MEXICO:

• “… To update the data on Mexico, its now our #2 source of imported petroleum because Saudi Arabia has fallen from #2 to #4.
• As of November 2009 (the latest data available) the U.S. imported 1.08 mbpd of crude and finished petroleum products from Mexico. Its exports to the U.S. peaked at 1.46 mbpd in 2004, the same year its production peaked. Net exports (production minus consumption) fell to 1.06 mbpd in 2008.
  For the years 2005-2008, Mexico’s exports to the U.S. declined by 0.51 barrels per day. In 2010, supply is expected to fall to 2.5 mpbd — nearly half a million barrels per day less than 2009.”
• “Consequently, Mexico’s oil reserves have decreased by more than 75% in two decades (owing partly to the correction of a previous, ridiculously inflated figure), production has begun to decline and exports are falling fast.”

VENEZUELA:

• “… As of November, the U.S. was importing 0.9 mpbd from Venezuela, making it our #3 source. Its exports to the U.S. peaked at 1.8 mpbd in 1997, the same year as its production peaked. Net exports (production minus consumption) have fallen 38% from the 1997 peak of 3.1 mpbd to 1.0 mpbd in 2008.
  Venezuela’s oil exports to the U.S. have been declining markedly since 2004, after a long period of relative stability, from 2004 through 2009, Venezuelan petroleum exports fell 0.7 mbpd.”
• “Now Chavez is turning east for help in developing his nation’s oil and gas resources. Recent agreements include a $20 billion joint venture with Russia to develop the Junin 6 field in the Orinoco oil belt, … .
  China has agreed to build a refinery and develop the Orinoco heavy oil fields, and Venezuela has guaranteed 560,000 barrels per day to China this year.
  
• “Chavez will put exports to the U.S. on a short path to zero the first chance he gets.”

PH Comment: It looks like oil availability and prices are going to be problems for the U.S. in the not-too-distant future unless we have a war between Israel and Iran: then the not-too-distant future will become NOW.

Until next time; keep your eyes on the horizon as the weather’s changing fast.

Iran Again: A weather report attempts to give an idea of upcoming/incoming weather in order for its viewers/listeners/readers to have some advance notice of the coming weather conditions and events, especially those that could produce dangerous results, and prepare accordingly. Here’s a bit of weather PrudentHome thinks is worth watching for:

• “US raises stakes on Iran by sending in ships and missiles” is the title of this Chris McGreal piece from The Guardian (guardian.co.uk/world/2010/jan31) made available via Drudge Report (drudge report.com) on 2/1/10. Here are some of its key points:

• “Tension between the US and Iran heightened dramatically today with the disclosure that Barak Obama is deploying a missile shield to protect American allies in the Gulf from attack by Iran. The US is dispatching Patriot defensive missiles to four countries — Qatar, United Arab Emirates, Bahrain and Kuwait — and keeping two ships in the Gulf capable of shooting down Iranian missiles. Washington is also helping Saudi Arabia develop a force to protect its oil installations.”

• KEY POINT: “Washington is also concerned at the threat of action by Israel, which is predicting that Iran will be able to build a nuclear missile within a year, a much faster timetable than assessed by the US, and is warning that it will not let Tehran come close to completion if diplomacy fails”

In an economically/financially  fragile world, a major war in the Middle East, with its almost certain effect of reducing oil availability, could/would be devastating to the industrialized nations of the world and their peoples: that includes the USA and us.

Until next time; keep your eyes on the horizon as the weather’s moving fast.

A Brief Apology: For over a month now, we here at PrudentHome have been dealing with a severe illness in one of the senior members of our family. It has taken our time, our effort and our concentration in order to give that family member the care and help they so richly deserve. It has not taken our commitment to strive to give the readers of PrudentHome our best efforts in helping them prepare for what we are sure are the difficult times ahead. We have been sporadic in our postings during this trial but we have been posting. We will continue on with our best efforts. Thank you.

Fragile Food Production: Food production in the world appears to be growing more fragile by the day as food producers fight challenges like the weather (climate change), oil price fluctuations, pests (Ug99), water availability, and a growing shortage of farmland. Now there’s a new concern: food production expectations. Here’s what it looks like in the headline from a World Net Daily (wnd.com) post this 1/10/10: “Government cover-up of food production shortage feared – Reports show demand growing, production declines estimated at 30%”. Here are some of the articles key points:

• “While trend experts, economists and investment gurus have been predicting food shortages for some time, new evidence indicates the U.S. Department of Agriculture mat be covering up the greatest food shortage in modern history.”

