Debt, Doom, and Food

Debt Doom, and Food–Wheat

The Economy–Debt Doom: “Can they pay it back?” by Colin Campbell at www2.macleans.ca, via lewrockwell.com today, sports this sub-line, “The U.S. is about to go broke and they’ll take us down with them”. Scary but apparently somewhat sensational unless you read on to find that this article very much revolves around the views of Peter Schiff. Here then are some of Mr. Schiff’s views and the articles highlights:

• “Peter Schiff was making the rounds on U.S. cable news shows in 2007, warning about the collapse of the housing market, anchors and fellow guests literally laughed in his face when he launched into his gloomy predictions. That kind of meltdown could never happen, they said. The economy was on rock-solid ground.. In those rosier economic days, Schiff, the president of Darien, Conn.’s Euro Pacific Capital, was repeatedly cast as a successful broker who’d gone off the deep end.”
• “These days, a vindicated Schiff is back on the talk show circuit with an even darker message. The current recession, he argues, is only the beginning of a larger economic restructuring. The American economy has been destroyed by years of reckless spending and borrowing. And now, the U.S. government is so deeply in debt that at some point in the very near future, he says, its lenders–namely China– are going to come to their senses and cut America off. …”When the system collapses –and it inevitably must, he insists–inflation will run wild as the U.S. prints money to support its spending habit. Interest rates will jump and everyone will suffer. The real day of reckoning is still to come.”
• “Late last month, well-known bond guru Bill Gross, founder of Pacific Investment management Co., warned the U.S. could eventually lose its AAA investment grade ranking.”

A PrudentHome Note: Peter Schiff is one of a dozen or so financial and economic players who have been pretty much spot-on regarding the condition of the economy and future national and international economic conditions. It’s our view that this relatively small group (i.e., Jim Rogers, Nouriel Roubini) who have proven their predictive mettle, should  have our attention when they speak to the future. The government and the “blue Sky” business news employees predictions and opinions should be very suspect.

Food–Wheat: survivalblog.com (Jim Rawles’ blog) led us to an interesting site (marketskeptics.com) this 6/21/09 and an article entitled “USDA Deliberately Misleading Investors To Hide Looming Food Shortage” by Eric deCarbonnel. The article’s contents were not all that surprising, that the USDA was “finessing” the wheat production and consumption numbers to suppress grain prices, but what caught our eye as we finished this informative article was a 6/15/09 post entitled “Wheat: Living On The Edge”: … “a batch of entries on the world’s agricultural situation from Nogger’s Blog.” Here are a couple of entries we thought you might find as interesting as we did:

• “So the top six exporting nations that account for over half of world production and 87.%5 of global trade in wheat are set to see their output fall by around 35.5MMT in the year ahead.”
• “…it looks a nailed certainty that Argentina (a world class wheat producer and exporter/PH) won’t even have any wheat to export at all in 2009/10, and will probably be a net importer (despite the fact the USDA currently has them down to export 4MMT next season).”

Interesting, no?

Next time we’ll plan on finishing our post on farmland investment (Part 2) and how this effects the individual family. Until then, keep your eyes on the horizon as the weathers changing fast.