Below is another section from the major article. This section is not completely finished, but is fairly close (needs another 2 or 3 hours of work).
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1) Chinese demand driving commodity prices
I have been predicting hyperinflation would start in China, leading to the dollar's collapse. Now it is happening. Chinese efforts to boost domestic consumption while supporting exports with its dollar peg and adopting loose monetary policy are creating enormous demand for raw materials. As a result, China is sucking up the world's supply of raw goods, putting massive upwards pressure on commodity prices, especially soybeans.
The dollar peg fuels demand from Chinese export sector
Since the dollar September last year, the yuan has been hovering around 6.83, as shown in the chart below. 
As the Chinese yuan has been pretty much pegged to the US dollar and the dollar has been quickly losing value, the yuan has depreciated 6.9 percent since February this year, greatly helping China’s export sector. September's month-on-month import and export numbers showed the seventh consecutive month of positive growth since March. While China's exports have dropped significantly, its market share has not, and its trade surplus keep growing.
The dollar peg, by subsidizing China's export sector, is creating tremendous demand for raw materials.
China’s exploding money supply driving up demand
As I explained in my article on Hyperinflation in China, China’s dollar peg and trade surpluses fuel monetary inflation.
The US's trade deficit requires China to print money!
The little discussed downside of the dollar peg is all the money China has to print to maintain it. China's Central Bank puts the extra dollars it receives from its trade surplus into its growing foreign reserves and then prints yuan to pay Chinese exporters. This results in an increase in China's base money supply by an amount equal to the increase in its foreign exchange reserves. While China's ability to keep accumulating US reserves is endless, its ability to keep its money supply under control is not.
China’s money supply has exploded since China re-pegged. Beijing has scrapped lending quotas, adopted a loose monetary policy, and kept interest rates at four-year lows to bolster liquidity and promote growth. The policy has obviously worked: Chinese banks have extended a massive 8.67 trillion yuan ($1.27 trillion) in new loans this year. To put this lending in context, consider the following:
A) 8.67 trillion yuan far exceeding the China’s initial full-year target of 5 trillion yuan.
B) New bank lending in the first nine months of this year is up 250 percent from the same period last year.
C) China has lent out more money in the first four months of this year than in the whole of 2008.
The effects of all this overextension of credit can be seen in the graph of Chinese money supply growth below.-765997.PNG)
China’s increasing supply of Yuan means that a lot more money is chasing its domestic supply of commodities, and bank lending is multiplying the effect of the government's spending. As a result, the prices of commodities in China are higher than the rest of the world, and this price imbalance is leading to record commodity imports (Chinese producers are buying commodities abroad rather than pay higher domestic prices).
China has no plans to abandon its loose monetary policy.
Chinese Working To Boost Domestic Consumption
China is turning to its poorer residents to help revive growth instead of Western consumers. It is dismantling all the measures it put in place over the years to suppress demand to fight inflation. It has dropped restrictions on purchasing property, eliminated price controls, got rid of loan quotas, lowered interest rates, ceased its sterilization efforts, etc… China has also been speeding up economic and political reforms to boost domestic consumption. A few of the measures include:
1) Raising subsidies for auto replacements from 1 billion yuan to 5 billion yuan.
2) Allocating 2 billion yuan to encourage home appliance upgrades.
3) Allowing non-deposit-taking institutions to offer consumer loans to Chinese citizens
4) Slashing the minimum financial requirement for commercial property investments for the first time in 13 years (from 35 percent to 20 percent).
5) Earmarking 6 billion yuan (878 million dollars) for low-rent house building projects across the country.
6) Issuing new rules to allow insurers to invest in corporate bonds without bank guarantees and allow smaller insurers to trade stocks directly.
7) Creating its own "NASDAQ" (the ChiNext).
8) Encouraging the creation of new commodity derivatives (trading in steel futures, rice futures, and polyvinyl chloride (PVC) futures have been launched this year).
9) Promoting Shanghai as a global financial center and a major gold trading market.
10) Supporting eleven national research programs with at least 62.8 billion yuan.
11) Quickly expanding its social security net and allocating 728 billion yuan ($106 billion, a 29.4 percent increase from prior year) for education, medical and health care, social security, employment, low-income housing and culture.
12) Developing its own credit rating agencies and sovereign credit rating standards
13) Opening its capital markets and currency to the world.
China’s efforts are working. Domestic consumption has become the driving force of the nation's growth. China has already surpassed the United States last January to become the world's largest auto market based on monthly sales. Chinese web shopping is reaching record highs. Additionally, with a significant part of China's population at the age of peak consumer spending, domestic consumption holds the potential for a period of extremely rapid growth over the next decade.
China's efforts to boost consumption (economic liberation, massive government spending, etc...) are hugely inflationary, creating tremendous hunger for raw materials.
Chinese demand driving commodity prices
Strong Chinese demand for the raw material is driving up commodity prices across the board. China is importing record quantities of everything from wood to sugar. The price of copper, used for autos and construction, had its biggest six-month gain in 22 years as Chinese buyers boost imports to records to replenish stockpiles. Chinese demand has also been a key driver of US soybeans prices this year. First quarter imports alone were up an incredible 31% from the same period in 2008. The Chinese government has been purchasing soybeans to protect the interests of domestic peasants and encourage them to keep planting. This is forcing China to import more soybeans from America.
Eventually Chinese demand will drive up commodity prices to an extent which forces it to drop the dollar to contain domestic inflation. Judging by its incredible levels of commodity imports, this event will happen in the very near future.
