ECONOMIC LIMBO: Yesterday, 9/29/08, at about 2PM the U.S. House of Representatives voted not to support a $700 billion bail-out of America’s private financial institutions. The American people were asked by their President, Secretary of the Treasury, Head of the Federal Reserve, and financial elite to evidence by a show of hands, their support for this bail-out. The peoples response was a single, up-thrust finger.
Stupid on the part of “the great unwashed”, the rubes inhabiting fly-over country, and financially ignorant middle-America? Maybe, but consider this: the business and financial leaders of our banks and financial institutions are said to oversee companies flush with cash and that will not lend money among themselves. We’re told they won’t because they don’t trust each other’s financial statements. Just maybe, regular American’s aren’t quite as stupid as they appear.
This bail-out bill will no doubt pass in some form. It will do so pretty quickly because the consequences of not doing so would probably be worse than the bail-out itself BUT, there are no guarantees that $700 billion will be enough or that the plan will work. Watch this one closely.
LAND: The Daily Reckoning of 9/24/08, presented an article entitled “ NO LONGER ‘CHEAP AS DIRT’” by Chris Mayer. Mr. Mayer notes that in the discussion of the global food crisis, the thing that doesn’t seem to get much discussion , “may be the most important thing of all: a growing shortage of quality topsoil.”
The article gives this interesting observation; “In the 1980’s, the amount of land under cultivation began to fall for the first time” since man began to farm around the Tigris and Euphrates rivers. We are now losing topsoil at a faster rate than we can replace it to things like desertification, erosion and development.
The foregoing plays out in countries scrambling to acquire farmland beyond their own borders in order to mitigate the possible effects of generational lows in global food supplies and export restrictions by food exporting countries.
The shortage of good farmland places it in the category of those things considered strategically significant such as oil and minerals.
WATER: In The Economist of 9/30/08 (www.economist.com) an article from 9/19/08 entitled “Running dry” points to a world water shortage replacing current food shortages as the primary concern for feeding a future hungry world. Northern China and western America were given as places where water is running out and it was noted that agriculture /farming accounts for 70% of human water consumption. A growing human population is sure to put more pressure on water stocks and thereby on food production.
Next week we’re going to do a book review on “How To Develop A Low-Cost FAMILY Food-Storage System” by Anita Evangelista. The remainder of this week, we’ll try to keep an eye on the economy in particular and the weather in general.
Until Friday then, keep your eyes on the horizon.
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