The Boom-Bust Cycle Has Expanded Across The Globe
A two part series from Farm Futures. “About every year, Ron Pierson tries to trade one of his larger Case IH tractors for a new one. He did not this year because the dealer was reluctant to add another expensive piece of used equipment to the big supply already on the lot. Shorty Kulhanek, a custom harvester based in Colby, Kan., had the same problem with his combines. Each year he typically trades his three Gleaners for new ones, but this year the dealer still had the ones he traded the previous two years. ‘I normally had a one-year turnover in the combines, but I didn’t this year because the dealer had too many used combines,’ he says. ‘I am glad I waited. I’ll trade for the 2017 models when they will be eager to deal.’”
“The glut of machinery came about after several years of farmers upgrading fleets with new equipment when the farm economy was strong and crop prices were high. Manufacturers responded by ramping up production. Now, farmers have not been in a rush to upgrade because of their newer fleets and the downturn in crop prices. That slowed demand for new equipment. Meanwhile, the used pieces they traded remain on the lots. In addition, the weak farm economy has farmers selling used equipment to raise capital.”
“Another reason to move slowly is dealers expect a lot of leased equipment will come onto the market and will need to be sold. ‘We have to remarket those to our dealers as used machines, and they will have to sell some of those instead of selling new machines,’ says Jim Walker, vice president of Case IH North America. ‘Lease returns have hurt both John Deere and us in the high-horsepower tractor business.’”
The Journal Star. “Cash rent prices for Peoria County farmland have generally followed property sale and commodity prices downward in 2016 in a market highly dependent on broader economic conditions and individual relationships. A recent University of Illinois report indicated the average cost of rent per acre in Peoria County was $221 this year, down from $238 in 2014, the last year for which data was available. The 2016 price still represents a significantly higher premium than several years earlier, when rent prices began climbing along with commodity rates.”
“Cash rent prices tend to increase at a slower pace than commodity prices and similarly decline at a rate just behind that of grain, said Patrick Kirchhofer, manager of the Peoria County Farm Bureau. ‘Cash rents will continue to come down if crop prices remain where they’re at,’ Kirchhofer said.”
The Erie Times-News. “Dean and Suzanne Curtis paid a price in sweat, 14- and 16-hour workdays, scraped knuckles and vacations they never took. But together, the Venango Township couple built something. They own 515 acres, a herd of 150 dairy cows and the buildings and equipment needed to produce thousands of gallon of milk each year. In 2009, they were just months from having all of it paid off. Then came the recession and a historic tumble in the price of milk.”
“Today, two refinanced mortgages and seven years of unreliable milk prices later, the idea of being debt-free seems like a distant memory, said Dean Curtis, who has been farming for 50 of his 64 years. Curtis said he and his wife have far less debt than many dairy farmers, but worry that some fellow farmers might not survive a pattern of low prices that has persisted through 2015 and most of this year.”
“Some of those who remain appear to be in trouble. Curtis, president of the Erie Crawford Cooperative, a farmer-owned feed mill, sees it in the growing list of farmers who are delinquent in paying their feed bills. ‘It’s ridiculous,’ he said. ‘I’m not angry at the farmers at all. It’s the whole farm economy that is ridiculous and what farmers are expected to live on.’”
“As recently as 2014, dairy farmers were collecting some of the highest prices in history, said James Dunn, professor of agricultural economics at Pennsylvania State University. Farmers, who sell milk not in gallons, but in 100-pound increments, were collecting an average of $25.64 per hundred pounds or the equivalent of about $2.98 a gallon in 2014, Dunn said. In 2015, that fell to $18.48 per hundred pounds or $2.14 a gallon. For the first six months of this year, he said, the price fell to $16.45 per hundred pounds, about $1.91 a gallon.”
“There’s little agreement about how much farmers need to break even. ‘There are people who have all different costs of production,’ Dunn said. ‘It has a lot to do with when they bought things, how well their crops worked out and the decisions they made over time.’ What Dunn can say is this: ‘Somebody who expanded in 2014 thinking that (price) was the new normal has been severely disappointed.’”
From Grub Street. “It’s never easy being a farmer, but it’s particularly tough right now. Supermarket prices fell for the tenth straight month in September, down 2.2 percent from last year. This makes the 2016 decline in food prices, as analysts predicted would happen, the worst since 1960. A number of factors have contributed to the price plummet. After years of high prices and insufficient resources, there’s now an oversupply of meat and grains, including a record corn crop of 15 billion bushels forecasted. Demand from China has declined, and the global economy isn’t exactly running on all cylinders. Meanwhile, farmers are expected to produce 212 pounds per capita of beef, poultry, and pork.”
“The price declines are significant. Last month, a pound of ground beef was down to $3.66 from $4.13 last year; bacon fell to $5.48 a pound from $5.73; and the cost of a dozen eggs fell more than 100 percent to $1.47 from $2.97. Some of the worst-hit by the decline have been pig farmers: The National Pork Board says that pigs are selling for $97 each, down from an all-time high of $280, in 2014.”