2) Just-in-time inventory system facing collapse
Since 1980, a combination of oversupply, ultra high interest rates and new business practices quickly turned the idea of owning extra inventory into financial heresy of the highest order, leading to just-in-time inventory management. Just-in-time inventory management means that everything is delivered just as it is needed or nearly so, which lowers inventory levels and frees up cash for other purposes. The last two decades of low inflation have lulled purchasing managers into believing that needed materials would be cheaper tomorrow than today, leading to the widespread use of just in time systems. In almost every corner of the globe and in almost every organization, spartan inventories have become an essential cost-cutting measure to remain competitive.
Users of commodities and manufactured goods today have business models that rely on weekly, or even daily, calculations to determine their inventory needs. For example, Wal-Mart tries to keep much of its inventory on the road in trucks to maintain low costs and flexibility.
Unfortunately there is a problem: just-in-time inventory is COMPLETELY DEPENDENT ON A STABLE DOLLAR. In a high inflation environment, every act of restocking inventory becomes a painful experience, destroying the just in time management’s cost saving justifications. If the dollar goes into a freefall, the entire global just-in-time system will collapse.
3) Catastrophic fall in global food production
*****Catastrophic Fall in 2009 Global Food Production*****
Water shortages
Of all the environmental trends that are shrinking the world's food supplies, the most immediate is water shortages.
[unfinished]
Longer term, the water situation is even scarier. Two billion people face acute water shortage this century as Himalayan glaciers melt. The Tibetan plateau (The glaciers of the Himalayas) is the faucet for much of Asia's drinking water, and the melting glaciers of the Himalayas feed the major rivers of China, India, Pakistan, Nepal, Bhutan, Bangladesh, Myanmar, Thailand, Vietnam, Laos and Cambodia. The shrinking Himalayan glaciers, which could melt entirely by 2035, will turn Chinese and Indian rivers like the Ganga and the Yangtze into seasonal rivers that dry up in summers, when irrigation needs are greatest. The countries dependent on the glaciers of the Himalayas contain 85 percent of the people in Asia and nearly half the world's population. The situation is an international political time bomb.
Australia's Food Bowl, Like The World's, Is Drying Up
This year thousands of acres went unplanted by Californian farmers coping with drought
Cities Are Running Out Of Water
Desertification
Desertification refers the spread of existing deserts and the creation of new ones. desertification isn't the result of global warming (thought it is possible global warming is making it worse). It is the result of reckless and extensive overuse of drylands around the world.
1930's Dust Bowl is a perfect example of desertification. When the United States entered an economic recession in the 1920s, farmers in Western states tried to raise profits by plowing and planting more acreage with new mechanized farming methods. Within a decade, a massive drought hit the entire country. Strong winds swept across the Great Plains, stirring up loose topsoil that had been displaced by overplowing and overgrazing of cattle. The results were dozens of epic dust storms that swallowed whole cities in black clouds and turned day into night.
Today, the UN is warning that parts of the world could become 'economic deserts', unviable for people or agriculture, and may have to be abandoned. Even in rich countries, people are hitting the limits of what can be done with money and infrastructure because there simply isn't enough water anymore. Disaster is feared as desertification spreads.
1) In China's northwest, desertification has escalated from 1,560 sq km annually in the 1970s to 2,100-2,400 sq km in the 1990s. Dust storms from the Gobi desert regularly blow through Beijing, and the government's response is getting more desperate: Chinese authorities have begun telling hundreds of villagers that farming will cease and that they will have to give up their animals.
2) Strong desertification processes have been developing in Latin America with several countries of the region, as well as significant sectors within some countries, in a state of water stress. This situation is projected to worsen significantly over the medium term.
3) Decades of war and mismanagement, compounded by two years of drought, are wreaking havoc on Iraq's ecosystem, drying up riverbeds and marshes, turning arable land into desert, killing trees and plants, and generally transforming what was once the region's most fertile area into a wasteland.
4) The Sahara desert is encroaching into the Nigerian landmass at the speed of 600 meters per annum, thereby threatening the country's food base. Most villages in the northern states have already been overtaken by sand dunes.
5) 90 percent of the water in Lake Chad, which is considered to be the sixth largest in the world and is bordered by four countries (Chad, Niger, Nigeria and the Cameroon) has been lost to the adverse effects of climate change. Lake Chad served as source of fresh water to the more than 30 million people living around its bank.
6) The Sahara Desert is crossing the Mediterranean, and the livelihoods of 6.5 million people living along its shores could be at risk.
7) 74 million acres of fertile land along the Mediterranean is turning to desert, giving rise to the term Sahelisation (ie: becoming part of the Sahara desert).
8) In Egypt, brackish groundwater has already compromised half the country's farmland.
9) Aquifers around the Po Delta in northern Italy are also showing signs of saltwater contamination.
10) Spain has implemented its first Program of National Action against Desertification after recognizing that 37 percent of the country is at risk from desertification and is in danger of becoming "eroded forever".
11) A new desert is forming 250 km from the 'Garden City of India', Bangalore. This new desert is the result of continued indiscriminate water use by village inhabitants even as sand from floods and wind started covering the region. Now thousands of acres of land are covered by sand dunes.
12) This September, Sydney residents woke to scenes from a Hollywood apocalypse movie as the worst dust storm in 70 years, carrying an estimated 5 million tons of soil from drought-ravaged farmland, turned the sky blood red.
