longer hay grows without a cutting, the poorer the nutritional quality and the more money farmers will spend this winter to supplement it.
    Cornfields are rotting without enough sun or heat to ripen the plants.

    "The season is lost," Julie Marie Bickford of the Maine Dairy Industry Association said Friday. "With milk prices so low and this feed disaster on top of it, farmers are like deer in the headlights."

    Hay and corn are critical components of livestock feed, Bickford said.
    "This stunted corn and alfalfa is forcing farmers to purchase grain and feeds. That is a very bad situation. Prices are extremely high because of the Midwest floods earlier this year. Maine's farmers couldn't come up with a worse situation in their worst dreams."

    On Thursday, a 75-year-old former dairy farmer visited the Wright Place in Clinton. He recalled delivering glass bottles of milk and told Brian Wright that
    he never remembered a rainier summer.

    "This is unreal," Wright said.

    [Wisconsin, July 28]

    For Kevin Leahy, it’s a total loss. He doubts any of his 600 acres — of what used to resemble corn — north of Shullsburg will be harvested.

    Kamps was at home during the storm and knew his crops would be in trouble when the oak leaves around his house started falling to the ground. The wind blew a drift of hail more than 2 feet high in front of his patio door, he said.

    “It was like a big sand blaster,” Kamps said. “I’ve seen damage before but not near so widespread and so major. This took everything we had.”

    [Iowa, August 4]

    When hail decimated crops near Lawler and Waucoma in June, it was the worst Iowa State University Extension field agronomist Brian Lang had ever seen.

    Until July 24.

    "I've never really seen bad hailed corn at tassel state and I've never seen it this bad, this widespread," Lang said. "There were 400,000 acres damaged with 10 percent totally destroyed. Even for the crop that didn't get hurt too much, this came at the worst possible time, tasseling."

    "I've never seen a hail storm this big," said Julie Vulk, Farm Service Agency executive director in Winneshiek County and interim director in Fayette County. "It's just hard to wrap your brain around it."

    Vulk estimated that 50 percent of farmers don't have insurance.

    [Iowa was then hit by another devastating hail storm on August 9]

    [New York, Aug 14]

    WEST WINFIELD - A panel of political representatives and aides sat for over three hours at a rally Friday in Mount Markham Middle School gym as over 200 upstate New York dairy farmers pleaded for action on a range of issues crippling their industry.

    One after another dairy farmers and others involved in the industry took a microphone to berate county, state and federal representatives from throughout the region.

    Some were brought to tears describing their inability to make a living, a few simply screamed in frustration and others demanded answers. But the dire situation facing the men and women speaking was painfully clear.

    “We are in a disaster,” declared Ken Dibbell, of Chenango County.

    “The people who feed the nation can’t feed themselves,” Gretchen Maine, a dairy farmer from Waterville, “what’s wrong this picture.”

    The time frames for both solutions seemed in contrast from farmers need for help, with many emotionally explaining they have either already abandon businesses or are on the brink.

    “I don’t think they get the message yet,” Tewksbury said, referring politicians unaware of the uncharacteristic display of emotions from prideful farmers. They don’t have until 2010. They have the next couple of months to decide if they can stay in business, he said.

    [Texas, August 14]

    Texas state climatologist John Nielsen-Gammon said Friday that at least nine of the 254 counties in Texas — the nation's most drought-stricken state — are suffering through their driest conditions since modern record-keeping began in 1895.

    Making matters worse are the relentless 100-degree days across the southern portion of Texas that has been under drought conditions since September 2007.

    The impact has been felt most by farmers and ranchers in the nation's No. 2 agriculture-producing state. Texas officials estimate statewide crop and livestock losses from the drought at $3.6 billion.


    "We've had some dry spells, but not as bad as this," said Rod Santa Ana with the Texas AgriLife Extension Service. "It hurts bad. A lot of these cotton fields didn't even come up. It's just bare ground. You'd never know cotton was even planted there."

    [Wyoming, August 21]

    That's little comfort to David Kane, a rancher near Sheridan, Wyo., who said the grasshoppers on his ranch are the worst they've been in more than 20 years. Kane already sold off part of his herd because the pests ate his cows' food.

    "They're devastating," Kane said. "They were so bad here on the ranch that we sprayed our meadows because the second-cutting of alfalfa wouldn't green up because they were eating it as fast as it was trying to grow."

    [Wyoming, September 10]

    The Big Horn Basin dry bean harvest is beginning, but cool, rainy weather and diseases have taken tolls on yield.

    Mike Moore, manager of the University of Wyoming Seed Certification Service, said his agency is just starting windrow inspections, and
    some fields are not doing well.

    “It’s sort of tough out there right now,”
    he said. The only area that seems less affected by disease is the far southern end of the Big Horn Basin, Moore said. His inspectors have found blight and mold around Powell, Byron, Emblem and Burlington.


    “It doesn’t look like location is going to allow you to escape it,” he said.

    [Texas, September 23]

    Bruce Wetzel has been a farmer in Sherman all his life, learning from his father back in the 1960's.


    He's seen all the ups and downs of producing wheat and corn in Texoma, and he says this was one of the worst years for corn.

    "All the rain we got back in April and May, we got 20 inches of rain in a two week period there, really just damaged our corn. Our corn just never quite recovered from too much water,” said Wetzel.

    Wetzel says he lost about 50% of his wheat and corn crops this harvest season, a trend that farmers are experiencing across Texoma.

    [New Jersey, September 26]

    "The rains have just killed me this year," said Tucker Gant, 51, a vegetable and fruit farmer in Elk, who estimates his total losses this year at nearly $220,000.

    "Nobody has ever seen rain as drastic as this year, even talking to old-time farmers," said Grasso, a third-generation farmer who estimates losses so far at roughly $50,000.

