Global free market for food and energy faces biggest threat in decades

The global free market for food and energy is facing its biggest threat in decades as a host of countries push through draconian measures to hold down prices, raising fears of a new “resource nationalism” that could endanger world food security.


Somali’s demonstrate against high food prices in the capital Mogadishu. At least two people were killed in clashes

India shocked the markets yesterday by suspending trading in futures contracts for a range of farm products in a bid to clamp down on alleged speculators and curb inflation, now running at 7.6pc.

The country’s Forward Markets Commission said contracts for soybean oil, chana (chickpeas), potatoes, and rubber had been banned for four months, even though a report by the Indian parliament last month concluded that soaring food costs had almost nothing to do with the futures contracts. Traders in Mumbai slammed the ban as an act of brazen political populism.

The move has been seen as a concession to India’s Communist MPs – key allies of premier Manmohan Singh – who want a full-fledged ban on futures trading in sugar, cooking oil, and grains.

As food and fuel riots spread across the world, a string of governments have resorted to steps that menace the free flow of food and key commodities. Argentina has banned beef exports, while Egypt and India have stopped shipments of rice.

Kazakhstan has prohibited wheat exports. Russia has slapped a 40pc export duty on shipments, and Pakistan a 35pc duty.

China, Cambodia, Malaysia, Philipines, Sri Lanka, and Vietnam have all imposed export controls or forms of rationing to ease the crisis.

UN Secretary-General Ban Ki-moon has warned that this lurch towards national controls is becoming a threat to the open global system we all take for granted. “If not handled properly, this crisis could result in a cascade of others and affect political security around the world,” he said.

A new report by UBS says the scramble for scarce raw materials is turning ever more political, with ominous implications for ill-endowed societies that rely on imports.

“The bottom line is that countries with resources, particularly in food and energy are becoming more protective of these resources,” it said.

(I know I am repeating myself and I know that many are already well prepared. This is for the ones that are not:
Store food and water “NOW”. Do this in a relaxed manner because your brain shuts down when you are under stress and in survival mode. – The Infinite Unknown)

Read moreGlobal free market for food and energy faces biggest threat in decades

The Great Depression of the 2010s

Economics is not rocket science. Neither is power.

Depressions are monetary phenomena caused by central bank issuance of excessive credit. In 1913, the newly created US central bank, the Federal Reserve, began issuing credit-based money in the US. Within ten years, the central bank flow of credit ignited the 1920s US stock market bubble; and shortly thereafter, following the collapse of the bubble in 1929, the world entered its first Great Depression in 1933.

Investment banks are the undoing of central banking. While all banks, central, commercial and investment, view credit as the opportunity to exploit society’s growth and productivity, investment bank exploitation of growth and productivity exposes society to extreme risks—for investment banks use society’s savings to make their volatile and speculative bets.

The speculative risks undertaken by investment banks is done by leveraging the savings of society; and, when investment bank bets are sufficiently large enough and the bets go bad—as they inevitably do as the luck of investment bankers is due more to their proximity to credit than to their ability to foresee the future—it is society that will bear the brunt of the pain in the loss of its savings.

Inevitably, investment bankers cannot resist the temptations of excessive credit and, like the buyers of teaser-rate home mortgages, they will always overreach themselves—an overreaching that will have disastrous consequences for the society whose savings they bet.

The leveraged overreaching by investment banks in the 1920s caused the Great Depression of the 1930s and their more recent overreaching in this decade, the 2000s, is about to cause another Great Depression in the next, the 2010s.

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U.S. immigration raids are about to get ugly

Letters listing millions of Social Security “no-match” workers are ready to mail to employers.

The Immigration and Customs Enforcement agency personnel are trained and ready. Buses and vans are standing by for raids. Detention facilities have expanded.

All that is lacking is clearance from the courts.

Employers should be prepared in the coming months for immigration raids on scales never before staged by the federal government. The stakes for employers will be especially high if the courts give a green light to the mailing of Social Security no-match letters.

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US infrastructure is falling apart

The basic infrastructure all of us depend on every day – including aviation, highway, public transit and rail – is falling apart and needs a proper flushing, if we could find a public water system that worked properly.