Save for the Antarctica, desertification affects all continents. New deserts are growing at a rate of 20,000 square miles (51,800 square kilometers) a year. More than 70 percent of drylands in Africa, Asia and Latin America that are being used for agricultural purposes are already experiencing the effects of desertification. Desertification leads to famine, mass starvation and unprecedented human migration.
Low commodity prices
Recession Compounds World Food Crisis
Across the nation, farmers are making plans to cut their production of corn, wheat, rice, peanuts, beef, pork, poultry and milk.
The 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. Wheat plantings this year are down about 4 million acres across the US and about 1.1 million acres in Canada. So even discounting drought related losses, the US, Canada, and other food producing nations are facing lower agricultural output in 2009.
Falling Milk Prices Kill Cows
Lack of credit
A lack of credit for farmers curbed their ability to buy seeds and fertilizers in 2008/2009 and will limit production around the world. The effects of droughts worldwide will also be amplified by the smaller amount of seeds and fertilizers used to grow crops.
prices may rise because a lack of credit for farmers curbed their ability to buy seeds and fertilizers and may limit production
Adverse weather conditions
[unfinished]
Middle East and Central Asia suffering worst droughts in recent history
Texas Drought Conditions Becoming Historic
The Texas drought continues
*****Torrential Rains Devastate India's Wheat Crop*****
an "UN-FREAKIN-BELIEVABLE" Harvest
*****Rains Swamp Crops And Wash Away Any Hope Of A Decent Harvest*****
Disaster in the making: the 2009/10 food crisis
If you are keeping track, so far we have:
1) Increased demand
2) Decreased supply
3) No buffer inventory
Sounds bad like a pretty bad situation right? Well, it gets worse. To "keep everyone calm" and "prevent panics", 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.
The food crisis should have started Last June
At the beginning of last June, concerns were mounting over the sharp rise in food costs. Faced with the terrible outlook for 2009 global wheat output, agricultural markets were getting fairly nervous about the tightness in food stockpiles. China was chewing through US old-crop soybeans with month after the month of record exports. Hedge funds and other big institutional investors had begun to pour money into the agricultural market, helping to drive commodities prices higher against the weakening dollar.
Against this backdrop, the USDA began a campaign to suppress rallying food staples. To start off, the USDA magically discovered an extra 113 million bushels of soybean supply within its “residual use” accounting column to ensure soybean end stocks would not slide below 100 million bushels. Even worse, the USDA began releasing production estimates which were pure madness. For example, despite a 40% drop in planted acreage, The USDA left their production estimate for Argentina's wheat crop unchanged at 11 MMT, a stunning 33% higher than last season’s 8.3 MMT (The Buenos Aires Grain Exchange Argentine was predicting a 6 MMT wheat crop at the time). The USDA also announced that wheat ending stocks would increase in 2009/10 and that world wheat stock to use ratios would climb to a comfortable 28.5pct. The media became filled with bearish stories based on the USDA’s bearish propaganda: the US will not run out of beans, prices will ration demand, China have more than enough and will go away, etc. Rumors of cancelled soybean exports sales were widespread (these cancellation never happened). To culminate everything, on June 30th the USDA shocked the trade with estimates showing record soybean and near record corn plantings. Somehow, the USDA found a million more wheat acres, one and a half million more soybean acres AND two million more corn acres than they had in March!
Given the stark contrast between USDA numbers and reality, there is no way that the flawed data released last June was an innocent mistake. The USDA deliberately mislead investors about the true state of the world's food supplies.
The August 2009 Soybean Crisis
While the USDA might have successfully changed perceptions about the food supply, it could not alter the reality. With Brazilian soybean supplies on the open market having all but ran out, the US was left as the only shop in town, resulting in monstrous soybean sales to China. By the end of August grain movement in the US came to a virtual standstill, with farmers are mostly sold out of soybeans. Those few soybean end-users (ie: feedmakers and poultry producers) were caught short, and were forced to pay prices as high as they paid at the very height of the bull market a year ago in 2008.
Soybean shortage causes intense backwardation
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.
The threat posed by soybean backwardation
Futures markets are dependent on confidence in the same way as banks. Futures markets offer promises to deliver commodities on specific dates (commodity IOUs) and Bank offer deposits, which promises to deliver cash on demand (dollar IOUs). Futures markets and banks issue far more IOUs then they have cash and commodities on hand to make good on these promises. For both futures markets and banks, a loss of faith in the ability to make good on these IOUs is fatal. Had the backwardation in soybeans continued into September, a panic could have quickly developed, spreading other agricultural commodities.
New wave of USDA propaganda
The intense backwardation in soybeans did not last. In the first week of September, the US launched a new attack on soybean markets which included:
1) More insane production estimates predicting a record breaking soybean crop.
Estimates for US soybean production | |||
Aug-11 | USDA | 3.199 | billion bushels |
Sep-1 | FCStone | 3.266 | billion bushels |
Sep-3 | Informa | 3.372 | billion bushels |
Sep-4 | Allendale | 3.309 | billion bushels |
2) Rumors that China was planning on unilaterally terminating OTC soybean derivative contracts (ie: more rumors about China cancelling outstanding export sales).
3) Rumors about a huge supply of old crop soybeans that were going to be dumped on the market to make way for the “record” 2009 corp.
4) The sale of 104.5 million bushels of soybean futures to reinforce the idea that soybean prices were headed for collapse.
