Another Volatile Day Ahead?
As you go through the day today, keep in mind that the minutes of the latest FOMC meeting will be released at 2:00 pm EDT. Recently, they been releasing "headlines" at 12:30, too, so stay sharp. The pattern of 2012 has been to sell PM whenever anything gets posted by The Fed or The Bernank. Therefore, be cautious.
What I hope to do while I attempt to take some down time is to rehash some "Greatest Hits". I plan to re-post daily a blog/thread from the archives, both from TFMR and ATW. We'll get to that in a moment but first...
Following along on yesterday's theme, the USDA issued a crop report earlier this morning and it was a doozy.
http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1046
If you don't want to pour through it, here's what ZH has to say:
And, of course, our own Grain Man "Art Lomax" is all over it, too. He's currently lurking in Pailin's Corner:
http://www.tfmetalsreport.com/comment/188505#comment-188505
The weather in The Corn Belt is only forecast to deteriorate over the coming weeks and the heat wave is expected to begin anew next week. Yikes!
OK, so here is your re-post of the day. This one was originally filed at ATW back on 3/29/11. I must admit that the food price surge that I was writing about never quite materialized...yet. I was also incorrect in my theory that overt QE would continue past June. Regardless, it contains several points that are still relevant today. Namely:
- "Let's start with the grains because rising grain prices cause all sorts of inflation. Not only are grains the raw input to countless consumer goods, grains are also the primary foodstuff for cattle ranchers and hog finishers as they prepare their herds for slaughter."
- "OK, so how about corn? Corn is extremely important in food production as it is used not only as a primary ingredient but as a sweetener, as well."
- "Have you ever heard the term "corn-fed beef"? Most of the best steakhouses proudly champion corn-fed beef because, frankly, its tastes a helluva lot better than grass-fed. The high sugar content of the corn gets converted into fat. The fat makes its way into the muscle and you, Mr. Steakeater, get yourself a beautiful, marbled "prime" steak. Fat cows are also desirable at slaughter because, well, they weigh more and cattle are sold by the pound. OK, so now, pretend for a moment that you're a cattle rancher. As your cattle are growing and being prepared for market (the term is "finished"), you want to feed them as much corn as they'll eat and you can afford. Corn at $7.00/bushel really cramps your business plan. Your first reaction is to control costs by thinning your herd, i.e. you sell some prematurely, before they are "finished". You might also simply want to sell some of your herd to take advantage of today's high prices. Either way, this extra supply in the short term has actually worked to keep cattle prices from soaring at the same rate as the grains. But this is temporary. By this summer, supply will decrease as cattle that would have been coming to market just then have already been slaughtered."
Here's the full post. You'll likely enjoy reading the comments section, too:
http://tfmetalsreport.blogspot.com/2011/03/ag-commodities-and-coming-inflation.html
That's it for today. Have fun and stay alert.
TF
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Comments
I see a lot of repeating of
I see a lot of repeating of the "corn is indigestible" meme here. Corn is quite digestible. It's just that the hull isn't. If you dug through your poop, or cow poop, you would see that the kernel is empty.
If you couldn't digest it, the nutrition label would say it had zero calories and was 100% fiber. If cows couldn't digest it, they would starve, not produce delicious marbled meat.
Reality is. You gain nothing by denying it.
squib
"You have all seen through the financial manipulation...interesting to see that few have carried it over to their whole lives, including food. So yes, your education about food has been manipulated as well"
I get the same feeling often, not just on the topic of food. I suppose I must have blind spots as well that I'm not aware of, but it does seem that there is more than one 'red pill', so to speak. People who've accepted that the whole financial system and all we're taught about it is fraud and against our best interests, but then compartmentalize that so it doesn't disturb any of the other sacred cows in their barn. As a general rule, I've come to operate on the assumption that whatever (food, ideas, anything) is pushed at me the hardest...is probably being pushed so hard because it's unnatural and bad for me.
@Rui
Mining shares have already tanked
Yep when gold & silver are positive and the Vectors are getting hammered you know a raid is coming. Every attempt that gold makes to rally higher is immediately beat back. Gold up $11.00 and the GDX is down almost a buck.
Gas Price
Gasoline seemed to resist dropping in price in tandem w/ oil, for the past few weeks.