That pretty much sums up a depressing report issued today by the congressional watchdogs at the Government Accountability Office today on the state of the US infrastructure. Not only are the problems large, but some of the solutions, such as increased taxes, vehicle usage fees, airline passenger levies as well as adding tolls on highways are as controversial and they would be painful.

And then there are the problems. “For example, demand has outpaced the capacity of our nation’s surface transportation and aviation systems, resulting in decreased performance and reliability. Furthermore, as we recently reported, federal surface transportation programs are not effectively addressing key challenges, such as congestion, because the federal goals and roles are unclear, many programs lack links to performance or needs, and the programs often do not employ the best tools and approaches. In addition, water utilities are facing pressure to upgrade the nation’s aging and deteriorating water infrastructure to improve security, serve growing demands, and meet new regulatory requirements.

Given these types of challenges and the federal government’s fiscal outlook, it is clear that the federal government cannot continue with business as usual, ” the GAO said.

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NATIONAL DRILL: U.S. Tests Response To Set of Calamities

Executive Branch ‘Runs’ Government From Outside D.C. as Mock Crises Mount

Thousands of key federal employees are being whisked from the Washington area by helicopter and car for a three-day test of their ability to run the government from remote locations during a disaster.

The exodus, which began yesterday and will continue today, involves the White House and other parts of the executive branch. Congress and the judiciary are not part of the exercise, which is being overseen by the Department of Homeland Security.

Since the late 1990s, every federal agency has been required to have a plan to quickly resume operations after a catastrophe. But the response to the Sept. 11, 2001, terrorist attacks raised doubts about many agencies’ preparations.

This week’s “continuity of government” drill is one of the largest by the federal government since 9/11, officials said. It is part of a national eight-day exercise in which officials are responding to a cascade of nightmarish events. The drill started Thursday, with terrorists sabotaging a tanker carrying poisonous gas in Washington state.

Read moreNATIONAL DRILL: U.S. Tests Response To Set of Calamities

Secretive FEMA Camp Drill Running In Iowa

The Federal Emergency Management Agency (FEMA) along with other government institutions are currently conducting an 8-day anti-terror and disaster exercise from May 1st through May 8th called National Level Exercise 2-08 in the United States.

We recently covered this exercise in great detail using press releases from FEMA and U.S. Northern Command as source material. We also raised the prospect of the government using this exercise as cover for a potential false flag terror attack. Considering the historical precedent of the government running drills on the day of the 9/11 attacks as cover for the actual operation, this 8-day long anti-terror and disaster exercise sparked some concern.

According to the press releases from both FEMA and U.S. Northern Command, drills are slated to take place in Oregon, Washington State and in the Washington DC or mid-Atlantic area. With this in mind, it is incredibly strange to see reports from the Des Moines Register and the Waterloo Cedar Falls Courier indicating that a secretive FEMA exercise is taking place in Waterloo, Iowa.

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What’s Up with the Secret Cybersecurity Plans, Senators Ask DHS

The government’s new cyber-security “Manhattan Project” is so secretive that a key Senate oversight panel has been reduced to writing a letter to beg for answers to the most basic questions, such as what’s going on, what’s the point and what about privacy laws.

The Senate Homeland Security committee wants to know, for example, what is the goal of Homeland Security’s new National Cyber Security Center. They also want to know why it is that in March, DHS announced that Silicon Valley evangelist and security novice Rod Beckstrom would direct the center, when up to that point DHS said the mere existence of the center was classified.

Those are just two sub-questions out of a list of 17 multi-part questions centrist Sens. Joe Lieberman (I-Connecticut) and Susan Collins (R-Maine) sent to DHS in a letter Friday.

In fact, although the two say they asked for a briefing five months ago on what the center does, DHS has yet to explain its latest acronym.

The panel, noted it was pleased with the new focus on cyber security, but questioned Homeland Security’s request to triple the center’s cyber-security budget to about $200 million.
They cited concerns about the secrecy around the project, its reliance on contractors for the operation of the center and lack of dialogue with private companies that specialize in internet security.

That center is just one small part of the government’s new found interest in computer security, a project dubbed the Comprehensive National Cybersecurity Initiative, which has been rumored to eventually get some $30 billion in funding.

Little is known about the initiative since it was created via a secret presidential order in January, though the Washington Post reports that portions of it may be made public soon.

