Somebody has to do the work

Sabbath eve, February 18, 2011

The moon is full, the sky clear. Outside my door, Great Pyrenees dogs prowl the compound barking at roaming coyotes, marking and remarking boundaries, positioning themselves like roving sentries to cover all possible points of attack. It’s one thing to defend against a single large dog and quite another to deal with six. There was a time when I found carcasses. Now the coyotes know better. So do neighboring dogs.

Corn prices have skyrocketed of late, from $3 and change at harvest time last year to over $7/bushel today. Cotton recently went over $2/pound for the first time in history. Brent oil has been over $100/barrel for a week or so. West Texas crude is considerably lower for some reason, but I am told most of the world’s light oil is fetching the higher price. It should come as no surprise that most of the American corn and cotton crop is out of the hands of farmers. A brother of mine called Cargill just for the hell of it to see if they’re buying corn. Not until August he was told.

The average American worker spends something on the order of 15% of his earnings on food. In many of the countries now revolting, people spend half or better of what they earn on food.

China is said to have lots of dollars they’re worried about. Truth is, I don’t think they’re worried about this at all. No more so than we were when we played the beggar thy neighbor game of debt slavery with the populations of Latin and South American countries. When China holds our money, they hold debt instruments that can be used to acquire goods like food, energy and precious metals whenever they damn well please. And acquiring these is exactly what they’re doing. What are we going to say? Dollars are no good here? They bought a quarter of our pecan crop. They’re buying a bunch of our corn crop. The cotton crop. They’re buying substantial interests in our new domestic shale oil fields and oil reserves from around the world that traditionally have been reserved for the United States.

Bernanke says quantitative easing has not caused inflation. Bernanke lies.

The Eagle Ford shale play is in full swing in South Texas. Some lease prices have grown 1,500% in a year’s time, an amount I think cost prohibitive, especially when the high cost of drilling both in terms of energy and money is taken into account. I remain convinced that the money finding its way into the region is from freshly hallucinated Fed funds, channeled through major banks into large corporations.

Small producers need not apply.

The high cost of oil has found its way to gas stations. Diesel fuel sells for around $3.40 a gallon in these parts and regular gas around $3. I doubt you can get it cheaper anywhere else in the country. It was at this price that the economy began to flounder in 2008 as higher fuel costs translate into higher costs for virtually everything else we really need, seeing as how our just-in-time rolling interstate warehouse on wheels is powered by diesel fuel. I suspect that people will once again decide to fill their tanks rather than pay the mortgage so don’t be surprised if there’s another downturn in the real estate market looming.

With high fuel prices, demand for fuel may decline but developing countries will continue sopping up the excess, so don’t expect fuel prices to fall on anything other than short time corrections, unless of course the fed stops creating new money and I seriously doubt that’s going to happen. When we do use less fuel, we’ll also produce less in the way of real goods and services so forget the idea of a genuine economic recovery. Anybody telling you that’s in the cards is blowing smoke up your ass.

Cabbages, spinach, turnips, carrots and onions survived the intense cold wave of a couple of weeks ago. I planted potatoes this week. Broccoli and beets succumbed to the cold, but I had already harvested broccoli and could plant another crop if I desired. I hope to plant more beets. Many of you may think I am crazy, but having food to eat is a luxury not to be taken for granted. This would be a good time to plow up the lawn and plant some potatoes, corn and vegetables or whatever else works in your region. There’s a learning process involved in food production and a time lag between planting seeds and having something to eat. If you don’t have land or resources to do this, perhaps you should consider doing part time work for someone that does in exchange for a supply of fresh food.

As for the ongoing riots around the world: it’s good that people are pissed off, but higher pay will do absolutely nothing to improve the situation, especially when every country in the world applies the same false solution simultaneously.

Money is not real wealth, only the standard by which wealth is measured. More money chasing inadaquate supplies causes higher prices.

Somebody has to work to produce real wealth.

Times of chaos are not conducive to real work. There lies the conumdrum we too shall soon face.