Economy

U.S. Credit Card Debt Soars to Unprecedented Heights

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WASHINGTON—Studies indicate that credit card defaults and related write-offs increased drastically since 2006. Today, lenders write off 33 percent more in credit card debt than they did two years ago.

Statistics show that about 35 percent of all credit card holders are already exhibiting signs of possible default. Late credit card payments result in fees many consumers can’t afford.

Credit card debt accelerated to unprecedented heights since bank loans began to dry up due to mortgage defaults. Total U.S. credit card debt reached almost $800 billion in November 2007, up from around $680 billion in March of last year, according to the latest available government statistics.

In the aftermath of the U.S. mortgage crisis, the credit card bubble may be next to burst. In the past few years, banks have aggressively marketed credit card ownership and usage to consumers with limited income and low credit scores. Credit card standards remain lax, while loan standards have tightened to a degree.

Read moreU.S. Credit Card Debt Soars to Unprecedented Heights

Gasoline May Soon Cost $10 a Gallon.

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Big New Shock at the Pump Forecast by Two Analysts

Get ready for another economic shock of major proportions — a virtual doubling of prices at the gas pump to as much as $10 a gallon.

That’s the message from a couple of analytical energy industry trackers, both of whom, based on the surging oil prices, see considerably more pain at the pump than most drivers realize.

Gasoline nationally is in an accelerated upswing, having jumped to $3.58 a gallon from $3.50 in just the past week. In some parts of the country, including New York City and the West Coast, gas is already sporting a price tag above $4 a gallon. There was a pray-in at a Chevron station in San Francisco on Friday led by a minister asking God for cheaper gas, and an Arco gas station in San Mateo, Calif., has already raised its price to a sky-high $4.62.

Read moreGasoline May Soon Cost $10 a Gallon.

Ted Turner Repeats Call For Population Curb

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Says diminishing farmland will lead to food riots, despite being behind corn-based ethanol push

Says diminishing farmland will lead to food riots, despite being behind corn-based ethanol push
Billionaire Globalist Ted Turner, who earlier this month predicted that global warming would eventually lead to cannibalism, has repeated his call to curb population growth, claiming that disappearing farmland will cause food riots, despite the fact that Turner himself is behind the push to grow corn-based ethanol, an industry the UN has blamed for food shortages and increased poverty.

“There are a lot of different problems being caused by an ever-increasing number of people in a finite-sized world,” Turner told CNBC’s Bob Pisani. “The resources of the planet just can’t keep up with the demand and I’m afraid this going to be more commonplace. I’m afraid we’re just seeing the tip of the iceberg. It’s very complicated I do want to say.”

Watch the video.

“We’ve had warnings for a number of years,” Turner said. “Grain stocks have been dropping every year for the last 10 years or pretty close to that – the reserves. And, the environment in so many different areas is being – the pressure being put on it by the ever-increasing number of people and the number of people using more stuff and more energy – that’s what ‘s leading to global climate change and the over-fishing of the oceans,” he added.

Read moreTed Turner Repeats Call For Population Curb

OPEC president sees $200 oil possible

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ALGIERS (Reuters) – OPEC President Chakib Khelil does not rule out oil prices reaching $200 a barrel, even though supply is adequate, because the market is driven by the dollar’s slide, Algerian government newspaper El Moudjahid reported on Monday.

“Questioned about a possible rise which would go to $200, the minister did not rule out this eventuality, explaining that this rise is indexed from now on to the fall in the dollar or to the rise in the dollar,” El Moudjahid reported.

“In terms of fundamentals, stocks are high, demand is easing, supply is satisfactory. Therefore normally, without geo-political problems and the fall of the dollar, the prices of oil would not be at this level,” he was quoted as saying.

Khelil, a former World Bank official, is also Algeria’s Minister of Energy and Mines.

He added: “The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa,” he was quoted as saying in brief remarks to journalists on Sunday.

He added that: “If this (the dollar) strengthens by 10 percent, it is probable that (oil) prices will fall by 40 percent.”

If the U.S. economic situation improved from now to the end of the year “that would help the market to stabilize.”

“But I don’t think that an increase in production would help lower prices, because there is a balance between supply and demand and the stocks of gasoline in the United States have recorded a surplus and are at their highest level for five years.”

The independent El Watan newspaper reported Khelil as saying that if the dollar’s value on currency markets stayed as it was at present, then oil prices would be expected to remain at between $80 and $110 a barrel.