    "It's never been that bad as far as I can remember," said Gant, pointing to water pooling in a field as he drove his pickup truck along a bumpy dirt trail toward 35 acres of barley overrun by tall weeds. "I have never seen water lay there more than two days. It should have been harvested, but you can't harvest weeds taller than barley."

    [North Dakota, October 5]

    North Dakota`s wet spring and summer is being followed by a wet and snowy fall.

    Two snowstorms have already turned the ground in much of the state white, and while the early snows will melt before winter sets in, many farmers may not get row crops harvested before the seasons change again, unless Mother Nature provides them with some dry weather.

    In North Dakota, it`s common to see autumn snow coat the state`s sunflower and corn crops, but acres and acres of soybeans covered in white is an unusual sight. October snowstorms have stopped many of the state`s combines right in their tracks, delaying the harvest of many late season crops.

    Precipitation totals in some areas of North Dakota have already surpassed yearly averages, but farmers are more concerned about wet weather damaging the condition of the soybean crop than corn and sunflowers.

    [Louisiana, October 8]

    Three weeks of heavy rains are threatening northeastern Louisiana's soybean, sweet potato and cotton crops, some of which have already shown significant deterioration in the fields.

    "It's killing us," said Ouachita Parish producer Gary Mathes. "We cut some beans a week ago that we had to sell at a salvage price of $3 a bushel."

    "We fought a short corn crop, but we had one heck of a bean crop and the rain is taking it away from us," Mathes said.

    Venoy Kinnaird said his farm has been drenched by about 20 inches of rain since Sept. 12.

    "I've got some beans that I won't cut; they're not salvageable,"
    Kinnaird said. "And I've got some sweet potatoes that are halfway out of the ground. Cotton has taken a terrible hit, too, even though we don't have that much planted around here this year.

    "We're absolutely waterlogged. What's really bad is we're coming off of a disaster last fall."

    [Nebraska, Minnesota, October 12]

    Weekend snow may have dealt a heavy blow to prospects for soybean harvest
    in Nebraska and other nearby states.

    Weather adversity could shave as much as 200 million to 300 million bushels from expectations for a 3.25 billion bushel crop nationally, a Nebraska soybean official said Monday.


    "Our part of the country got snow," said Victor Bohuslavsky of the Nebraska Soybean Board Monday. "And I talked to people in Minnesota this morning and they hadn't hardly started harvest and they were blasted with snow."

    [Louisiana, October 17]

    Northeastern Louisiana farmers finally saw the sun Friday afternoon, but it might be too late to save the bulk of the soybean, cotton and sweet potato crops.

    "It's pitiful," said Caldwell Parish producer Drew Keahey. "I think it's going to be worse than last year."

    But some parishes, like Morehouse, have received more than 30 inches of rain since Sept. 12, literally drowning crops that were mature and ready for harvest when the rain began.

    Soybeans may have suffered the most, producers said.

    "There will be a lot of beans that never come out of the field," Keahey said.

    [Northern Kansas, October 16]

    Harvest so far has been about as awful as the new Bob Dylan Christmas album.

    Typically USDA's November yield forecasts increase, but
    this is not a typical year, as freezing weather has dinged yields and caused major crop quality problems.

    A colleague of mine sent me some snapshots of
    an Iowa farm that had seven inches of snow last Saturday. Northern Kansas had over 10 inches of snow.


    .

    [Mississippi, October 21]

    Corn will suffer from quality issues. Soybeans will have significant quality and yield losses if harvested. Rice will suffer quality and yield losses with much of the crop is on the ground. Cotton crop will suffer yield and quality losses and cottonseed will have essentially no value.

    Bolstering this is a fact-sheet released the week of Oct. 12 by Delta Council. The release says, “Large areas of the Mississippi Delta have received 15 to 20 inches of rain over the last 30 days with many areas receiving 25 to 40 inches of rainfall over the past 60 days since Aug. 15. In places this is anywhere from 400 to over 600 percent of normal.”

    The Delta Council release also quotes Steve Martin, interim head of the Delta Research and Extension Center (DREC) in Stoneville, Miss.: “Crop conditions are rapidly deteriorating. The USDA weather service at Stoneville reports that October has seen the second highest level of rainfall ever recorded (record was set in 1941).

    [Illinois, November 2]

    The autumn monsoons are hard to figure,
    said Benjamin Sittrell, a meteorologist for the National Weather Service office in suburban St. Louis.

    "Typically during the late-year period, it's our driest portion of the year," Sittrell said. "To see such astronomically high amounts of precipitation, where we got several inches above the previous record levels, is very abnormal.

    Sittrell said
    thousands of acres of farmland are under water, particularly in the flat areas of southern and western Illinois, where the Illinois, Ohio and Kaskaskia rivers are among several that are flooding.

    [Arkansas, November 4]

    On Monday and Tuesday, Gus Wilson, Chicot County Extension staff chairman for the University of Arkansas Division of Agriculture, made the rounds, visiting farmers and getting a first-hand look at what record rain has left of crops in the state’s southeasternmost county.

    “It’s bleak,” Wilson said. “It’s going to really hurt these poor Delta counties because here, agriculture is all that we’ve got.”

    Earlier this season, the harvest outlook was promising.

    “In September, I was pretty happy with what I was seeing in the fields,” he said. “Now we are going to be lucky to make half a crop compared to the last couple of years, all because of the weather.”

    “Seven or eight weeks ago, we were looking at 1,100- to 1,200-pound cotton” lint yield per acre, Wilson said. “Now we’re 500 to 600 pounds.”

    The soybeans are just as bad. Back in September, “we had a good soybean crop. The yield was there,” he said. “We have lost at least 60 percent to 80 percent due to the weather.”