• “ … growing economies in Asia have ben consuming record amounts of raw goods, particularly food staples as consumers move to higher calorie diets. When supplies are reduced and demand is constant or growing, pieces normally rise.

Industry observers and economists remained mystified by the low agricultural prices in spite of this trend.One analyst, Eric DeCarbonnel from MarketSkeptics believes the answer is found in data he believes the U.S. Department of Agriculture has manipulated to keep prices low.

“Instead of adjusting production estimates down to reflect decreased production, [the USDA] 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,” he said.

DeCarbonnel points out that across the Midwest United States, many counties already have been declared federal disaster areas, which is defined by a decrease in crop production of at least one type by 30 percent or more. Hundreds of other counties across the country have experienced crop failures of 10-20 percent, not enough to qualify as federal disaster areas but still contributing to the overall poor harvest.”

• “DeCarbonnel’s conclusion is that the government is intentionally covering up the nature of the food shortage because if the public realized the true extent of the crisis and/or prices rose dramatically, economies could collapse and governments could fall.

He’s not alone in his claims, as researchers around the world are now publishing similar accusations.”

For a more extensive treatment of this subject/information, go here:
http://www.marketskeptics.com/2009/12/2010-food-crisis-for-dummies.html

This is the kind of information that has led/leads PrudentHome to encourage its readers to: expand your food storage program (and purchase your garden seeds for this years garden ASAP – enough for two gardens MINIMUM) and keep your awareness of what’s going on at the highest level.

Until next time, keep your eyes on the horizon as the weathers changing fast.

• “With the prospect of Israel bombing Iran’s nuclear facilities looming (just listen to Benjamin Netanyahu’s impassioned speech before the UN last Friday/PH), Tehran has renewed its threat to shut down the strategic Straight of Hormuz, through which up to 40 percent of the world’s oil passes …”
• “While the threat from Iranian authorities isn’t new, the fact that it could be blocked, even temporarily, comes at a bad time for the world economy in which a spike in energy prices, even for a short time, could have a detrimental impact.”

Oil and Availability: From The Oil Drum, at theoildrum.com, on 9/28/09 we have an “Interview with Sadad al Husseini (a geologist, reservoir engineer – production engineer who began work with Aramco in 1970 working in exploration, production and project management and who is now a consultant) – “The Facts Are There”. Here are some of Mr. Husseini’s observations on oil availability in the near and longer term:

“Sadad: I’ve been tracking the number of projects, globally, for a long time in the Middle East and elsewhere — Russia, Brazil, west coast of Africa and others. A lot of this information is in the public domain, so there is no mystery there. The International Energy Agency recently reported on the same numbers. The bottom line is that there are not enough projects. There is not enough new capacity coming on line, within say the next five or six years, to make up for global declines. …”

Even at these modest decline rates, we are basically going to see a shortage of capacity within two to three years. We’re being lulled by the current excess capacity, which has more to do with lower demand than anything to do with supply. So we do have a problem in the near term. In the longer term it’s even worse because in the longer term the lead time to discover, develop and put on line production runs into 10 years. And there isn’t enough being done in the long term as well. So it’s both a short and a long-term problem.“

PH Comment: With all of the foregoing, and knowing that food production is very much related to oil production (quantity produced, processed, transported/distributed, stored, and cost), perhaps it’s time to remind ourselves of those two nagging questions: “Got food storage?” and “Got garden?”

Until next time; keep your eyes on the horizon as the weathers changing fast.

US National Security – Imported Oil and Food: Energy Bulletin (energybulletin.net) on 6/1/09 presented a post authored by Rick Munroe: “Review of Rand study, Imported Oil and US National Security (May 2009)”. Although this was a summary of the full report, there were three areas of concern that seemed to stand out as particularly pertinent to the American family.

