Monday, December 8, 2008

My Previous Post

I have received a number of emails regarding my last post.  My apologies if I don't get back.  I have been home ill, and I am 400 (no exaggeration) or so emails behind as it is.

People had much to say about anarchy.  I don't know why.  I don't think that is much of a risk.  I guess the link to Gerald Celente's stuff got some folks riled up.  Celente has an incredible track record, and I am not dismissing him outright - but I wanted to point out what is happening in Detroit and other cities around the country.  

We have 10% of the U.S. population on food assistance.  If the economy contracts further, and that appears to be a foregone conclusion, that percentage is SURE to rise.  So it would seem to me that inner city homesteaders, truck farms, and vegetable gardens were a fantastically positive sign.

The contraction in the economy has taken the pressure off of agricultural prices because of the decline in diesel, natural gas, and fertilizer prices.  This is a two edged sword.  Declining crop prices lead to declining plantings, which leads to future declines in harvests until such time as economic equilibrium is met for the FARMERS.  Notice I said "FARMERS", not consumers.  If economic equilibrium for the farmers does not equate to equilibrium for food supplies and consumers needs, its is the consumer who loses.  This is what the USDA was founded for.  To make sure the farmer's x and y graph took the consumer's x and y graph into consideration through farm subsidies.  Did I mention that the ability to get credit affects the farm economy just as much as "Main Street"?  And that any failing here could lead to some incredible consequences?  Of course, I always look at this from the investment side... but I can't help notice that when you are talking FOOD, their are significant political and social liabilities and issues as well.

Celente thinks we will be experiencing rioting for food by 2012.  I don't deny the possibility.  I do think, however, that the greatest liability for this is in the working class cities - LIKE DETROIT.  If cities like Detroit can remake their urban landscapes into mini farms, dairies, and orchards, it seems that Celente's vision does not have to be our future.

This is not to say that megalopolis's like New York Metro or the Washington to Boston Corridor could support themselves this way - they cannot.  Population will by necessity be redistributed.  

For food supply issues, it is the rate of change that matters.  Unfortunately, world inventories of wheat, corn, and rice are insufficient to handle a fast rate of change.

It is what it is.


Mentatt (at) yahoo (d0t) com


19 comments:

The Mad Scientist said...

http://ispeakofpeak.blogspot.com/

Yes the Mad scientist has recently decided to dump his thoughts on the world directly rather than through Greg.

Greg T. Jeffers said...

I have unleashed the monster!!

oOOo said...

Well, riots and anarchy have already broken out in Greece the last few days, due to the deteriorating economic situation and because the cops shot a 15 year old kid. The Greeks have a history of not putting up with useless, opressive or corrupt government though. Maybe the majority of American people are too apathetic to react? Or too deceived by the corporate media. There must however be a limit to how bad it has to get before Americans react, and I dont mean just through Youtube or blog discourse... No offense meant..

bureaucrat said...

As long as the food stores remain open and stocked, there will be no rioting. Most of us have too much to lose to waste our energy. All the world needs is Lean Cuisine and mustard to stay happy!

Greg T. Jeffers said...

I do not believe that Celente is correct in that Americans WILL react, and I think positively, long before we get to that point.

As long as the rate of change remains what it has been,my bet is that people will do the things necessary that will allow us to make this transition.

I think cities like Detroit are your BEST petri dishes, if you will, and I like what I see there. Also, te population of Detroit has been cut in half over the past 20 years or so, not with people marauding the country side but with people moving away and filling in other slots.

I really believe that most folks will figure this out in time, and that most of us just want to raise our children and enjoy our lives.

Anonymous said...

At least we haven't outsourced food production to China. But, there are transportation and production risks if there is a shortage of diesel fuel.

It's looking like the lunatics are running the asylum, with Obama wanting to build roads and Congress bailing the UAW. It could get ugly until this sorts itself out in spite of our fearless leaders.

Regards,

Coal Guy

Greg T. Jeffers said...

Chuck:

I am glad I am not the only to notice that the Dems are paying back the Unions with tax money.

Nothing changes.

So much for the Audacity of Hope....

bureaucrat said...