    “Our rice is going to be half,” Wilson said.

    “This is the worst I’ve ever seen and I’ve been a county agent for eight years and around farming all my life,” Wilson said.

    [Alabama, Georgia, north Florida, November 6]

    Alabama Commissioner of Agriculture Ron Sparks is calling it a “potential crisis” — the rainy weather conditions throughout most of September and October that have frustrated growers who were eyeing pretty good cotton, peanut, soybean and corn crops.

    The same holds true for producers in Georgia and north Florida, where harvest has been delayed by almost continuous rainfall, during what is usually the driest months of the year.

    “Prior to September, many producers were expecting to harvest a bumper crop and were very optimistic for the upcoming harvest season,” says Sparks. “Uncommon and unfavorable precipitation during September and October have degraded various crops and caused poor harvesting conditions, which caused the harvest to be behind schedule by around four to six weeks.”

    The major crops affected by the recent rainfall are cotton, soybeans, corn and peanuts, says the Commissioner. “Reports indicate that our state is in dire need of dry weather within the next two weeks, which may eliminate a potential state disaster [Area was then hit by 5+ inches of rains from Topical Storm Ida],” he said in early November. “Producers are already suffering from heavy September and October rainfall and dry conditions will not eliminate damage that has already taken place to crops across the state. Many producers are experiencing a sharp decrease in crop yield, lower grading, and crop damage from recent rainfall.”

    “The bottom line is that Alabama producers are uncertain as to what the commodity markets will bring forth and where agriculture in our state is going,” says Sparks. “The recent weather conditions over the past two months will definitely have a negative impact on Alabama’s crop harvest.”


    William Birdsong, agronomist at the Wiregrass Research and Extension Center in southwest Alabama, reported that wet and rainy conditions continued to delay harvest for row crops. Cotton yields and lint quality continued to suffer as a result of the wet conditions, he said. Less than 5 percent had been harvested in his area, and this could go down as the worst crop in years if the rain does not subside.

    [Alabama, November 10]

    What had started as a good season for cotton could be a complete loss for some farmers if heavy rains hit fields before harvest, said Richard Petcher, agent with the Alabama Cooperative Extension Service.

    "It's been a 30 percent loss so far in southwest Alabama, and more rain could make it 40 to 50 percent," Petcher said Monday. "Some fields are already a 100 percent loss."

    Financial damage from Ida could be in the millions of dollars for Alabama farmers, he said. Rains have delayed harvests by about three weeks affecting not only cotton but also leaving some peanut crops vulnerable to early frosts.

    "The majority of the cotton crop is still in the fields,"
    he said. "Peanuts are about 60 percent harvested. There's been concern about rain, but now it's almost panic."


    Soybeans have also been hurt by rain, with crops rotting and sprouting in the fields, Petcher said.

    [Illinois, November 12]

    "I've been doing this for 30 years and I've never seen a year like this,"
    said Ron Waldschmidt, a vice president with farm equipment dealer A.C. McCartney in Wataga, Illinois.

    "It's not unusual in any given year to have wet conditions, or maybe a variety that tends to mold, or maybe the moisture is a little bit high. But this year, you've got it all," he said.

    [Arkansas, November 12]

    On Nov. 4, Gus Wilson took a sample of soybeans with 100 percent damage.

    “It was the first time I’ve seen that,” says the Chicot County, Ark., Extension staff chair. “The situation here is bad, bleak. We’ll be lucky to make half the crop we’ve made in the last three to four years. That’s strictly due to the weather.”


    Chicot County in extreme southeast Arkansas has caught huge rains all fall. Now, watching crops deteriorate, Wilson says he’s not seen “a group of growers who’ve been more discouraged. Those who were planning to plant wheat may be out of luck. If there’s wheat planted and emerged in Chicot County, I don’t know where it’s at.”

    Faced with a seemingly unceasing deluge in 2009, veteran farmers are struggling to come up with a similar year in the past.

    “My father is 82 years old and he’s farmed 55 to 60 years,” says Wilson. “He says this is the worst harvest season he’s ever seen. Out of his career, he said only one year comes close — he can’t remember if it was in the late 1950s or early 1960s.

    [Virginia, November 17]

    Last week's torrential rainfalls have caused damage and delays to some Virginia farm crops, but the extent of losses is unknown, some agriculture experts said yesterday.

    Several crops that were recently planted or still in the fields were hurt by the widespread, three-day deluge, including winter wheat, barley and soybeans, said Molly Payne Pugh, executive director of the Virginia Grain Producers Association.


    "There is definitely going to be damage," Pugh said. "I don't have a good feel for how much yet. Right now, we are assessing."

    [Mississippi, November 23]

    On the dashboard of his truck,
    Allen C. Evans III, a farmer near Clarksdale, has a sheaf of receipts from the grain elevator, showing the damage levels of each load of soybeans: 39.9 percent, 67.9 percent, 51.8 percent. A born fretter, he is afraid to call, he said, to find out the final reckoning of the disastrous season.

    "You're just kind of walking around like a zombie," Mr. Evans said, "saying, never could I have guessed that the best crop I've ever raised in my entire life - the one I never worried about - of all the crops to have taken away from us, how can this be the one?"

    In the Delta, those elevator receipts have become talismans of the times. Michael Patterson, who helps pay for his farming with the proceeds from his grain hauling company, displayed one showing a farmer who brought in 1,110 bushels of soybeans, but got paid for 11. The rest were damaged.

    That farmer was distraught, Mr. Patterson said.

    “You don’t want to be the generation,” he said, “that loses the family farm.”

    These two realities can’t coexist!

    Farmers can’t be going bankrupt across the US thanks to the worst harvest season ever seen while at the same time producing the USDA's Biggest Crop Ever! Someone is lying, and evidence supports the farmer’s story.