(Reporting by William Maclean; editing by James Jukwey)

Mon Apr 28, 2008 5:59am EDT

Source: Reuters

The food crisis begins to bite

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Rioting in Haiti. Rationing in America. Queues in Egypt. Protests in Afghanistan. As the price of food continues to soar, the impact is being felt by people around the globe

CHINA

The roaring economy and an ever expanding middle class have had a particularly profound effect on food prices, particularly rice and wheat. Because of industrialisation, rice planting fell from 33 million hectares in 1983 to 29 million by 2006 and China now imports more than ever, placing a major strain on international supplies. Despite freezing prices, rampant inflation means the cost of food has risen by 21 per cent this year.

USA

In a land where supposedly the rich are thin and the poor are overweight, one of the largest cash and carry stores, Sam’s Club, announced this week it would limit customers to take home a maximum of four bags of rice. The move came a day after Costco Wholesale Corp, the biggest US warehouse-club operator, limited bulk rice purchases in some stores and warned that customers had begun stockpiling certain goods.

NORTH KOREA

Even during times of relative stability, North Korea has shown itself to be inept at feeding its population. During the 1990s a famine caused by poor harvests killed an estimated two to three million people. On Wednesday the World Food Programme warned that the country could again be plunged into famine because of the spiralling cost of rice and there was an estimated shortfall of 1.6 million tons of rice and wheat.

EGYPT

Up to 50 million Egyptians rely on subsidised bread and this year Cairo has estimated it will cost $2.5bn. But with the price of wheat rocketing in the past year there are fears the country has plunged into a “bread crisis”. Queues are now double the length they were a year ago. Inflation hit 12.1 per cent in February with prices for dairy goods up 20 per cent and cooking oils 40 per cent

VENEZUELA

Latin American countries were some of the first nations to voice their concern at rising wheat prices, particularly after thousands of people in Mexico took to the streets at the beginning of 2007 to take part in the so-called “Tortilla Protests”. This week the presidents of Bolivia, Nicaragua and Cuba’s vice-president flew to Caracas to announce a joint $100m scheme to combat the impact of rising food prices on the region’s poor.

BRAZIL

On Wednesday Brazil became the latest major rice producer to temporarily suspend exports because of soaring costs and domestic shortages. In recent weeks Latin American countries and African nations have asked for up to 500,000 tons of rice from Brazil which will now not be delivered. Brazil’s agricultural ministry has said it has to ensure that the country has at least enough rice reserves to last the next six to eight months.

IVORY COAST

Some of the worst instability resulting from high food prices has been felt in West Africa. One person was killed and dozens were injured last month as riots tore through Ivory Coast after the prices of meat and wheat increased by 50 per cent within a week. Ivorian President Laurent Gbagbo was forced to cut taxes to halt the disorder. Violent protests have also broken out in Cameroon, Burkina Faso and Senegal.

AFGHANISTAN

There have been street protests about the soaring cost of food in a country almost entirely reliant on imports of wheat. Already utterly impoverished, the plight of Afghans has worsened because Pakistan has cut its regular flour supply. The government has sought to assure citizens that there is sufficient food and has set aside $50m for additional imports. The price of wheat has risen by around 60 per cent in the last year.

THAILAND

The price of rice in the world’s largest exporter rose to $1,000 a ton yesterday and experts warned that it will continue to rise. This is because of the massive demand from the Philippines which is struggling to secure supplies after India and several other producers halted exports. The government has said it can meet the export requests. Indonesia has said it is withholding purchases for a year because prices are so high.

EAST AFRICA

Hundreds of thousands of poor Africans in Uganda and Sudan are to lose out on a vital source of food after one of the world’s largest humanitarian organisations said it was cutting aid to 1.5m people. Dave Toycen, president of World Vision Canada, blamed soaring costs and countries failing to live up to aid commitments for the fact that the number of people the charity can help will fall by almost a quarter.

INDIA

The country as added to the problems facing many countries in the region by halting its export of rice, except for its premium basmati product. This has left countries normally reliant on Indian exports, such as the Philippines, searching for alternative supplies. India has more than half of the world’s hungriest people and its priority is to safeguard domestic supply. But it too has watched as the cost of food has soared, not just rice but cooking oil, pulses and even vegetables. India has this year forecast a record grain harvest but experts warned farm productivity will have to rise much faster if the nation is to feed its 1.1bn people and avoid a food security crisis. Around two-thirds of India’s population are dependent on agriculture for their livelihoods but agriculture is growing much more slowly than the overall economy.