Say what u want about there not being a direct connection, though it's funny how as SOON as oil price starts upward, gasoline jumps INSTANTLY.
Not advocating any further regulations, but there are 2 gas stations here, less than 5 miles apart, one on a more traveled route, the price difference per gallon is 15 cents! Quite a spread! The one place offers 3 cents off for cash purchase.
A completely different station has a card on the pump that says " Yes, you may use your Debit Card, please pay 10 cents additional per gallon."
As well as in the past 5 years this area has gone to ALL pre pay for fuel.
In just my short time I have seen gas go from .86 cents/gal. , to what $4.40/gal.?
(and my Barber chuckled, commenting he remembers paying, i think he said .07 cents/gal. !! )
As well as the addition of 10% ethanol, after the troubles w/ the additive MTBE which caused severe mixing and contamination with ground water.
Wow! I didn't realize I had seen so many changes with gas, and I have used it for less than 20 years! Interesting when you write something out, how it gives you a chance to reflect.
Wonder what changes the next 20+ years will bring for gasoline? Will the move away from the Petrodollar be the catalyst for the West to finally get passed fossil fuels?
GDX down because GG is down 8-9%
lowered production estimates. Leave that gold in the ground until it's worth more, I say.
So it may be a good idea to
So it may be a good idea to fill the freezer(and the cupboards)...? Just as a precaution of course.
Harbinger
It's getting real for a lot of regular folks. When sacred cows [the corn vs. grass fed discussion was my segue
] begin getting slaughtered by committed progressives, it is time to pay attention.
City of San Bernardino - Council Votes to File Ch. 9 Bankruptcy. Story is here. Ch. 9 is a special provision of the bankruptcy rules. Wiki gives a good overview, here.
So far, cities in California filing for bankruptcy protection under Ch. 9 include Vallejo, Stockton, Mammoth Lakes, and soon, San Bernardino [it is reported that the bankruptcy petition will be filed shortly before the August 15, 2012 payroll is due; so, my best guess is that the petition will be filed on Aug. 14, stay tuned].
So, what is this sacred cow stuff?
I live in San Bernardino County, and am a So Cal native. I have personal knowledge of this long, slow decline going on in the county. So, let me share some observations.
Remember, Norton Air Force Base was the big County employer for decades. It got axed in the base closure process in the late 80's, and officially closed all operations in 1995.
Norton AFB basically was a giant funding mechanism for the local economy. All those airmen spent their federal paychecks in the local economy. Downtown San Bernardino's E street was bustling. It had a Pussycat Theatre, showing first run Marilyn Chambers movies, too.
When Norton closed, the economy cratered, viciously. Public labor union sympathizers balanced the corrupt right, but both raided the public coffers with campaign promises that essentially set in motion this current bankruptcy problem.
The simple fact is that the politicians sitting in office in San Bernardino now, have no choice but to file the bk. California is broke, and stole redevelopment money from the cities. These cities, like San Bernardino, counted on this free money from the state, and now that it is gone, the cities are facing real, shi- - your-pants-type moments of enlightenment about their budget problems.
So, the politicians no longer can promise endless wage increases, or generous pension benefits to all the public workers [all public labor unions, by the way]. There is NO private business to speak of. There is no incentive programs in place. The tax structure here, and in Cali in general, is too onerous. No small business wants to start here, and in fact, even if one wanted to go into business, the red tape is suffocating. So, tax revenues decline, but public payments and promises increase. Oops, game over. Time to press reset.
So, the sacred cows, the public employee labor unions, have reached the slaughter house. The left, the progressives, the democrats are without solutions. The right is enmeshed in public corruption civil and criminal trials.
Now what?
Simple. The natural progression of the collapse of free money is upon us. Only it is happening much faster than I anticipated. I did not expect to see local cities, under heavy democratic control, where the state legislatures are nearly 2/3 democrats, and where the governor and atty general are democrats, resort to the ultimate weapon against debt just quite so soon. It is far more dire than meets the eye. Look at the wall street crowd running deathly afraid from a radical eminent domain idea. This one has some curiosity to it, but I doubt it will ever come to pass.
I will be a front line reporter on all of this, so stay tuned.
Which city is next? A big one files bk, like LA, or maybe smaller ones surrounding the big cities? Who knows. There is no money, taxes are too high, there is no source of revenue, and the pension obligations keep piling up.
