Comments on Market Skeptics: ***Disaster Feared As Desertification Spreads*...

Yeah, US maybe sitting on a big pool of water but ...

2009-08-24T05:40:13.833-07:00

Yeah, US maybe sitting on a big pool of water but just because a farmer may own the land on top of it, he doesn't own the water beneath it.

Just ask T. Boone Pickens who's buying aquifer rights like it ain't no thang but a chicken wang.

But good points on the possibilities of the russians (russian mafia?) stealing the fruits of your labor. Unless you have DEEP connections, I'm sure that risk exists.

Hello, the Russians don't have the infrastructure ...

2009-08-23T15:38:08.874-07:00

Hello, the Russians don't have the infrastructure to water all those crops if they were planted. In the USA there is a giant aquifer the size of alaska under the great plains. Farmers just drill and have tons of water. Problem for USA is that over the last 40 years rather than digging 15 feet they have to dig some 60 feet.

Yes in 30 years if water use is not controlled or limited the USA's giant aquifer will run dry. Current use is not sustainable.

Russians don't exactly have giant aquifers readily below their crops like the USA. They already use 60% groundwater and 40% surface with 20% of that mixed for their water sources. Groundwater over there is evaporating more since the water table is high. Conclusion, Russians can't grow the same amount of crops like the USA. USA also uses more chemicals and genetically modified crops, large corporate farms with technologically advanced equipment for higher yields. The Russians are gangsters and have horses to farm with still with small farms. Investing in Russia? Ready to bribe them?

-Lawstud

Absolutely true - an honest and stable government ...

2009-08-20T08:01:25.883-07:00

Absolutely true - an honest and stable government is a precondition for one to keep the fruits of your labor. If the thugs are still in charge in Russia - you will not be allowed to keep your investments to yourself.

This is why Russia's land is so underutilized. Who would risk investing if it becomes successful and then is stolen from you. These Russian power structures have raped their own people for hundreds of years. What has significantly changed in this respect?

Eric; How are you going to mitigate the political ...

2009-08-18T04:45:32.356-07:00

Eric; How are you going to mitigate the political risk of investing in Russian Agriculture? How do you keep the state or local gov't thugs from confiscating your property? i.e. Zimbabwe. When your investment starts making profits it will attract attention from those with power/connections. There's a reason Russian Ag is underdeveloped....

Maybe Chineses have brains too? I don't know, just...

2009-08-18T02:52:28.549-07:00

Maybe Chineses have brains too? I don't know, just guessing..

Eric, You're assuming the US won't use its contro...

2009-08-17T21:56:51.985-07:00

Eric,

You're assuming the US won't use its control of the waves to blackmail China. What do you think the oligarchs in the US had in mind when they industrialized China and created the debt bubble? These guys have a lot of brilliant but evil brains working for them.

Continued from above: The current situation is ma...

2009-08-17T16:14:05.643-07:00

Continued from above:

The current situation is made worse to the extent that along with lowering food prices in the US by increasing the supply of food, the supply of food that is perceived is increased even further to the extent that the agricultural futures market creates “paper food”, so prices in the US fall further. To the extent that the world food supply is decreasing because of droughts and desertification, US food prices are even farther below what they would be if a free market existed during the current global shortage. The pundits on CNBC constantly talk about food prices plunging along with the prices of other commodities because of plunging global demand. However, they ignore that from the perspective of many other counties, whether food prices are high or low they are skyrocketing when compared with their ability to pay for food. Counties that can produce only a limited variety of crops become more vulnerable to famine in the same way that Ireland became vulnerable to potato blight.

When the agricultural futures market collapses along with the dollar, global food prices will move closer to prices that would be determined by a free market. Overall food production will increase as resources are used more efficiently with less wasteful production of luxury food. Fortunately for the US, there is still a relatively large potential for agricultural production. However, as dollar collapses and oil prices rise, the US will have to export a larger part of its food in exchange for the oil to meet its needs which include the need to use oil to produce and transport crops. Because of this, as other currencies rise, crops from the US will flow overseas which will lead to rising prices in the US. At the same time, prices will fall overseas to the extent that global food shortages don’t become worse.

Since my comments are related to both this article...