5) Helpful news stories warning farmers about a imminent price collapse and suggesting they sell before its too late.
Below is a good example of what this USDA propaganda looked like:
PRICE COLLAPSE LOOMS
Despite the strength of the current market, observers said prices could easily plunge as the Midwest soybean harvest finally gets rolling in late September or early October.
Barring an early freeze that could cut yields, U.S. farmers are expected to bring in a bumper crop. The U.S. Department of Agriculture has projected U.S. soybean production at 3.199 billion bushels, an all-time high.
Export buyers and crushers may find themselves awash in soybeans, triggering a collapse in the cash market.
"When it breaks," the eastern soymeal broker said, "it's going to be swift and violent."
The USDA’s scare tactics worked and pressure in the soy cash market eased as. Soybeans trickled into grain terminals and processors in Nebraska, southern Illinois and Iowa as farmers sold their stocks before the “price collapse”. Old crop sales saw net cancellations of 58.8 TMT as buying switched to the cheaper new crop with 1.11 MMT export sales. Exporters backed off their spot soybean bids. Crushers decided to shut down for two weeks and wait for new-crop beans to be available. Soybeans on the Chicago Board of Trade fell to a five-month low.
The consequence of USDA propaganda
Despite what the USDA wants us to believe, the food situation hasn’t improved. There is no bumper US harvest bail the world out. Asian demand for US soybeans is surging. The reality of food shortages in 2009/10 remains unchanged.
On the other hand, USDA propaganda has succeeded in making the situation much worse.
1) Waiting for new crop has created a lot of pent up demand
Many US processors extended their plant downtime maintenance in July due to both weaker profit margins and the unwillingness to outbid exporters for spot soybeans.
As a result, US soybean consumption has plunged in the last three months, as seen in the graph of monthly US soybean crush data below. -763255.PNG)
All the soybean crushers who shutdown production waiting for the new crop will be crushing far more soybeans than normal to make up for lost time, which means there is a lot of pent up demand.
An insane amount of outstanding export sales for US soybeans
Below is a graph of total outstanding export sales for US soybeans going back ten years (data straight from the USDA’s website). As of October 16, the US has already committed to exporting 19,716,862 Metric Tons (724 million bushels) of soybean from the 2009 crop. The United States has never had a backlog of exports sales this size. If the USDA’s record harvest never comes in, things are going to get ugly real fast!
Everyone is waiting for the record harvest that doesn't exist!
2) Low prices are causing to overconsumption and underproduction
New crop of soybeans is already being rapidly consumed: early harvest from the Mississippi River Delta is being shipped to desperate Midwest crushers.
Even governments are being duped by the USDA production estimates, with grain exports pouring out of desperate Ukraine. Despite is 20% fall in grain production, cash-starved ukraine continues to export grain ahead of even last season's record pace. Because they are unaware of the food shortage facing the world, distressed sellers like Ukraine are mismanaging their grain supplies, and will have little grain available for export during the second half of 2009/10 (when global food shortage will be at its worse).
Meanwhile, farmers are allowing millions of bushels to rot in the rain because it is too expensive to harvest and dry them at current prices. Acres of spring wheat are going unplanted because
3) The USDA’s false estimates will lead to panic
USDA estimates have NO CREDIBILITY
Below are the latest USDA estimates for soybean production, imports, and exports. I highlighted in red the numbers that are worth noticing.
Thousand Metric Tons
Date Created 10/9/2009 8:44:57 AM
2006/07 | 2007/08 | 2008/09 | 2009/10 | |
Production | ||||
United States | 87,001 | 72,859 | 80,749 | 88,454 |
Brazil | 59,000 | 61,000 | 57,000 | 62,000 |
Argentina | 48,800 | 46,200 | 32,000 | 52,500 |
China | 15,967 | 14,000 | 15,500 | 14,500 |
India | 7,690 | 9,470 | 9,100 | 9,000 |
Paraguay | 5,856 | 6,900 | 3,900 | 6,700 |
Canada | 3,460 | 2,700 | 3,300 | 3,500 |
Other | 9,337 | 8,004 | 9,090 | 9,413 |
Total | 237,111 | 221,133 | 210,639 | 246,067 |
Imports | ||||
China | 28,726 | 37,816 | 40,700 | 39,500 |
EU-27 | 15,291 | 15,123 | 13,000 | 12,400 |
Japan | 4,094 | 4,014 | 3,450 | 3,950 |
Mexico | 3,844 | 3,614 | 3,100 | 3,535 |
Taiwan | 2,436 | 2,149 | 1,830 | 2,250 |
Thailand | 1,532 | 1,753 | 1,500 | 1,705 |
Indonesia | 1,309 | 1,147 | 1,200 | 1,600 |
Turkey | 1,268 | 1,277 | 950 | 1,280 |
Egypt | 1,328 | 1,061 | 1,200 | 1,230 |
Korea, South | 1,231 | 1,232 | 1,130 | 1,200 |
Other | 8,003 | 8,976 | 7,175 | 7,494 |
Total | 69,062 | 78,162 | 75,235 | 76,144 |
Exports | ||||
United States | 30,386 | 31,538 | 34,836 | 35,516 |
Brazil | 23,485 | 25,364 | 29,986 | 23,650 |
Argentina | 9,559 | 13,837 | 5,885 | 9,700 |
Paraguay | 4,361 | 5,400 | 2,400 | 4,900 |
Canada | 1,683 | 1,753 | 1,975 | 2,000 |
Other | 1,836 | 1,627 | 1,845 | 2,085 |
Total | 71,310 | 79,519 | 76,927 | 77,851 |
Some of the glaring problems with these estimates for 2009/10:
1) The USDA expects the United States to harvest a record breaking 88.454 MMT (Million Metric Tons). With soybean fields buried in snow across the Midwest, this seems highly unlikely.