Read moreWhat’s Up with the Secret Cybersecurity Plans, Senators Ask DHS

Defense Industry Consolidation in the USA

The US GAO’s 2008 Assessments of Selected Weapon Programs is proving to have a longer tail than usual. Booz Allen Hamilton is a strategic/ I.T/ program assistance consultancy with strong representation in the government and defense sectors. This May Day, we refer readers to the recent Washington Post article “One-Stop Defense Shopping,” wherein Booz Allen Hamilton VPs Dov S. Zakheim and Ronald T. Kadish discuss the state of competition in the American defense industry, and some of its consequences:

“The GAO report lays bare a festering problem in our nation’s military procurement system: Competition barely exists in the defense industry and is growing weaker by the day.

It was a different story just two decades ago. In the 1980s, 20 or more prime contractors competed for most defense contracts. Today, the Pentagon relies primarily on six main contractors to build our nation’s aircraft, missiles, ships and other weapons systems. It is a system that largely forgoes competition on price, delivery and performance and replaces it with a kind of “design bureau” competition, similar to what the Soviet Union used—hardly a recipe for success….”

America is certainly not the only country facing these pressures: Britain is even farther down this road, and Europe is aggressively moving to restructure its own industry into a very few global competitors. Ultimately, the policy implications described here will be played out on a near-global basis, with the possible exception of China.

30-Apr-2008 18:27 EDT

Source: Defense Industry Daily

Homeland Security Update: Chertoff Says New Laws Needed

At a speech before the Heritage Foundation this week, Homeland Security Secretary Michael Chertoff said the U.S. needs to have a “nonpoliticized, serious discussion” while writing new laws to define the best way to combat terrorism.

Chertoff said that once laws are written, the public should not second-guess government actions and claim that federal officials are overstepping their authority. He decried critics who make such accusations, despite the widespread pubic calls after the September 11, 2001 attacks for the U.S. government to do more to protect the country. Chertoff further said U.S. society needs to come to a determination as to what are acceptable authorities for the U.S. government versus what violates people’s rights.

If the public limits what the government can do, it must accept that the risk of terrorist attacks may increase, he said. If the public gives the government greater authorities, it should not criticize the government for using those authorities at a later date.

Chertoff called U.S. laws “woefully inadequate” in the context of current technology. He said the most significant step American society needs to take is adapting laws to the 21st Century challenge of fighting terrorism. Changes in technology have created unique challenges for the government when it comes to intercepting communications, as well as collecting and analyzing information found in the public domain according to Chertoff.

Thursday, May 01, 2008

Source: Helicopter Association International

Anyone who trades liberty for security deserves neither liberty nor security. – Benjamin Franklin

Making a killing from hunger

We need to overturn food policy, now!

GRAIN

For some time now the rising cost of food all over the world has taken households, governments and the media by storm. The price of wheat has gone up by 130% over the last year.[1] Rice has doubled in price in Asia in the first three months of 2008 alone,[2] and just last week it hit record highs on the Chicago futures market.[3] For most of 2007 the spiralling cost of cooking oil, fruit and vegetables, as well as of dairy and meat, led to a fall in the consumption of these items. From Haiti to Cameroon to Bangladesh, people have been taking to the streets in anger at being unable to afford the food they need. In fear of political turmoil, world leaders have been calling for more food aid, as well as for more funds and technology to boost agricultural production. Cereal exporting countries, meanwhile, are closing their borders to protect their domestic markets, while other countries have been forced into panic buying. Is this a price blip? No. A food shortage? Not that either. We are in a structural meltdown, the direct result of three decades of neoliberal globalisation.

Farmers across the world produced a record 2.3 billion tons of grain in 2007, up 4% on the previous year. Since 1961 the world’s cereal output has tripled, while the population has doubled. Stocks are at their lowest level in 30 years, it’s true,[4] but the bottom line is that there is enough food produced in the world to feed the population. The problem is that it doesn’t get to all of those who need it. Less than half of the world’s grain production is directly eaten by people. Most goes into animal feed and, increasingly, biofuels – massive inflexible industrial chains. In fact, once you look behind the cold curtain of statistics, you realise that something is fundamentally wrong with our food system. We have allowed food to be transformed from something that nourishes people and provides them with secure livelihoods into a commodity for speculation and bargaining. The perverse logic of this system has come to a head. Today it is staring us in the face that this system puts the profits of investors before the food needs of people.

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