“While pig farmers can reduce their herds, there’s little crop farmers who are paying rent on the land they farm can. Supermarkets, too, are suffering: Grocery chain Supervalu says second-quarter revenue fell 4.8 percent, while Kroger lowered expectations and plans to cut capital investments by $500 million this year and next.”
From Bloomberg. “It was advertised as Brazil’s ‘new frontier,’ the vast savanna running alongside the Amazon jungle that would help meet China’s insatiable demand for food. The farmers of Brazil heeded that call, razing trees, plowing virgin land and planting soybeans at a frenetic pace for much of the past decade. Now, soybean demand from China has slowed and the world supply has increased amid a record U.S. crop, denting international prices. In parts of northeastern Brazil, so little rain has fallen in the last four years that farmers find themselves stuck in what is the worst agriculture crisis to hit the country in a decade.”
“Vanguarda Agro SA, Brazil’s second-largest farming group, has been gradually moving out of Matopiba since 2014 and won’t plant a single hectare in the region this year, said CEO Arlindo Moura. Moura said the investment needed to transform scrubland into farmland is no longer feasible following the decline in soybean prices over the past few years. ‘When the soybean price was at $15 a bushel, every piece of land was good for planting,’ Moura said. ‘With soybeans under $10, you have to produce more than 50 bags per hectare (44.6 bushels per acre).’”
The Wall Street Journal. “Harvests are under way of what are projected to be the largest corn and soybean crops in U.S. history, which soon will hit a global market already sitting on the largest-ever grain stockpiles. Indeed, some farmers are hoping for a weather hiccup somewhere in the world to curb yields and breathe life into crop prices that recently hit multiyear lows. They may be waiting a long time.”
“It is a dramatic turnaround from four years ago, when prices for many commodities were soaring to the highest levels U.S. producers had seen in their lives. The boom-bust cycle of commodity production in America has expanded across the globe in recent years, as crop and livestock farmers in South America, China and the Black Sea region have adopted farming practices that largely mirror those in the U.S. breadbasket. That has raised the potential risks and rewards for producers looking to sell, as weather, currency swings and policy changes in far-off countries have a greater impact on U.S. food prices than ever before.”
“‘The world is still expanding production area, and because of that, this cycle could go on awhile,’ says Dan Basse, president of Chicago-based commodities firm AgResource Co., who notes that farmers world-wide have added nearly 180 million acres to cultivation in the past decade, about as much as the combined acreage of the entire U.S. Grain Belt.”
“The barnyard-wide glut stems from decisions made globally to plant more row-crop acres and to raise bigger herds in response to new demand and high prices during the most recent shortage. ‘There’s an old industry adage that money makes milk, and more money makes more milk,’ says Chuck Nicholson, a professor of supply chain and information systems at Pennsylvania State University, who focuses on agricultural markets. The current glut has ‘a lot to do with the decisions that farmers make in aggregate—producers can turn on the milk spigot relatively quickly and tend to be more reluctant to turn it off.’”
“To make space for crops like corn after a massive wheat harvest last summer, Frank Riedl, general manager at Great Bend Co-op, a Kansas grain elevator and farm supplier, bought and leased extra land on which to build bunkers the size of football fields where he can heap millions of bushels of overflow grain. ‘There’s an abundance of corn out here in the country and we don’t have the storage base for it,’ he says. ‘Farmers are trying to find any place they can to dump their crops.’”
Rut-roh. Sum ting wong.
http://www.bloomberg.com/news/articles/2016-10-23/chinese-money-flowing-to-hong-kong-stocks-has-suddenly-dried-up
Some weekend LOLZ from the High Country:
“With Colorado resort economies roaring amid a dire shortage of affordable housing, ski-area operators are getting creative in the search for thousands of seasonal workers.
Companies are deploying online videos, hip social media posts and employer branding strategies while casting the net for employees, pitching their snowy resorts as not just vacation destinations but inspiring workplaces.
Aspen Skiing needs to hire about 2,500 seasonal employees to ramp up for ski season; about half of those are returning workers and about 500 have worked for the company for more than 20 years. Aspen Skiing gets more applicants than positions, and while sifting through the resumes is a challenge, that pales to the difficulty of finding housing for workers.
That’s the theme across the ski resort landscape, where more and more homeowners have converted housing once available for workers to short-term vacation rentals.
“If we had housing, we would be all hired right now,” said Laing, noting that Aspen Skiing just staffed a new position dedicated to employee housing. “It’s always been a critical issue, but now with the advent of new technologies like VRBO and Airbnb, properties that were available for our employees have just disappeared and housing has gone from critical to crisis.”
http://www.denverpost.com/2016/10/23/ski-resorts-thousands-of-seasonal-staffers/
So why don’t they just build some cheapo, low/no frills apartments and rent them to employees at below market rates? It’s not like the ski resorts don’t have any land.
