Monday, December 21, 2009

Food Shortages Around the Corner

I linked to an article last spring about the catastrophic drop in food production in the 2009 growing season. Any disruption of the global food harvest was predicted to cause shortages.

Well, we had a poor harvest over many areas of the world, including the United States midwest.

Long and short of it, this blogger's analysis of the harvest information shows that we basically don't have enough food to make it through to the harvest next fall. That fact will not be immediately apparent, but if this information is correct, we should see significantly higher food prices in the U.S. and Europe, and shortages in developing countries.

Now is the time to stock up. Don't buy things you won't eat, just buy non-perishable goods and canned goods, and frozen goods if you've got an extra freezer or two. We just bought half a cow and half a pig from the meat processor in my wife's hometown in Iowa. The beef costs $2 a pound. Of course, we've got about 350 pounds of it, but it's awesome. The pork is even better. I think it was about $1.75 a pound. We got sausage, bacon, roasts, pork chops, etc, etc. The freezers are full. We're very happy. This is the cheapest way to buy meat, and it's much better meat than grocery store meat.

If I'm wrong, no harm, no foul. Eat what you've stored away. If I'm right, you'll be glad you did. Rice, oats, wheat flour, cooking oil, soy products, and corn will be more expensive and there will be spot shortages. Beef, pork, and poultry will increase in price because we feed them on corn and soy.

Also, plan on putting in a garden this spring. You'll help yourself a bit and the food will be healthier. Learn to can. Learn to freeze. Maybe talk to your church about using part of the church grounds for a community or congregational garden. We've kicked around the idea of a fenced garden plot with a chicken coop contained in another perimeter fence around the garden. That way the deer stay out, and the grasshoppers have to run a chicken-coop gauntlet in order to get to the garden. Both deer and grasshoppers are a serious threat to gardens in western South Dakota.

The markets are bumping along as predicted. Expect nothing dramatic to happen until after the New Year. Gold is continuing to correct, now below $1100. It's still got lower to go, IMHO. As long as it stays above $920, this is a correction in the bull market and thus a buying opportunity.


Friday, December 11, 2009

Gold and Markets Update

Well gold has not gone parabolic, which is a good thing. The anticipated correction is here, wiping out almost 10% in just a few days. This is also a good thing. Gold has had an amazing run in the last few months. It needs to take a breather. Likely gold is done for a few months at least. It could decline to as low as $920 and the bull market will still be intact. If it goes below that, something else is going on and we will need to reassess. It would still not be a bad thing to sell at least some of your physical gold and take some profits, even at this level. It's up to you.

The stock markets seem to be working on a topping pattern. They've basically been moving sideways for the last few weeks. This is a season which is generally strong and which usually results in "the Santa Claus Rally" The fact that the markets hit my 10,500 Dow target and then began moving sideways in this generally positive season does not bode well for future rises. Look for positive to neutral behavior from the markets until after New Year's Day.

The economic numbers are being massaged and then spun by the media. The latest jobs report is a prime example. There is all kinds of seasonal hiring around the holidays, which always results in a dip in the unemployment numbers. But the numbers (even the officially massaged numbers) are still bad. The rate of increase in unemployment is "slowing" and this is supposed to be cause for celebration. Look for revisions in the next couple of months, which is the Powers That Be saying "Oops! We made a mistake. The numbers aren't as good as we thought." This is standard operating procedure when the authorities are trying to manipulate mass sentiment.

Keep to your plan. Prepare for the worst, hope for the best, and trust in God.