HAITI

The poorest country in the Western hemisphere has seen a three to four-fold increase in the number of so-called boat people trying to leave because of food shortages. Already gripped by wretched poverty, the food crisis triggered riots that led to the death of six people. Haiti’s wretched food security situation is a result of “liberalisation measures” forced on the country after former president Jean-Bertrand Aristide was returned to power.

THE PHILIPPINES

The government has been desperately trying to secure alternative sources of rice to counteract the decision of a number of nations to halt rice exports. The country’s National Food Authority, which handles rice imports for the government, has now said it plans to increase imports 42 per cent to 2.7m tons this year. This could cost $1.3bn if it does not increase the price of the subsidised rice it is selling to people. But the Philippines is responsible for producing 85 per cent of its own food and international experts believe the country will handle this crisis. The government has also been encouraging consumers and even fast food restaurants to be more frugal and be careful not to waste food. The government is confident it will be able to source sufficient supplies from Vietnam and Thailand.

EUROPE

Less vulnerable to food price fluctuations than emerging nations, but food prices across Europe have nonetheless increased. In Britain wholesale prices of food have increased by 7.4 per cent over the past 12 months, roughly three times the headline rate of inflation. According to the government’s own statistics grocery bills have gone up by an average of £750 over the same period, the equivalent of a 12 per cent rise.

By Jerome Taylor and Andrew Buncombe
Friday, 25 April 2008

Source: The Independent

Investigators: Millions in Iraq contracts never finished

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WASHINGTON – Millions of dollars of lucrative Iraq reconstruction contracts were never finished because of excessive delays, poor performance or other factors, including failed projects that are being falsely described by the U.S. government as complete, federal investigators say.

The audit released Sunday by Stuart Bowen Jr., the special inspector general for Iraq reconstruction, provides the latest snapshot of an uneven reconstruction effort that has cost U.S. taxpayers more than $100 billion. It also comes as several lawmakers have said they want the Iraqis to pick up more of the cost of reconstruction.

The special IG’s review of 47,321 reconstruction projects worth billions of dollars found that at least 855 contracts were terminated by U.S. officials before their completion, primarily because of unforeseen factors such as violence and excessive costs. About 112 of those agreements were ended specifically because of the contractors’ actual or anticipated poor performance.

In addition, the audit said many reconstruction projects were being described as complete or otherwise successful when they were not. In one case, the U.S. Agency for International Development contracted with Bechtel Corp. in 2004 to construct a $50 million children’s hospital in Basra, only to “essentially terminate” the project in 2006 because of monthslong delays.

Read moreInvestigators: Millions in Iraq contracts never finished

Food Riots and Speculators

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Food riots have broken out across the globe destabilizing large parts of the developing world. China is experiencing double-digit inflation. Indonesia, Vietnam and India have imposed controls over rice exports. Wheat, corn and soy beans are at record highs and threatening to go higher still. Commodities are up across the board. The World Food Program is warning of widespread famine if the West doesn’t provide emergency humanitarian relief. The situation is dire. Venezuelan President Hugo Chavez summed it up like this, “It is a massacre of the world’s poor. The problem is not the production of food. It is the economic, social and political model of the world. The capitalist model is in crisis.”

Right on, Hugo. There is no shortage of food (This is disinformation – The Infinite Unknown); it’s just the prices that are making food unaffordable. Bernanke’s “weak dollar” policy has ignited a wave of speculation in commodities which is pushing prices into the stratosphere. The UN is calling the global food crisis a “silent tsunami”, but its more like a flood; the world is awash in increasingly worthless dollars that are making food and raw materials more expensive. Foreign central banks and investors presently hold $6 trillion in dollars and dollar-backed assets, so when the dollar starts to slide, the pain radiates through entire economies. This is especially true in countries where the currency is pegged to the dollar. That’s why most of the Gulf States are experiencing runaway inflation.

Read moreFood Riots and Speculators

Rationing of rice hits Britain’s Chinese and curry restaurants

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Rice is being rationed in Britain as shopkeepers limit supplies to their customers to prevent hoarding. Restrictions on sales in Asian neighbourhoods are reported as emergency measures are taken by governments worldwide to combat the soaring cost of rice and prevent outbreaks of food rioting.

Tilda, the biggest importer of basmati rice, said that its buyers had resorted to restricting their customers to two bags per person.