More LOLZ in Boulder:
“The tide might be turning in Boulder’s crazy rental market, as vacancy rates hit highs not seen since the Great Recession and property managers say apartments are sitting empty through several price drops.
“We’ve started noticing properties sitting longer than usual, and actually needing some lower rental rates in order to attract tenants,” said Simon Heart, owner of All County Boulder Property Management.
“We target to lease properties within 30 days, but within the last month or two, there are properties that have been sitting for 30-60 days that we’ve had to lower the rent several times” to fill.”
http://www.dailycamera.com/top-business/ci_30497036/big-shift-apartment-vacancy-rates-boulder-county-rising
‘It is a dramatic turnaround from four years ago, when prices for many commodities were soaring to the highest levels U.S. producers had seen in their lives.’
What preceded this boom? The largest money creation period in human history. This causes more money to places claims on wealth, in this case commodities. In a globalized world, it’s just a matter of time before markets react and produce more. The WSJ and Bloomberg won’t lay this situation at the central bankers door, but I will.
‘Curtis said he and his wife have far less debt than many dairy farmers, but worry that some fellow farmers might not survive a pattern of low prices that has persisted through 2015 and most of this year.’
‘Some of those who remain appear to be in trouble. Curtis, president of the Erie Crawford Cooperative, a farmer-owned feed mill, sees it in the growing list of farmers who are delinquent in paying their feed bills. ‘It’s ridiculous,’ he said. ‘I’m not angry at the farmers at all. It’s the whole farm economy that is ridiculous…’
Distorting prices has consequences.
High prices and easy credit will be a double whammy on these farmers on the way down. With land rents $200/acre and falling, the land won’t sell for $3,000, $4,000, $10,000 an acre, and the mortgages won’t get paid.
The price of meat at the local shop hasn’t come down at all. At the wholesale chain up in the bigger town, it is dropping like a rock. The little shop can keep margins high for a while, until he can’t.
The reduced demand for food imports from China is interesting. I haven’t seen an explanation for it. Maybe millions of workers have left the cities and returned to the hills to help on the farm.
‘There’s little agreement about how much farmers need to break even. ‘There are people who have all different costs of production,’ Dunn said. ‘It has a lot to do with when they bought things, how well their crops worked out and the decisions they made over time.’ What Dunn can say is this: ‘Somebody who expanded in 2014 thinking that (price) was the new normal has been severely disappointed.’
This is the kind of stuff that makes me think it could be worse than 2000-whatever. If we have a housing bubble pop, what if there is a farm bust at the same time? An energy/raw materials bust too, a commercial real estate pop? In more than one major economy?
The farm bust is inevitable, because of the boom. You’ve said many times that a storm was brewing. The cheap credit thing has permeated everywhere.
‘It has a lot to do with when they bought things, how well their crops worked out and the decisions they made over time.’
But isn’t this exactly how an economy is supposed to work? People prosper or fail based on their own good or bad decisions? The only difference now is the scale - low rates and easy credit have enabled many more people to make spectacularly bad decisions than ever before, like buying subpar farmland at a cost not commiserate with historic commodity prices, or buying a car they can’t remotely afford, or developing luxury condos in a low-income neighborhood.
For years the bad decision people have run amok, influencing the direction of the economy. So what if it blows up in their faces and everything pops at the same time? I have to think that’s a good thing, finally rewarding the people who made good decisions like refraining from any of the above. It might result in the good decision people reclaiming some influence which, in the long run, will be better for everybody.
“finally rewarding the people who made good decisions like refraining from any of the above.”
Unfortunately, there will only be less pain for the more prudent. Some have tried to make good decisions based on bad signals. It’s not like they are going to get a “reward”. They will get some relief from things like having to overpay for necessities for all these years of easy credit. Making good decisions has been a game of not playing on the railroad tracks for quite some time. If there is a payoff, it will be having practiced what others may be suddenly thrown into.
The farmer that leased my parent’s ground for the last 25 years went on a giant land-buying spree over the past several years, including buying my parent’s place. I can put my finger on over 1.3 million dollars worth of purchases he’s made in the last 5 years. It’ll be interesting to see how it pans out. I know he’s not buying any new equipment and he and most farmers I know have been in the farming business for generations, so maybe he’ll manage, but I can’t help but wonder if he’s gonna go bust. We were both looking at the same piece of farm ground at one point. He bought it and I didn’t even bid because of the price. A part of me hopes to buy it from him cheap when he goes bust. Fingers crossed!