    Adverse weather conditions across the globe

    American farmers weren’t alone in their suffering this year. Abnormal weather has ruined crops around the world in 2009:

    1) The worst drought in half a century has turned Argentina's once-fertile soil to dust and pushed the country into a state of emergency. The country's wheat yield for 2009 was 8.7 million metric tons, down from 16.3 million in 2008.

    2) Australia is suffering the longest running and most severe drought on the planet. November temperature records were broken all over eastern Australia, and lower wheat yields than expected were reported, leading to production estimate cuts. Profarmer Australia has cut their Australian wheat production estimate by 1 MMT to 20.9 MMT, and Commonwealth Bank of Australia reduced their estimate by 0.7 MMT to 21.6 MMT (USDA's current estimate is, of course, is an insane 23.5 MMT).


    3) Northern China was hit by worst drought in 50 years. Chinese wheat production was predicted to be down 10% "In A Best Case Scenario". The sustained drought lead to water and food shortages in June for more than 1.37 million people in northwest China's Ningxia Hui Region. Chinese corn production is expected to shrink at least 10%, with shortages developing by spring-summer of 2010.

    4) The Middle East and Central Asia are suffering from the worst droughts in recent history, and food grain production has dropped to some of the lowest levels in decades. Total wheat production in the wider drought-affected region is currently estimated to have declined by at least 22 percent in 2009.

    5) Wind, rain, and hail ruined India’s spring wheat crop.
    Following failed wheat harvest, India then experienced the driest monsoon in 37 years. In terms of affected area, India’s drought was the worst since 1918. Farmers who could no longer irrigate crops now feared nothing would be left to drink. Millions of poor villagers across southern India are facing an imminent food shortage following months of intense drought and recent devastating floods.

    6) Etc…

    Financial crisis worsens drop in crop production

    On top of the worldwide abnormal weather, the low commodity prices and lack of credit caused by the financial crisis harmed production. The lack of credit curbed farmers’ ability to buy seeds and fertilizers limiting production, and low prices at the end of 2008 discouraged the planting of new crops in 2009. In Kansas for example, farmers seeded nine million acres, the smallest planting for half a century.

    Between the effects of the financial crisis and the abnormal weather experienced across the globe, the idea that 2009/10 saw record harvests of anything is pure fantasy.

    US Soybeans Supply and Demand

    Analyzing U.S. soybeans supply and demand reveals how bad the situation is. The US is the biggest producer and exporter of soybeans, and, when America runns out of soybeans, it will create panic.

    Below are the latest figures from the USDA. Highlighted in red are the problem numbers which need serious adjustment to reflect reality.

    U.S. Soybeans Supply and Demand

    (Million metric tons)

    USDA



    Numbers

    Beginning stocks

    3.76

    Plus:



    Production


    90.33

    Imports


    0.22

    Minus:



    Crushings


    46.13

    Exports


    36.47

    Seed


    2.56

    Residual


    2.20




    Ending stocks


    6.95


    No beginning stocks of US Soybean

    By the end of August, grain movement in the US came to a virtual standstill, with farmers sold out of soybeans. Those few soybean end-users (ie: feedmakers and poultry producers) which caught short were forced to pay prices as high as they paid at the very height of the bull market in 2008.

    The struggle to secure quick-delivery soybeans in the US cash markets sent soybean futures into intense backwardation (backwardation is when cash prices are higher than future prices). Desperate Midwest crushers were bidding up to $2.72 a bushel over CBOT September futures contracts to acquire scarce soybean supplies. Some processors in the heart of the Midwest soy belt grew so desperate for soybeans to crush that they paid to transport some of the early harvest from the Mississippi River Delta northward to Illinois.

    The chart below shows the backwardation of soybean futures on August 28. Notice the huge price gap between promises to September and November contracts. Notice the even larger gap between cash prices and September futures.



    Finally, at the end of 2008/09, these was a huge about of amount of soybean sales outstanding, 2,216,016 MT, which were rolled over into the 2009/10 crop year. This means the exporters couldn't find enough soybeans to make good on the 36,069,606 MT of soybeans they sold last year. Basically, the US ran out of soybeans in August 2009, and the beginning stock of US soybeans should be considered zero for 2009/10.


    Export Sales


    Outstanding

    (metric tons)

    At Year End

    2001/02

    446,721

    2002/03

    459,879

    2003/04

    291,586

    2004/05

    624,737

    2005/06

    813,820

    2006/07

    946,268

    2007/08

    888,059

    2008/09

    2,216,016


    Real number for US Soybean Production

    The graphic below shows 2008 Soybean Production by country, which should be an accurate representation of where they were grown in 2009.



    The next graph also shows 2008 Soybean Production with soybean producing counties declared disaster areas in 2009 highlighted in red, which should provide be an accurate
    representation of how badly production was effected this year. Keep in mind that

    1) Many counties that weren’t declared disaster areas based on the USDA’s requirement of 30% damage, still suffered 10 to 20 percent losses.

    2) Many counties which were declared disaster areas (in red) suffered crop losses far worst than 30 percent.


    Based on USDA’s disaster declarations and reports of horrendous crop losses, a realistic estimate of US soybean production would be below 2007/08 soybean production at around 70 MMT (Million Metric Tons).



    Real number for US Soybean exports

    The chart below showing outstanding soybean export sales shows what is wrong with the USDA’s export estimates for 2009/10.




    Outstanding soybean export sales represent the amount of soybeans that have been sold but not yet exported. At any point in time, it is possible to buy "old crop" soybeans (already harvested) or "new crop" soybeans (which will be harvested next year). Outstanding soybean export sales rise until harvest and then go down as soybeans start being exported.


    Predicting total 2009/10 exports using outstanding export sales data

    On average, total soybean exports for the last eight years has been 3.6 times the peak in outstanding export sales.




