Mushroom at the End of the World

SUBHEAD: Survival and the possibility of life in the ruins of neoliberal capitalism.

By David Bollier on 27 July 2017 for David Bollier's Blog -
(http://www.bollier.org/blog/mushroom-end-world)


Image above: A White Matsutake mushroom emerging from the forest soil in New England. From (http://mushroom-collecting.com/mushroommatsutake.html).

In a world that is falling apart (no further elaboration needed), how shall we understand the dynamics of survival and collaboration? How does life persist and flourish in a world that is hellbent on commodifying and privatizing every aspect of human relations and the natural world?

For anthropologist Anna Lowenhaupt Tsing, the answer is to study the strange life of the humble matsutake mushroom, which tends to grow in North America but is a prized delicacy in Japan.

The social and commercial systems by which the mushrooms are harvested, sorted, transported and sold – blending gift economies and global commodity-chains in the process – hold some penetrating insights into contemporary capitalism.

Tsing, a professor at the University of California, Santa Cruz, tells this story in The Mushroom at the End of the World: On the Possibility of Life in Capitalist Ruins (Princeton University Press, 2015).

The book bills itself as “an original examination into the relation between capitalist destruction and collaborative survival within multispecies landscapes, the prerequisite for continuing life on earth.” It’s a brilliant premise: explore the deep dynamics of capitalism by telling the unusual ecological life and commercial journey of a mundane fungus.

The book is a wickedly wonderful ethnography. The matsutake mushroom is not just a metaphor for showing how this mushroom species devises strategies of survival for itself (in this case, entering into a symbiosis with trees and other plants and microbes); the mushroom is a partner of sorts with humans who take, steal, gift and sell it in various contexts.

Why so much attention to matsutake, a wild mushroom that cannot be grown in captivity? Because Tsing sees it as a proxy for the fate of human beings in today’s near-ruined world.

The hardy, resourceful mushroom tends to grow in disrupted ecosystems and ruined landscapes — just as billions of people around the world must now scrape out an existence in the face of ubiquitous, often-predatory capitalist systems and blighted environments.

As a subterranean fungus of northern landscapes, matsutake play a valuable role in helping trees grow in forbidding locations. You might say that mushrooms are experts in dealing with precarity.

Oddly enough, so are the people who harvest the mushrooms. Matsutake foragers in the US Pacific Northwest tend to be refugees from Laos and Cambodia, American veterans, and itinerant poor people. They either can’t get regular jobs or don’t want them, preferring the “freedom” of being on their own in the open spaces of nature.

“Mushroom foragers work for themselves,” writes Tsing. “No companies hire them. There are no wages and no benefits; pickers merely sell the mushrooms they find. Some years there are no mushrooms, and pickers are left with their expenses.

Commercial wild-mushroom picking is an exemplification of precarious livelihood, without security.”

After a harvest in Oregon, say, the mushrooms are bought by pop-up wholesalers who ship them promptly to sorters, who classify them and export them to Japan, where a large and ready market of high-end customers eagerly buy them, usually to give as gifts.

Tsing rejects rejects the standard narratives about “progress” that tend to be the axis for understanding the future, in both capitalist and Marxist accounts.

Instead, in an analysis appropriate for our time, Tsing presents to us a capitalism of “disturbance-based ecologies in which many species sometimes live together without either harmony or conquest.”

Studying the mushroom trade is illuminating because it shows how investors commodify everything today and treat people and elements of nature “as if the entanglements of living did not matter.

Through alienation, people and things become mobile assets; they can be removed from their life worlds in distance-defying transport to be exchanged with other assets from other life worlds, elsewhere.”

Tsing’s primary message is that the whole “progress narrative” has been supplanted by a messy patchwork of precarious survival: the very life-strategy used by matsutake mushrooms.

She writes:

Global supply chains ended expectations of progress because they allowed lead corporations to let go of their commitment to controlling labor. Standardizing labor required education and regularized jobs, thus connecting profits and progress.

In supply chains, in contrast, goods gathered from many arrangements can lead to profits for the lead firm; commitments to jobs, education, and well-being are no longer even rhetorically necessary. 

Supply chains require a particular kind of salvage accumulation, involving translation across patches. The modern history of U.S-Japanese relations is a counterpoint of call-and-response that spread this practice around the world.

Tsing rejects the idea of a comprehensive, unitary critique of capitalism, arguing instead that the world is full of “patchiness, that is, a mosaic of open-ended assemblages of entangled ways of life,” which the capitalist growth-paradigm obscures.

Tsing accordingly presents the reality of precarity – for both mushrooms and people – in all their particularity and ephemerality. Living things are not fungible parts of machines; they are singular and improvisational — something our critiques ought to acknowledge.

Contemporary capitalism certainly recognizes this reality by “translating” the local and peculiar into usable inputs for ongoing capital accumulation.

Tsing wishes to show that no single rationality can begin to describe today’s economy, where “supply chains snake back and forth not only across continents but also across standards…”

Not only are supply chains wildly heterogeneous, they often rely upon non-capitalist social forms, much as Facebook relies upon social sharing and Airbnb and Uber have colonized people’s private lives by marketizing their apartments and cars. For Tsing, “capitalist and noncapitalist forms interact in pericapitalist spaces.”

Despite the messy contingencies of this arrangement, capitalism still manages to amass assets for further investment. “How does this work?” Tsing asks. The short answer is that capital accumulation proceeds through a process of “salvage accumulation”:

Civilization and progress turn out to be cover-ups and translation mechanisms for getting access to value procured through violence: classic salvage.”  In today’s global supply chains, this means “coerced labor, dangerous sweatshops, poisonous substitute ingredients, and irresponsible environmental gouging and dumping.

The Mushroom at the End of the World is no dry social-sciences monograph; in its poetic expressiveness and subtle depictions of social reality, the book often reads like a novel. There are no tidy conclusions, just a series of penetrating vignettes, analyses and observations.

The ultimate point is to open up a new grand narrative. Once we can get beyond the stark divide of “Man” and “Nature” as dual opposites, Tsing writes:

all creatures can come back to life, and men and women can express themselves without the strictures of a parochially imagined rationality. No longer relegated to whispers in the night, such stories might be simultaneously true and fabulous. How else can we account for the fact that anything is alive in the mess we have made?

If The Mushroom at the End of the World describes the survival techniques of precariat mushroom foragers working under capitalism — a story of ingenuity, commitment and proud autonomy — the next step is to tell more of the stories of how precariat commoners are emancipating themselves through commons.

Tsing is right: once the market/progress narrative is exposed as a cover-story, a range of different narratives become possible.

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Debacle at Doha

SUBHEAD: The Saudi led debacle in Doha will be seen as marking the beginning of the end of the old oil order.

By Michael Klare on 28 April 2016 for Tom Dispatch -
(http://www.tomdispatch.com/post/176134/tomgram%3A_michael_klare%2C_the_coming_world_of_%22peak_oil_demand%2C%22_not_%22peak_oil%22/)


Image above: Skyscrapers in the city of Doha, Qatar. From (http://www.resilience.org/stories/2016-04-29/the-debacle-at-doha).

Sunday, April 17th was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices.

Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels.

In anticipation of such a deal, oil prices had begun to creep inexorably upward, from $30 per barrel in mid-January to $43 on the eve of the gathering. But far from restoring the old oil order, the meeting ended in discord, driving prices down again and revealing deep cracks in the ranks of global energy producers.

It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market.

Most of all, however, it demonstrated that the petroleum-fueled world we’ve known these last decades -- with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers -- is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.

The Road to Doha
Before the Doha gathering, the leaders of the major producing countries expressed confidence that a production freeze would finally halt the devastating slump in oil prices that began in mid-2014. Most of them are heavily dependent on petroleum exports to finance their governments and keep restiveness among their populaces at bay.