The last sacred cow to go is, of course, Calfornia's proposition 13. Remember in the 1970's, property taxes were going up every year? California's citizens voted in favor of prop. 13, and that restricted the ability of government to raise property taxes. That sacred cow has had its last meal. It will be slaughtered right after the election, provided that the democrats in the legislature take a few more seats. Stay tuned on this one.
If prop 13 falls, property taxes will skyrocket. And the California economic malaise will continue.
Remember, what starts in Cali spreads to the rest of the country. So, watch and learn, grasshoppers, watch and learn.
Border patrol stations + stuff
This sounds like a typical - create a problem to then justify some draconian (SP?) policy to remove more freedoms. Or it is this integration thingy. All of north America as one state. They are doing this "perimeter" protection crap in Canada too.
Maybe this FOMC could be a vicky verky sneaky beaky - everyone expects the drop. Folks short and get walloped.
Yes - food - the more we allow them to feed us shit the more they will put it in the shelves. The more sick we become, the richer these murdering scumbags get.
Please please only buy proper old fashioned food. If we ALL did it - they would be no crap on the shelves.
No GM anything.
Only naturally fed meat.
Free range organic eggs.
This is one thing we have the power to change - at a personal level, today; at a national level when enough folk make a conscious decision. I notice Costco in Canada has more and more organic food. They will supply what people with money demand. We just need to stop feeding the scumbags.
Imagine how they must laugh at us sheeple. The grow crap and offer it to us - we toil all week and give them hours of our slog (in the form of cash) to eat filth. Stop it - Stop it now! Talk about quality of life. A roof - warmth and proper food. Imagine five years from now - Tomatoes tasting like tomatoes again. Imagine young folk who have never tasted a proper tomato?
Self esteem:
Very interesting concept. There was a post a few days ago re Maslow's triangle.
It was commented that as one moves up the triangle towards self actualization one develops self esteem on the way.
There was a comment about how it is hard to have self esteem when one is foraging in a dumpster for food.
I think there is something wrong with this notion:
Does a homeless man always have no self esteem. If he wins the lottery does he immediately get self esteem?
Did Nelson Mandela have no or low self esteem when in prison for 20 years?
Does the poor kid with the huge smile, in the Gambia, who has barely enough to eat have self esteem?
Does a man who chooses to fast for a week elevate or lower his self esteem?
What about if I took my money out of the bank (lets call it a bullion bank ;-)) and bought a sports car. Would that improve my self esteem? What if I lived on a deserted island and no one could see my new sports car, would that make a difference?
What about comparison with peers? If we have more than our neighbors do we have more self esteem? What about if we compare ourselves to Richard Branson or Bill Gates, does our self esteem fall? What if we compare ourselves to those starving in Africa, then what?
Thing is - this is ALL external stuff! Not self stuff. Self esteem is a given. We already posses it. We can chose to give it away. Nobody can take it from us. It belongs to us.
Self esteem is something one carries around and forms an unshakeable core that is self. It has nothing to do with where we find ourselves from minute to minute or day to day.
This is not to be confused with that devil ego.
I think Maslow was wrong.
We are conditioned to view ourselves by external factors - Job - retail therapy etc. "they" want us to be slaves to this programming. It is simply very good brainwashing.
Truth is, everyone has this internal freedom. It is unshakable if you want it to be.
B
Rise, then fall,
Here is opportunity for the rise in price, followed by the sell the news of FED minutes release.
Test of downtrend line very possible today.
Turd spot on with FED announcement bashings.
Watching for pre-game leaks and rumors to spice the price.
Bugzy
Self-esteem, negative or positive is the end product of how an individuals behavior is in tune with their values. Values are set by what we believe, so no matter what an individual believes they can have positive self-esteem.
Yes, but...
...they are so intertwined as to be indistinguishable, inseparable.
THE HIGHER UP THE ORTHRODOX CHAIN....
THE HIGH PRIESTS OF GOVT & RELIGION
(ABOVE: The German Constitutional Court)
(ABOVE: The Pope & Bishops at the Vatican)
Here we can see that in the two highest levels of Govt and Religion, costumes are not meant just for Halloween. Being raised a Catholic does not change my opinion, that the more ORNAMENT the clothes, the less you will find true wisdom and truth. It is simply amazing how many people in the world are taken by the notion that the BIGGER THE BUILDING & MORE ELABORATE THE FACADE the more important the institution... whereas the opposite is true.
