Weather and recovery

Discussion in 'Economy' started by william the wie, Jan 14, 2011.

  1. william the wie
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    william the wie Gold Member

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    With the rest of the world losing crops due to weather and US crops like to be at least average will the US dollar take off like a rocket and choke off recovery? I don't know not being a farmer but a bidding war for available supplies seems likely and available supplies are disproportionately denominated in US dollars. Sinking currencies could cause major problems for the BRIC nations.
     
  2. Revere
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    I hope American farmers have a spectacular growing season.

    Can it be said other countries with failed crops will be addicted to American agriculture?

    Is that a bad thing?
     
  3. william the wie
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    william the wie Gold Member

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    The USD skyrocketing will hurt every industry but agriculture and could set off an epic bond bear in the US bankrupting many of our states. It is not all good news in the least.
     
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    So we need a weak dollar to keep the debt bubble from bursting?
     
  5. william the wie
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    william the wie Gold Member

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    I would think so but bonds ain't my thing. If China and Japan have to draw down their holdings in treasuries to buy groceries interest rates should spike despite a stronger dollar. Russia was the main breadbasket of the old world up until roughly 1915 and Turkey's entry into WWI. It has only partially recovered from collectivization so if expected worse than usual spring floods on the Don and Volga then that means a huge hunk of the world's winter wheat crop will be destroyed. Drought in Argentina and flooding in Brazil means a shortage of soybeans, sugar and coffee. Potato, maize and rice production may or may not be OK, tea may or may not be fine, likewise sugarbeet production. Corn syrup and Cocoa is not doing fine. I just think it unlikely that mashed potatoes and grits are going to substitute for noodles, bread and possibly rice in a happy way.
     
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    This debt monkey has to get off our backs one way or the other. Better this than crash the currency by pursuing inflationary policies that destroy Americans' livelihoods.
     
  7. william the wie
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    william the wie Gold Member

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    Not going to argue for that either. However the major problem is the 10 or so top twenty banks considered too big to fail and from the evidence too stupid to succeed. They are a net deficit to the financial system. Getting the Fed to turn them over to federal bankruptcy court when interest rates spike is the only way to avoid inflationary policies.

    Then there are the self-destructive states. From the results IL is the worst case, since Chicago still has a functioning barge canal that connects the Great Lakes to the Mississippi there is no blindingly obvious reason why it should be failing but with the next two biggies there are. NY forgot that its main reason for prosperity was transshipments first Albany did not upgrade the Erie canal and then NYC refused to containerize its port. CA ran off its movie industry in the south with taxes and in the north Silicon Valley is slowly relocating mostly to Austin and Seattle that is another nail in the CA coffin. Other states have other problems but those three are headed for default, which is survivable but federal help may attempt to avoid that and end us up somewhere else that is not survivable.

    So I see rising exports as an excuse for DC to run the printing press and that will be a disaster.
     
  8. william the wie
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    william the wie Gold Member

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    Self-immolations as food price protests seems to be growing throughout North Africa. It started in Tunisia and has spread to Egypt definitely with reported cases in Algeria and Mauritania.
     
  9. waltky
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    waltky Wise ol' monkey Supporting Member

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    Granny says a lotta people talk about the weather - but nobody don't do nothin' `bout it...
    :confused:
    Weather experts predict major flooding in Midwest
    18 Feb.`11 - Millions of people in the Midwest are at risk from major flooding this spring, according to a forecast being released Friday by the National Weather Service.
     
  10. william the wie
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    william the wie Gold Member

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    I would say all non-flooded farmers will make a mint off this constriction of supply.
     

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