    Peak in

    Acc Exports /


    Accumulated

    Outstanding

    Peak outstanding

    Crop year

    Exports

    Export Sales

    sales

    2001/02

    29,926,021

    6,445,789

    4.6

    2002/03

    29,102,246

    8,499,004

    3.4

    2003/04

    24,176,072

    8,261,700

    2.9

    2004/05

    29,966,013

    8,206,497

    3.7

    2005/06

    25,510,276

    5,808,523

    4.4

    2006/07

    30,288,289

    8,592,069

    3.5

    2007/08

    30,449,470

    9,797,062

    3.1

    2008/09

    33,853,590

    10,002,895

    3.4

    2008/09


    19,426,479








    Average

    3.6


    If the pattern from the last eight years holds true, 2009/10's peak outstanding export sales of 19 MMT implies total exports of roughly 70 MMT for 2009/10.

    2009 peak outstanding export sales

    19,426,479




    3.6

    Implied exports for 2009/10

    69,935,324





    US Soybean Supply and Demand catastrophically out of balance

    The table below shows the USDA Numbers compared to more realistic estimates.

    U.S. Soybeans Supply and Demand


    (Million metric tons)

    USDA

    Realistic



    Numbers

    Numbers

    Beginning stocks

    3.76

    0

    Plus:




    Production


    90.33

    70

    Imports


    0.22

    0.22

    Minus:




    Crushings


    46.13

    46.13

    Exports


    36.47

    70

    Seed


    2.56

    2.56

    Residual


    2.20

    2.20





    Ending stocks


    6.95

    (50.67)


    Of course a negative ending stock isn’t possible. This just means that the US will run out of soybeans before next September. The process is well under way.

    The chart below shows US monthly soybean exports for the last year, and, again, the problem is obvious.


    The US exported over 7 MMT of soybeans in November! Furthermore, since the US exported 3.7 MMT in the first two weeks of December, the rate of exports isn’t slowing down. At this rate the US soybean supplies will start running critically low around March/April.

    Economic Pandemonium

    The true financial crisis begins when the world realizes that there are couple months food supply missing from 2010. The last two years were a gentle, mild preview of the real thing.

    Total Panic

    The sudden, shocking discovery that food supplies are running out will produce total panic. The reaction will inventory building — hoarding –at all levels. Major food producing nation will export bans (India has already banned food exports). Producers, Middlemen, And Households will rush the acquire supplies. All this hoarding will wrosen the crisis by throwing supply and demand further out of balance: export bans cut supply available on international market and inventory building increases demand. Food prices will more than double.

    Central bank exodus from the dollar

    With one out of eight Americans on food stamps, foreign central banks are subsidizing US food consumption by funding the US government with their treasury purchases. Once the food crisis begins next year, they will be faced with the choice:

    1) Continue subsidizing US food consumptions as triple digit food inflation ravages their economy and their people starve.
    2) Dump their treasury holdings onto the market to rapidly appreciate their currencies, lowering the cost of food imports and preventing widespread domestic starvation.

    Not much of choice. China, for example, will drop the dollar peg without a second thought to prevent triple digit food inflation from damaging its economy and causing widespread of social unrest. Chinese exporters will be badly hurt, but that will be a small cost if it can keep food prices down.

    In India, the government is ALREADY under pressure to selloff the country’s $270 billion in forex reserves.

    Food prices are rising faster than any other commodity and food prices hit the poor the most.

    While overall inflation is just 3 per cent,
    food prices are rising at unforgivable 17.7 per cent. Prices of rice and wheat have gone up in double digits in one year (10 per cent).


    Perhaps the most surprising is that
    while food prices are rising, the government seems to be doing nothing, although it is fortunate to have many policy options at hand.

    One option is to release food grain stocks [which unfortunately, DON’T EXIST], say analysts. They argue why should wheat and rice prices rise when India has near record stocks of food grains.

    The second option that the government has to reduce the inflation in potatoes, onions and pulses is to use some of India's enormous reserves of foreign exchange to import these food items so crucial for the poor.

    India today has $270 billion in forex reserves. A small fraction of this could be used to import food and help the poorest.

    “But the dollar can’t collapse because there is no alternative to the US dollar for a reserve currency…”

    I love the "there is no alternative to the US dollar for a reserve currency" argument. Every time I hear it, I imagine someone standing on the deck of the Titanic on the night of April 14, 1912, and declaring, "This boat can't possibly sink because there aren't enough lifeboats!"

    The lack of viable alternatives doesn't mean the dollar can't sink, it simply means that when it does go down, it will result in a tragedy of epic proportions which will be remembered for centuries to come.

    Political Fallout of 2010 Food Panic

    While a food crisis was unavoidable to some extent because of the abnormal weather and financial crisis, the total panic which will soon grip world agricultural markets is a creation of the USDA and its fictitious production estimates. If not for the USDA's interference, food prices would have risen in the first half of 2009 in anticipation of the 2009/10 shortage. The United States Department of Agriculture, has caused incalculable damage to the world economy by encouraging overconsumption of rapidly diminishing food supplies.

    Once the 2010 Food Crisis starts, confidence in the US government will be shattered as a result of the USDA’s faulty estimates. The starvation and misery caused by higher food prices will also create a lot of anger…

    Insolvent Midwestern banks

    With failed crops, farmers across the Midwest are bankrupt, and so are their banks. This is especially important considering that the FDIC is out of money. Every bank failure is now being financed with the immediate sale of treasuries.

    Whether the US choose to bail out Midwest banks with billions of emergency aid for bankrupt farmers or finances the FDIC takeover of their banks, the outcome will be the same. The enormous quantity of debt which the US will need to sell to finance emergency aid and resolve bank failures in the Midwest will pressure an already collapsing market for US treasuries.