“It is happening in the cash and carries,” said Jona-than Calland, of Tilda.

“It’s to stop people from hoarding. I heard from our salesforce that one lady went into a cash and carry and tried to buy eight 20kg bags.”

Read moreRationing of rice hits Britain’s Chinese and curry restaurants

Japan’s Hunger Becomes a Dire Warning for Other Nations

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MARIKO Watanabe admits she could have chosen a better time to take up baking. This week, when the Tokyo housewife visited her local Ito-Yokado supermarket to buy butter to make a cake, she found the shelves bare.

“I went to another supermarket, and then another, and there was no butter at those either. Everywhere I went there were notices saying Japan has run out of butter. I couldn’t believe it – this is the first time in my life I’ve wanted to try baking cakes and I can’t get any butter,” said the frustrated cook.

Japan’s acute butter shortage, which has confounded bakeries, restaurants and now families across the country, is the latest unforeseen result of the global agricultural commodities crisis.

A sharp increase in the cost of imported cattle feed and a decline in milk imports, both of which are typically provided in large part by Australia, have prevented dairy farmers from keeping pace with demand.

While soaring food prices have triggered rioting among the starving millions of the third world, in wealthy Japan they have forced a pampered population to contemplate the shocking possibility of a long-term – perhaps permanent – reduction in the quality and quantity of its food.

A 130% rise in the global cost of wheat in the past year, caused partly by surging demand from China and India and a huge injection of speculative funds into wheat futures, has forced the Government to hit flour millers with three rounds of stiff mark-ups. The latest – a 30% increase this month – has given rise to speculation that Japan, which relies on imports for 90% of its annual wheat consumption, is no longer on the brink of a food crisis, but has fallen off the cliff.

According to one government poll, 80% of Japanese are frightened about what the future holds for their food supply.

Last week, as the prices of wheat and barley continued their relentless climb, the Japanese Government discovered it had exhausted its ¥230 billion ($A2.37 billion) budget for the grains with two months remaining. It was forced to call on an emergency ¥55 billion reserve to ensure it could continue feeding the nation.

“This was the first time the Government has had to take such drastic action since the war,” said Akio Shibata, an expert on food imports, who warned the Agriculture Ministry two years ago that Japan would have to cut back drastically on its sophisticated diet if it did not become more self-sufficient.In the wake of the decision this week by Kazakhstan, the world’s fifth biggest wheat exporter, to join Russia, Ukraine and Argentina in stopping exports to satisfy domestic demand, the situation in Japan is expected to worsen.

Read moreJapan’s Hunger Becomes a Dire Warning for Other Nations

Load Up the Pantry – The Wall Street Journal

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I don’t want to alarm anybody, but maybe it’s time for Americans to start stockpiling food.

No, this is not a drill.

You’ve seen the TV footage of food riots in parts of the developing world. Yes, they’re a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

“Load up the pantry,” says Manu Daftary, one of Wall Street’s top investors and the manager of the Quaker Strategic Growth mutual fund. “I think prices are going higher. People are too complacent. They think it isn’t going to happen here. But I don’t know how the food companies can absorb higher costs.” (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you’ll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They’re all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here’s the bad news: They may actually accelerate.

Read moreLoad Up the Pantry – The Wall Street Journal

Wal-Mart’s Sam’s Club limits rice purchases

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NEW YORK, April 23 (Reuters) – Wal-Mart Stores Inc’s (WMT.N: Quote, Profile, Research) Sam’s Club warehouse division said on Wednesday it is limiting sales of several types of rice, the latest sign that fears of a rice shortage are rippling around the world.

Sam’s Club, the No. 2 U.S. warehouse club operator, said it is limiting sales of Jasmine, Basmati and long grain white rice “due to recent supply and demand trends.”

U.S. rice futures hitting an all-time high Wednesday on worries about supply shortages.

On Tuesday, Costco Wholesale Corp (COST.O: Quote, Profile, Research), the largest U.S. warehouse club operator, said it has seen increased demand for items like rice and flour as customers, worried about global food shortages and rising prices, stock up.

Sam’s Club, the No. 2 U.S. warehouse club operator, is limiting sales of the 20-pound (9 kg), bulk bags of rice to four bags per customer per visit, and is working with suppliers to ensure the products remain in stock.

Warehouse clubs cater to individual shoppers as well as small businesses and restaurant owners looking to buy cheaper, bulk goods.