On the same topic, I was looking at some farm ground for purchase and was told ‘you can’t farm on this ground, you can’t do anything on this ground. It has a permanent easement with the US’. The satellite picture clearly shows farm activity so I poked in more. It looks like they gave an easement to the US and got paid 600K. Now they’re trying to sell the land for 475K which is $1760 an acre. The only thing you can do on the property is hunt. And if the US wants to do something with the property, like put a pond on it, guess what, as ‘partner’ you get to help pay for it. But man, you can go there any time you want and look around and enjoy it. What a bargain.
I see property again and again where the price per acre means the land would never pay for itself. When are these Yellen bucks gonna die?
But man, you can go there any time you want and look around and enjoy it. What a bargain.
These kinds of regulations only serve to hurt the little guys and make the well-connected even more wealthy. Someone will buy the land for cheap, because it is useless with the easement, and then arrange a “swap” of some far more worthless land (for some purported environmental purpose) in order to get the easement removed, and then return the land to its most-useful purpose, farming. Watch.
Kennedy put a man on the moon, Obama put men in women’s bathrooms, LOLZ:
“I was in my 50’s when I finally figured out that I am a woman with a male body. That realization can come at any age. Some are coming to it as very young children, while others are even older than I was when they discover their true gender. However old you are when you first know that your gender is different from the sex you were assigned at birth, the next thing you have to figure out is what to do about it.
My choice has been to do almost nothing and simply be a woman. So what does that mean? It all comes down to what “gender” really means. For a long time, it was used as synonymous with sex. It was all about genitals and chromosomes. But it finally became evident that gender is more complicated than that. It is more about how you think and feel than how your body is put together. And now the idea has emerged that, unlike sex, gender is entirely subjective. It is whatever you self-identify as. As some people say, sex is between the legs but gender is between the ears. If you think and feel that you are a woman, you are. I do and I am.”
http://www.huffingtonpost.com/entry/just-a-woman-with-a-male-body_us_580a1b9de4b0f8715789f938?section=
Cool trophy, bro. Can you pay off your student loans with that?
I “think and feel” that I am a black German Shepard.
Does that make me one?
So bark like a dog. It’s nothing new. The ancients called it “being touched”. I think it means being made crazy by the gods.
And I can apply for affirmative action, minority only scholarships, minority government set-asides, minority only…???
and play on either the girls or boys sport teams depending on how I feel?
You at least should be able to compete in the AKC competition in Madison Square Garden. You are special.
A non answer.
Liberals and progressive don’t like to think of the consequences of their actions.
But we had such good intentions…
Sorry for the non-answer, I was slightly put off by your reference to German Shepards. A noble breed. The granddaughter of Rin-Tin-Tin and Roy Rogers’ Bullet was the companion of my youth. No matter how obscure you pick a perversion, it will go against someone’s sensibilities.
Still OK for you to bark like a dog.
In doing so you will answer your own question, as have others.
As some people say, sex is between the legs but gender is between the ears.
As long as this guy stays in the men’s bathroom — or the gender neutral disabled single bathrooms, I don’t care what his philosophy is.
If you want to keep that dude out of the ladies’ room, that makes you racis or something.
To summarize.
Cheap money, insane obama deficits and ZIRP have destroyed everything they touched.
The only people who have benefited are those that are first in line. The 1%ers of Wall Street banks.
The ones who paid Hillary $250,000 for a 20 minute speech. Over and over again.
Not one went to jail under obama and Holder.
What was Hillary selling?
95% of the electorate voted for crony capitalism and Wall Street water carriers in 2008 and 2012. The Establishment is giving the sheeple what they voted for, good and hard.
Note how this ping-pongs its way through the economy:
‘The glut of machinery came about after several years of farmers upgrading fleets with new equipment when the farm economy was strong and crop prices were high. Manufacturers responded by ramping up production. Now, farmers have not been in a rush to upgrade because of their newer fleets and the downturn in crop prices. That slowed demand for new equipment. Meanwhile, the used pieces they traded remain on the lots. In addition, the weak farm economy has farmers selling used equipment to raise capital.’
‘Another reason to move slowly is dealers expect a lot of leased equipment will come onto the market and will need to be sold. ‘We have to remarket those to our dealers as used machines, and they will have to sell some of those instead of selling new machines,’ says Jim Walker, vice president of Case IH North America. ‘Lease returns have hurt both John Deere and us in the high-horsepower tractor business.’
‘Supermarkets, too, are suffering: Grocery chain Supervalu says second-quarter revenue fell 4.8 percent, while Kroger lowered expectations and plans to cut capital investments by $500 million this year and next.’
Supply meet demand.
Not even ZIRP can stop it. Only delay it.
Watch when the panic hits…
Wait until true price discovery reasserts itself. Got popcorn?
DIVIDENDS AND BUYBACKS
I went to high school in a small town in Nebraska and worked for local farmers during the summer. The successful ones were those that stored their equipment inside during the winter and systematically maintained it.
Engines would get rebuilt and clutches replaced on tractors. Combines, hay balers, and corn pickers have hundreds of bearings, chains, and belts that would get serviced over the winter.