Both Russia and Venezuela, for instance, rely on energy exports for approximately 50% of government income, while for Nigeria it’s more like 75%.  So the plunge in prices had already cut deep into government spending around the world, causing civil unrest and even in some cases political turmoil.

No one expected the April 17th meeting to result in an immediate, dramatic price upturn, but everyone hoped that it would lay the foundation for a steady rise in the coming months. The leaders of these countries were well aware of one thing: to achieve such progress, unity was crucial.

Otherwise they were not likely to overcome the various factors that had caused the price collapse in the first place.  Some of these were structural and embedded deep in the way the industry had been organized; some were the product of their own feckless responses to the crisis.

On the structural side, global demand for energy had, in recent years, ceased to rise quickly enough to soak up all the crude oil pouring onto the market, thanks in part to new supplies from Iraq and especially from the expanding shale fields of the United States.

This oversupply triggered the initial 2014 price drop when Brent crude -- the international benchmark blend -- went from a high of $115 on June 19th to $77 on November 26th, the day before a fateful OPEC meeting in Vienna. The next day, OPEC members, led by Saudi Arabia, failed to agree on either production cuts or a freeze, and the price of oil went into freefall.

The failure of that November meeting has been widely attributed to the Saudis’ desire to kill off new output elsewhere -- especially shale production in the United States -- and to restore their historic dominance of the global oil market. Many analysts were also convinced that Riyadh was seeking to punish regional rivals Iran and Russia for their support of the Assad regime in Syria (which the Saudis seek to topple).

The rejection, in other words, was meant to fulfill two tasks at the same time: blunt or wipe out the challenge posed by North American shale producers and undermine two economically shaky energy powers that opposed Saudi goals in the Middle East by depriving them of much needed oil revenues.

Because Saudi Arabia could produce oil so much more cheaply than other countries -- for as little as $3 per barrel -- and because it could draw upon hundreds of billions of dollars in sovereign wealth funds to meet any budget shortfalls of its own, its leaders believed it more capable of weathering any price downturn than its rivals.

Today, however, that rosy prediction is looking grimmer as the Saudi royals begin to feel the pinch of low oil prices, and find themselves cutting back on the benefits they had been passing on to an ever-growing, potentially restive population while still financing a costly, inconclusive, and increasingly disastrous war in Yemen.

Many energy analysts became convinced that Doha would prove the decisive moment when Riyadh would finally be amenable to a production freeze.  Just days before the conference, participants expressed growing confidence that such a plan would indeed be adopted.

After all, preliminary negotiations between Russia, Venezuela, Qatar, and Saudi Arabia had produced a draft document that most participants assumed was essentially ready for signature. The only sticking point: the nature of Iran’s participation.

The Iranians were, in fact, agreeable to such a freeze, but only after they were allowed to raise their relatively modest daily output to levels achieved in 2012 before the West imposed sanctions in an effort to force Tehran to agree to dismantle its nuclear enrichment program.  Now that those sanctions were, in fact, being lifted as a result of the recently concluded nuclear deal, Tehran was determined to restore the status quo ante.

On this, the Saudis balked, having no wish to see their arch-rival obtain added oil revenues.  Still, most observers assumed that, in the end, Riyadh would agree to a formula allowing Iran some increase before a freeze.

“There are positive indications an agreement will be reached during this meeting... an initial agreement on freezing production,” said Nawal Al-Fuzaia, Kuwait’s OPEC representative, echoing the views of other Doha participants.

But then something happened. According to people familiar with the sequence of events, Saudi Arabia’s Deputy Crown Prince and key oil strategist, Mohammed bin Salman, called the Saudi delegation in Doha at 3:00 a.m. on April 17th and instructed them to spurn a deal that provided leeway of any sort for Iran.

When the Iranians -- who chose not to attend the meeting -- signaled that they had no intention of freezing their output to satisfy their rivals, the Saudis rejected the draft agreement it had helped negotiate and the assembly ended in disarray.

Geopolitics to the Fore
Most analysts have since suggested that the Saudi royals simply considered punishing Iran more important than raising oil prices.  No matter the cost to them, in other words, they could not bring themselves to help Iran pursue its geopolitical objectives, including giving yet more support to Shiite forces in Iraq, Syria, Yemen, and Lebanon.

Already feeling pressured by Tehran and ever less confident of Washington’s support, they were ready to use any means available to weaken the Iranians, whatever the danger to themselves.

“The failure to reach an agreement in Doha is a reminder that Saudi Arabia is in no mood to do Iran any favors right now and that their ongoing geopolitical conflict cannot be discounted as an element of the current Saudi oil policy,” said Jason Bordoff of the Center on Global Energy Policy at Columbia University.

Many analysts also pointed to the rising influence of Deputy Crown Prince Mohammed bin Salman, entrusted with near-total control of the economy and the military by his aging father, King Salman. As Minister of Defense, the prince has spearheaded the Saudi drive to counter the Iranians in a regional struggle for dominance.

Most significantly, he is the main force behind Saudi Arabia’s ongoing intervention in Yemen, aimed at defeating the Houthi rebels, a largely Shia group with loose ties to Iran, and restoring deposed former president Abd Rabbuh Mansur Hadi.

After a year of relentless U.S.-backed airstrikes (including the use of cluster bombs), the Saudi intervention has, in fact, failed to achieve its intended objectives, though it has produced thousands of civilian casualties, provoking fierce condemnation from U.N. officials, and created space for the rise of al-Qaeda in the Arabian Peninsula. Nevertheless, the prince seems determined to keep the conflict going and to counter Iranian influence across the region.

For Prince Mohammed, the oil market has evidently become just another arena for this ongoing struggle. “Under his guidance,” the Financial Times noted in April, “Saudi Arabia’s oil policy appears to be less driven by the price of crude than global politics, particularly Riyadh’s bitter rivalry with post-sanctions Tehran.”

This seems to have been the backstory for Riyadh’s last-minute decision to scuttle the talks in Doha. On April 16th, for instance, Prince Mohammed couldn’t have been blunter to Bloomberg, even if he didn’t mention the Iranians by name: “If all major producers don’t freeze production, we will not freeze production.”

With the proposed agreement in tatters, Saudi Arabia is now expected to boost its own output, ensuring that prices will remain bargain-basement low and so deprive Iran of any windfall from its expected increase in exports.

The kingdom, Prince Mohammed told Bloomberg, was prepared to immediately raise production from its current 10.2 million barrels per day to 11.5 million barrels and could add another million barrels “if we wanted to” in the next six to nine months.

With Iranian and Iraqi oil heading for market in larger quantities, that’s the definition of oversupply.  It would certainly ensure Saudi Arabia’s continued dominance of the market, but it might also wound the kingdom in a major way, if not fatally.

A New Global Reality
No doubt geopolitics played a significant role in the Saudi decision, but that’s hardly the whole story.

Overshadowing discussions about a possible production freeze was a new fact of life for the oil industry: the past would be no predictor of the future when it came to global oil demand.  Whatever the Saudis think of the Iranians or vice versa, their industry is being fundamentally transformed, altering relationships among the major producers and eroding their inclination to cooperate.


Until very recently, it was assumed that the demand for oil would continue to expand indefinitely, creating space for multiple producers to enter the market, and for ones already in it to increase their output.

Even when supply outran demand and drove prices down, as has periodically occurred, producers could always take solace in the knowledge that, as in the past, demand would eventually rebound, jacking prices up again. Under such circumstances and at such a moment, it was just good sense for individual producers to cooperate in lowering output, knowing that everyone would benefit sooner or later from the inevitable price increase.

But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it’s every producer for itself in a mad scramble to protect market share.

This new reality -- a world in which “peak oil demand,” rather than “peak oil,” will shape the consciousness of major players -- is what the Doha catastrophe foreshadowed.