With prices for basic food items surging, customers have been going to the clubs to try to save money on bulk sizes of everything from pasta to cooking oil and rice.

Read moreWal-Mart’s Sam’s Club limits rice purchases

Bay Area Shoppers Asked To Limit Rice Purchases

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The price of a food staple — rice — is rising significantly, NBC11 reported.
The price of rice has increased dramatically in recent weeks due to crop failure overseas and resulting hoarding, NBC11 reported.
And at least one Bay Area store is asking customers to hold back on their rice purchases. Costco has posted signs asking customers to follow their regular rice-buying habits.
The rice price increase is a result of a domino effect, NBC11’s Noelle Walker reported. Drought in Australia led to a severe decline in rice production that in turn led the world’s largest rice exporters to restrict exports. That spurred higher rice prices and hoarding in Asian countries, NBC11 reported.
Now in the United States, rice prices have skyrocketed.
Son Tran owns Le Cheval Vietnamese Restaurant in Oakland.
He said he’s seen the price of rice go from $20 to $40 in a matter of weeks.
And Le Cheval’s stockpiles are dwindling.
Add to that, the price of vegetables has gone up 50 percent, and some of Tran’s regular customers aren’t so regular anymore.

Read moreBay Area Shoppers Asked To Limit Rice Purchases

Hyperinflationary Depression

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Until now, I have given equal credence to two possible scenarios:

  1. We could have several years of inflation as we do now, and the powers-that-be would have a sudden rush of brains to the head, like Paul Volcker and Ronald Reagan did in 1980, and stop the “printing press,” ending inflation and the gold and silver bull market, for at least a few years; or
  2. It is too late to stop it. The political forces and the Unfunded Liabilities would prevent the powers-that-be from ending the money-printing process, and in fact, would grossly accelerate it. This would result in a hyper inflation (400 percent inflation or more), and the eventual total destruction of the dollar. Suddenly America would find its money totally useless. Store shelves would be empty, gas would go through the stratosphere, and Americans would suffer through the greatest threat since the Great Depression of the ’30s.

So what caused me to settle on number two?

I received John Williams’ recent newsletter “Shadow Government Statistics,” www.shadowstats.com in which he describes his case for a hyper-inflationary depression. It was most persuasive. It certainly persuaded me, and is consistent with what I’ve said for years.

I spent the ’70s fending off the media label of “Prophet of Doom,” arguing that I expected much less than doom. It turned out to be so.

With my new book in circulation, I’ll face the same accusations, and this time they are right. The financial world we know and love is facing genuine doom. You could lose the value of all your assets in the stock market. You could find yourself unable to buy essential commodities, when you want them, and gold and silver will be valued, not in the tens or hundreds of dollars per ounce, but in the thousands!

John Williams’ Shadow Government Statistics newsletter is most unusual. John is a consulting economist with all of the academic credentials. Most of his clients are bank officers and high-ranking corporate officers. He has rearranged the government data according to historical analysis.

For example, the government says inflation is under four percent by the simple expedient of eliminating energy and food from their calculations. John says inflation is over 11 percent, including energy and food.

His academic credentials are way ahead of mine, but at least I know enough to understand his work. It’s my job to try to reduce such things to terms my subscribers can grasp.

Here are some brief paragraphs from this 25-page report.

“With the creation of massive amounts of new fiat (not backed by gold) dollars will come the eventual complete collapse of the value of the U.S. dollar and related dollar-denominated paper assets.”

Read moreHyperinflationary Depression

Credit Crisis Turning into Credit Armageddon

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While most investors are focused on the latest stock market rally, hidden from view is a monumental change that few recognize and fewer understand: Unprecedented amounts of old debts are coming due in America, and many are not getting refinanced.

Even worse, borrowers are going into default, lenders are taking huge losses, and outstanding loans are turning to dust.

The numbers are large; the government’s response is equally massive. So before you look at one more stock quote or any other news item, I think it behooves you to understand what this means and what to do about it …

New Evidence of A Credit Crack-Up

Until recently, economists have had only anecdotal evidence of credit troubles.

They knew that individual banks were taking losses. They knew that many banks were tightening their lending standards. And they realized that there were hiccups in the credit markets.

So they called it the “credit crunch” — essentially a slowdown in the pace of new credit growth.

But we didn’t buy that. Earlier this year, we warned that America’s credit woes involved much more than just a slowdown. We wrote that it was actually a credit crack-up — an outright contraction of credit the likes of which had never been witnessed in our lifetime.