As for a priest who speaks the truth, I have to say this fella is TOPS:
The reason why I wrote this post is to put some PERSPECTIVE on the current economic system. The world is being run by OVERDRESSED CLOWNS. I would not worry about the paper price of gold and silver when you understand that LUNATICS IN COSTUMES running the present show are obnoxiously incompetent.
Must be a slow day in Turdville
Seems like at least 50% of the posts today involve cows. Cows! I love the fact that this crowd is so easily distracted. Turd's vacation theme must be spreading throughout Turdville. Happy Summer, Turdites!
Interesting post, CaliLawyer. Glad to see someone is still on duty. I have peeps in California so I'm always on full alert when you give an on-the-ground update regarding the 7th largest socialist economy in the world. I guess someone has to live there. I'm just glad it isn't me.
wax off
Gold
http://www.zerohedge.com/news/gold-report-2012-erstes-comprehensive-summ...
With GG cutting projection estimate
and possibly others, will this not affect supply vs increased demand and consequently price down the road?
SRS
You forgot these guys!
REPLY...TYBERIOUS...
TYBERIOUS.... I left them out because their COSTUMES are not as nice as the German Constitutional Court.
.
Holding back progress
This may require a rewrite
Infringers assemble
Scranton Pa is broke too
When the city of Scranton, Pa., found itself down to its last $5,000 in the bank last week, its Democratic mayor took a highly unusual step: he unilaterally cut the pay of city workers — including police officers, firefighters and even himself — to the minimum wage, just $7.25 an hour. Now the city’s unions are fighting for their promised pay in court.
But Scranton finds itself in a position that is unusual even in this era of widespread budget pain: it has nearly run out of cash and, so far, no one is willing to lend it more.
As the city has fallen behind on its bills, it has received warning letters from the company that sells it gasoline for its police cars and fire trucks; the landfill where it dumps its garbage; and even its water company, which threatened to cut off service, according to a lawsuit that Mayor Christopher A. Doherty filed against Scranton’s City Council last month in an attempt to force it to adopt his financial plan, which calls for raising taxes.
Mr. Doherty warned in the suit that the city’s “basic daily operating functions” could be compromised, “placing the city’s residents in immediate peril and undermining their health, safety and public welfare.”
The troubles of Scranton, a city of 76,000, are a combination of long-term structural decline, a mayor and City Council at loggerheads and, since June, an inability to borrow. A majority on the Council turned Scranton into a financial pariah this spring by refusing to honor a guarantee that the city had placed on the revenue bonds issued by its parking authority. The municipal bond market took its refusal as a sign that the city might also default on its own bonds, and cut off credit.
The only bank still willing to help Scranton raise money pulled out of a $16 million short-term financing deal, leading to a cash crunch. The Council later said it would honor the guarantee after all, but the city remains unable to borrow.
http://www.nytimes.com/2012/07/11/us/unions-fight-scranton-mayor-after-h...
Btw, the mayor wants a 78% increase in property taxes over the next 3 years.
T Mosley
All this talk of corn and poo got me to thinking. I have here a can of green giant whole kernal corn and I am going to count a 400 kernal control sample and consume the sample today. Sometime tomorrow after my digestion cycle is complete I will report back with a solid count I hope. After all I am a turdite and I always do my part.
California Broke...
So how in the world do they pay for the recently approved publicly funded Jerry Brown and other muppett approved $120 billion dollar high speed rail from LA to SF? You couldnt make this stuff up in your worst dreams.
Cipher
@Dyna
Riddle Me This?
Why the hype about the release of the Fed Minutes? Was not this information given out after the FOMC meeting? Or is there information in the minutes that was not released after the actual meeting?
@murphy - The Solution...
for Scranton, of course, can only be a 78% increase in property taxes.... they couldn't look around and realize that they are SPENDING Millions more than they can afford and the ANSWER isn't foisting ill conceived expenditures on to poor property owners... It's a crazy world where the only answer is to tax more not cut spending and choose less or fewer services...
@waxy
Don't worry. They'll come for you eventually via interstate deals between used car salesmen in Congress.
