Weekend Update with Jerry Robinson – August 15, 2010

By Jerry Robinson | FTMDaily.com

It appears that despite the “best” efforts of Washington, the U.S. economy is continuing its miserable collapse. The jobless rates are more than just mere numbers. They represent agonizing pain of families who are in fear of losing their home to foreclosure and their creditworthiness to bankruptcy. In 2007, I declared that the bloated American empire was “bankrupt.” In 2008, I stood on platforms, in universities, behind pulpits, and in lecture halls and declared that the American empire was “bankrupt.” In 2009, I wrote a book entitled “Bankruptcy of our Nation: 12 Key Strategies for Protecting Your Finances in these Uncertain Times.” In that same year, I was interviewed on dozens of television and radio shows around the world. My message: The American empire is bankrupt.

Today, even in our current financial state, many are still living in an illusion of prosperity… just as they were 5 years ago. Oh sure, the magnitude of this economic crisis has given us a few new “arm-chair” economists. Many of them are filling our airwaves. And all of this new found desire to study economics on the part of some is good UNLESS… it is rooted in their desire to prove one side of the political aisle wrong. The “blame game” is the ultimate “fool’s” game in a declining empire. Instead of seeking to place blame, those who are concerned about this economy (and especially those already unemployed) should be turning off their political talk radio and focusing instead on their own financial game plan.

The news headlines coming out this weekend are unfortunately no better than the news from last week. The merciless drop in U.S. employment levels has led to the death of the American dream for many families. Adding insult to injury, a new report was released this week that employees of the Federal government work less, have more job stability, get better benefits, and get paid more than employees in the private sector. I think we are long overdue for draconian spending cuts at the Federal level. Don’t you?

Tensions continue at the Federal Reserve as deflation-inflation fears worry many of the banking cartel’s top officials. Kansas City Fed Reserve President Thomas Hoenig publicly warned that the Fed is currently undertaking a “dangerous gamble” by keeping rates at near zero for so long, and must start raising rates or risk damaging the nascent U.S. recovery.

This weekend, President Obama refuses to back down on his ardent support for an Islamic Center at Ground Zero. With the Obama administration’s stunning decline over the last 12 months, I am expecting an “October surprise” to prevent a huge Republican victory in this November’s mid-term elections.Stay tuned to the Follow the Money Weekly Radio Show every Saturday for more of my analysis on this topic.

The New York Times ran an interesting piece on the shadow war yesterday entitled: Secret Assault on Terrorism Widens on Two Continents.

If you are looking to get more out of your dollar on your next international vacation, consider this list of the world’s least expensive cities of 2010.

For those of you who like bizarre news stories (like me) here’s an unusual story from England… a 13 year-old boy was hit by lightning at 13:13 (military time) on Friday the 13th. “It’s all a bit strange” the ambulance team leader told a local newspaper… I would say.

Finally, take a moment to pray for the more than twenty million people left homeless after Pakistan’s worst floods in decades. It all began in late July when unusually heavy monsoon rains swept across the country. Many have been left with no shelter, no food, and no clothes.

And when you think about Pakistan, take a moment to realize how blessed you are if you have a roof over your head, food in your belly, and people who care about you. Yeah, I know, our economy is going south and there is much to be done.  But in all of your doing, try not to forget how billions of people from the around the world would love the opportunity to trade places with you.

Jerry Robinson

About Jerry Robinson

Jerry Robinson is an economist, published author, columnist, international conference speaker, and the editor of the financial website, FTMDaily.com. In addition, Robinson hosts a weekly radio program entitled Follow the Money Weekly, an hour long radio show dedicated to deciphering the week’s economic news.

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Download the Emergency Stockpile List

On this week’s radio show, I discussed the importance of having a emergency stockpile of food and water in addition to having a financial reserve. Click the following link to download an Emergency Stockpile List.

http://www.jrmi.org/JRMI-Emergency-Stockpile-List.pdf

Price increases fuel fears of food ‘crises’

By Javier Blas in London | Financial Times

Published: June 15 2010 18:51 | Last updated: June 15 2010 18:51

Food commodity prices will increase more than previously expected in the next decade because of rising energy prices and developing countries’ rapid growth, two leading organisations said on Tuesday, worsening the outlook for global food security.

“A return to higher global economic growth . . .  together with continuing population gains, are expected to increase demand and trade and underpin prices,” the United Nations’ Food and Agriculture Organisation and the Organisation for Economic Co-operation and Development said in their annual agricultural outlook.

Higher crude oil prices would add force to rising agricultural commodities prices, particularly in those regions – including Europe and the US – where energy inputs such as fertilisers were used intensively, said the report.

For the next 10 years the FAO and OECD forecast that significant food prices, with the exception of pork, would remain above the 1996-2007 average, in both nominal and real terms – adjusted for inflation. Although prices were unlikely to surge back to the record levels of early 2008, they warned that “if history is any guide, further episodes of strong price fluctuations . . . cannot be ruled out, nor can future short-lived crises”.

Angel Gurría, secretary-general of the OECD, said all indications pointed to a “period of high prices”, although these would be below the peaks of the 2007-08 food crisis when prices spiked to record levels, triggering riots in countries from Bangladesh to Haiti.

The forecast of high prices is likely to exacerbate concerns about global food security. Since the food crisis, and the number of chronically hungry people surging above the 1bn mark last year, agriculture has drawn more attention from policymakers – particularly in the US. The OECD earlier this year organised its first ministerial meeting on agriculture for 12 years.

The prospect of higher prices could prompt those nations dependent on food imports – such as Saudi Arabia and South Korea – to try to secure long-term food supplies by accelerating their investment in overseas agriculture in so-called “farmland grabs”. Mr Gurría said some food-importing nations felt “strategically vulnerable” about their agricultural commodities supplies, but added it was critical to avoid “a race for [food] self-sufficiency”.

Developing countries would provide the main source of growth for world agricultural production, consumption and trade, said the report.

“As incomes rise, diets are expected to slowly diversify away from staple foods towards increased meats and processed foods,” it said. In turn, with increasing affluence and an expanding middle class, food consumption in developing countries would become less responsive to price and income changes.

In real terms, the report projected cereal prices to rise around 15-40 per cent relative to the 1997-2006 average, up from last year’s forecast of 10-20 per cent. Vegetable oils are expected to be more than 40 per cent higher, against last year’s forecast of a 30 per cent increase. Meat and dairy products will also be more expensive in the next decade, reversing last year’s forecast that pointed to lower prices.