Wall Street scoffed. No one had seen anything like this happen before, and almost everyone assumed that it would not happen now.

They were wrong.

Indeed, three new official reports are now telling us, point blank, that the credit crack-up is already beginning!

Read moreCredit Crisis Turning into Credit Armageddon

Food Rationing Confronts Breadbasket of the World

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MOUNTAIN VIEW, Calif. – Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.

“Where’s the rice?” an engineer from Palo Alto, Calif., Yajun Liu, said. “You should be able to buy something like rice. This is ridiculous.”

Read moreFood Rationing Confronts Breadbasket of the World

In lean times, biotech grains are less taboo

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A farmer harvests soy beans on the outskirts of Gualeguaychu, north of Buenos Aires.(Andres Stapff/Reuters)

Soaring food prices and global grain shortages are bringing new pressures on governments, food companies and consumers to relax their longstanding resistance to genetically engineered crops.

In Japan and South Korea, some manufacturers for the first time have begun buying genetically engineered corn for use in soft drinks, snacks and other foods. Until now, to avoid consumer backlash, the companies have paid extra to buy conventionally grown corn. But with prices having tripled in two years, it has become too expensive to be so finicky.

“We cannot afford it,” said a corn buyer at Kato Kagaku, a Japanese maker of corn starch and corn syrup.

In the United States, wheat growers and marketers, once hesitant about adopting biotechnology because they feared losing export sales, are now warming to it as a way to bolster supplies. Genetically modified crops contain genes from other organisms to make the plants resistance to insects, herbicides or disease. Opponents continue to worry that such crops have not been studied enough and that they might pose risks to health and the environment.

(Genetically modified crops have been studied long enough to know that GM food weakens the immune system within days, increases the cancer risk dramatically etc. – The Infinite Unknown)

Read moreIn lean times, biotech grains are less taboo

Bank of America Net Income Falls 77% on Writedowns

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April 21 (Bloomberg) — Bank of America Corp., the second- largest U.S. bank, said profit dropped for a third straight quarter as the company set aside $6.01 billion for bad loans.

First-quarter net income declined 77 percent to $1.21 billion from $5.26 billion a year earlier, the Charlotte, North Carolina-based bank said today in a statement. The results fell short of analysts’ estimates and sent the bank’s stock down 2.5 percent in New York trading.

Chief Executive Officer Kenneth Lewis scaled back a January forecast of 20 percent earnings growth this year after reporting the two worst quarters since he took over in 2001. Lewis said he now expects “sequential profit improvement” for the rest of 2008. The bank’s consumer unit, which contributed more than 60 percent of operating income in 2007, faces a nationwide jump in unpaid debt and the highest unemployment rate since 2005.

“The first quarter was much worse than our expectations three months ago,” Lewis said on a conference call. “It’s too early to strike up the band and say that happy days are here again.”

Read moreBank of America Net Income Falls 77% on Writedowns

Energy producers in driving seat at Rome talks

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ROME: Consumer countries and international oil firms keen to gain greater access to the world’s energy resources are likely to walk away empty-handed from talks with producer nations in Rome.

Record high oil, which struck $117 a barrel on Friday, has helped to drive up the profits of oil majors, but it has also increased the spending power of national oil companies and made them ever more reluctant to grant access to their resources.

“The relative positions of international energy companies and national energy companies are changing — and not in our favour,” Paolo Scaroni, chief executive of Italian oil and gas company Eni said in a speech at the opening of the International Energy Forum (IEF).

OPEC member Venezuela, under President Hugo Chavez, has spearheaded a global trend towards resource-holders seeking to maximise their returns from their energy wealth.

International firms have found themselves faced with tougher terms and shut out of the best energy territory.

During the 1970s, the international oil companies controlled nearly three-quarters of global oil reserves and 80 percent of production, Scaroni said.

Now, they control 6 percent of oil and 20 percent of gas reserves, and 24 percent of oil and 35 percent of gas production, he said. National oil companies hold the rest.

Read moreEnergy producers in driving seat at Rome talks

The REAL cost of inflation

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The Daily Mail’s Cost of Living Index reveals food prices rising at SIX times official figure

The true, devastating scale of rising prices is revealed today – by the new Daily Mail Cost of Living Index.

It shows that families are having to find more than £100 a month extra this year to cope with increases in the cost of food, heat, light and transport.