(A)dministration (P)ress
AP Coverage of 'Lie-bor' Scandal Fails to Note That Geithner Ran the New York Fed When It Learned of Problems
By Tom Blumer | July 11, 2012 | 12:42
Not only is the Associated Press aptly currently described as the Administration's Press -- as least as long as the White House's current occupant remains there -- it also seems to be serving as the Administration's Protection.
In a story about the "Lie-bor" scandal, wherein British banks have admitted to colluding to set the London Interbank Offered Rate (LIBOR) -- arguably the world’s most important benchmark for interest rates -- artificially low, AP reporter Martin Crutsinger "somehow" forgot that current Treasury Secretary Tim Geithner was President of the New York Branch of the Federal Reserve Bank during much of the time period in which Congressional investigators are interested. Clearly, they want to know what Geithner knew, and when he knew it. The first three paragraphs of Crutsinger's writeup, followed by his sole context-free mention of Geithner, follow the jump (bolds are mine throughout this post):
Read more: http://newsbusters.org/blogs/tom-blumer/2012/07/11/ap-coverage-lie-bor-scandal-fails-note-geithner-ran-new-york-fed#ixzz20KqdvtBO
I'll see your corn fed beef
and raise you shit fed pork. As previously posted, some corn will pass through a bovine undigested. My son the dairy farmer raises all his bull calves and feeds them out as fat steers. Always has at least 4 pigs in the steer lot to clean up what they poop out. Feeds them nothing else. Cheap pork, tastes great.
“That’s a Clown Question,
“That’s a Clown Question, Bro”
Statement of Commissioner Bart Chilton at the CFTC Public Meeting on Dodd/Frank Rulemaking
July 10, 2012
Thank you Mr. Chairman. There are a couple of important events coming up that I want to share with you today. First, tonight the All-Star game will be played. Also, in just 11 days, we’ll have the two-year anniversary of the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Now, some of you are asking, “How’s he going to put these two totally divergent things together?” It’ll all make sense in a minute. Really.
First, how many of you have heard of Bryce Harper? He’s the youngest position player ever chosen for an All Star game and plays for what is for many of you, your hometown team, the Washington Nats. He not only has a way with the bat but he seems to have a way with words, too. A couple weeks ago, a reporter asked him what he seemed to think was a silly question, and he responded by saying, “That’s a clown question, bro.” That answer went on T-shirts. It went on late-night TV. It went viral.
Now, back to Dodd-Frank. There are those who say we don’t need it. Let’s repeal it—or at least parts of it. Let’s de-fund the agencies overseeing it so they can’t enforce it. Heck, let’s just take ‘em to court if we don’t like the line-up. Let’s take our bat and ball and go home. So, here’s the question they seem to be asking: “Do we even need Dodd-Frank?”
Let’s not even talk about 2008 and the financial collapse and the real reason Dodd-Frank came along in the first place. Let’s talk about how MF Global (as some would suggest) got caught trying to steal. Let’s talk about JPMorgan’s losing streak. Let’s talk about Barclays’ balk. Do we need Dodd-Frank? That’s a clown question, bro.
So yes, we need rules. We need the funding to enforce them. Plenty of folks still seem to think they can get around the rules. Plenty of folks in this town seem to think we don’t need umpires. Do we? That’s a clown question, bro.
Last Updated: July 11, 2012 Truly it is a clown question
non-gmo non-hybrid corn
no shortage of it here. as a matter of fact, i can see some out the window. google "heirloom seed" and you will find plenty of folks* who want to sell you some. it's easy to grow - the indians did it for ages without ag school diplomas. plant some and you'll have plenty.
what? can't plant on asphalt and concrete? it sucks to live in the city, doesn't it? guess what - it will suck even more when there's a diesel shortage and the trucks stop bringing stuff to the city.
a krugerand won't buy a can of beans from an empty supermarket shelf.
* i like sandhill preservation center and baker creek seeds. there are lots more.
Maybe it's me, but
has there been a very loud echo of "if I go down, you go down with me" resonating from the US and Europe for at least the last 10 years? How else do we explain all these players who are neck deep in sh*t who seem to have RISEN into positions of greater power over that time.
I'm really so glad that there is no honor amongst thieves. They will destroy themselves. Long popcorn.