2) Despite predicting that Chinese soybean production will drop by 1 MMT in 2009/10 (from 15.5 MMT to 14.5 MMT), the USDA is also predicting China will import 1.2 MMT less (from 40.7 MMT to 39.5 MMT). That makes absolutely no sense! If Chinese demand for soybean is soaring (see above) and Chinese production is down, for what possible reason would the USDA predict China’s soybean imports to be less in 2009/10?
3) India is suffering from the worst drought in over forty year, yet the USDA is expecting Indian soybean production to fall only 1% in 2009/10!
4) The USDA is predicting a 2% increase in soybean exports for 2009/10! In light of surging Asian demand for soybeans and the huge amount of export sales outstanding, predicting that the US will export only 35.5 MMT of soybeans is simply ridiculous.
The USDA's numbers don't add up. The shortages of wheat, soybean, sugar, etc will soon reach the point where no about of spin can hide them. As the world will realize there are a few a few months food supply missing, faith in the USDA will crumble, and panic will start. Prices of virtually all agricultural commodities will double or triple (sending the dollar into a freefall).
The world is heading towards a complete disaster
As a result of governments covering up about the looming food shortage over the last few months, there has been no stockpiling (which would have help ease the crisis). Worse, with the USDA predicting record crops for everything under the sun, end users were convinced to shift demand from 2008/09 (when world had a bumper harvest) to 2009/10 (which saw a catastrophic fall in production).
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nice piece. profound synopsis. rather like viewing the bayeux tapestry in sections. congratulations eric... I can only wonder what comes next (vis a vis the major piece... and global financial meltdown).
You're real monetary crack...
I hear many problems in Argentina, with drought and freeze (during august)... In Uruguay not...
Did you hear that India wants 200 ton gold of IMF, after ask of China for 400 ton... Dude, where is my gold?
Greetz
Yann
Thanks eric, keep up the good work.
Hopefully all the jackasses that jump on this board and start complaining and knockin everyone down have already staved to death!!!
anonymous said
rather like viewing the bayeux tapestry in sections.
Give me a break..
Having said that . Very Good post.
Might have to buy myself some ag ETF..
Which do you think will perform best from now? gold or grains?
Regards
Olly
When the real data will show up ?
Anyone ?
I live in Ching-Chang Province, China. I not sure what Eric talking about -- prices are dropping here on all items. Everyone in my village now burning wheat for fuel -- taking 3 showers every day because water now so plentiful. I no understand why Eric think things bad here -- they are good. Much food, much water, much wheat for burning in fireplace. We are ok in Ching-Chang Province, China.
I'm begining to think the U.S. should scale back food production and stop exporting ALL GRAINS overseas.
By the way Eric; the intrinsic value of the U.S. dollar DOES take into account our government gold holdings (270 million+ ounces), our agricultural power (Ag potential is the new manufacturing of this century...think factories in the 1940-1990 timeframe).
Everything you typed about desertification (sp?) is BULLISH for the dollar, long-term...think about it.
Eric you should really consider disabling your comment section. The amount of trash comments are exponentially growing. And now they are becoming racist.
Eric, do you want to be associated with racist ideologies? Your inability to moderate your comment section may well cause many to not take any stock in what you say.
Please, block people's ability to make comments.
Thank you,
Mike
NY, NY
Gold is being perceived as money today:
US Dollar up BIG today.
Gold up as well.
It's happening; slowly, but surely.
Be wary.
Hello there,
I live 59 kilometers north of Ching-Chang Province, China. Our village of Dung Dung has much water and much food. We also burn wheat in fireplace. Prices on all items dropping each day. Life is good here in Dung Dung Province, China.
i have to kinda agree with mike. the recent statements here are stereotypically racist towards chinese and indian people. the problem i have though is that i think eric should shut down the comment section for a limited time and not forever. but i do agree something needs to be done.
I see nothing wrong with the china/india posts. They are funny and I like them.
Sounds like we have a few pinko-commie-earth hugging democrats posting here:
"Oh, please don't say anything humorous or insensitive unless it's about a white person or a Christian...everything else is off limits."
You people sicken me.
UPDATE:
US Dollar up BIG today.
GOLD up and getting stronger by the minute.
This could be it. If this trend continues, "THE GREAT UNWINDING" will begin in earnest.
US Dollar UP.
GOLD UP.
Everthing else...way, way DOWN.
Be wary.
JUST ANNOUNCED:
http://www.24hgold.com/english/news-gold-silver-imf-sells-200-tons-of-gold-to-india-for-6-7-billion.aspx?article=2424345674G10020&redirect=false&contributor=The+Prudent+Investor
IMF SOLD 200 TONS of GOLD TO India over the past two weeks! This transaction increased India's gold holdings by 55%...in TWO WEEKS! This news is huge; and can mean only ONE thing.
US Dollar UP.
GOLD UP.
Everything else...way, way down.
Be wary.
HELL of a spike in gold and silver!
R
O
MOONSHOT TODAY IN GOLD AND US DOLLAR!