According to the Consumer Price Index, inflation is running at only 2.5 per cent.

Yet the Mail’s index finds that food costs alone are rising at 15.5 per cent a year – more than six times the official rate.

And there are double-digit increases in other “must-pay” essentials such as petrol, gas and electricity.

Many families need to find more than £1,200 extra a year just to stand still.

Once higher mortgage costs are added, millions are having to pay out at least another £2,000 a year to keep their heads above water.

The Bank of England’s chief economist Charlie Bean admitted last night that higher food and energy costs are likely to push the Consumer Price Index over 3 per cent this year.

Read moreThe REAL cost of inflation

The Collapsing Dollar – Authorities lose patience

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Jean-Claude Juncker, the EU’s ‘Mr Euro’, has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds.


Jean-Claude Juncker, who is calling for Washington to
take steps to halt the slide of the dollar

Momentum traders have blithely ignored last week’s accord by the G7 powers, which described “sharp fluctuations in major currencies” as a threat to economic and financial stability. The euro has surged to fresh records this week, touching $1.5982 against the dollar and £0.8098 against sterling yesterday.

“I don’t have the impression that financial markets and other actors have correctly and entirely understood the message of the G7 meeting,” he said.

Mr Juncker, who doubles as Luxembourg premier and chair of eurozone financiers, told the Luxembourg press that he had been invited to the White House last week just before the G7 at the urgent request of President George Bush. The two leaders discussed the dangers of rising “protectionism” in Europe. Mr Juncker warned that matters could get out of hand unless America took steps to halt the slide in the dollar.

Read moreThe Collapsing Dollar – Authorities lose patience

Vaccines and Medical Experiments on Children, Minorities, Woman and Inmates (1845 – 2007)

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Think U.S. health authorities have never conducted outrageous medical experiments on children, women, minorities, homosexuals and inmates? Think again: This timeline, originally put together by Dani Veracity (a NaturalNews reporter), has been edited and updated with recent vaccination experimentation programs in Maryland and New Jersey. Here’s what’s really happening in the United States when it comes to exploiting the public for medical experimentation:

(1845 – 1849) J. Marion Sims, later hailed as the “father of gynecology,” performs medical experiments on enslaved African women without anesthesia. These women would usually die of infection soon after surgery. Based on his belief that the movement of newborns’ skull bones during protracted births causes trismus, he also uses a shoemaker’s awl, a pointed tool shoemakers use to make holes in leather, to practice moving the skull bones of babies born to enslaved mothers (Brinker).

(1895)

New York pediatrician Henry Heiman infects a 4-year-old boy whom he calls “an idiot with chronic epilepsy” with gonorrhea as part of a medical experiment (“Human Experimentation: Before the Nazi Era and After”).

(1896)

Dr. Arthur Wentworth turns 29 children at Boston’s Children’s Hospital into human guinea pigs when he performs spinal taps on them, just to test whether the procedure is harmful (Sharav).

(1906)

Harvard professor Dr. Richard Strong infects prisoners in the Philippines with cholera to study the disease; 13 of them die. He compensates survivors with cigars and cigarettes. During the Nuremberg Trials, Nazi doctors cite this study to justify their own medical experiments (Greger, Sharav).

(1911)

Dr. Hideyo Noguchi of the Rockefeller Institute for Medical Research publishes data on injecting an inactive syphilis preparation into the skin of 146 hospital patients and normal children in an attempt to develop a skin test for syphilis. Later, in 1913, several of these children’s parents sue Dr. Noguchi for allegedly infecting their children with syphilis (“Reviews and Notes: History of Medicine: Subjected to Science: Human Experimentation in America before the Second World War”).

(1913)

Medical experimenters “test” 15 children at the children’s home St. Vincent’s House in Philadelphia with tuberculin, resulting in permanent blindness in some of the children. Though the Pennsylvania House of Representatives records the incident, the researchers are not punished for the experiments (“Human Experimentation: Before the Nazi Era and After”).

(1915)

Dr. Joseph Goldberger, under order of the U.S. Public Health Office, produces Pellagra, a debilitating disease that affects the central nervous system, in 12 Mississippi inmates to try to find a cure for the disease. One test subject later says that he had been through “a thousand hells.” In 1935, after millions die from the disease, the director of the U.S Public Health Office would finally admit that officials had known that it was caused by a niacin deficiency for some time, but did nothing about it because it mostly affected poor African-Americans. During the Nuremberg Trials, Nazi doctors used this study to try to justify their medical experiments on concentration camp inmates (Greger; Cockburn and St. Clair, eds.).