At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of “peak oil”; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall.

This can be traced both to slowing economic growth globally and to an accelerating “green revolution” in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.

 This is no theoretical construct.  It’s reality itself.  Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line.

While the demand for oil does continue to rise in the developing world, even there it’s not climbing at rates previously taken for granted. With such countries also beginning to impose tougher constraints on carbon emissions, global consumption is expected to reach a peak and begin an inexorable decline. According to experts Thijs Van de Graaf and Aviel Verbruggen, overall world peak demand could be reached as early as 2020.

In such a world, high-cost oil producers will be driven out of the market and the advantage -- such as it is -- will lie with the lowest-cost ones. Countries that depend on petroleum exports for a large share of their revenues will come under increasing pressure to move away from excessive reliance on oil.

This may have been another consideration in the Saudi decision at Doha. In the months leading up to the April meeting, senior Saudi officials dropped hints that they were beginning to plan for a post-petroleum era and that Deputy Crown Prince bin Salman would play a key role in overseeing the transition.

On April 1st, the prince himself indicated that steps were underway to begin this process. As part of the effort, he announced, he was planning an initial public offering of shares in state-owned Saudi Aramco, the world’s number one oil producer, and would transfer the proceeds, an estimated $2 trillion, to its Public Investment Fund (PIF).

“IPOing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil,” the prince pointed out. “What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”

For a country that more than any other has rested its claim to wealth and power on the production and sale of petroleum, this is a revolutionary statement. If Saudi Arabia says it is ready to begin a move away from reliance on petroleum, we are indeed entering a new world in which, among other things, the titans of oil production will no longer hold sway over our lives as they have in the past.

This, in fact, appears to be the outlook adopted by Prince Mohammed in the wake of the Doha debacle.  In announcing the kingdom’s new economic blueprint on April 25th, he vowed to liberate the country from its “addiction” to oil.”  This will not, of course, be easy to achieve, given the kingdom’s heavy reliance on oil revenues and lack of plausible alternatives.

The 30-year-old prince could also face opposition from within the royal family to his audacious moves (as well as his blundering ones in Yemen and possibly elsewhere).  Whatever the fate of the Saudi royals, however, if predictions of a future peak in world oil demand prove accurate, the debacle in Doha will be seen as marking the beginning of the end of the old oil order.

• Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. A documentary movie version of his book Blood and Oil is available from the Media Education Foundation. Follow him on Twitter at @mklare1.

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International trade is collapsing

SUBHEAD: Denmark (home of biggest container shipper Maersk) says trade in primary commodities is down 25%.

By Michael Snyder on 9 November 2015 for Economic Collapse -
(http://theeconomiccollapseblog.com/archives/we-have-never-seen-global-trade-collapse-this-dramatically-outside-of-a-major-recession)


Image above: The Danish company Maersk debuts the Tripple-E, the largest ship in the world in 2013. Maersk  has been the top container ship operator in the world since 1996. From (http://www.industrytap.com/worlds-largest-container-ship-debuts-in-copenhagen/13932).

If you have been watching for the next major global economic downturn, you can now stop waiting, because it has officially arrived.  Never before in history has global trade collapsed this dramatically outside of a major worldwide recession.

And this makes perfect sense – when global economic activity is increasing there is more demand for goods and services around the world, and when global economic activity is decreasing there is less demand for goods and services around the world.

So far this year, global trade is down about 8.4 percent, and over the past 30 days the Baltic Dry Index has been absolutely plummeting.

A month ago it was sitting at a reading of 809, but now it has fallen all the way to 628.  However, it is when you look at the trade numbers for specific countries that the numbers become particularly startling.

Just within the last few days, new trade numbers have come out of China.  China accounts for approximately one-fifth of all global factory exports, and for many years Chinese export growth has helped fuel the overall global economy.

But now Chinese exports are falling.  In October, Chinese exports were down 6.9 percent compared to a year ago.  That follows a decline of 3.7 percent in September.

The numbers for Chinese imports are even worse.  Chinese imports in October were down 18.8 percent compared to a year ago after falling 20.4 percent in September.  China’s growing middle class was supposed to help lead a global economic recovery, but that simply is not happening.

The following chart from Zero Hedge shows just how dramatic these latest numbers are compared to what we are accustomed to witnessing.  As you can see, the only time Chinese trade numbers have been this bad for this long was during the major global recession of 2008 and 2009…



Other numbers confirm the magnitude of the economic slowdown in China.  I have mentioned the ongoing plunge of the China Containerized Freight Index previously, but now it has just hit a brand new record low…

The weakness in China’s economy and its exports to the rest of the world are showing up in the weekly China Containerized Freight Index (CCFI): On Friday, it dropped to the worst level ever.

The index, operated by the Shanghai Shipping Exchange, tracks how much it costs, based on contractual and spot-market rates, to ship containers from China to 14 major destinations around the world. Unlike a lot of official data from China, the index is an unvarnished reflection of a relentless reality.

It has been cascading lower since February and has since dropped 31%. At 742 currently, it’s down 26% from its inception in 1998 when it was set at 1,000.

Here are some more deeply disturbing global trade numbers that come from my previous article entitled “18 Numbers That Scream That A Crippling Global Recession Has Arrived“…

• Demand for Chinese steel is down 8.9 percent compared to a year ago.
• China’s rail freight volume is down 10.1 percent compared to last year.
• In October, South Korean exports were down 15.8 percent from a year ago.
• According to the Dutch government index, a year ago global trade in primary commodities was sitting at a reading of 150 but now it has fallen all the way down to 114.  

What this means is that less commodities are being traded around the world, and that is a very clear sign that global economic activity is really slowing down.

Additionally, German export orders were down about 18 percent in September, and U.S. exports are down about 10 percent for the year so far.

Clearly something very big is happening, and it is affecting the entire planet.  The CEO of the largest shipping company in the world believes that the explanation for what is taking place is fairly simple…

In fact, according to Maersk CEO, Nils Smedegaard Andersen, the reason why companies that are reliant on global trade, such as his, are flailing is simple: global growth is substantially worse than the official numbers and forecasts. To wit: “The world’s economy is growing at a slower pace than the International Monetary Fund and other large forecasters are predicting.”

Quoted by Bloomberg, Andersen says that “we believe that global growth is slowing down,” he said in a phone interview. “Trade is currently significantly weaker than it normally would be under the growth forecasts we see.“

Global financial markets can run, but they can’t hide from these horrifying trade numbers forever.

One of the big things that is contributing to this new global economic slowdown is the unwinding of the U.S. dollar carry trade.  A recent piece from Phoenix Capital Research explained the U.S. dollar carry trade pretty well…

When the Fed cut interest rates to zero in 2008, it flooded the system with US Dollars. The US Dollar is the reserve currency of the world. NO matter what country you’re in (with few exceptions) you can borrow in US Dollars.

And if you can borrow in US Dollars at 0.25%… and put that money into anything yielding more… you could make a killing.

A hedge fund in Hong Kong could borrow $100 million, pay just $250,000 in interest and plow that money into Brazilian Reals which yielded 11%… locking in a $9.75 million return.

This was the strictly financial side of things. On the economics side, Governments both sovereign and local borrowed in US Dollars around the globe to fund various infrastructure and municipal projects.

Simply put, the US Government was practically giving money away and the world took notice, borrowing Dollars at a record pace. Today, the global carry trade (meaning money borrowed in US Dollars and invested in other assets) stands at over $9 TRILLION (larger than the economy of France and Brazil combined).

But now the U.S. dollar carry trade is starting to unwind because the U.S. dollar has been doing very well lately.  As the U.S. dollar has surged against other global currencies in 2015, this has put a tremendous amount of stress on emerging markets around the world.

All of a sudden oil, other commodities and stock markets in nations such as Brazil began to crash.