Gold up $15/ounce
Dollar Index up .33
THIS IS HUGE! THE GREAT UNWINDING HAS BEGUN!
Gold is money, nothing else.
I can't believe Anonymous is complaining about getting the article in sections. I was actually going to recommend you keep doing it this way, because each section contains so much good information!
Keep it up.
Let's take a vote: Who finds the comments area of Eric's blog more entertaining than the blog itself?
Me: Aye!
I only skim his posts anyway.
Gold up $22/ounce
US Dollar up .28
Everything else is down.
It has begun.
We could see $1100 gold before this day is done.
The veil has been lifted.
The moves in the market today could be reflective of imminent disclosure of UFO contact and our governments knowledge of, and contact with other-worldly civilizations. There's been alot of buzz on the web that we will be told the truth in the near-term by the gov.
What do you guys think?
Maybe Fekete was right?
If so, I'm scared. Someone please hold me.
me to.
the conclusions are the only juicy bits.
the burning wheat posts are not racist in my god-like opinion.
Having said that...
It was funny the first few times but its been flogged to death and its got boring.
I have advice for the whingers who are offened by them....
Just roll your index finger over the little wheel on your mouse and scroll past them.. its not hard.
Also , i think anonymous has had a nervouse breakdown. He should join Numonic in a group therapy session.
Regards
Ozzymandis
most of you americans believe in aliens already.
It would hardly be ,news.
R
O
Eric if I were you I would've locked this down long ago. Now you got semi-racist comments and bad, cuss filled poetry (or lyrics I have idea which) filling up your comment sections, on top of all the personal bashing posts. Eric, you really do need to lock this down, and permanently. Them them you have the resolve to deal with this.
I see that marketskeptics.net is available to registration.
I am thinking of taking that domain and creating a parody site of marketskeptics.com. I am a witty fellow and would have much fun with a project like that.
Disclosure: I am the India and China wheat-burning poster and actually have an acute sense of timeliness with regards to market trends.
I will register that domain if I get twenty "AYE's".
People of this blog, what say you?
Energy, Grains, Metals, and the US Dollar are UP.
Stocks, Meats, and Softs are DOWN.
Very, very troubling.
Hyperstagflation...we've NEVER experienced this in an advanced economy.
Be wary.
AYE!
Oh wow...
Have you guys seen gold?
I just came back from a meeting and looked at the market action and I cannot believe my eyes...
Gold up over 27+ points...
And the dollar is also up .25+ of a point...
I would never have thought I would see this day...
But Viper, at this moment, you were right the dollar up and gold up...
But it doesn't count because of the new on India...
Sucka...
heh...
3% of COMEX silver removed from warehouse this past Friday. Smart money is making it's move RIGHT NOW:
https://www.kitcomm.com/showthread.php?t=52458
aye
eric,
viper said gold and the u.s. dollar would go up in tandem. everyone thought he was crazy, and a few days later; voila!, it's happening.
you said the dollar would crash (hyperinflation) driving up the price of commodities. it appears viper is right and you are wrong.
please explain yourself.
oh, and "aye"...i think viper's blog would be funny and informative.
IMF's Golden secret:
www.Broadscape.com
Read the fifth post down by Genesis:
http://tickerforum.org/cgi-ticker/akcs-www?post=116618
Perhaps the wheels are about to fall off...
Well...
After reading all the comments, and yes even the lyrics,...
I have to say you guys need to chill on exploiting the comment area of Eric's blog...
Let's all just take a breather and remember why we are all here again...
Maybe this help you:
Children, children; I implore you...
This be a house of good communication, not one of hate speak...
We can all get along under this house of ivory and golden towers...
And in so doing we shall reap the benefits of the golden calf...
And we all know what those benefits are...
Living in the land of milk and honey...
To never worry, nor want for shelter, clothing or food...
That others will bow to our greatness as they see that our worship and faith in the golden calf, which was pure and never wavered, ...
Was paid off by wealth untold...
So let us not engage in hostilities between ourselves children...
For to do so would be to forfeit those beneficial promises that the golden calf have given us, its dedicated followers...
Now let us turn to our golden calf figures, that all of us have, and recite after me:
"Barukh ata Adonai, Eloheinu, melekh ha‑olam, bo're p'ri ha‑etz"
And now children the blessing of peace and abundance granted by the golden calf has been reaffirmed for you...
Also know that each of you has been forgiven of your transgressions that was done in our holy tower of ivory and gold...
And as you go about your day, never forget these blessings and the kindness that the golden calf has given you...
"Shalom aleichem"...
And what the hell..
aye to Viper...
What I have said will pass has passed. I know what is to come and will share my wisdom with all of you once I feel the love, respect, and admiration from you...all of you...including Eric.
Eric, pay homage to me on this blog, and I will lead you and your people to the promised land.
@Viper,
You are one funny dude. I like your style and I want to hear what you have to say. You have my respect, brother.
Aye!
Eric's not making predictions about grains and other food commodities in terms of days, he's speaking of the long term trend (months at minimum).
His theme is
1) Yields are dramatically lower all over the world
2) Governments are lying about yields and stockpiles
3) Inevitably shortages will occur
4) Hoarding will ensue as panic buying starts
5) Prices will skyrocket
6) Hyperinflation will set in in nations (China) that tie their currency to the dollar, so they'll break those ties
7) Dollar goes into hyperinflation
8) US enters 3rd world, defaults on debts, federal government collapses, US empire disintigrates
(That last #8 is my little addition).