Here are some of the highlights:

• b. Policy recommendations: “… on corn ethanol: “Using corn for ethanol is economically inefficient and has harmed US national security.”
• c. Agri-food concerns: “The UK – truckers blockade indicated how quickly a fuel supply shortage can cause a food supply crisis. The vulnerability of the agri-food sector is particularly noteworthy. When oil prices spike, there is a direct and fairly immediate effect on the price of food (and eventually on the viability of the import-export model itself). Any threat to food imports must be offset by domestic food production. However most family farmers cannot readily absorb high fuel prices, so they may be forced to curtail on-farm activities at the very moment when their nation needs them to produce more, not less. Given the seasonal narure of most agricultural production, a price spike during the critical months could effect an entire year’s production”
• e. Civil disorder: An important Energy Bulletin reviewer’s observation of a possible short-coming in the report – “The authors appear to have complete faith in the “unseen hand” to efficiently sort out all resulting difficulties during a major fuel emergency. There is barely a hint in this study of the potential for civil disorder despite the nation’s extreme dependence on oil products, it’s suburban configuration and it’s reliance on just-in-time delivery for many essential goods. Nor is there any consideration of how low-income Americans may react to suddenly being immobilized by fuel poverty.”

Betting the farm: Why Jim Rogers Is Betting The Farm is the Lew Rockwell (lewrockwell.com, on 6/2/09) headliner to the Garry Whit piece in The Standard (thestandard.com.hk) on 6/1/09.

The article speaks to commodities in general but food in particular regarding future prices and investment possibilities. One of the worlds most savvy investor’s observations/opinions are highlighted but it may be more valuable to the average family to look at the root causes for future food price escalations. Here are some of those causes;

Long term: “…the rising global population will be a fundamental driver of the rising price of food.” Also, “.. global warming. Dry places getting dryer and wet places getting wetter and this is playing havoc with farming.” In addition, “ Rising wealth leads to rising food consumption, but it also leads to more meat consumption, Raising cattle or sheep requires significantly more grain and stimulates demand… .”

Short term: “ …the credit crunch.”, as “Farmers cannot get the finance they need to buy the inputs (i.e. seed, fertilizer, and pesticides) that go into growing food.” Also, “A tumbling dollar is likely to cause food prices to rise …. Debased currencies stimulate an appetite for investment in real assets.”

The two articles we’ve reviewed today point clearly to the need for the prudent home to develop both a significant home storage program for food (and essentials) and a home food production program for sustainable family welfare.

Until next time, keep your eyes on the horizon as the weathers changing fast.

THE BAD : “ Just when you thought it might be safe to go back into the water “ … along comes several Money News ( NewsMax.com) articles from : 1. Mohammed El-Erian ( on Friday, 8/1/08 ) co-exec officer of PIMCO (w/nearly ¾ of a TRILLION $ IN ASSETS under management ) that U.S. unemployment in headed upwards toward 6% while the economy faces simultaneous pressures from the housing, consumer, and financial sectors. , 2. Former White House economist & NYU Prof Nouriel Roubini estimates the current financial problems will produce credit LOSSES between 1 & 2 TRILLION $ with the U.S. taxpayer bearing the cost. 3. Former White House economic adviser Martin Feldstein predicts that the U.S. dollar will continue to decline in value with the worlds economic system eventually failing to support the huge U.S. trade deficits ( nearly ¾ TRILLION $/year). , and finally, 4. Allen Sinai, chief economist for Decision Economics, predicting a worsening U. S. recession ( he says we’re already in one! ) based on continuing weak jobs growth and an economy dependent ( 70% ) on consumption by consumers.

THE SCARY : The Middle-East always seems to be in some sort of turmoil. This probably wouldn’t appear as ugly a condition as it is except for the fact that the Middle-East is OIL COUNTRY.

The current and most pressing concern at the moment is the possible flash point between Israel and Iran

The probabilities at this flash point seem to be : 1. The international community won’t be able to offer meaningful/effective sanctions to alter the direction of Iran’s nuclear enrichment efforts. 2. Israel views Iran’s nuclear enrichment program as an attempt to develop a nuclear weapon and this, coupled with Iran’s bellicose statements towards Israel , creates the Israeli conclusion that Iran poses an existential threat., and 3. There will in all likelihood be a military confrontation between Israel and Iran. The effects of this confrontation will be far reaching. At the very least oil prices and availability will be dramatically effected in a negative way for an uncertain period of time.