Meanwhile, those that had taken out loans denominated in U.S. dollars were finding that it was taking far more of their own local currencies to service and repay those loans.  This financial crunch in emerging markets is going to take years to fully play out, and it is going to take a tremendous toll on global markets.

Of course we have seen this happen before.  A surging dollar helped cause the Latin American debt crisis of the 1980s, the Asian financial crisis of the 1990s and the major global recession of 2008 and 2009.

If you thought that the financial shaking that happened in late August was bad, the truth is that it was nothing compared to what is now heading our way.

So buckle your seat belts boys and girls, because we are definitely in for a bumpy ride.

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For the Nothing Is Happening crowd

SUBHEAD: A lot of people out there expected something to happen in September that did not ultimately happen.

By Michael Snyder on 29 September 2015 for The Economic Collapse -
(http://theeconomiccollapseblog.com/archives/this-is-for-the-nothing-is-happening-crowd)


Image above: A palace of wealth built on the foundation of a shack.  From (http://www.eurekastreet.com.au/article.aspx?aeid=34683#.Vg1-0XsnpBo).

There were all kinds of wild theories floating around, and many of them had no basis in reality whatsoever.  But without a doubt, some very important things did happen in September.

As I warned about ahead of time, we are witnessing the most significant global financial meltdown since the end of 2008.  All of the largest stock markets in the world are crashing simultaneously, and so far the amount of wealth that has been wiped out worldwide is in excess of 5 trillion dollars.

In addition to stocks, junk bonds are also crashing, and Bank of America says that it is a “slow moving trainwreck that seems to be accelerating“.

Thanks to the commodity price crash, many of the largest commodity traders on the planet are now imploding.  I wrote about the death spiral that has gripped Glencore yesterday.

On Tuesday, the stock price of the largest commodity trader in Asia, the Noble Group, plummeted like a rock and commodity trading giant Trafigura appears to be in worse shape than either Glencore or the Noble Group.

The total collapse of any of them could easily be a bigger event than the implosion of Lehman Brothers in 2008.  So I honestly do not understand the “nothing is happening” crowd.  It takes ignorance on an almost unbelievable level to try to claim that “nothing is happening” in the financial world right now.

Within the last 60 days, we have seen some things happen that we have never seen before.

For example, did you know that we witnessed the greatest intraday stock market crash in U.S. history on August 24th?

During that day, the Dow Jones Industrial Average plunged from a high of 16,459.75 to a low of 15,370.33 before rebounding substantially. That intraday point swing of 1,089 points was the largest in all of U.S. history.

Overall, the Dow was down 588.40 points that day.  When you combine that decline with the 530.94 point plunge from the previous Friday, you get a total drop of 1119.34 points over two consecutive trading days.

Never before in history had the Dow fallen by more than 500 points on two trading days in a row.  If that entire decline had fallen within one trading day, it would have been the largest stock market crash in U.S. history by a very wide margin, and everyone would be running around saying that author Jonathan Cahn was right again.

But because this massive decline fell over two consecutive trading days that somehow makes him wrong?

Are you kidding me?

Come on people – let’s use some common sense here.  We are already witnessing the greatest global stock market decline in seven years, and after a brief lull things are starting to accelerate once again.

Last night, stocks in Hong Kong were down 629 points and stocks in Japan were down 714 points.  In the U.S., the Nasdaq has had a string of down days recently, and the “death cross” that has just formed has many investors extremely concerned…

The Nasdaq composite spooked investors on Monday after forming a death cross, a trading pattern that shows a decline in short-term momentum and is often a precursor to future losses.

A death cross occurs when the short-term moving average of a security or an index pierces below the long-term trend, in this case the 50-day moving average breaking through the 200-day moving average.

In the past month, similar chart patterns formed in the S&P 500, Dow and small-cap Russell 2000, but the Nasdaq avoided a death cross formation until Monday.

What we witnessed in September was not “the end” of anything.

Instead, it is just the beginning.

And if you listen carefully, some of the biggest names on Wall Street are issuing some very ominous warnings about what is coming.  For instance, just consider what Carl Icahn is saying…

Danger ahead—that’s the warning from Carl Icahn in a video coming Tuesday.

The activist says low rates caused bubbles in art, real estate and high-yield bonds—with potentially dramatic consequences.

“It’s like giving somebody medicine and this medicine is being given and given and given and we don’t know what’s going to happen – you don’t know how bad it’s going to be. We do know when we did it a few years ago it caused a catastrophe, it caused ’08. Where do you draw the line?”

Even people like Jim Cramer are starting to freak out.  He recently told his audience that “we have a first-class bear market going”…

Jim Cramer, the ex-hedge fund manager and host of CNBC’s show “Mad Money,” has been vocal recently on air, saying repeatedly that he doesn’t like the market now, and last week said “we have a first-class bear market going.”

Similarly, Gary Kaltbaum, president of Kaltbaum Capital Management, has been sending out notes to clients and this newspaper for weeks, saying the poor price action of the stock market and many hard-hit sectors, such as energy and the recently clobbered biotech sector, has all the earmarks of a bear market. Over the weekend, Kaltbaum said: “We remain in a worldwide bear market for stocks.”

As I have warned repeatedly, there will continue to be ups and downs.  The stock market is not going to fall every day.  In fact, on some days stocks will absolutely soar.

But without a doubt, we have entered the period of time that I have warned about for so long.  The global financial system is now beginning to unravel, and any piece of major bad news will likely accelerate things.

For instance, the total collapse of Deutsche Bank, Petrobras, Glencore, the Noble Group, Trafigura or any of a number of other major financial institutions that I am currently watching could create mass panic on the global financial stage.

In addition, an unexpected natural disaster that hits a financially important major city or a massive terror attack in the western world are other examples of things that could accelerate this process.

Our world is becoming increasingly unstable, and we all need to learn to expect the unexpected.

The period of relative peace and security that we all have been enjoying for so long is ending, and now chaos is going to reign for a time.

So get prepared while you still can, because there is very little time remaining to do so…

.

The real need for GMO Big Ag

SUBHEAD:  It is because it increases profit, scarcity, and control of food as a commodity.

By Patrick M. Lydon on 13 May 2015 for Final Straw -
(http://www.finalstraw.org/the-real-need-for-gmo-and-industrial-scale-food/)


Image above: Arid conditions in the played out Central Valley of California. From original article.

I’d like to start off with a story about a woman I know who works full time, takes home a below-median income, and raises two kids in Silicon Valley. This woman also has an organic garden in her tiny back yard, partially for her own enjoyment, and partially so she can afford to eat good food.

Every year, her tiny part time garden produces far more than she needs. She shares the excess, and I mean huge excess. She shares peppers and lettuce and lemons and cucumbers and spinach and beets and all else with dozens of people. This full-time worker, part time farmer produces more food than her and her friends know what to do with.

And her story is not unique.

Let’s pause here to think about what this means for a moment, about this woman, her part time passion, and how much she and those around her receive from it.

Now, think about this single instance of plentiful food, and multiply it across your block. How many people could all the empty yards in a suburban block feed if they were put to use growing food?
Now multiply that across your neighborhood, all the empty yards, lawns, abandoned lots. How much of a bounty in food could you have?

Now think further, across your entire city, your entire region. Imagine yards and blocks and rivers and valleys filled perennials, fruits, berries, filled with lush vegetable gardens.

A silly agrarian dream? The United Nations Doesn’t Think So, nor does its Food and Agriculture Organization, or decades of research by Rodale Institute, or the millions of Regenerative Farmers, Natural Farmers, and Permaculturists who are working today to feed most of the world.

The Myth that We Need Industrial Agriculture has been debunked, and the only ones who are holding onto this myth, are the industry giants who helped create it.