Viper appears to be making day to day predictions. Eric has never done that, as far as I can recall.
I always like gold + silver rising, but day to day fluctuations are more noise than anything else...
Dash,
We never left the "gold standard". We were made to believe we did, but it's always been there. Now the masses are starting to get a glimpse of what lies behind the curtain.
Gold and the US Dollar now walk hand-in-hand. This is huge.
If you don't get what I'm talking about, don't worry, that means you're no different than the 99.99999% of the world's population.
I am here to help you. Pay homage to me and I will continue to bring bread to your table...but only if Eric pays much respect and homage to me and offers to post only my work to his blog.
Sinclair has been saying for over a year that the US Dollar crash happens in Nov., 2009. He even has been counting down to a specific date (I don't remember the date)
This isn't funny anymore.
UFO/Alien Disclosure within three weeks.
IMF's Golden Secret:
www.Broadscape.com
This blog contains some of the best articles on economy on the internet.
The worst part of precious metal investing is the company you have to keep. Witness this disaster of a comment section. But at least it's good for a few laughs. Viper - you got an LOL.
Hey Viper - if you do the marketskeptics.net, I would love to contribute. I am a fair hand at satire. Sounds like a blast. You should be able to figure out how to get in touch with me through my profile.
@Viper
Get real. There is no messiah.
It doesn't matter what you say. Even if you're 100% spot on, even if you have access to pure truth, it is impossible for people to trust you and know you are right.
See? Jesus could appear today and people wouldn't believe it.
Note I'm not religious at all. My point is it is impossible to trust anyone, so each of us must trust ourselves. Granting trust to someone else is a sucker's play.
I think Viper has gont the same way as anonymous and numonic.
Another chair please Doctor!
Regards
God
dashxdr said...
Let's take a vote: Who finds the comments area of Eric's blog more entertaining than the blog itself?
Seriously?
I only skim his posts anyway.
Whaaaat?
Dashxdr, you are the fourth most frequent commentator on this blog. Now you're telling me "only skim" my post? lol
Anonymous: 2130 comments
Numonic: 459 comments
Eric deCarbonnel: 280 comments
dashxdr: 225 comments
This is what the tea leaves tell me will happen tomorrow....
Au +3.22%
Ag +5.1%
US Fiat +1.3%
Everything else...down.
DOOM!
Eric,
I don't even bother to skim your posts. I come straight to the comments; that's where the action is, baby!
In all seriousness, this blog is an epic fail. You haven't a clue as to what you're talking about most of the time. There will not be hyperinflation; in fact, quite the opposite.
I see two major events taking place within the next 18-36 months:
1. Remonetization of Gold & Silver in all industrialized nations.
2. Full disclosure of government contact with aliens/ufo's/little green men. (Yes, I'm serious).
Be wary.
@Eric
Well your entries have tapered off, and I've already absorbed the theme.
As Pinnion said, I read your conclusions and I read some of your in-line comments, but I don't read the quoted articles except by skimming.
And I'm speaking of entertainment value. Your blog contains information. Your comments area contains entertainment.
It's the perfect mix!
@Viper
(1) A bit too critical of Eric...
And (2) aliens?
Wacko...
For real though...
Wacko...
Sucka...
Regardless of what grain production is over the next year; there will be NO food crisis.
People will starve in Africa, Asia, and to a lesser degree -- South America. People in North America, Europe, & Australia will have plenty of food. It has always been this way and it always will be this way.
People have been starving in this world since the beginning of time, but it is not a "crisis".
There will never be prolonged peach or prosperity in Asia, Africa, or South America; the people there are, in the aggregate, ignorant (which is why it's so easy for dictators to rule in these places). Every planet must have "have's" and "have not's", for technological advancement can only surface after concentration of capital (both monetary & political). If wealth were truly distributed fairly, there'd never be cures for disease, snuggies, or satellite radio. I'd rather not live in a mud-hut, so I vote to keep the status quo.
This blog is an epic fail.
Eric, you are wrong and probably too immature to recognize the fact that you are most lacking in humility.
Viper hath spoken.
Be wary.
I think Viper is LOLAnon and Psychopath.
@Viper
I want to hear more about the imminent little green men announcement. Within 3 weeks, eh?
Humans of earth, I have come in peace. You need not fear me, I mean you no harm. However, it is important to note that most of you will not survive the next 24 hours. Those of you that do survive will be enslaved and experimented on. You should in no way take any of this personally, it's just business.
So, just to recap, I come in peace, I mean you no harm, and you all will die. -- Galaxar from Monsters VS Aliens
Dash,
I said 18-36 months for alien disclosure, not 3 weeks.
I am not LOL or psycho.
I am Viper.
Koo Koo Ka Choo!
Be wary.
Absent a complete debt collapse, an advancing US Dollar and Gold at the same time can mean only one thing:
Full Disclosure is Imminent...I still say 18-36 months, but who knows; if TPTB see something to gain with sooner disclosure, they will do it.
One more think; regardless of what we're told...they are not nice.
Be wary <> I'm done here <> Goodbye and...be wary.
There will be hyperinflation, when ?
When china decides it.
.
How many "Vipers" are there?
Viper said...
UFO/Alien Disclosure within three weeks.
Isn't there some section in the bible that speaks of a den of vipers?
hmm im starting to wonder if eric enjoys the comments.. judging from the comment he made that is lol
MY - LAST - POST - HERE - EVER...