These farmers rarely bought new equipment - they maintained their paid for machinery instead.
I was quite surprised to that ““About every year, Ron Pierson tries to trade one of his larger Case IH tractors for a new one.”
Does farm equipment really wear down after one year? Or does this guy want shiny new stuff every year? Maybe they should have a 2-3 year lease program for farm equipment like they do for Mercedes.
I worked a dairy for a couple of summers in Northern CA…ditto there. The equipment was relatively basic though, a couple of tractors (front loader, with sh*t scraper on the back), an old harrow bed, hay baler, and a couple of ATVs. Old equipment, continually repaired and held together by spot welds and bailing wire.
There was only about 300 acres though. I can imagine though, if you were farming crops on large swaths of land, having precision planting of expensive seeds to increase yield might actually make some of the modern equipment worthwhile.
True, but to trade in tractors and combines in every single year like an orthopedic surgeon trading in his Benz/Beamer/Audi? As mentioned above, surely they should still be in excellent condition.
Those suckers must depreciate. He has to be taking a bath when he trades them in.
Politico dot com leads with this, a narrative that has been scripted:
http://www.politico.com/magazine/story/2016/10/in-the-land-of-raw-firepower-a-feeling-that-trump-is-out-of-ammo-214382
When an EMP attack or coordinated grid takedown (hello Friday, two days ago in case you forgot) happens I’d rather be in Knob Creek than in Manhattan or Los Angeles where the real journalists who script these narratives will learn fast that when seconds count, the police are only minutes away, LOLZ.
Post hurricane Katrina New Orleans was a nice preview of the future that awaits the children of those of you who choose to breed.
Got 7.62×39?
Associated photo gallery piece that should make all the Correct The Record employees soak their mattresses tonight:
http://www.politico.com/magazine/gallery/2016/10/kentucky-machine-guns-the-land-of-the-second-amendment-000682?slide=0
If you’re starving, out of food, with no electricity, would you rather rely on a “deplorable” to fix that situation, or some soft-handed academic who’s never set foot off the island of Manhattan?
“This sucker could go down” — George W. Bush
Les Deplorables are not about to go quietly into the Long Goodnight Hillary and the collectivists are planning for them.
The Jewish resistance in Warsaw under German occupation set a nice example for us, let’s try to live up to that.
And yeah, it is actually coming to that, soon…
Couldn’t happen to a nicer bunch of people, LOLZ
Economists: A Trump win would tank the markets:
“New research out on Friday suggests that financial markets strongly prefer a Hillary Clinton presidency and could react with panicked selling should Trump defy the polls and deliver a shocking upset on Nov. 8.
“Wall Street clearly prefers a Clinton win certainly from the prospective of equity prices,” said Dartmouth College’s Eric Zitzewitz, one of the authors of the new study along with the University of Michigan’s Justin Wolfers. “You saw Clinton win the first debate and her odds jumped and stocks moved right along with it. Should Trump somehow manage to win you could see major Brexit-style selling.”
Stock prices around the world tanked over the summer when British voters surprised pundits and voted in favor of pulling the country out of the European Union. Trump himself now talks about his own upset prospects as “another Brexit.”
http://www.politico.com/story/2016/10/donald-trump-wall-street-effect-markets-230164
What is the role of a “financier” in the lives of people who actually work for a living? Has there any been any net benefit, ever?
And since it’s Sunday, why exactly did Jesus throw the moneychangers out of the Temple?
Note. Don’t believe everything you read…
Post-Brexit crisis, what crisis? The FTSE 100 is roaring ahead
After an initial slump in the first two trading days following the Brexit vote, the index of Britain’s top 100 companies regained all its losses by Wednesday and is now at its best level since last August.
https://www.theguardian.com/business/2016/jul/01/post-brexit-apocalypse-why-markets-rising
Brexit won’t happen for another 18 months. All those European “analysts” and “finance ministers,” i.e. global bankers, have this notion that they can cancel the Brexit, or hold another referendum, or at least water down Brexit in some way. Then they can just keep their trade agreements. I’ve heard the hints on Bloomberg News.
“And since it’s Sunday, why exactly did Jesus throw the moneychangers out of the Temple?”
Funny you should mention, that’s exactly what I thought of when Trump burned it down at the Al Smith dinner. All those smug pharisees and publicans sitting around and he shoved it right up their patooties.
My father used to get invites to the Al Smith dinner when I wuz a pup, back when all you had to do was be a Catholic New Yorker of even modest means and have the price of a ticket, which was somewhat affordable back in the day. Being something of a tightwad, it was one of his few indulgences.