    Panic selling of distressed debt

    When the dollar starts rapidly losing value, the flaw in the whole “hold to maturity strategy” will be revealed. Financial institutions around the world will realize that the dollar will lose all value years before their toxic assets ever have the chance to mature. They will then begin dumping trillions of toxic US debt at firesale prices, simply to escape the dollar's devaluation.

    Self-reinforcing Breakdown of derivative markets and US financial system

    Short term treasuries function as the collateral backing derivative markets and US financial system. When the dollar and treasuries start falling in value with exit of foreign central banks, investors will lose confidence in that collateral and start withdrawing from derivative markets. This will result in a flood of new treasuries coming onto the market as collateral is liquidated, causing further loss of confidence, and so on.

    To image how this damaging dynamic would work, take a look at the Portfolio Allocation of PIMCO Commodity Real Ret Strat C Fund (PCRCX). PCRCX is a commodity fund which uses derivatives to gain its exposure to commodities.
    PIMCO Commodity Real Ret Strat C Fund (PCRCX) Portfolio Allocation
    Track portfolio allocation change of PIMCO Commodity Real Ret Strat C fund (PCRCX)

    Date

    Cash

    Stock

    Bond

    Other

    06/2009

    11.56%

    0%

    75.75%

    12.7%

    03/2009

    27.7%

    0%

    62.97%

    9.34%

    12/2008

    34.59%

    0%

    57.76%

    7.64%


    Most Recent Top 10 Holdings in PIMCO Commodity Real Ret Strat C Fund (PCRCX)

    30-Jun-09

    Pimco Cayman Cmdty Fd Ltd Instl

    13.41%

    US Treasury Note 3%

    10.07%

    US Treasury Note 2%

    10.04%

    US Treasury Note 1.875%

    9.84%

    FNMA

    9.70%

    US Treasury Note 2.5%

    8.68%

    US Treasury Note 2.625%

    8.29%

    US TREASURY NOTE

    7.82%

    US Treasury Note 2%

    6.79%

    PIMCO FDS PRIVATE ACCOUNT PORTFOLIO SER

    5.63%


    It is easy to see why, with the treasury market breaking down, investors will question the wisdom of investing in a fund that has over 76% of its assets in US bonds. Investors will start withdrawing their money from the fund, and PCRCX will have to sell treasuries into a market already filled with only sellers. This “run on the bank” dynamic will gain steam until it leads to the collapse of derivative markets and the US financial system.

    The use of a single asset class as collateral for an entire financial system is idiotic. There is no such thing as liquidity of investment for the community as a whole.

    derivative casino will be bankrupt

    derivatives are essentially bets (about future value of commodities, currencies, bonds, etc). Like gambling at casinos, to make money in derivative markets requires meeting two conditions:

    1) Being on the winning side of the bet.
    2) Being able to collect on the bet.

    The point here is that it doesn't matter how many chips are won if the casino goes bankrupt before they can be traded in.

    There is about $14 Trillion collateral behind listed/OTC derivative markets, and this collateral is invested in short term dollar-denominated debt. As the dollar and credit markets collapse, this collateral will lose all value (the equivalent of a casino going bankrupt). Investors trying to collect on profitable bets (ie: call options on gold) will find their derivative contracts backed by insolvent counterparties and worthless debt.

    Warped perception of risk

    Right now, the entire commodity derivative market is built on the idea of no default risk. This is to say, investor are now taking default risks very seriously in the credit markets (after experiencing horrible loses due to financial crisis), but these concerns over counterparty solvency are completely absent in commodity derivatives. When the the dollar, treasuries and derative markets start collapsing, concerned investors will start wondering who is on the other side of their commodity investments, and they will be horrified at what they find out.

    Deflationary panic in commodity markets

    The biggest sellers of commodity IOUs are insolvent institutions desperate for funding. They are taking advantage of the warped perception of risk to raise capital cheaply. For example, investors in commodity derivatives will be thrilled to learn that completely-insolvent, taxpayer-bailed-out AIG Financial Product is a key player in commodity derivatives.

    AIG Financial Products and it subsidiary Banque AIG have been key players in the development of commodities as an asset class and has been active in this space since 1991. AIG Financial Products provides clients with a full suite of commodity offerings, including OTC derivatives on both individual commodities and commodity indices, structured products, and bespoke commodity investment solutions. As the creator of a leading benchmark for commodities investing, the Dow Jones - AIG Commodity IndexSM, AIG Financial Products helped spearhead the rapid growth of commodity-based investment in recent years and as of the end of the third quarter of 2006, there was an estimated $30 billion tracking the DJ-AIGCI.

    Insolvent institutions like AIGFP have been very active and creative in selling all kinds of commodity investments to anyone foolish enough to buy them. Take for example commodity linked structured notes being sold to retail investors, banks, and commodity funds.

    Retail and institutional investors alike are piling into commodity-linked structured notes according to the firm MTN-I, even as overall sales of structured notes declined.

    Sales of commodity-linked notes rose to $15.8 billion over the first half of 2008, up from $7.8 billion over the same period a year ago, according to MTN-I…

    About 77% of all commodity-linked structured notes sold so far this year were issued by investment banks. MTN-I's research showed Deutsche Bank leading sales in the first half of 2008, with 59% of all sales. Barclays was second with 13% and Credit Suisse third with 5%. Merrill Lynch, across various entities, represented a little over 5% of sales.

    Typically structured notes are unsecured, which puts buyers at risk if issuers go into bankruptcy. That wasn't a concern of most institutional investors until the events of this fall. The bankruptcy of Lehman Brothers, however, quickly left buyers on the hook and possibly unable to recoup their capital.