Ecologically speaking, we have the ability to grow much of our own food while also enriching the land around us, assuming we understand and follow somewhat seasonal diets; biologically speaking, this way of eating can contribute great benefits to our body’s health; psychologically speaking, the garden is therapeutic, our minds are put more at ease and operate more clearly and peacefully after time spent working in the garden.

Again, replicate this view across your neighborhood, city, and region. How different does your world look? More peace? More good food? More neighborly neighbors?

Not only is there a benefit to the human world, but there is great ecological benefit to our earth as a whole. Through regenerative growing methods such as permaculture and natural farming, the process of growing food – and flowers and shrubs and trees alongside – is also a process of regenerating land and wildlife in our cities, and a process of reducing the need for destructive industrial agriculture.

Once more, replicate this view across the land where you live; envision the process of making humanity more healthy and peaceful, and making our earth more beautiful, more healthy, and more resilient at the same time.


Image above: Example of abundance from organic home gardening. From original article.

When you see the reality of how our current food system works – and how it works against health, peace, and resilience at every turn – you begin to wonder how we were ever tricked into believing that we need industrial agriculture. Or pesticide. Or synthetic chemicals. Or a food system where global distribution is the rule and not the exception.

This view of industrial agriculture as our savior has of course been debunked both by scientific and anecdotal evidence over the past several decades. So one wonders, why we are still operating our food systems in such a way?

The real reason why we need GMOs, synthetic fertilizers, pesticides, and industrial agriculture is because it increases profit, scarcity, and control of food as a commodity. Make no mistake, there is little to no benefit for us as individuals in this reasoning, and myriad pitfalls.

The real reason we need GMOs, synthetic fertilizers, pesticides and industrial agriculture is, by any measure of social or biological wellness, a lie; one invented and carefully maintained to benefit a few very wealthy people.

Show the heads of the food industry that you know the truth. Grow a garden. Show them your power.

how careless profit seekers the truth. Share your bounty freely with your friends and neighbors. Show them your compassion.

Show those who seek to hold the keys to a basic human need, that you won’t abide by their treachery to the human race. Show them your awareness and your strength.

There is hope for the world, and it lies in your awareness and actions, and also… in your gardens.




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Capitalism cannot be reformed

SUBHEAD: The essence of capitalism is to turn nature into commodities and commodities into capital.

By Mickey Z on 23 August 2013 for World News Trust -
(http://worldnewstrust.com/capitalism-cannot-be-reformed-mickey-z)


Image above: From (http://www.widescreen-wallpaper.eu/view-destruction_of_capitalism-1920x1200.html). Click to enlarge.

“The essence of capitalism is to turn nature into commodities and commodities into capital.” - Michael Parenti

While anyone paying an iota of attention could recognize that “separation of church of state” is more honored in the breach here in the Home of the Brave™, I’d further submit that the good ol’ U S of A is a genuine theocracy -- with the myth of capitalism firmly entrenched on the throne.

Even most activists willingly and counterproductively genuflect at the altar of profit margins.

Just like the mainstream folks they deride, so-called radicals parrot homilies passed down to them by their corporate commissars. Capitalism, we’re conditioned to believe, may need the occasional tweak and sometimes an overhaul but hey, it’s better than anything else out there!

Define “Inefficiency”
All of the above came to my mind as I re-read a pamphlet called “The Inefficiency of Capitalism: An Anarchist View.” The author (Brian Oliver Sheppard) opted to eschew the “usual, moralistic leftist critique of capitalism.” Instead, he tackled it “head on, on its own turf -- economics.”

While I’d question how “anarchist” his pamphlet is, Sheppard does highlight ten of the “most outstanding inefficiencies of capitalism”: product duplication, systemic unemployment, cost-shifting, waste of unsold goods, the inefficiency of hierarchies, planned obsolescence, price gouging, creation of false desires, parasitic “jobs,” and inefficient distribution patterns.

I’m not here to debate the usefulness of this list, however. Instead, I’m asking all of you to see past the economic subterfuge because such myopic critiques inherently imply that capitalism can be reformed.

Prices may be controlled, wages raised, products made to last longer, etc. etc. etc. -- but what all this ignores is that capitalism = ecocide.

Understanding capitalism and explaining its destructiveness to others does not require an advanced degree or superior insight. This isn't about vague, inapplicable concepts like "good" or "evil” and it certainly has nothing to do with the fantasies bandied about by deluded economics professors.

It's all about design.

Until There’s Nothing Left
Capitalism is an economic system based on perpetual growth and the relentless exploitation of what we've come to call "natural resources." By definition, such an approach is unsustainable, cannot be reformed, and is thus, anti-life.

To gain access to and control of resources, capitalism requires brutal, sustained military interventions (or the threat thereof). The U.S. Department of Defense, for example, is the world’s largest military power and the planet's worst polluter and eats up 54 percent of U.S. taxpayer dollars.

Military interventions (or the threat thereof) lead to wars, war crimes, the propping up of authoritarian regimes, poverty and repression, environmental devastation, and eventually… corporate dominion over resources.

Capitalism -- in its predatory pursuit of profit -- requires humans to dominate humans and humans to dominate non-humans and humans to dominate the landscape… until there's nothing left.

Resources are finite. They cannot/will not be replicated in a laboratory. Exploiting, poisoning, and consuming the ecosystem alters the delicate and symbiotic balance of the natural world -- which only leads to further devastation of our shared landbase.

Capitalism requires constant consumption. Hence, humans are re-programmed into compliant, ill-informed consumers. Pervasive propaganda/public relations keep consumers consuming, workers working, and repressors repressing (explaining why middle class cops pepper spray activists instead of joining up with them).

Which Side Are You On?
While other economic systems may address some of the vast human inequalities inherent in a capitalist society, unless such a system is designed in synchronicity with our shared ecosystem, it will do nothing to prevent the looming economic/social/environmental collapse, thus…

To be anti-capitalist is to look beyond the next fiscal quarter, beyond national boundaries, and beyond the corporate propaganda.

To be capitalist is to ignore reality. To be capitalist is to pretend that technology is neutral, humans can "control" nature, and the playing field is even.

To be anti-capitalist is to see past skin color, gender, ethnicity, sexual preference, ability/disability, age, “class,” or species.

To be capitalist is to prize shareholders over sharing, commodities over communities.

To be an anti-capitalista is to comprehend that a system based on growth at all costs is anti-life. To be anti-capitalist is to be anti-ecocide.

To be capitalist is to voice support for a toxic, poisoned, clear-cut landbase ravaged by unremitting war, disease, inequality, repression, incarceration, and discrimination.

To be anti-capitalist is to bravely see past the façade, own up to the myriad global crises, and have a bold new vision for the future -- a future that extends well beyond today's closing bell on Wall Street.

To be anti-capitalist is to recognize the urgent need to begin the process of creating a new system -- a system not for sale to the highest bidder; not based on celebrity, material consumption, physical beauty, or military conquest; a system that promotes unity and collective action while maintaining individuality and independence; a system that challenges us to think for ourselves and about others; a system that understands the connection between human behavior and non-human life.

To be a capitalista is to act as if we are the last generation of humans.

To be an anti-capitalista is to re-imagine our relationship with the natural world.

Which side are you on, comrades? The future is waiting on your decision.

See also:
Ea O Ka Aina: Which side are you on? 8/16/13

.

Damned if you do, doomed if you don't

SUBHEAD: All we can do is "minimize the suffering of the herd". Our way of life is over. For good. We’ll have to find other ways.

 By Raul Ilargi Meijer on 4 March 2011 for The Automatic Earth - (http://theautomaticearth.blogspot.com/2011/03/march-4-2011-damned-if-you-do-doomed-if.html)

 
Image above: "The Silk Road" by Hing Nian Zhang. From (http://worldhistoryto1500.blogspot.com/2010/10/networks-of-communication-and-exchange.html).  