Master of Ceremonies, Al Smith IV and great grandson of the original Al Smith, kept mentioning how they’d raised $6 million for Catholic Charities. So why was Cardinal Dolan so sweaty and nervously fooling around with his little red beanie? Well, that’s because the amount of money Catholic Charities receives from the US government is around $2.9 BILLION, (maybe more, I’ve heard as much as $10 billion) much of it going into the refugee racket, since they are contractors to the State Department. And he was sitting right between two people, one of which is going to have the power to cut or sustain his little gravy
train come January.
I’m not saying Trump is the Second Coming, but he was certainly very Christ-like at the Al Smith dinner in his conduct regarding the modern day money-changers. The symbolism was not lost on me.
‘I’m not saying Trump is the Second Coming, but he was certainly very Christ-like at the Al Smith dinner in his conduct regarding the modern day money-changers. The symbolism was not lost on me.’
What? Trump more popular than Lenin?
This sponsored narrative provided by the National Association of Realtors:
http://www.bloomberg.com/news/articles/2016-10-20/it-s-better-to-buy-than-to-rent-and-it-probably-always-will-be
P.S. Realtors are liars, and houses always</depreciate.
More parasites and maggots:
“Last year, the 64 one-time lawmakers who sat on boards pulled down an average $357,182, twice what they earned when taxpayers paid their salaries, according to data compiled by Bloomberg of former members of Congress who served on Russell 3000 company boards in 2015.”
http://www.bloomberg.com/graphics/2016-congressional-board-pay/
In episode 2 of season 5 of Game Of Thrones they burn the King of the Wildlings alive for refusing to kneel to the usurper king. ISIS did that too to a downed Jordanian Air Force Pilot.
Good food for thought on what to do with these economic terrorists, LOLZ.
Jobs! Jobs! Jobs!
“Metro Denver joins just a handful of 51 metropolitan cities across the country with an unemployment rate below 3 percent.
With a labor force of 1.55 million, the metro Denver area unemployment rate dropped to 2.9 percent in September, which is down from 3.2 percent in August. And even at 3.2 percent, metro Denver and Salt Lake had the lowest unemployment rate in August, according to the Bureau of Labor Statistics’ September report. Riverside, California had the highest rate in August at 6.6 percent.
Across the state, construction jobs were plentiful as employers added 2,700 jobs in September — a 2.7 percent increase from last month. Over the year, construction jobs grew by 19 percent, making it the fasted growing sector in the state. That reflects in this year’s fastest growing private companies. Five of 10 fastest growing Denver area companies topping the list of Denver Business Journal’s list of companies with more than $52 million in revenue in 2015 are construction firms.”
http://www.bizjournals.com/denver/news/2016/10/21/metro-denvers-unemployment-rate-down-again.html
And now you know the consequences of the massive obama deficits and ZIRP.
I have always said - the day the US Government sells Treasuries payable in something OTHER than US dollars is the bell ringing that the end of America is near.
At that point in time - get rid of ALL your dollars. Buy anything of value. Take debt in US dollars. Because it will be worth virtually nothing in the very near term future.
——
Paul Volcker Explains Why The Fed Can’t Raise Rates
Oct 23, 2016 - zerohedge
Yes, this country can handle the nearly $600 billion federal deficit estimated for 2016. But the deficit has grown sharply this year, and will keep the national debt at about 75 percent of the gross domestic product, a ratio not seen since 1950, after the budget ballooned during World War II. Long-term, that continued growth, driven by our tax and spending policies, will create the most significant fiscal challenge facing our country. The widely respected Congressional Budget Office has estimated that by midcentury our debt will rise to 140 percent of G.D.P., far above that in any previous era, even in times of war.
That staggering number has been ignored by most, and certainly the Obama administration, which has been glad to take credit for a sputtering “recovery” while ignore what caused it.
Unfortunately for Obama, just last week it was revealed that none other than the chair of the Democratic Party, Donna Brazile, was “peddling fiction” when the head of the DNC admitted to John Podesta that the “people are more in despair about how things are - yes new jobs but they are low wage jobs… HOUSING is a huge issue. Most people pay half of what they make to rent.”
While the reality of the recovery was set to emerge sooner or later, the US debt continues to grow, and as of Friday hit an all time high of 19,785,585,189,878.12, just $214 billion away from a nice, round $30 trillion, nearly doubling under President Obama, and worse: starting to accelerate again, despite the lack of any apparent economic crisis that demand a surge in debt issuance.
Still, one can’t really blame the government for continuing its debt-funded spending spree - despite protests to the contrary - after all rates are so low, it would be irrational not to take advantage and add on more debt. However, it is here that the punchline from the Volcker op-ed kicks in, and explains why the Fed is stuck and will find it next to impossible to hike rates:
Our current debt may be manageable at a time of unprecedentedly low interest rates. But if we let our debt grow, and interest rates normalize, the interest burden alone would choke our budget and squeeze out other essential spending. There would be no room for the infrastructure programs and the defense rebuilding that today have wide support.