    Other troubled financial institutions that have issued commodity structured notes include insurance giant American International Group (AIG), UBS AG (UBS), Morgan Stanley (MS) and French bank Dexia (HIB4.BE).

    AIG Financial Products Corp is also actively involved in commodity ETFs. From the prospectus of DJ-AIGCI:

    (Who in their right mind would buy an AIG-backed commodity ETF?)

    ETFS Agriculture DJ-AIGCI

    Investment objective

    ETFS Agriculture DJ-AIGCISM (AIGA) is designed to track the DJ-AIG Agriculture Sub-IndexSM and pays a capitalised interest return which cumulates daily. The Sub-Index is an "excess return" index and the interest component combines to give a total return investment.

    AIGA is backed by matching Commodity Contracts purchased from AIG Financial Products Corp. (AIG-FP) whose payment obligations are guaranteed by American International Group, Inc (AIG) and backed 100% by collateral held by the collateral manager BNY Mellon in a separate account and adjusted daily.

    As investors realize who is on the other side of their investments, it will lead to a deflationary panic in commodity markets, with all but the most trusted commodity investments being abandoned. Insolvent institutions like AIG will lose a critical source of funding and, more importantly, investment demand, instead of being absorbed by the IOUs of insolvent institutions, will flow directly into physical commodities, driving up prices.

    The Federal Reserve will print trillions

    If the treasury market collapses, the government will lose the ability to sell debt to fund itself, which isn’t an option. To preventing such a collapse, the Federal Reserve will have to make purchases in the trillions despite already having run out of room on its balance sheet, which means it will have to print money. A massive expansion of the Fed’s balance sheet at a time of when inflation is spiraling out of control will destroy all confidence in the dollar, worsening the currency crisis.

    What life looks like during hyperinflation

    Below is an extract from Paper Money by "Adam Smith," covering Germany's hyperinflation in 1923, which offers a good account of what life looks like during hyperinflation.

    The German Hyperinflation, 1923

    Before World War I Germany was a prosperous country, with a gold-backed currency, expanding industry, and world leadership in optics, chemicals, and machinery. The German Mark, the British shilling, the French franc, and the Italian lira all had about equal value, and all were exchanged four or five to the dollar. That was in 1914. In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper.
    Most Germans were taken by surprise by the financial tornado.

    "My father was a lawyer," says Walter Levy, an internationally known German-born oil consultant in New York, "and
    he had taken out an insurance policy in 1903, and every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread."


    More than inflation, the Germans feared unemployment. In 1919 Communists had tried to take over, and severe unemployment might give the Communists another chance. The great German industrial combines -- Krupp, Thyssen, Farben, Stinnes -- condoned the inflation and survived it well. A cheaper Mark, they reasoned, would make German goods cheap and easy to export, and they needed the export earnings to buy raw materials abroad. Inflation kept everyone working.

    So the printing presses ran, and once they began to run, they were hard to stop.
    The price increases began to be dizzying. Menus in cafes could not be revised quickly enough. A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. "If you want to save money," he was told, "and you want two cups of coffee, you should order them both at the same time."

    The presses of the Reichsbank could not keep up though they ran through the night.
    Individual cities and states began to issue their own money.

    The flight from currency that had begun with the buying of diamonds, gold, country houses, and antiques now extended to minor and almost useless items -- bric-a-brac, soap, hairpins. The law-abiding country crumbled into petty thievery. Copper pipes and brass armatures weren't safe. Gasoline was siphoned from cars. People bought things they didn't need and used them to barter -- a pair of shoes for a shirt, some crockery for coffee. Berlin had a "witches' Sabbath" atmosphere. Prostitutes of both sexes roamed the streets. Cocaine was the fashionable drug. In the cabarets the newly rich and their foreign friends could dance and spend money. Other reports noted that not all the young people had a bad time. Their parents had taught them to work and save, and that was clearly wrong, so they could spend money, enjoy themselves, and flout the old.

    The publisher Leopold Ullstein wrote:
    "People just didn't understand what was happening. All the economic theory they had been taught didn't provide for the phenomenon. There was a feeling of utter dependence on anonymous powers -- almost as a primitive people believed in magic -- that somebody must be in the know, and that this small group of 'somebodies' must be a conspiracy."

    When the 1,000-billion Mark note came out, few bothered to collect the change when they spent it.
    By November 1923, with one dollar equal to one trillion Marks, the breakdown was complete. The currency had lost meaning.


    But although the country functioned again,
    the savings were never restored, nor were the values of hard work and decency that had accompanied the savings. There was a different temper in the country, a temper that Hitler would later exploit with diabolical talent. Thomas Mann wrote: "The market woman who without batting an eyelash demanded 100 million for an egg lost the capacity for surprise. And nothing that has happened since has been insane or cruel enough to surprise her."

    With the currency went many of the lifetime plans of average citizens. It was the custom for the bride to bring some money to a marriage; many marriages were called off. Widows dependent on insurance found themselves destitute. People who had worked a lifetime found that their pensions would not buy one cup of coffee.

    Pearl Buck, the American writer who became famous for her novels of China, was in Germany in 1923. She wrote later: "The cities were still there, the houses not yet bombed and in ruins, but
    the victims were millions of people. They had lost their fortunes, their savings; they were dazed and inflation-shocked and did not understand how it had happened to them and who the foe was who had defeated them. Yet they had lost their self-assurance, their feeling that they themselves could be the masters of their own lives if only they worked hard enough; and lost, too, were the old values of morals, of ethics, of decency."

    The death of the “US consumer”

    The famous “US consumer” has been the driving force of the global economy for decades. This ends in 2010, as the dollar’s collapse will wipe out America’s purchasing power.