This coming Friday, August 8, we’ll be talking about some more preparation sources for the prudent home as well as the “ WEATHER”.

In the meantime , keep your eyes on the horizon.

MUSINGS. There are a number of valuable traits to have/acquire and to develop if you want to adequately prepare for what’s promising to be an uncertain future:

• Positive Attitude: Faith, positive visualization, and a high level of determination and will.
• Awareness: Keep your eyes on the horizon. Develop good, reliable sources for information that effects you and your family. Re-evaluate these sources regularly with a critical eye and most certainly include your government in these periodic evaluations. No one’s right all the time but your sources need to be right on the big/important things most of the time.
• Preparing: Acquire, store, and develop the essentials needed to meet future challenges, both natural and man made. Be familiar with the effective use of these essentials.
• Skills: Their acquisition, maintenance, and development are a critical part of preparation. Here you must include also the teaching of these skills along with cross-training, especially in the critical skill sets ( such as first-aid, gardening, equipment maintenance, etc.)
• Conservation: Waste-not want-not.
• Frugality: Spend within your resources on the things you need. The things you want come last.
• Innovate/Adapt/Improvise: Change your environment and the things in it to meet your current and future needs.
• Independence: Do for yourself. Grow and expand the number of things you can do for yourself along with skill levels within these things.

SOURCES: Here are a few of the sources you might find valuable in your efforts to acquire and expand your knowledge and skills.

1. The Internet (you’re already here !).
2. Your local public library.
3. Your local used-book store.
4. Your local farmers market.
5. Yard sales (especially in this economy).
6. Community Colleges & State Universities (especially non-credit technical courses).
7. FEMA
8. The Red Cross

FOUR BASIC BOOKS: Here are four basic books we have, read (and re-read) and recommend as a beginning in establishing and maintaining your essentials and skills.

1. “The American Red Cross First -Aid & Safety Handbook” by Kathleen Handal, M.D.
2. The Encyclopedia of Country Living” by Carla Emory
3. “Making The Best of Basics” by James Talmage Stevens
4. “How to Grow More Vegetables (than you ever thought possible on less land than you can imagine)” by John Jeavons

Note: #4 is best available thru the Bountiful Gardens Catalog @ (707) 459-6410. This catalog is difficult of over-value with its information and seed sources.

Note: #’s 1-4 may be available @ your local used-book store. You might want to check there first.

Meanwhile, until next Tuesday, keep your eyes on the horizon.

WORLD: A number of Gulf Oil States and Egypt are apparently looking outside their own borders for agricultural/food production and security. The countries mentioned in the article we read included Thailand, Pakistan, and Sudan .

GERMAN CHANCELLOR MERKEL: Said in a six page letter to her counterparts in the G-8, that sudden rises in food prices “… endanger democracy, destabilize nations, and lead to international security problems.”

INTERNATIONAL WORLD BANK study (as yet unpublished) as well as the British Gallagher Report (also as yet unpublished) both say that plant and bio-fuel production have substantially (75%!?) pushed up food prices while the U.S., EU and Britain have plans for major increases in plant and bio- fuel production in the future.

BEGINNING PREPAREDNESS: A food assurance program thru home food storage

It’s probably accurate to say that most U.S. households have little or no home food storage preparations. A quick look at current conditions such as rising unemployment rates, national and international financial uncertainly, rapidly rising food and fuel prices, as well as possible geo-political up-heavels all seem to argue for a robust home food storage program. But how to begin?

FOOD STORAGE PRINCIPLES; SID

• SIMPLE: Begin with foods you regularly eat, especially those requiring little or no preparation.
• INEXPENSIVE: Shop competitively and strive to stay within your budget.
• DO-ABLE: Set up a limited goal for your first step such a three-day supply of food and water for each family member (don’t forget the pets) . Give yourself thirty days to reach this goal.

FOUR THINGS: four items you’ll want to have before you begin.

1. A dedicated space within your home to store your preparation items that is dry, cool (away from any heat source such as a stove or hot-water heater) and dark (the bottom of a pantry or closet would do).
2. A pen or pencil.
3. A notebook.
4. A permanent marker.

In our next post, July 11, we’ll discuss more about SID and the FOUR THINGS (as well as the weather of course).

Meanwhile, keep your eyes on the horizon.