From early this decade 'til now, it's all been about the reptilians...and their thirst for gold. I am not kidding...the pot is beginning to boil over...
Be wary.
I believe Viper. I don't know why, but I do.
I´m gay. Serious.
I believe Viper... is insane. I don't know why, but I do.
Wow, you people are a trip.Very funny. I don't have a clue about what is about to happen, but happen it will. Eric's a smart dude, so is KD and TAE duo, and my uncle Pete. Uncle Pete says do not let your mouth write a check that your ass can't cash.In this instance, do not allow what you want to happen to screw you up on what will happen.Cheers!
Eric does an excellent job blogging here.
However, many people in the commet area don't behave professionally.
BTW, please use a name, any name instead of Anon.
Eric what do you think about oil trust's such as bpt prudoe bay as protection from the dollar? Find your blog very informative and interesting. If people have kept up with your blog they should already have your major article figured out. i am looking forward to it. I like your articles on recent news events best.
@lysander
"... do not allow what you want to happen to screw you up on what will happen."
Preach brother...
Preach it!
Scream it from the roof top so that these fools may know!
On another note...
Viper...
Dood, you lost your goddamn mind...
Sucka...
@LOLAnon/Psychopath
Let me clue you in on something.
You cannot predict the future. No one can.
You have a very specific picture of what is going to play out. It is very, very specific. And it is clear if you are doing any preparation at all, it is on the basis that precisely what you predict will happen, will happen.
Now if what you predict is going to happen doesn't happen, what then?
I can answer that. You, sir, are royally screwed.
Here's the important point: If you're right and I'm wrong, we're both dead anyway.
But if I'm right and you're wrong, I'll survive and you won't.
BTW for people that haven't been watching, LOLAnon/Psychopath's expectation is that US, thrashing around in empire collapse, will opt for war, starting with nuking Iran, which will lead to a big global nuclear conflict (I presume).
As such LOLAnon/Psychopath laughs at anyone who is trying to do anything at all to prepare for upcoming strife.
This is a time of evolution. Many people won't survive. But a lot will.
There is irony in that you are so offended when other people get caught up in their expectations of what will happen, yet you are blind to that in yourself.
Personally I believe in diversification as regards preparation. Prepare for a lot of scenarios, as many as you possibly can, rather than just one.
Most americans are prepared for the scenario of, "Business as usual forever."
So any preparation at all is already loads ahead of the masses.
I dont think there will be nuke war. Why would they do that when there is so much viral tech. about.
Seems a wast to knock all those houses down when you could just knock the people down.
I recon it will be the same as when USSR died.
It broke up into smaller pieces an a load of well conected gangsters took over.
Same when Rome died. Long decline and then just more or less evapourated.
Vipre said there will always be concentrations of wealth on the plannet and he is right. Its just ,the wealth will be in the east and america will be their lackies.There will be rich areas of the former USA like there is rich areas of South Africa.
But they will be surounded by shanty towns(tent cities which are already growing), which will be filled with formerly fat americans.
Along the coast there will be areas that cater for Chinese tourist.In short usa is tyhe new russia/china.
Dasxdr. You talk as if your taking Viper seriously when he talks about UFO s.As far as i can tell with my god-like powers, he is joking , avin a laugh , pratting about.I dont think he believes 10% of the crap he comes out with.
Regards
Ottomawango
You talk as if your taking Viper seriously when he talks about UFO s
Personally I don't believe in aliens from space visiting earth, or that UFOs come from outside. But it's impossible to prove it hasn't happened.
I'd hope for Viper to go into it because he could either introduce some interesting information I don't have, or he could demonstrate he's a crackpot.
Incidentally the whole concept of aliens caring about humans and earth and gold is insane, a complete lack of imagination. It's projecting current human technology and deficiences onto the universe. We value seashells (whampum) so therefore the visiting aliens must also.
@dashxdr
To be fair...
I never stated that America would attack Iran...
I guess its hard for you to understand the things I've said, to miss something as simple as that...
And yet you label me...
It's to bad really...
But then as a worshiper of Mammon I wouldn't expect anything less from you...
@ dashxdr
Sounds like your a believer in aliens on earth to me.
Well , you ve just dropped a dozen notches in my rateings lol.
Just because you cannot prove something doesnt exist, its not a reason to believe it does.
You connot prove i havent got a pet tranasauras-rex as a pet, doesnt mean you would believe it.
The onus is on poeple to prove something before we believe it.
Too much X Files dude!
Honestly...You americans, tut tut.
P S
Am i the only sane one on this blog?
Regards
Lord Ordox, Lizard King of Mordox Persious 5.
Viper.
Dont even bother.stick to filling dashes head with bull.
My opinion of you is, your just a prankster. Nothing more .nothing less.
Regards
Smoking man
Pinnion,
Wait and see, my friend.
Everything you know is about to change.
@Mr Pinnion
Read what I wrote regarding the aliens issue one more time, you didn't understand it.
Logically it is impossible to prove something doesn't exist. One cannot prove god doesn't exist for example.
BTW I believe life exists throughout the universe. I just don't believe any of it has journeyed to earth. Life on earth came from earth.
The comments area on this blog is deteriorating into complete chaos, and it's rapidly losing its charm.
Soz Dashxdr
I did missunderstand you.
Viper has got tedious and boring now.
Dont like saying it but maybe it is time for eric to deleat all unfunny and boring posts.
Obviousely , none of mine would be affected.
Regards
Ozzi
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