…all that would take for US interest expense to spiral out of control is a spike in debt servicing costs, i.e., interest. But that’s not all: US government debt is just a tiny fraction of total US liabilities and future obligations. How tiny? As the following chart from Bridgewater shows, it is less than 10% of the massive stack of US obligations that amount to well over 1,100% of GDP!
So, yes: a practical person may be forgiven for wondering just what will happen to the roughly $200 trillion in total US obligations as rates start creeping higher, especially since that “creep” is not due to actual economic growth (see the Brazile quote above and more or less every article we have written since 2009), but due to the Fed desire to once again telegraph that it believes the US recovery has arrived (as it did in December 2015 only to admit it was dead wrong half a year later).
So what happens next? Well, in a world of rising rates and soaring debt… nothing good. Back to the Op-Ed:
It’s not just federal spending that would be squeezed. The projected rise in federal deficits would compete for funds in our capital markets and far outrun the private sector’s capacity to save, to finance industry and home purchases, and to invest abroad. Instead, we’d be dependent on foreign investors’ acquiring most of our debt — making the government dependent on the “kindness of strangers” who may not be so kind as the I.O.U.s mount up.
so true
We have been talking about that concept here for a long time.
During the crisis it seemed there wasnt enough buyers of debt at the low rates needed so bernake stepped in with a debt orgy of 4 trillion. None of that has been really sold. Look at the balance sheet.
The bottom line is that potus way overspent and now people wont get any interest on their savings for years, maybe even the rest of their lives.
To make sure there is somewhere to get yield the stock market has been propped up to compensate. Potus told u to buy stocks.
Simple ,the gov will take your 401k
See Portugal,Hungary ,Poland for results
In Hungary, you could opt out of the grab, but would lose your future social security check (which would be about $300 Euros a month)
Not a tough choice to make.
doanld trump will make people work for their money.
Realtors down on their knees, in an alley, doing what they were born to do?
Yeah, I’m all for it
All fluff (pun intended).
“doanld trump will make people work for their money.”
LOL, I’ve thought of that from time to time when I watch his rallies and speeches online. One of his lines is “JOBS, JOBS, JOBS, good-paying JOBS!” And the crowd goes nutz and starts cheering. Little do many of them realize that there’s a fair percentage of people who DON’T want jobs. They don’t want to lose their soft political, government, academic or financial sinecures. (definition of sinecure: “a position requiring little or no work but giving the holder status or financial benefit.”) or, in some cases, the disability payments.
Whether Trump wins or loses, the genie is out of the bottle. Hillary was right in assert that Les Deplorables - a quarter of the population - are “irredeemable,” which is to say, they refuse to turn a blind eye to official or party corruption and they are not going to comply will illegal or un-Constitutional laws or executive orders. Nor, I suspect, are they going to react well when Hillary’s collectivist kleptocracy steps up its “redistribution of the wealth.” Most of all, they will detest and shun their “countrymen” who voted this criminal sociopath into office and will be relentless in reminding them of the consequences of their stupidity and fecklessness as the country turns into a banana republic.
If Trump doesn’t win…
“Après moi, le déluge”
“After me, the deluge” is attributed to the King of France Louis XV (1710-1774)
The French Revolution came next.
The French Revolution and the Jacobians were an unmitigated disaster that France has never recovered from.
Oh - they recovered alright.
The French Revolution gave the world Napoleon.
All because of the absolute corruption of the monarchy.
Coming soon to the Hillary Clinton administration.
This is America’s last chance to stop it.
How is it that France never recovered from the French revolution? It went from being an agricultural, feudal aristocracy to being a modern, industrial capitalist economy.
This is what Republicans want, according to the HBB’s resident Republican party lobbyists.
How about the voting machines, are the voting machines stupid and feckless? Because I really do believe the voting machines will be the weapon of last resort.
http://www.paulcraigroberts.org/2016/10/21/rigged-elections-are-an-american-tradition-paul-craig-roberts/
I thought this line from the above was very interesting:
“Don’t vote early. The purpose of early voting is to show the One Percent how the vote is shaping up. From this information, the oligarchs learn how to program the electronic machines in order to elect the candidate that they want.”
I wonder about that, too, because since I received my vote by mail ballot I’ve gotten two creepy voice messages on my voice mail from two different “concerned citizen” organization urging me to mail it back as soon as possible. First of all, how do they know I’ve received the ballot by mail and secondly, what’re they so frantic about?
That’s interesting, though, about early voting. I just looked up when it started in the US, and dang if it wasn’t 1992, the year of Bill Clinton, George HW Bush and H Ross Perot. Hmmm.
Voters, other than those who mark “D” on their ballots, want honest, competent, responsive, accountable governance. Is that too much to ask for?
