Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Global Food Crisis 2010 Means Financial Armageddon
The Market Oracle ^ | 12-27-2009 | Eric deCarbonnel

Posted on 12/27/2009 3:28:50 PM PST by blam

Global Food Crisis 2010 Means Financial Armageddon

Commodities / Food Crisis
Dec 25, 2009 - 04:12 PM
By: Eric deCarbonnel

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.

[snip]


TOPICS: News/Current Events
KEYWORDS: commodities; food; foodcrisis
Navigation: use the links below to view more comments.
first 1-5051-66 next last

1 posted on 12/27/2009 3:28:51 PM PST by blam
[ Post Reply | Private Reply | View Replies]

To: blam

Ah, point of order.

He with the food makes the rules.

There are some asian countries that got lots of rice but it’s the US that feeds the world. They would really have to pound the dollar down to out bid Americans for our own wheat.


2 posted on 12/27/2009 3:32:38 PM PST by PeteB570 (NRA - Life member and Black Rifle owner)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

bookmark


3 posted on 12/27/2009 3:35:25 PM PST by GiovannaNicoletta
[ Post Reply | Private Reply | To 1 | View Replies]

To: PeteB570

You forget who’s in charge of the US. He’ll give our food away and watch us starve while he gorges on wyguu beef and truffles.


4 posted on 12/27/2009 3:45:14 PM PST by Josephat
[ Post Reply | Private Reply | To 2 | View Replies]

To: blam

One bushel of corn or wheat for ....say......10,000 bbls of oil. Problem solved.

On the upside, if there’s a food shortage are we still paying US farmers not to grow crops?


5 posted on 12/27/2009 3:45:24 PM PST by TheUndead (...it's all downhill from here.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam
Don't know about this.

Even under adverse conditions (cold wet spring forcing very late planting, cool summer, late maturing, flooding during harvest time) the corn crop was predicted to be the second largest ever and the soy bean crop - the largest ever. Haven't heard how that panned out, but I think its close. Haven't tracked the wheat, but its price is quite low now indicating a more than adequate supply.

6 posted on 12/27/2009 3:46:29 PM PST by Western Phil
[ Post Reply | Private Reply | To 1 | View Replies]

To: Western Phil

For more than 50 years the American Farmer has produced way more food than we could possibly eat.

We’ve been feeding the world, so to speak.

See my tagline, it’s been true for, what, a hundred years? It will be true in 2010 also.


7 posted on 12/27/2009 3:49:41 PM PST by Balding_Eagle (Overproduction;, one of the five top worries of the American farmer.)
[ Post Reply | Private Reply | To 6 | View Replies]

To: blam

Gee, if there’s not enough food to go around, perhaps it will be time to show the world who’s the butch, and who’s the b*tch. . .

Nevermind, I forgot Doctor Utopia is running the place right now, he’ll give it all away and force us to pay triple. . .


8 posted on 12/27/2009 3:52:52 PM PST by Salgak (Acme Lasers presents: The Energizer Border: I dare you to try and cross it. . .)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

Oh no another disaster in the making. I guess Al Gore will be out making a new movie and cashing in on the food credits.


9 posted on 12/27/2009 3:52:58 PM PST by seawolf101
[ Post Reply | Private Reply | To 1 | View Replies]

To: Josephat

I’m long on lobsters given Michelle’s tastes ... ;-)


10 posted on 12/27/2009 3:53:13 PM PST by Tunehead54 (Nothing funny here ;-)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Western Phil

if u read the article he explains this


11 posted on 12/27/2009 4:00:52 PM PST by remaxagnt (`)
[ Post Reply | Private Reply | To 6 | View Replies]

To: blam

Seems like somebody just read Ehrlich and wrote an article about it.

We’ve been hearing this crap since the ‘70s.


12 posted on 12/27/2009 4:05:18 PM PST by Carling (Somewhere in Kenya, a village is missing its idiot.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

end the ethonol mandate for gasoline NOW


13 posted on 12/27/2009 4:09:42 PM PST by GeronL (This is a tagline)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

Don’t forget the production of ethanol, which has caused a shift of food production from people to fuel.


14 posted on 12/27/2009 4:10:42 PM PST by kabar
[ Post Reply | Private Reply | To 1 | View Replies]

To: Salgak

One of the reasons the idiot won is because the people of this country have gotten so comfortable they think they deserve more and more for less and less. The forgot that comfort comes from hard work, sweat and putting away for the future. We are fast running out of what was once “put away”.


15 posted on 12/27/2009 4:12:21 PM PST by GeronL (This is a tagline)
[ Post Reply | Private Reply | To 8 | View Replies]

To: blam

Thank heavens the US can produce more food than it can consume. (Remember, in the 1930s depression the government bought food and destroyed it because of over production.)

