Sabbath eve, April 8, 2011. I’ve avoided typing the dreaded D-word for fear that somehow what I wrote would come true. It has come anyway. We’re in a drought. I hear people saying this is the worst drought since the 30’s…
Bullshit, I say. Maybe the size and scope is larger, but it was a damn sight dryer in ’06 and ’08 in my locality than it is now. However, this one’s not yet done with us.
Forecasts have been calling for rain a week from now for 3 months. Time after time systems break down. Fronts blow through dry with wind and driving dust. Afterwards heat returns from the south, sucking moisture from cracking ground. Tender grass sprang up but now dessicates as fast as it once appeared. A late frost adds insult to injury scorching young corn and milo plants struggling against a relentless wind. A couple more weeks of this and the crops will be gone, aside from miniscule areas where farmers can irrigate. With high energy costs, irrigation water is far from free.
Corn prices skyrocket in tandem with the price of oil. Parts, supplies and fertilizer also go up by the day. Cattle prices also continue to climb. I am told U.S. cattle numbers are lower than any time since the 1950’s. Feedlot managers fear a sudden collapse, nonetheless. How can people pay $10 or $11 a pound for a steak at the grocery store?
I read that almost 60 billion dollars spent into the economy last year should have gone instead to pay mortgages, but banks don’t repossess properties because the Fed will take them at full face value as collateral for interest free loans through the overnight window. Foreclosing would force banks to mark the notes to market. So maybe that’s how people keep buying $4 gas and $10 steaks. They’re squatting in their houses. And that’s also how the banks keep operating with shit for assets.
The Fed has become the largest holder of American Treasuries, surpassing both Japan and China. All bought with dollars hallucinated out of thin air.
Gold and silver continue to climb in value against the dollar. I bought a small amount of silver back when it was $19 an ounce, about a year ago. Today it sells for over $40 an ounce. We can take comfort from the fact Bernanke says there’s little or no inflation…
The Middle East and much of the rest of the world is in turmoil. While high food prices represent an inconvenience to most Americans who spend less than 10% of earnings to feed themselves, these same price increases are deadly to people already spending half of what they earn to eat. And that remains the case for one out of two people sucking air on this planet at the moment.
Meanwhile we continue turning our dwindling supply of corn into ethanol. We drive like hell and fly when we damn well please.
According to Shadowstats, the real unemployment rate in America continues to be 22%.
At least we aren’t being swamped by tsunamis or fried by a smoldering nuclear power plant.