It's somewhat darkly funny, isn’t it: rising food prices are, as we all know, a major factor in the protests in the Arab world, and these protests in turn, according to the FAO, lead to higher food prices (oil being a main driver, for one). Irony, unintended consequences? No shortage of either these days, is there? Damned if you do, doomed if you don't.  

You need look no further than Geithner and Bernanke "saving the US economy" (look at those markets!) in the face of persistent mile-high unemployment, with a fast growing percentage of new jobs paying $10 an hour or less with no benefits. 

Then again, are those consequences really unintended? As the real economy is being gutted to the bone, the rising markets are nothing but a mirage, a talk-to-the-hand scheme devised by the spin masters who know what all of you like to hear and who feed you exactly that. Until their masters decide the time has come when they can't squeeze enough money out of you anymore to justify keeping the game going.  

And then it will all vanish into thin air. And you won't even know what hit you. You’ll be left with a whole load of nothing. No services, no benefits, no jobs, no homes, just a huge bunch of empty bags. Don't let the markets fool you, look at the situation on the ground. That reflects the future much better. We will probably see another set or two of positive numbers for jobs, and the stock markets may not have reached their highest peak. 

But it's all the hot air of false optimism: the economy is irreparably broken. For a while, you can delay debt payments by creating more debt, but that is a dead end street, and the piper waits at the other side. Richard Russell, who's about as old as Noah now, writes about Mary Meeker et al.'s USA Inc. report :

Dead Nation Walking

[..] Mary writes, "Imagine no Army, Navy, Air Force, Marine Corp or Coast Guard, no federal courts or prisons, no national park service, no food and drug administration, no embassies, no salaries for Congress. That's what it would take to finance the budget by 2025 and still pay interest on America's debts, without either raising revenues or reducing entitlement growth. That's certainly not a recognizable America." Later in the article, Meeker notes that the nation's problem is not a revenue problem, it's a SPENDING problem. She writes, "Simple math says that balancing the budget purely by raising taxes would require doubling rates across the board, which would kill growth." So as I see it, what's coming up is a massive cut-back in federal (plus states and municipalities and cities) spending. This is the stark and painful picture of the years ahead.[..] But what about the markets? What of the Dow and the S&P which have been rising steadily for two successive years? As I see it, investors are taking it "one step at a time." Corporate earnings on a year-over-year basis have surged. And that's what investors have tuned in to. As far as the coming cut-backs, investors' attitudes are "We'll worry about that when the time comes. In the meantime, hasn't the 'good ol' USA come out of every tight problem with ringing bells and confetti. We'll do it again, and the hell with the deficits." Recently and rather ironically, I read that consumer confidence was at its highest level in three years. The history of America has been perpetual optimism, or that well-known expression -- "What, me worry?"

Here I'm wondering where that consumer confidence number comes from that Russell talks about. A newly published poll done by NBC and the Wall Street Journal tells a different story. Neil King Jr. and Scott Greenberg write in the Journal:

Poll Finds Support Lacking for Entitlement Reductions

Overall, the new poll found deepening pessimism about the future of the economy and the country's direction. Only 29% thought the economy would get better over the next year, a dip of 11 points since last month and the lowest since August. "This is a country that refuses to feel better," said Mr. McInturff.

What'd they do? Talk to a different set of Americans? And what's that about "A country that refuses to feel better"? Do Americans not want to feel better? Or are they just finding it hard on the back of job losses, eroding pensions and benefits, full frontal attacks on collective bargaining, and all the other blanks anyone amongst you can fill in? There's one line in the article on that poll that's really got to be the money shot of the day:

[..] more than half [of poll respondents] favored bumping the retirement age to 69 by 2075.

See, that's really a great idea: to have people today voice their opinion on the retirement age, 64 years from now, of kids that are 5 year-olds. It says a great deal about the folks who posed the questions, as well as about those who actually responded to such an absurd proposition, and of course about the entire discussion regarding the economy that's pretty much not taking place at all in any serious way, shape or form. 

Whenever you see predictions or polls that include dates like 2050 or 2075, please do realize that you're very simply being punked. The overall message of the poll is that a large majority of Americans don't want significant cuts to entitlement programs. Unfortunately, as Richard Russell indicates, those cuts will come anyway, and soon. 

American leadership has decided that saving banks trumps saving people, and once you're on that road, it’s very hard to get off it. The die is cast, les jeux sont faits, there's no way back. Again unfortunately, there are very few people out there who understand what must of necessity lie ahead.

 The sort of things we hear all over the place is: Buy stocks! or Buy gold! But that's not what we should be listening to, because it's simply not all that simple. Yes, gold is a good investment, but only after you’ve covered your "basic bases", when food and shelter and access to water are taken care of. And when you can afford to sit on it for 5-10 years, or even longer. That will work for some of us, but not for most. 

Sitting on gold when you're hungry, cold, or thirsty doesn't make a lot of sense. Our point of view at The Automatic Earth is that in the near future there will be far too many people who hold gold, but will have to sell to cover losses and/or necessities, and into a buyer's market to boot, to keep the price of gold up. Not a popular view, we know.  

Where and how do we differ from the 'priests of gold'? It all comes down to the extent to which the world as we know it today is going to change. That extent is in our view greatly underestimated. In the world of finance, there is hardly any recognition of even the mere possibility that owning stocks, bonds, or even gold may not necessarily be the best way to go forward. The main thought remains that if you have enough of something "fungible", you can always trade it and buy whatever it is you need. 

But that's not necessarily true. It may be the model we have grown up in, but it's by no means universal. Besides, even if you own a ton of gold, and you have water and food covered, but those around you where you live have not, what exactly is it that you have bought yourself? A prison?

 Our western economic thinking is Flatland 1- (or maybe 2-) dimensional, in the sense that we think we can always buy what we don't have or can't make. That's not how it works, though. In Sri Lanka, or Guatemala, or some small town in the US in the future, you can't just come into a community and offer them a bunch of gold in return for the scarce or only water they have. There are circumstances in which water trumps gold, hard as that may be to believe living in Flatland. 

In a world in which water purification plants are ever more energy extensive and that energy ever more hard to come by, communities even in locations (think cities) in the US will find it increasingly harder to maintain them. The money used to save our zombie banks, and with them the entire mortgage and finance systems, could have been used to save things like water purifying plants, and roads, bridges, sewer systems, and don't let's forget jobs, and, ultimately, people. 

But it wasn't. And that will turn out to be a fatal mistake for many. But before we get there, we’ll have to negotiate a major number of steep speedbumps on the way. Like: what will happen to the US dollar in the near future? We at the Automatic Earth are convinced that reports of its imminent demise are greatly exaggerated. 

Yes, the dollar will eventually die. But it won't be first in line to perish. And that's where many analysts and experts get it all wrong. As I said before, there are very few who understand what goes on. Mike Shedlock is in many aspects an exception, as he proves once more here, addressing precisely that issue:

US Dollar About to Lose Reserve Currency Status - Fact or Fantasy?

A number of sites are commenting on a Bloomberg video in which El-Erian, PIMCO Co-CEO says "Dollar could lose its reserve currency status".

Bloomberg: "Mohammad what does a weak dollar signal to you, a dollar that can't jump up here on a day like we've seen today?" El-Erian: "It is a warning shot to America that we cannot simply assume flight to quality, flight to safety. That people are starting to worry about the fiscal situation in the U.S. They are starting to worry about the level of debt. They are starting to worry about what they hear about states and municipalities. So, I would take this as a warning shot that we cannot assume that we will maintain the standing of the reserve currency as we have in the past."

