Agriculture blog

Last summer I found out about an agriculture

http://www.bigpictureagriculture.com


In that blog, you can see the reasons why the prices of both basic agricultural commodities were skyrocketing.

[...] the price of wheat rose more than 50 percent from mid-June until its peak in mid-July. By now everyone knows that the global corn and soybean market was greatly affected by our Midwestern drought. The spring wheat crop was good, however, and even though the U.S. produces only 10 percent of the world’s wheat, it is the largest wheat exporter. It was reassuring that throughout this drought season, we knew that global wheat and rice stocks were very ample and much above the levels of the food crisis year 2007/08. So, why did the price of wheat go up so much even though global wheat stocks were 42 percent higher than in 2007/08? In part, it looks like it over-reacted.

One reason was poor weather in some of the other wheat exporting nations. There was too much rain in some of Europe and a lack of rain in Russia, the Ukraine, and Kazakhstan. Russia is the world’s third largest wheat exporter and its yields fell 31 percent from last year, according to CME group. (Why hasn’t Paul Krugman chimed in this time, or has he noticed? Fact is, there are frequent droughts in this region.) Some expect Russia’s available wheat for export will be gone by the end of the year, as producers there have been exporting rapidly in case export restrictions are instated. Spain’s production was down 30 percent due to drought. There is some worry about the next growing season, too. There are dry conditions in Western Australia, the world’s second largest wheat exporter after North America. There are also dry soil conditions in the hard red winter wheat growing region in the U.S., lessened, however, by very recent rains.

Gold: healthy correction, huge opportunity for EUR buyers

Recalling the EUR/Gold divergences that we spoke about some months ago, we had a nice one on Friday. It has kept the ratio over the first two days of this week so my take is that it might diverge a little bit more, but it would be wise to start a spread long Gold and short EUR. For those with spare EUR to buy gold or any precious metal (which includes a potentially better buy such as silver), this is a nice entry point.

We are in a correction that has lasted more than a year now. Given the deflationary period we are in, markets might get really funny, but it would be good for inflation to raise over 3-5 percent this year. Otherwise we might enter a hard deflation, where cash is kept within financial institutions, and forced out all at once by central bank printing. That is the case where we get hyperinflation. I don't believe it's coming within the next two years. My take is that in 2013 we will see high inflation, in 2014 will be a turning point in which there will be a deflation and, depending on how hard it is, there will either be another cycle of the same (high inflation for 2015 after central bank printing) or we will enter the final hyperinflationary stage.

Well, there are some people that still rely on their governments. After all, they will always be able to resort to their (tungsten) reserves or, in this case, to something you can really eat

The Middle East: Somebody still thinks it is incidental?

Everybody knows that selling oil in any currency other than the USD is very dangerous, let it be EUR (Saddam Hussein) or gold (Muhammar Al-Gadhafi).

Let's look at this Middle East map:

From Zerohedge, the Iranian currency, the rial, has crumbled a 70% since the EU and the USA imposed sanctions on the country.

When President Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act, in July 2010, the official Iranian rial-U.S. dollar exchange rate was very close to the black-market rate. But, as the accompanying chart shows, the official and black-market rates have increasingly diverged since July 2010. This decline began to accelerate last month, when Iranians witnessed a dramatic 9.65% drop in the value of the rial, over the course of a single weekend (8-10 September 2012). The free-fall has continued since then. On 2 October 2012, the black-market exchange rate reached 35,000 IRR/USD – a rate which reflects a 65% decline in the rial, relative to the U.S. dollar.

In my opinion, the end game is in sight. Energy resources will be controlled by a small elite, and most of us will perish or will be become defacto slaves. A very nasty future lies ahead.

Orwell

Anarcho-Capitalism is something unknown and very contradicting to the ears of an European.

Anyhow, here's something interesting that I came across at their forums

Spanish government pardons a man conviced of running over a 23 years-old male

The Spanish government, who by a God-granted law has the right to pardon convicted felons, has commanded that a man who killed another while he was driving in opposite direction. It is known that the son of the Justice Minister works at the law firm that represents the felon. Here is the complete "royal" law

Real Decreto 1668/2012, de 7 de diciembre, por el que se indulta a don
RAMÓN JORGE RÍOS SALGADO
Visto el expediente de indulto de don Ramón Jorge Ríos Salgado, condenado por la
Audiencia Provincial de Valencia, sección cuarta, en sentencia de 17 de enero de 2011,
como autor de un delito de conducción con grave desprecio para la vida de los demás en
concurso ideal con un delito de homicidio, un delito de lesiones, una falta de lesiones y
una falta de daños, a la pena de trece años de prisión e inhabilitación especial para el
derecho de sufragio pasivo durante el tiempo de la condena, por hechos cometidos en el
año 2003, en el que se han considerado los informes del Tribunal sentenciador y del
Ministerio Fiscal, a propuesta del Ministro de Justicia y previa deliberación del Consejo de
Ministros en su reunión del día 7 de diciembre de 2012,
Vengo en conmutar a don Ramón Jorge Ríos Salgado la pena privativa de libertad
pendiente de cumplimiento por otra de dos años de multa, que se satisfará en cuotas
diarias de seis euros cuyo inicio y forma de cumplimiento serán determinados por el
Tribunal sentenciador, a condición de que abone las responsabilidades civiles fijadas en
la sentencia en el plazo que determine el Tribunal sentenciador y no vuelva a cometer
delito doloso en el plazo de cinco años desde la publicación del real decreto.
Dado en Madrid, el 7 de diciembre de 2012.
JUAN CARLOS R.
El Ministro de Justicia,
ALBERTO RUIZ-GALLARDÓN JIMÉNEZ

 It is rumored that the killer, whose surname is Salgado, is a relative of the former socialist Finance Minister.

This case, along with the final "royal" decree signed by former socialist government, pardoning the banker Alfredo Saez, Botín's deputy director at Santander Bank, offers a rather crappy view of the state of things in Spain.

If you have an account in Santander UK (former Abbey), or Santander anywhere else, or hold Spanish debt (doubtful), you better close it up or sell into the market now that the market offers you a chance by relaxing the pressure over Spanish sovereign debt.