Trump was right in calling for an “investigation into the investigation” of Crooked Hillary and her e-mail server. The fix was in on this sham “investigation” from the start. The DoJ and the FBI need to be thorough purged of any officials who have a problem upholding their sworn oath to the Constitution or their duty to uphold the law (and keep it from falling into disrepute).
http://www.wsj.com/articles/clinton-ally-aids-campaign-of-fbi-officials-wife-1477266114
Massive corruption.
It’s the democrat way.
But we had such good intentions….
The true deplorables in this country are the voters so morally debased and feckless that they enable, accept, and rationalize such corruption.
HORSEFACE LIES
‘Lease returns have hurt both John Deere and us in the high-horsepower tractor business.’
Speaking of which…there are technical reasons for the lopsided victory that made this unfair…but nevertheless, here’s an amusing tug of war between a modern 800hp tractor and an old 18hp steam tractor…
https://www.youtube.com/watch?v=FLQhvruimfs
Folks who need new equipment every year seem a little bizarre to me. Why not just rent it?
We have a CAT tractor from the early 1970’s that still runs great. Will never buy a new one though. Prices have gotten out of control. They expect u to pay on it for 20 - 30 years.
The price for CAT parts from the dealer are insane, huge markups. It seems a lot of aftermarket stuff is coming out now. Some people say they will never by anything but OEM. Sometimes I think they get the stuff from the same manufacturer.
I went into napa auto parts the other day and the wheel hub I bought for my domestic car was made in china.
All the major OEM parts manufacturers have off-shored their plants.
Delphi, which is now made up of former GM parts divisions, including what used to be called Delco Electronics where I worked in college, has 155K employees worldwide.
Guess how many of those are in America?
About 5K.
Italy: the art of making bad debt disappear.
http://wolfstreet.com/2016/10/23/italys-banking-crisis-how-to-conceal-a-problem-that-threatens-entire-eurozone/
Psychopaths can’t help but let the mask slip every once in a while and show who and what they really are.
http://www.breitbart.com/2016-presidential-race/2016/10/23/stein-slams-hillary-laughter-lynching/
Drain the swamp.
And then sop up the ooze.
Jill Stein calls out the Democrats on being corporate statists and tools of the elites. Whoa. Definitely not a sellout or the controlled opposition like Bernie.
http://www.breitbart.com/2016-presidential-race/2016/10/23/jill-stein-dems-manipulate-voters-media/
No member of the .1% need ever fear criminal prosecution for any law-breaking. Consequences are for the little people.
http://www.zerohedge.com/news/2016-10-24/prominent-democrat-connected-clintons-donated-675000-campaign-deputy-fbi-directors-w
Are The Polls Rigged Against Trump? All Of These Wildly Divergent Surveys Cannot Possibly Be Correct
With just over two weeks to go until election day, some surveys are showing a very tight race, while others say that Hillary Clinton has a massive lead
Michael Snyder | Economic Collapse - October 24, 2016
http://www.infowars.com/are-the-polls-rigged-against-trump-all-of-these-wildly-divergent-surveys-cannot-possibly-be-correct/
Professor Who Predicted Last Five Elections Says Trump Has 87% Chance of Winning
Helmut Norpoth still confident despite polls showing Hillary ahead
Paul Joseph Watson - October 24, 2016
A confidential memo allegedly obtained from Correct The Record, a Democratic Super PAC, reveals a plan to “barrage” voters with high frequency polls that show Hillary ahead in order to “declare election over,” while avoiding any mention of the Brexit vote (which completely contradicted polls that said Brexit would fail).
Emails revealed by Wikileaks show how Democratic operatives planned to encourage “oversamples for polling” in order to “maximize what we get out of our media polling.” In other words, sample more Democrats than Republicans in order to make people believe that Hillary’s lead is far greater than the reality of a tight race.
Norpoth’s forecast of a Trump victory mirrors what’s taking place in the betting markets, with British bookmakers William Hill revealing last week that 65% of all bets on the market have backed Trump to win the election, a similar phenomenon to what happened before the Brexit vote, where the polls were proven completely wrong.
http://www.infowars.com/professor-who-predicted-last-five-elections-says-trump-has-87-chance-of-winning/
do millenials understand the long term effects of 2 vs 3.3% growth?
most would answer w “what’s significant about a 1.3% difference?”
“Supermarket prices fell for the tenth straight month in September, down 2.2 percent from last year. This makes the 2016 decline in food prices, as analysts predicted would happen, the worst since 1960. ”
For us who brown bag, this is a boon! I saw a Yahoo article two days ago that restaurants are feeling the pinch because in some “progressive” places they raised the minimum wage. Labor costs have gone up while supermarket prices go down. My colleagues still go out to lunch while I bring mine in. Every lunch day I save the equivalent 3 shares worth of Yamana stocks by bringing my lunch and I know the macro nutrient content of what I eat.
It’s a winner.
Forget the money saved, restaurant food is unhealthy, full of fat and salt.
full of fat and salt
and tastiness
And the bogus war on salt claims another victim-palate…
I don’t recall