Read moreVaccines and Medical Experiments on Children, Minorities, Woman and Inmates (1845 – 2007)

A Trillion Dollar Rescue for Wall Street Gamblers

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Nothing for Families and Retirees

If the move to a Unitary Executive of unfettered presidential power frightens you, America’s radical right turn to Unitary Finance should compound your fears–and your debts as well. The financial events of the last two weeks of March 2008 demonstrate that the “economic royalists” and “money changers” whom Franklin Delano Roosevelt (FDR) drove from the temple of finance have returned to mismanage our economy into dire straights of unprecedented risk–debt creation, euphemized as “leveraging” and “wealth creation.”

The few checks and balances that remain in the way of the financial sector’s increasingly centralized planning, especially at the state level, are being swept aside under the guise of “saving the system.” Few Wall Street beneficiaries who use this phrase explain just what the system is. For starters, its political managers are industry lobbies appointed to high managerial and planning positions in the public agencies that are supposed to regulate these industries. Their idea of financial planning is to put a trillion dollars in government agency funds and credit guarantees at risk. This agency funding was supposed to be used to help average American families obtain housing and health care, and to protect their savings and provide for their retirement. Instead, it is being mobilized to support the economy’s bankers and financial managers. Indeed, the past few weeks have seen seemingly trillions of dollars committed for war making and bank support.

The banking system’s free creation of credit, doubling each five years or so for the economy at large, threatens to culminate in debt peonage for many American families and also for industry and for state and local governments. The economic surplus is being quickly absorbed by a combination of debt service and government bailouts for creditors whose Ponzi schemes are collapsing right and left, from residential to commercial real estate and corporate takeover loans to foreign bubble-economy credit.

This is the context in which to view the past few weeks’ financial turmoil surrounding Bear Stearns, JPMorgan/Chase and the rapidly changing debt landscape. “The system” that the Treasury, Federal Reserve and the New Deal agencies captured by the Bush Administration is trying to save is an economy-wide Ponzi scheme. By that I mean that the business plan is for creditors to lend debtors enough money for them to pay the interest costs so as to keep current on their loans.

Super Imperialism – New Edition: The Origin and Fundamentals of U.S. World Dominance

Read moreA Trillion Dollar Rescue for Wall Street Gamblers

U.S. Foreclosures Jump 57% as Homeowners Walk Away

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April 15 (Bloomberg) — U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners lost their homes to lenders.

More than 234,000 properties were in some stage of foreclosure, or one in every 538 U.S. households, Irvine, California-based RealtyTrac Inc., a seller of default data, said today in a statement. Nevada, California and Florida had the highest foreclosure rates. Filings rose 5 percent from February.

About $460 billion of adjustable-rate loans are scheduled to reset this year, according to New York-based analysts at Citigroup Inc. Auction notices rose 32 percent from a year ago, a sign that more defaulting homeowners are “simply walking away and deeding their properties back to the foreclosing lender” rather than letting the home be auctioned, RealtyTrac Chief Executive Officer James Saccacio said in the statement.

Read moreU.S. Foreclosures Jump 57% as Homeowners Walk Away

Your Internet provider is watching you

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Fine print reveals that you have fewer rights than you might realize


The Comcast case is a rare example of the government getting into the ISP contract nitty-gritty. “There really should be an onus on the regulators to see this kind of thing is done correctly,” said Bob Williams, who deals with telecom and media issues at Consumers Union.

NEW YORK – What’s scary, funny and boring at the same time? It could be a bad horror movie. Or it could be the fine print on your Internet service provider’s contract.

Those documents you agree to — usually without reading — ostensibly allow your ISP to watch how you use the Internet, read your e-mail or keep you from visiting sites it deems inappropriate. Some reserve the right to block traffic and, for any reason, cut off a service that many users now find essential.

The Associated Press reviewed the “Acceptable Use Policies” and “Terms of Service” of the nation’s 10 largest ISPs — in all, 117 pages of contracts that leave few rights for subscribers.

“The network is asserting almost complete control of the users’ ability to use their network as a gateway to the Internet,” said Marvin Ammori, general counsel of Free Press, a Washington-based consumer advocacy group. “They become gatekeepers rather than gateways.”

Read moreYour Internet provider is watching you