Fact and Fantasy The first part of what El-Erian said is factual. Here it is again for convenience. "People are starting to worry about the fiscal situation in the U.S. They are starting to worry about the level of debt. They are starting to worry about what they hear about states and municipalities." Those are true statements. Unfortunately, his "warning shot" regarding reserve currency status is fallacious.[..] Global Beggar-Thy-Neighbor Policies It is pretty pale to suggest the end of the US dollar as a reserve currency when countries hold dollars as a function of math, then hold still more dollars to suppress their currencies, hoping to keep their exports up to "stimulate growth". Mathematical Impossibility Another mathematical relationship says the dollar, the pound, the Yen, and the Yuan cannot all be weak at the same time (relative to each other). Yet that is precisely what every country wants. It's mathematically impossible. You can see the effect in rising commodity prices. If commodity prices were a function of the US dollar alone, then they would be rising in US dollar terms alone. Instead there is upward pressure on commodities in all currencies. At some point the desirability to hoard commodities will peak.[..] Will Another Fiat Currency Replace the Dollar? [..] The Canadian and Swiss economies are simply not big enough for them to be global reserve currencies. In regards to the Euro, is Europe in a better fundamental situation than the US? Would it matter even if it was? To answer the second question, please remember trade deficit math. As for the Yuan, it is complete silliness to suggest the currency of a command-economy dictator-led country that will not even float its currency will be some sort of major reserve currency. To the extent that China trades with Russia, South Korea, etc., local reserves in varying currencies can happen (and are happening already), but the global significance of it is wildly overstated. The amounts in question are tiny, as a simple function of math. Will the dollar remain the global reserve currency forever? Of course not. However, it is highly unlikely any of the presumed leading Fiat candidates including the Yuan and the Keynesian wet-dream IMF SDRs (Special Drawing Rights), will take the dollar's place. SDRs are essentially a basket of currencies. The concept of trading in baskets of currencies backed by nothing is even more ridiculous than the existing setup. People do not buy goods and services in baskets of currencies. What can replace the dollar? Gold, or a mechanism like gold that would impose hard restrictions on perpetual deficits is what it takes to restore sanity. However, we may not see a significant move towards gold until there is a massive currency crisis or revolt against fiat currencies in general, not just the US dollar.

And Mish is not the only one who agrees with us on the dollar, as Erik Schatzker and Sree Vidya Bhaktavatsalam write at Bloomberg:

BlackRock's Fink Says He's a 'Big Buyer' of Dollars That Gross Says Avoid

BlackRock Inc.'s Laurence D. Fink, chief executive officer of the world’s largest asset manager, said he’s a "big buyer" of the U.S. dollar, which rival Bill Gross has urged investors to avoid. [..] "I’m a big buyer of the U.S. dollar," as the sovereign- debt crisis in Europe will cause volatility in the region, Fink said [..]

In other words, for the near to medium term future the US dollar is the place to be. Don't forget that we have started to see volatility rear its rising head in many places. It may still be in far away lands for now, but that won't last. 

Once it becomes clear, as in when the markets start falling for real, that there will be no pensions for the boomers and no jobs for their children, we’ll see people in the streets all over the western world too. And the US dollar will be the first flight to safety haven. Gold will have its day, but that day is a long time away, and when it arrives, the world will be a very different place. And there is no perfect reaction or preparation for it. All we can do is "minimize the suffering of the herd". Our way of life is over. For good. We’ll have to find other ways.

 .

GMO's sprout in WikiLeaks

SUBHEAD: Leaked cable references attempt at upward speculation in commodity prices to pressure ultimately unsuccessful GM crop approval in Europe.

By Rady Ananda on 15 December 2010 for Activist Post - (http://www.activistpost.com/2010/12/leaked-cable-hike-food-prices-to-boost.html) Image above: GMO Free Europe graphic. From (http://www.gmo-free-regions.org/conference2010/downloads.html).

In a January 2008 meeting, US and Spain trade officials strategized how to increase acceptance of genetically modified foods in Europe, including inflating food prices on the commodities market, according to a leaked US diplomatic cable released by WikiLeaks. During the meeting, Secretary of State for International Trade, Pedro Mejia, and Secretary General Alfredo Bonet “noted that commodity price hikes might spur greater liberalization on biotech imports.” It seems Wall Street traders got the word. By June 2008, food prices had spiked so severely that “The Economist announced that the real price of food had reached its highest level since 1845, the year the magazine first calculated the number,” reports Fred Kaufman in The Food Bubble: How Wall Street starved millions and got away with it. The unprecedented high in food prices in 2008 caused an additional 250 million people to go hungry, pushing the global number to over a billion. 2008 is also the first year “since such statistics have been kept, that the proportion of the world’s population without enough to eat ratcheted upward,” said Kaufman. All to boost acceptance of GM foods, and done via a trading scheme on which Wall Street speculators profited enormously. Mass food riots in several nations ensued, as did an investigation by the U.S. Senate Committee on Homeland Security and Governmental Affairs, resulting in a finding that, yes, unrestricted speculation in food commodities caused soaring prices.

In a comment at the end of the cable, the diplomat also revealed a level of pessimism about Spain’s willingness to help force GM foods on Europe:

This was a very good substantive discussion. However, it is clear that while Spain will continue sometimes to vote in favor of biotechnology liberalization proposals, the Spaniards will tread warily on this issue given their own domestic sensitivities and other equities Spain has in the EU.

That pessimism was largely unfounded, as “Spain planted 80 percent of all the Bt maize in the EU in 2009 and maintained its record adoption rate of 22 percent from the previous year,” noted a reportby the International Service for the Acquisition of Agri-biotech Applications (ISAAA). The leaked cables, amounting to over 1,300 right now, reveal US obsession with expanding the biotech market:

• One leaked cable confirms US concern with promoting GM foods in Africa, whichRichard Brenneman described as “a significant item on the State Department’s agenda.”
• In another leaked cable describing the potential to expand US interests in “isolationist” Austria, that nation’s ban on GM foods is highlighted.
• According to a leaked cable from 2007, of concern was French President Sarkozy’s desire to implement a ban on GM foods in line with populist sentiment. According to GM Free Regions, France maintains its opposition to GM foods today.
• In this leaked cable, the Pope openly blamed global hunger on commodity speculation and corrupt public officials, so far refusing to support the use of GM foods. (Also see my Dec. 12 piece, “Leaked cables confirm Pope’s distance from GMO debate and limited stance on bioethics.”)More may be revealed in the remaining cables.

Profiteering Leaves World open to Future Price Manipulation

Food commodity speculation was enabled in 2000 by the Commodity Futures Modernization Act. Deregulation handyman Senator Phil Gramm (R-TX) introduced the bill, coauthored by financial industry lobbyists and cosponsored by Senator Richard Lugar (R-IN), the chairman of the Agriculture Committee. Mother Jones describes the legislative climate when the bill passed:

As part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown….

Gramm’s most cunning coup on behalf of his friends in the financial services industry—friends who gave him millions over his 24-year congressional career—came on December 15, 2000. It was an especially tense time in Washington. Only two days earlier, the Supreme Court had issued its decision on Bush v. Gore. President Bill Clinton and the Republican-controlled Congress were locked in a budget showdown. It was the perfect moment for a wily senator to game the system. As Congress and the White House were hurriedly hammering out a $384-billion omnibus spending bill, Gramm slipped in a 262-page measure called the Commodity Futures Modernization Act.

Not only did that Act enable the subprime meltdown that crashed the economy and put tens of millions into foreclosure, it also enabled Wall Street investors to artificially spike the price of food. “Bankers had taken control of the world’s food, money chased money, and a billion people went hungry,” Kaufman clarified. After a year long investigation, he confirmed that price hikes in food from 2005 thru the peak in June 2008 had nothing to do with the supply chain, but instead occurred as a result of a Wall Street investment scheme known as Commodity Investment Funds. The first to develop the idea was Goldman Sachs, which took 18 different food sources, including cattle, coffee, cocoa, corn, hogs and wheat, and created an investment package. Kaufman explains:

They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known thenceforward as the Goldman Sachs Commodity Index. Then they began to offer shares.

