Weather Report: The Economy — Global & National, Food Security?

THE ECONOMY–GLOBAL: CNNMoney.com (money.cnn.com) offered this little jewel on 1/25/09, “Global outlook to be slashed – again”.

The essence of this small piece is this: the International Monetary Fund (IMF) is again cutting it’s global growth forecast to a revised “…between 1% and 1.5%, as economic conditions deteriorate further…”.

For a perspective here we must look to last November’s ’09’ economic forecast which came in at 2.2%. While these differences may not appear significant to us at first glance, Axel Bertuch-Samuels ( deputy director of IMF’s monetary and capital markets department) describes them as “…huge.”

THE ECONOMY–NATIONAL : “Roach: Worst is Ahead for U.S. Economy” is the title of an article from News Max (moneynews.newsmax.com) on 1/25/09 by Gene Koprowski.

Morgan Stanley’s Asia Chairman, Stephen Roach is the source for the article’s core observations, such as : “…the worst of the current recession is still ahead for investors and consumers and the economy won’t likely be made better by the deficit spending by the new U.S. President Barack Obama.”, and “…The response has been one liquidity injection or one capital injection after another. But we just don’t seem to be getting out of this hole. The toxic assets have a scope and breadth beyond what the authorities have conceded or contemplated”.

Mr. Roach also notes that unemployment is likely to rise from the current 7.25% level to beyond 9%.

Note: PrudentHome’s predictions and observations on the U.S. economy for ’09’ are somewhat in line with Mr. Roaches, just not quite as optimistic.

FOOD– SECURITY?: News Max (newsmax.com) presented this informative article today on the California droughts effect on food availability and price: “Calif. Farmers Idle Crops, Prices may Rise”. A California almond grower, Bill Diedrich, summed up the real theme of the story this way, “ The real story here is food security, … It’s an absolute emergency and anything to get water flowing quickly is needed.”

With the worst drought in almost two decades, federal water deliveries down (in ’08’ deliveries were off 40% of normal allocations)and federal reservoirs at their lowest level since 1992, the outlook is grim. An example is given here by the officials in Fresno County “…farmers will only grow about 6,000 acres of lettuce, roughly half the acreage devoted to greens in 2005.” The bottom line is that consumers will pay more.

Job losses are another facet of this calamity and are estimated to be as high as 60,000 across the Central Valley.

Note: At PrudentHome we’ve stated that there is no food security without food production. This holds true for the nation and especially so for the family. We’ll be talking about the family garden later in the week.

Until a little later then, keep your eyes on the horizon: the weather is changing fast.