    US Economic Disintegration

    70% of the US economy is consumer spending, with at least 20% of it directly tied to commercial retail real estate. Less than 10% of our economy is related to the production of basic goods and services. This style of economy cannot handle a pull back in consumer spending.

    America is facing a terrifying future. As the dollar loses most of its value, America’s savings will be wiped out. The US service economy will disintegrate as consumer spending in real terms (ie: gold or other stable currencies) drops like a rock, bringing unemployment to levels exceeding the great depression. Public health services/programs will be cut back, as individuals will have no savings/credit/income to pay for medical care.

    What has already happened in the last year offers a good preview of what to expect in the next:

    'tent cities' are growing all around the country
    California is experiencing a meltdown
    Police cars are being repossessed due to falling tax revenues
    Major retailers, hotel chains, and theme parks are going bankrupt
    Loan quality at American banks is the worst in at least a quarter century and is deteriorating at the fastest pace ever
    The victims of this financial disaster don’t have the money to bury their loved ones.
    US states have started printing their own currencies
    Recession has put a major strain on social security trust fund
    US Contract law torn apart

    Given the food shortage in 2010, there is also the potential for famine in the US

    The US will not fall alone

    With the free falling dollar spreading doubt about all paper currencies, and countries with weak financial health will join the US in hyperinflation. Two countries which will follow the US into economic oblivion are Britain and Japan

    Britain is probably the only country worse off than the US, and they know it. Privately, something close to desperation is starting to develop inside government, with cabinet ministers being quoted as saying things such as. "The banks are f***ed, we're f***ed, the country's f***ed." The last time Britain built up this much debt was when it was fighting half of Europe.

    Japan meanwhile is facing a demographic collapse and its debt to GDP is approaching 200%. The dollar’s collapse is going to wipe out the value of Japan's foreign reserves and destroy the country’s largest export market (the US), heavily damaging the economy. The yen, like the pound and dollar, will not survive.


    Financially Surviving 2010

    Here is some investment advice for surviving the 2010 Food Crisis.

    Avoid all commodity futures!

    DO NOT BUY agricultural futures! While it might be tempting to buy futures contract for soybeans and other agricultural commodities, this is a mistake. Look at the backwardation which happened at the end of August this year: shortage sent cash price of soybeans over $13 while futures contracts hovered around $11. Futures contracts missed out on most of the price spike by nearly 25%.

    The 2010 Food Crisis will send futures into permanent backwardation. In other words, shortages will send cash prices into steep backwardation, and then, when the dollar and treasuries collapse, defaults fears will cause that backwardation to grow. Fears that CME might collapse could easily lead futures to trade at a fraction of the commodities they track.

    Avoid all other derivatives

    It is impossible to hedge against the dollar’s fall with derivatives! Since global derivatives markets operate on the assumption of the continued stable value of the dollar and short term US debt, Using derivatives to bet against the dollar is NOT a good idea. The panic in 2010 will see the majority of derivatives end up worthless.

    Avoid all US debt

    The biggest buyers of US debt, foreign central banks, are about to become the biggest sellers. Get out while you still can!

    Avoid all investments dependent on US consumer

    The dollar’s collapse will rob US consumers of all purchasing power, and any investment depend on US consumption will lose most of its value.

    Avoid investments in oil (at least for the next year)

    While I am bullish on oil for the long term, there are several reasons to be underweight oil in the near term:

    1) There is a supply glut (volumes of oil products stored at sea have risen to more than 90 million barrels.)
    2) The dollar’s collapse wipe out a huge amount of demand for oil. While demand from emerging economies like India and China will replace this lost demand, it will take in one to two years.
    3) Higher food prices will hurt demand for everything else, including oil.
    4) There is a very high the entire Strategic Petroleum Reserve will hit the market next year after the treasury market collapses and the US government is desperate for cash.

    Investments in oil won’t be complete disaster as the dollar’s collapse will generate a lot of demand for “real” assets, but I expect oil to be the worst performing commodity in 2010.

    Avoid Margin Accounts

    If your broker fails, you are virtually guaranteed to be left with nothing.

    Invest in Physical gold

    With the Gold Market already Reaching The Breaking Point, the 2010 Food Crisis is guaranteed to trigger a gold banking crisis. Those who own physical gold (and not some paper derivative) will do well.

    Invest in agriculture sector

    Anything (non-derivative) related to agriculture is going to have a good year. The stocks of fertilizer and seed producers should do well for example.

    The best investment in agriculture is to buy farmland in countries which don’t subsidies their agricultural sector (subsidies for their booming agriculture sector is the first thing cash-strapped governments will cut).

    I have moved to Russia and am setting up a fund to invest in Russian agriculture. Russia is the only country with a significantly underdeveloped agricultural sector, as the world fertilizer consumption graph below suggests. Please Email me if you are interested.



    Invest In commodity producers

    Commodities will have a great year next year as the dollar collapse. Agricultural commodities will be the best performing and oil will be the worst. Everything else should fall somewhere in between. Commodities not consumed in the US but heavily consumed in China, like coal, will do best.

    Invest in service sector of emerging economies

    America’s lost purchasing power will be transfer to nations exporting nations with large foreign reserves. Investments in the service sector of places like Russia, China, Brazil, India, etc should do well.

    Invest in the debt of stable currencies

    For the short term, I would stick with short term debt (in stable currencies) or, better yet, gold. However, after the 2010 Food Crisis begins, interests rates around the world will jump significantly in response to spiking food prices, and this will probably be a good opportunity to acquire long term bonds at attractive rates (in stable currencies like the yuan, ruble, etc).

    Conclusion

    There is no precedence for the panic and chaos that will occur next year. The global food supply/demand picture has NEVER been so out of balance. The 2010 food crisis will rearrange economic, financial, and political order of the world, and those who aren’t prepared will suffer terrible losses…

    by Eric deCarbonnel