Thank God Rhodesia can feed all of Africa! All that is left is Europe and Asia!

Oh, wait...


16 posted on 12/27/2009 4:13:24 PM PST by Ruy Dias de Bivar (Are my guns loaded? Break in and find out.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: kabar; writer33

I beat ya by exactly a minute.

Corn ethonol being forced into the gas tank is one of the reasons. Undoing that should be the first thing we do if there is a food shortage. And stop paying farmers not to grow foods.


17 posted on 12/27/2009 4:13:48 PM PST by GeronL (This is a tagline)
[ Post Reply | Private Reply | To 14 | View Replies]

To: blam
The good news....

ObamaCare provides free treatment for malnutrition.

18 posted on 12/27/2009 4:16:56 PM PST by zeestephen
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

I dunno. It’s damn hard to find people who have money to buy food but cant do so.


19 posted on 12/27/2009 4:20:08 PM PST by freespirited (People talk about "too big to fail." Our government is too big to succeed. --Chris Chocola)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

“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.”

In the last 30 days?! Isn’t this winter? What crop is growing in the winter?

I’m pretty well “crisis-ed out” & don’t find this very believable. But no doubt Obama will find a way to utilize it.


20 posted on 12/27/2009 4:20:25 PM PST by Twotone (Marte Et Clypeo)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam; FromLori
The upcoming problem with food isn't production per se, it's transportation.

Land and sea shipping business is dying rapidly in the background. When they go under, the fleets are mothballed and unable to be re-activated easily.

All US grain is effectively transported on 2 rail lines.

A failed harvest is the least of our problems (and that is likely given the solar minimum we're in).

Get fat while you can.


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

21 posted on 12/27/2009 4:21:45 PM PST by The Comedian (Evil can only succeed if good men don't point at it and laugh.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PeteB570
There are some asian countries that got lots of rice but it’s the US that feeds the world.

I hope America can be thankful to God for this blessing! If we forget God is the Provider then God help us!
22 posted on 12/27/2009 4:23:22 PM PST by RushingWater
[ Post Reply | Private Reply | To 2 | View Replies]

To: GeronL
Yep, and it is not only in the US. Other countries are following suit. Brazil is the second largest.

“World’s Ethanol Production Forecast 2008 - 2012” -- According to the MarketResearchAnalyst.com information the top five ethanol producers in 2006 were the United States (4.855 billion US gallons per year (bgy), Brazil (4.491 bgy), China (1.017 bgy), India (0.502 bgy) and France (0.251 bgy).

23 posted on 12/27/2009 4:23:40 PM PST by kabar
[ Post Reply | Private Reply | To 17 | View Replies]

To: Ruy Dias de Bivar

The US CAN grow more food than we eat, but we choose to ferment and burn it instead. The US is now a net importer of food.

If you don’t believe me, go to the produce aisle and check the labels.


24 posted on 12/27/2009 4:28:06 PM PST by Qout
[ Post Reply | Private Reply | To 16 | View Replies]

To: blam

We are culling out the dairy herds out here in California. Too much milk. Agriculture in the US is still operating in the realms of weak markets and over production.


25 posted on 12/27/2009 4:30:43 PM PST by artichokegrower
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

Luckily, we’ll all be enslaved by the Goa’uld before the food crisis hits...


26 posted on 12/27/2009 4:32:32 PM PST by pabianice
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

Yup. He posted this on MarketSkeptics a few days ago.

I stocked up with abt 20lbs of dried goods, and a bunch more canned stuff today.

Had a yummy lunch (of the type I might eat if the SHTF) of pan fried egg noodles, with home grown Oregano, covered with beef gravy and peppercorns.

So I stock up on food and then the SHTF and all the yokels who spent their money on HDTV and Ipods come up the hill...

Life ain’t fair, I tell ya!!


27 posted on 12/27/2009 4:33:10 PM PST by djf (Invest now! Buy paper! Earn interest! That's more paper!! (A little soy sauce and you CAN eat it!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Qout
The US CAN grow more food than we eat, but we choose to ferment and burn it instead. The US is now a net importer of food.

That's a steaming pile.

The American Farmer produces FAR more food than we can eat, and has done so for more than 50 years.

We can waste our food production resources growing 'natural' foods, we can burn our food sources to heat our homes and power our cars, and STILL have mountains and mountains of surplus.

See my tagline.

28 posted on 12/27/2009 4:35:00 PM PST by Balding_Eagle (Overproduction;, one of the five top worries of the American farmer.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: Qout
I should add, we can PAY our farmers NOT to produce, and STILL we have montains and mountains of surplus food and feedstuffs.