(Kaufman summarizes his report in this June 2010 interview by Thom Hartmann, and in this July Democracy Now interview.) Kaufman points out that also in 2008, ConAgra Foods was able to sell its trading arm to a hedge fund for $2.8 billion. The world’s largest grain trader and GMO giant, Cargill, recorded an 86% jump in annual profits in the first quarter of 2008, attributed to commodity trading and an expanding biofuels market. The Star Tribune calculated that Cargill earned $471,611 an hour that quarter. The investment bubble burst in June 2008 and “aggregate commodity prices fell about 60% by mid-November 2008,” notes Steve Suppan of the Institute for Agricultural and Trade Policy. Though the US House of Representatives introduced a regulatory bill, “legislative loopholes will exempt at least 40-45%” of such trades. Supporting the loopholes is Cargill, among other multinational corporations. Suppan concludes:

The outlook for a sustainable and transparent financial system to underwrite trade dependent food security is not good… [T]he budget for the just launched congressional Financial Crisis Inquiry Commission, scheduled to report December 15, [2010] is just $8 million. The Wall Street lobbying budget for defeating financial reform legislation is thus far $344 million…

The final bill was signed into law in July 2010 (summarized by the New York Times), and the Commodity Futures Trading Commission continues to issue new rules purportedly aimed at regulating financial markets. “But big banks influence the rules governing derivatives through a variety of industry groups,” notes another New York Times piece. Did the artificial price hike open EU doors to GM foods?

No, in fact ISAAA noted that: “Six European countries planted 94,750 hectares of biotech crops in 2009, down from seven countries and 107,719 hectares in 2008, as Germany discontinued its planting.” A closer look at EU member state actions on GM foods after June 2008 details some of the GM-free battle in Europe:

• In December 2008, after a ten-year hiatus, Italy agreed to open field tests of GM crops.
• The Czech Republic became the second largest grower of Bt corn in the EU in 2008, nearly doubling the acreage planted in 2007. The USDA characterized it as being an investment target not only in agriculture but also in vaccine development.
• At the EU level, “In an apparent U-turn in his attitude as one of EU executive’s most GM-wary commissioners, environment chief Stavros Dimas” wrote draft approvals for two more varieties of GM corn, reported Reuters in December 2008.
• However, by September 2008, Wales, Northern Ireland and Scotland had all become GM-free, and urged the UK to do likewise. Though pressured by the European Commission, in January 2009 Hungary refused to lift its ban on GM foods. Its sovereign right to reject GMOs, along with Austria’s, was later upheld by an EU vote with 20 member states supporting such bans.
• In March 2009, Luxembourg became the fifth EU nation to ban GM foods, following France, Hungary, Greece and Austria.
• In October 2009, Turkey banned the import of biotech products.
GMO-Free Europe. European states handle the issue differently than in the US, allowing regions within a nation to maintain GM-free zones. Each step a nation takes toward GM approval invariably draws regional resistance. Biotech Crops Expand Globally in 2009

Though the strategy to hike food prices to spur European acceptance of GM foods failed, it worked elsewhere. Globally, biotech crops expanded by 7% in 2009 over 2008 figures, according to this chart by ISAAA:

In fact, ISAAA asserted GM expansion was due to the 2008 price hikes, as noted by chairman and founder Clive James: “With last year’s food crisis, price spikes, and hunger and malnutrition afflicting more than 1 billion people for the first time ever, there has been a global shift from efforts for just food security to food self-sufficiency.” Poorer nations hardest hit by hunger — in Africa and South America — are more vulnerable to price hikes. But even after the geologically unusual earthquake in January, Haitian farmers rejectedMonsanto’s “gift” of GM seeds. However, the big push remains in Africa and China. A Wary Future

Although it is now widely accepted that Wall Street speculation caused the food bubble, starving hundreds of millions, regulators have so far failed to curb the practices that allow international banksters to manipulate food prices. Meanwhile, the biotech industry continues to repeat its mantra that GM food can cure world hunger. This claim is not backed by the science and it seems to hold less sway in the GM food debate, especially with the Pope recognizing what many others assert: There is no shortage of food; hunger expanded because of price hikes.

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SUBHEAD: Leaked cables reveal Pope's situational positions on bioethics and GMO's.

By Rady Ananda on 13 December 2010 for Activist Post - (http://www.activistpost.com/2010/12/leaked-cables-confirm-popes-distance.html)

Video above: "Julian Assange interrupts SNL, again" on 12/18/10 from (http://news.cnet.com/8301-17852_3-20026127-71.html)

A leaked June 2009 cable from the US Vatican Embassy confirms the Pontiff’s refusal to take a stance on genetically modified foods. The Pope’s refusal to reject GM foods creates a vacuum in light of his condemnation of human genetic manipulation and his promotion of environmental stewardship. Last month, at least one news source falsely reported that the Pope approves genetically modified foods. Vatican officials immediately denied such claims, but did admit there is debate within the Pontifical Academy of Sciences. The cable confirms:

The Vatican has not taken a formal position on genetically modified (GM) crops — some Church leaders oppose them because GM technology is mostly in the hands of multinational corporations, while others support their use as an element in a larger strategy to address world hunger.

The cable, released by WikiLeaks, also confirms the Pope’s view that world hunger is more about failings in the distribution infrastructure and as a result of commodity food trading that drove up food prices:

In his World Food Day message in October 2008, the Pope noted that the world can produce enough food to meet increasing needs, but said factors like speculation in foodstuffs, corrupt public officials, and growing investments in weapons prevented food from reaching the hungry. In this Democracy Now interview, Frederick Kaufman, a contributing editor at Harper’s Magazine, detailed how a speculative food bubble increased the number of those going hungry by 250 million. Wall Street investors like Goldman Sachs, AIG, Bear Stearns, Lehman Brothers, and JPMorgan Chase bought “futures” on commodities, refusing to sell them. This created a false shortage, causing prices to skyrocket. Another leaked cable discusses a Papal visit to Spain in July 2009 when Pope Benedict XVI condemned genetic research. Embassy official Peter Martin described the speech this way:

Benedict did not shy away from comments on same-sex marriage, abortion, and genetic research, but the comments were not so much finger-wagging at the Spanish government, as a message aimed at the Western world in general.

In a June 2008 Doctrinal Instruction concerning bioethics, Pope Benedict XVI clarifies the Catholic Church’s opposition to genetic engineering on the grounds of a “eugenics mentality.” His argument about protecting the dignity of human life can be equally extended to all life. Indeed, in the June 2009 leaked cable, the Pope’s concern for the environment is well noted:

The Pope speaks frequently about the importance of caring for God’s creation…. The Holy See is an active observer at the UN Environment Program, Food and Agriculture Organization and other international for a.… The Pope has even joined with other religious leaders … to issue moral appeals to their faithful on humanity’s responsibility to be good stewards of nature. The Vatican’s environmental message is consistent: nature is a gift from God, so human beings have a responsibility to care for and not to abuse it.

If the integrity of the human person needs to be maintained, and if humans should care for the environment, shouldn’t the integrity of all life forms be maintained? While recognizing advances in biomedical science, the 2008 Doctrinal Instruction fails to consider the burgeoning agriceutical industry, which amounts to mass drugging the population thru a genetically modified food supply. This scheme falls squarely outside Papal and Hippocratic protectionism toward humans. Though the Church condemns genetic manipulation only as far as humans go, Papal arguments on the sanctity of natural life can easily be applied to genetically engineered foods, as well. It’s not that far of a stretch to oppose GM foods after opposing other forms of genetic manipulation. Rady Ananda’s work has appeared in several online and print publications. She holds a B.S. in Natural Resources from The Ohio State University’s School of Agriculture.