2009-08-17T16:11:40.541-07:00

Since my comments are related to both this article and the food shortage article from August 13, I decided to submit them for this article since I see that comment activity has greatly slowed down for the food shortage article.

As land available for domestic production around the world becomes scarcer, it is increasingly misused and desertification and the severity of food shortages are increased. At the same time, as people around the world find it harder to purchase dollars to purchase food from other countries, more pressure is put on the limited land available for domestic production. Desertification makes the scarcity of land even worse along with a further decrease in the ability to purchase food from overseas and the positive feedback continues. US agricultural subsidies make the problem even worse as other countries are forced to become dependent on the US for their agricultural needs. This keeps food prices below those that would be set by the free market and worsens shortages at the same time as countries around the world become increasingly dependent on a limited variety of crops. The problem is made even worse if during global shortages the US stops supplying countries that are dependent on the US.

During the Irish famine, the problem was not that food prices in Ireland were too low, it was that food prices in England were too low. England should have only been able to consume an amount of food equal to what they could produce and what they could gain through trade based on comparative advantage. By making available to England food that was produced using Irish land and labor, the supply of food was increased and food prices fell. At the same time, whether prices in Ireland were low or high, there would still not have been enough food. Whatever the price was whether it was low or high, it would have been too high to feed all the people.

If production of luxury food for the British which used large amounts of land had been replaced by production of other foods for which land was used more efficiently, the Irish would not have become so dependent on their potato crop and both countries could have been fed. Instead, because the Irish could only afford to produce food for themselves using crops which consisted mainly of potatoes, they were left vulnerable to blights which affected that crop.

The economic relationship between England and Ireland that existed in the 19th century is similar in many ways to the system of dollar hegemony that exists today. The main difference is that rather than purchasing power being extracted and transferred between countries through high prices for rents combined with the direct use of British force, this is now accomplished with high prices for dollars combined with the use of US military force.

Eric is correct in that when the food shortages occur it can be accompanied either by high or low food prices. However, no price for food can cause there to be enough food if the shortage is severe enough. Just as in a lifeboat with five people and one piece of bread, some people will starve if they are not rescued regardless of any price that could be set for the price of bread.

Numonic is correct in that keeping food prices too low can lead to a shortage. Attempting to keep food prices lower during a shortage than that which is determined by the market creates even more of a shortage. If the shortage is not too severe, raising prices can sometimes end the shortage.

Continued below

A lot of people say that the world is overpopulate...

2009-08-17T13:14:27.542-07:00

A lot of people say that the world is overpopulated. Well, the droughts will significantly reduce the number of people living on earth.

There's - IMO - another reason desertification had...

2009-08-17T13:06:54.800-07:00

There's - IMO - another reason desertification had spread in the 1930s in the US. And that's the New Deal of Roosevelt. He did a number of things to stop the slide in commodity prices. e.g. destroying a significant part of the cotton harvest/crop. These higher prices were an incentive for farmers to increase the acreage of farmland. Weblink.

BlasterMillennia said... What will be the effect ...

2009-08-17T12:45:16.017-07:00

BlasterMillennia said...
What will be the effect of China's desertification on its post-U.S.-dollar-collapse development?

When China breaks the dollar peg and appreciates the yuan, the buying power of Chinese consumers will increase and they will be able to buy/import all the foreign wheat/soybeans they need. With their increased purchasing power, Chinese will suck up the world's food like the US sucked up the world's oil with the overvalued dollar

Although China will start losing manufacturing jobs after it appreciates the yuan, in the short term China will remain the world manufacturing powerhouse with a large trade surplus with virtually every nation on Earth. Even after Chinese imports become expensive, it will be hard for anyone to avoid buying "made in China" over the next two or three years.

China together with Russia will come out of this financial crisis as one of the winners because demand for their exports will hold up best (ie: demand for China's cheap consumer goods and Russia's agricultural commodities is going to do well).

Eric, what about the big dollar post ? I just can´...

2009-08-17T12:25:21.840-07:00

Eric, what about the big dollar post ? I just can´t wait so see it !
Will you finish this week ?

What will be the effect of China's desertification...

2009-08-17T12:15:04.146-07:00

What will be the effect of China's desertification on its post-U.S.-dollar-collapse development?

Comments on Market Skeptics: *****Disaster Feared As Desertification Spreads***...