Pork is a good example. Due to a surplus of corn and other feedstuffs, for the past 6 months the surplus of pork has grown to a unbearable level, driving many pork producers into bankruptcy

29 posted on 12/27/2009 4:39:43 PM PST by Balding_Eagle (Overproduction;, one of the five top worries of the American farmer.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: kabar

Brazil gets theirs from sugar, which is apparently several times for efficient an ethonol source than corn.


30 posted on 12/27/2009 4:45:09 PM PST by GeronL (This is a tagline)
[ Post Reply | Private Reply | To 23 | View Replies]

To: GeronL

Regardless, it still diverts land usage for crops that feed people to produce fuel.


31 posted on 12/27/2009 4:52:31 PM PST by kabar
[ Post Reply | Private Reply | To 30 | View Replies]

To: Josephat

If he does the people will serve him up on a platter with an apple in his mouth.


32 posted on 12/27/2009 4:55:15 PM PST by beethovenfan (If Islam is the solution, the "problem" must be freedom.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Balding_Eagle

33 posted on 12/27/2009 4:56:38 PM PST by kabar
[ Post Reply | Private Reply | To 28 | View Replies]

To: Balding_Eagle

I stand corrected. Last year the US exported $96 billion in agricultural goods while we only imported $73 billion.
http://www.ers.usda.gov/data/fatus/monthlysummary.htm


34 posted on 12/27/2009 4:59:18 PM PST by Qout
[ Post Reply | Private Reply | To 29 | View Replies]

To: Qout

And that’s with a hard throttle placed on the American farmer.

Every farmer I know could ramp up production 10%, and do it for the 2010 crop.

Give him a serious financial incentive, and 15% for 2010 isn’t out of the realm of possibility.

By 2015 we could have some serious increase in production.

by 2020, it could nearly double from what is produced today.

The blessing of capitalism is alive and well in the American farmer


35 posted on 12/27/2009 5:24:28 PM PST by Balding_Eagle (Overproduction;, one of the five top worries of the American farmer.)
[ Post Reply | Private Reply | To 34 | View Replies]

To: kabar

Thanks, a good visual of the self induced scourge of the average farmer.

The government uses, and fine tunes, that huge production to hang over the head of the farmer, limiting his downside risk, but keeping him captive to a limited profit margin.

That’s why most farmers have a family member who has an off-the-farm job.


36 posted on 12/27/2009 5:34:35 PM PST by Balding_Eagle (Overproduction;, one of the five top worries of the American farmer.)
[ Post Reply | Private Reply | To 33 | View Replies]

To: hennie pennie

*bookmark*


37 posted on 12/27/2009 5:40:55 PM PST by hennie pennie
[ Post Reply | Private Reply | To 1 | View Replies]

To: Balding_Eagle

And that is not counting the CRP contracts that are ending. Piles and piles of corn and milo on the ground because the bins are full....If one wants to know what the weather is sometimes it is best to step into the real world.


38 posted on 12/27/2009 5:48:25 PM PST by Dust in the Wind (U S Troops Rock)
[ Post Reply | Private Reply | To 35 | View Replies]

To: blam

I’ve been stockpiling cannes goods and also making sure I have lots of flour onhand. Looks like I might want to get busy and make sure I have more than I do now.


39 posted on 12/27/2009 6:11:59 PM PST by chris_bdba
[ Post Reply | Private Reply | To 1 | View Replies]

To: Balding_Eagle

Thanks Balding Eagle.


40 posted on 12/27/2009 6:13:31 PM PST by MonicaG (Thank you to our military & veterans, with love & gratitude. XOXOXO)
[ Post Reply | Private Reply | To 7 | View Replies]

To: Twotone

Winter wheat and some other grains grow in the winter?


41 posted on 12/27/2009 6:14:33 PM PST by chris_bdba
[ Post Reply | Private Reply | To 20 | View Replies]

To: blam

Mr. deCarbonnel of The MarketSkeptic seems to have an agenda. I followed some of the links and he seems to cite a lot of individual farm disaster stories which in total do not really prove his point. Then he is touting investment in Russian land, which may be a good idea for someone with deep pockets, but is surely a crapshoot given the governments’ ability/propensity to confiscate whenever it looks like someone is going to make some money.


42 posted on 12/27/2009 6:31:30 PM PST by Sicvee (Sicvee)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GeronL
Ethanol...Undoing that should be the first thing we do

That is the last thing we will do. Republicans will starve before they will touch the sacrosanct Ethanol mandates and subsidies and Democrats would like to have most of the population starve to reduce the country to a sustainable 50 million or 3 million or whatever the golden number of the moment is.