Um, let's try to remember how we got to this place, primarily thru Mr. Greenspan (A Republican who should have known better) making cheap credit available for too long. He knew exactly what was going to happen, and it is now happening. Obama and the new Congress have been handed a bag of rotten apples. "Inflating the economy" was what you wanted in the first place, Jeffers. The bailouts en masse were also predictable no matter who is now in charge. Geez, pick a side! :)

Anonymous said...

The auto companies CANNOT survive with the labor rates they have to pay. They need to go bankrupt so that they can reorganize into a profitable form. The bailout preserves the big three for the sake of the UAW. It is counter productive. Might as well put the money in front of the Lincoln Memorial and set it on fire.

The money could be much better spent on loan guarantees for wind power, solar power, nuclear power, coal to oil. These are things that will actually turn a profit, and make things better as oil gets short.

Regards,

Coal Guy

Dan said...

Fred gets it. Too bad the only politician with half a clue couldn’t get any traction.

Anonymous said...

Cute little gardens in the inner cities north of the mason dixon line cannot and will not produce sufficient food to feed cities full of people who think they are entitleed by right to be fed by "someone". Growing enough food to feed yourself, your family and have extra to feed others is serious, hard, time consuming, back breaking work.

I grow enough organic vegetables for my wife and me, with some extra to sell at a road side stand. I know what I am talking about here. This kind of cutesy thinking will only create false hope and starving people.

Carl In Wisconsin

Greg T. Jeffers said...

Carl:

I am a career analyst, and would very much like to understand your experience and metrics.

Please email me directly. I would very much like to review any empirical data you have so I might understand the problem better.

You mention the Mason/Dixon line. My farm is outside Nashville TN. We grow organic food for our family, and find that it is more time consuming than back breaking (milking the goats is HAND breaking and puts a crimp in my neck because I am just too tall for my set up)....

Perhaps we can share production data, etc....

Greg T. Jeffers said...

People will quickly lose the idea that someone should feed them. If that is so, could not a city of 800k, like Detroit, grow 20% of their own produce? Maybe 50% of their eggs? Fruit should not be difficult.

In our garden we grow several hundred pounds of tomatoes and potatoes each year, and all the corn we can stand (we freeze the sweet corn and dry the dent corn for corn bread), these are our main calorie crops (corn and potatoes that is... I am going to try a wheat field next year but I hear that it is hardly worth it... still, I want to see for myself).

Again, I don't think the idea is that people will grow ALL of their own food, just enough to make the difference - whatever number that is.

Anonymous said...

I might agree with ya on the growing your own food thing but there is a snag in that train of thought.

The record number of people on food stamps! Apparently, there are those that just don't want to exert the effort. And the numbers are much larger today than in the 30s.

Anonymous said...

http://www.silverbearcafe.com/private/12.08/famine.html

Has some interesting tidbits on food production of recent.

bureaucrat said...

We have 300 million people today. If 15 million were unemployed during the Depression, and it was 25% unemployment, that means the U.S. population was 60 million. We were small potatoes back then.

bureaucrat said...

I'm gonna bet that without those 20th century condiments -- like butter, mustard, cheese, salt etc., your potatoes taste like old shoes> :) That darn modern living keeps coming back in ..

Sean said...

Carl-- you stumbled across a social ill that I think explains many of our current problems: the entitlement mentality. And it applies to everything. When gas was $4/gal, people felt entitled to cheaper fuel or some miracle alternative (that Big Oil was "holding back.") When people got upside down in their mortgages, they felt entitled to governmental action so they don't have to own up to their own mistakes. I work in a prison as a dentist, and everyday I'm reminded by my inmates that they're "entitled" to whatever it is that they want. This goes on and on. I just saw a story on CNN about a sheriff who is now some sort of hero for not carrying out some evictions; so shelter, at someone else's expense, is an entitlement. Everyone who reads this blog understands that the future is going to be a harder, more austere place. Physical labor will become necessary again. Growing some of our own diet will be essential. Those who don't like this will either starve or be shot when they attempt to steal the fruits of others' toil.

Greg T. Jeffers said...

bureaucrat:

Making butter and cheese is easier than you might think (although to make butter you need cows milk, and only our goats are milking this year. Our cow has just been freshened by our neighbors bull and will calf in June).

Everyone will not have to grow their own food, just enough to suppliment the rest of the system.