43 posted on 12/27/2009 6:35:07 PM PST by arthurus ("If you don't believI really hate to in shooting abortionists, don't shoot an abortionist." -Ann C.)
[ Post Reply | Private Reply | To 17 | View Replies]

To: blam

Luckily most every geographic area in the USA has a strong agricultural and processing base. The only problem will be distribution but for most Americans there is no more then 100 miles to travel to get ample food. There is no food shortage, only a distribution problem. The scary part is a Hugo Chavez response by our disgusting government.


44 posted on 12/27/2009 6:55:12 PM PST by Organic Panic
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

Think I’ll hold onto my McDonalds stock...


45 posted on 12/27/2009 7:02:49 PM PST by Night Hides Not (If Dick Cheney = Darth Vader, then Joe Biden = Dark Helmet)
[ Post Reply | Private Reply | To 1 | View Replies]

To: The Comedian

You are a little over the top here. The rails have been storing grain cars for when demand picks up, it will take no effort to pull them off storage tracks.

The consolidation of the Western Railroads took place 10 years ago and the problems of the mergers exceeded any imbalance we see due to the recession. You also ignored barge capacity.


46 posted on 12/27/2009 7:10:08 PM PST by sgtyork (The secret of happiness is freedom, and the secret of freedom, courage. Thucydides)
[ Post Reply | Private Reply | To 21 | View Replies]

To: NVDave

A pingaroo


47 posted on 12/27/2009 7:11:11 PM PST by investigateworld (Abortion stops a beating heart)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sgtyork
You are a little over the top here.

Thanks. I try.

The rails have been storing grain cars for when demand picks up, it will take no effort to pull them off storage tracks.

How much effort will it take to repair the 2 main rail lines that get taken out by sleeper cells from Michigan?

30 days? 2 weeks? 5 days?

And where are the wave of extra truck drivers and dispatchers who are going to be required to make up the backlog going to come from? The trucking companies are going under at a rate of several per *week*.

There are 3 days max worth of supplies in most American cities. Without trucks to move product to and from the railway depots, America dies.

How's that for hyperbole?

...You also ignored barge capacity.

Pfft, dude, barge capacity requires paid staff to navigate it. The empty merchantile floatilla is growing daily. One more CIT-level event, and you've got half the shipping companies in America unable to make payroll. How many crews are going to work for free, and for how long?

Sorry, I stand by my analysis of the fragility of the food supply: Transport undercut by economic instability.


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

48 posted on 12/27/2009 7:49:08 PM PST by The Comedian (Evil can only succeed if good men don't point at it and laugh.)
[ Post Reply | Private Reply | To 46 | View Replies]

To: The Comedian

Your going to have to show me exactly the two points in these two maps that will immobilize the Western US railroads.

http://en.wikipedia.org/wiki/File:BNSF_Map.png

http://www.co-ventures.com/Union_Pacific_Railroad_system_map_svg.jpg

Note that the Canadian Pacific also has significant service in the upper Midwest.

And let me tell you as a former Santa Fe operations manager that a section of track damaged in the worst system deraillments (which occur every few months) can easily be repaired in 24 - 36 hours.


And where are the wave of extra truck drivers and dispatchers who are going to be required to make up the backlog going to come from? The trucking companies are going under at a rate of several per *week*.

You need to recognize that you have made self contradictory statements here. Yes, trucking companies are going under at an alarming rate — that means that there are drivers out there looking for work that will be available if demand picks up. (BTW I thought we were talking about railroads)


barge capacity requires paid staff to navigate it. The empty merchantile floatilla is growing daily. One more CIT-level event, and you’ve got half the shipping companies in America unable to make payroll. How many crews are going to work for free, and for how long?

Now you are talking about an national economic meltdown, not a transportation resource shortage.


49 posted on 12/27/2009 8:16:06 PM PST by sgtyork (The secret of happiness is freedom, and the secret of freedom, courage. Thucydides)
[ Post Reply | Private Reply | To 48 | View Replies]

To: sgtyork
Now you are talking about an national economic meltdown, not a transportation resource shortage.

I think you need to re-read my posts.

I am talking about a cascading transportation logistical failure brought on by any number of factors, including financial collapse of anyone in the supply chain, and/or terrorism. Or union action, for that matter.

My point was that actual crop failure is the least of our worries.


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

50 posted on 12/27/2009 8:48:05 PM PST by The Comedian (Evil can only succeed if good men don't point at it and laugh.)
[ Post Reply | Private Reply | To 49 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-66 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson