Drought

Consumer Spending Drought: 16 Signs That The Middle Class Is Running Out Of Money

Drought - Photo by Bert KaufmannIs “discretionary income” rapidly becoming a thing of the past for most American families?  Right now, there are a lot of signs that we are on the verge of a nightmarish consumer spending drought.  Incomes are down, taxes are up, many large retail chains are deeply struggling because of the lack of customers, and at this point nearly a quarter of all Americans have more credit card debt than money in the bank.  Considering the fact that consumer spending is such a large percentage of the U.S. economy, that is very bad news.  How will we ever have a sustained economic recovery if consumers don’t have much money to spend?  Well, the truth is that we aren’t ever going to have a sustained economic recovery.  In fact, this debt-fueled bubble of false hope that we are experiencing right now is as good as things are going to get.  Things are going to go downhill from here, and if you think that consumer spending is bad now, just wait until you see what happens over the next several years.

Even though the Dow is surging toward a record high right now, everyone knows that things are not good for the middle class.  A recent quote from CPA Howard Dvorkin kind of summarizes our current state of affairs very nicely…

“The fact of the matter is that America is broke — whether it’s mortgages, student loans or credit cards, we are broke. The old rule of thumb is that people should have six months’ of savings,” Dvorkin says.”If you talk to people, most don’t have two pennies.”

These days most Americans are living from paycheck to paycheck, and thanks to rising prices and rising taxes, those paychecks are getting squeezed tighter and tighter.  Many families have had to cut back on unnecessary expenses, and some families no longer have any discretionary income at all.

The following are 16 signs that the middle class is rapidly running out of money…

#1 According to one brand new survey, 24 percent of all Americans have more credit card debt than money in the bank.

#2 J.C. Penney was once an unstoppable retail powerhouse, but now J.C. Penney has just posted its lowest annual retail sales in more than 20 years…

J.C. Penney Co. (JCP) slid the most in more than three decades after the department-store chain lost $4.3 billion in sales in the first year of Chief Executive Officer Ron Johnson’s turnaround plan.

The shares fell 18 percent to $17.40 at 11:28 a.m. in New York after earlier declining 22 percent, the biggest intraday drop since at least 1980, according to data compiled by Bloomberg. J.C. Penney yesterday said its net loss in the quarter ended Feb. 2 widened to $552 million from $87 million a year earlier. The Plano, Texas-based retailer’s annual revenue slid 25 percent to $13 billion, the lowest since at least 1987.

How much worse can things get?  At this point the decline has become so steep for J.C. Penney that Jim Cramer of CNBC is declaring that they are in “a true tailspin“.

#3 In the United States today, a new car has become out of reach for most middle class Americans according to the 2013 Car Affordability Study…

Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.

The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales. According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year.

#4 The founder of Subway Restaurants, Fred Deluca, says that the recent tax increases are having a noticeable impact on his business…

“The payroll tax is affecting sales. It’s causing sales declines,” he said, estimating a decline of about 2 percentage points off sales at his restaurants. “There are a lot of pressures on consumers,” Deluca said, adding “I think this is on the permanent side, but I think business will adjust to it.”

#5 Many other large restaurant chains are also struggling in this tough economic environment…

Darden Restaurants, which owns the casual dining chains Oliver Garden, LongHorn Steakhouse and Red Lobster, said blended same-store sales at its three eateries would be 4.5 percent lower during its fiscal third quarter.

Clarence Otis, Darden’s chairman and chief executive, said that “while results midway through the third quarter were encouraging, there were difficult macro-economic headwinds during the last month of the quarter.”

“Two of the most prominent were increased payroll taxes and rising gasoline prices, which together put meaningful pressure on the discretionary purchasing power of our guests,” he added.

#6 The CFO of Family Dollar recently admitted to CNBC that this is a “challenging time” because of reduced consumer spending…

At Family Dollar where the average customer makes less than $40,000 a year, the combination of a two-percent hike in the payroll tax, rising gas prices and delayed tax refunds has created a “challenging time and an uncertain time for the consumer right now,” said Mary Winston, the company’s chief financial officer.

“In our case, anything that takes money out of our customer’s wallet gives them less money to spend in our stores,” she told CNBC. “So I think all of those things create nervousness for the consumer, and I think there are sometimes political dynamics going on that they might not even fully understand the details, but they know it’s not good.”

#7 Even Wal-Mart is really struggling right now.  According to a recent Bloomberg article, Wal-Mart is struggling “to restock store shelves as U.S. sales slump“…

Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”

“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”

This all comes on the heels of an internal Wal-Mart memo that was leaked to the press earlier this month that described February sales as a “total disaster”.

#8 Electronics retailer Best Buy continues to struggle mightily.  Best Buy just announced that it will be eliminating 400 jobs at its headquarters in Richfield, Minnesota.

#9 It is being projected that many of the largest retail chains in America, including Best Buy, will close down hundreds of stores during 2013.  The following is a list of projected store closings for 2013 that I included in a previous article…

Best Buy

Forecast store closings: 200 to 250

Sears Holding Corp.

Forecast store closings: Kmart 175 to 225, Sears 100 to 125

J.C. Penney

Forecast store closings: 300 to 350

Office Depot

Forecast store closings: 125 to 150

Barnes & Noble

Forecast store closings: 190 to 240, per company comments

Gamestop

Forecast store closings: 500 to 600

OfficeMax

Forecast store closings: 150 to 175

RadioShack

Forecast store closings: 450 to 550

#10 Another sign that consumer spending is slowing down is the fact that less stuff is being moved around in our economy.   As I have mentioned previously, freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.

#11 Many young adults have no discretionary income to spend because they are absolutely drowning in student loan debt.  According to the New York Federal Reserve, student loan debt nearly tripled between 2004 and 2012.

#12 The student loan delinquency rate in the United States is now at an all-time high.  It is only a matter of time before the student loan debt bubble bursts.

#13 Due to a lack of jobs and high levels of debt, poverty among young adults in America is absolutely exploding.  Today, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.

#14 According to one recent survey, 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.

#15 Median household income in the United States has fallen for four consecutive years.  Overall, it has declined by more than $4000 during that time span.

#16 According to the U.S. Census Bureau, the middle class is currently taking home a smaller share of the overall income pie than has ever been recorded before.

Are you starting to get the picture?

Retailers are desperate for sales, but you can’t squeeze blood out of a rock.

For much more on how the middle class is absolutely drowning in debt, please see this article: “Money Is A Form Of Social Control And Most Americans Are Debt Slaves“.

But if you listen to the mainstream media, they would have you believe that happy days are here again.

Right now, everyone seems to be quite giddy about the fact that the Dow is marching toward an all-time high.  And I actually do believe that the Dow will blow right past it.  In fact, it is even possible that we could see the Dow hit 15,000 before everything starts falling apart.

But at some point, the financial markets will catch up with economic reality.  It is just a matter of time.

In the meanwhile, those that are wise are taking advantage of these times of plenty to prepare for the great economic drought that is coming.

Don’t be caught living paycheck to paycheck and totally unprepared when the next wave of the economic collapse strikes.  Anyone that believes that this debt-fueled bubble of false hope can last indefinitely is just being delusional.

During The Years Of Plenty, Prepare For The Years Of Drought - Photo Taken By Tomas Castelazo

8 Economic Threats That We Were Not Even Talking About At The Beginning Of The Summer

In the crazy times in which we live, it helps to expect the unexpected.  Sometimes you can think that you have it all figured out and then this world can throw a real curveball at you. Very few people anticipated that we would see a massive outbreak of the West Nile Virus in Texas this year or that the Mississippi River would be in danger of drying up after experiencing historic flooding last year.  Who would have thought that we would see the worst drought in more than 50 years or that horrific wildfires would burn nearly 7 million acres of land?  This is why economic conditions are always so hard to predict.  A single “black swan event” can come along and change everything almost overnight.  Our world has become incredibly unstable, and so who really knows what the rest of 2012 will bring?  Will we see a stock market crash?  Will the hurricane season be unusually bad?  Will war erupt in the Middle East?  Will we see a major earthquake on the west coast or even a volcanic eruption?  Will the upcoming election cause an eruption of anger and frustration in America?  We don’t know the answers to those questions yet, and the truth is that we will probably see some things happen that very few of us are anticipating at this point.

This is an exciting time to be a “news junkie”, but unfortunately the vast majority of the news these days is bad.

It is almost as if a “perfect storm” is developing.  Our weather is going crazy, our financial system is on the verge of collapse, our politicians seem more insane than ever, there is evidence of social decay all around us and the drumbeats of war in the Middle East grow louder with each passing day.

As strange as 2012 has been so far, I fear that things are about to get a whole lot stranger.

Not that we haven’t had some very unanticipated events happen this year up to this point.

The following are 8 economic threats that we were not even talking about at the beginning of the summer….

#1 West Nile Virus

What is up with all of the strange disease outbreaks that we have seen so far this year?

Flesh eating disease and the bird flu have both been making global headlines this summer, but in the U.S. right now it is the West Nile Virus that is getting the most attention.

So far more than 1,100 cases of the West Nile Virus have been diagnosed in the United States and more than 41 people have died from it.

More than half of the cases so far have been in Texas, but we have also seen people come down with West Nile Virus in Mississippi, Louisiana, South Dakota, and Oklahoma.

If you live in any of those areas, you might want to do your best to avoid mosquitos for the rest of the summer.

#2 Historic Drought

This summer, the United States has experienced the worst drought that it has seen in more than 50 years.

This weather has been absolutely crippling for farmers and ranchers all over the nation.  As I wrote about the other day, about half of all corn being grown in the U.S. is currently either in “poor” or “very poor” condition.

As the drought has dragged on, many farmers and ranchers have become increasingly desperate.  In fact, one farmer has even been feeding his cows candy in an attempt to deal with rising feed prices.

Needless to say, this drought has been causing commodity prices to soar.

On Tuesday, the price of corn closed at a record $8.38 a bushel, and the price of soybeans closed at $17.30 a bushel.

#3 The Mississippi River Is Drying Up

Thanks to this drought, rivers and lakes all over the United States are drying up.  In fact, there have been reports that millions of fish have been dying because water levels have gotten so low in many areas.

Even the mighty Mississippi River has dropped to dangerously low levels.

At this point, the Mississippi is lower than most people living along the river can ever remember.  If it drops much lower, it could potentially have an absolutely devastating impact on the U.S. economy.

A recent NBC News report described what is at stake….

About $180 billion worth of goods move up and down the river on barges, 500 million tons of the basic ingredients for much of the U.S. economy, according to the American Waterways Operators, a trade group. It carries 60 percent of the nation’s grain, 22 percent of the oil and gas and 20 percent of the coal, according to American Waterways Operators. It would take 60 trailer trucks to carry the cargo in just one barge, 144 18-wheeler tankers to carry the oil and gas in one petroleum barge.

If all traffic along the Mississippi was forced to stop, it is estimated that it would cost the U.S. economy about 300 million dollars a day.

And already there have been stoppages along one 11 mile stretch of the river….

Nearly 100 boats and barges were waiting for passage Monday along an 11-mile stretch of the Mississippi River that has been closed because of low water levels, the U.S. Coast Guard said. New Orleans-based Coast Guard spokesman Ryan Tippets said the stretch of river near Greenville, Miss., has been closed intermittently since Aug. 11, when a vessel ran aground.

So what happens if the Mississippi gets even lower?

#4 Wildfires

The extreme heat has also been responsible for the horrific outbreak of wildfires that we have seen in the western United States this year.

So far in 2012, nearly 7 million acres have been burned up.

That is an area about as big as the states of Maryland and Delaware combined.

#5 The Global Elite Hoarding Gold

In the past, the global elite and the mainstream media would mock those who are hoarding gold in anticipation of a major financial collapse.

But now it is the global elite who are hoarding gold.

In a previous article, I discussed how men such as George Soros and John Paulson are investing mind-boggling amounts of money in gold right now.  The amount of money that these two individuals are investing in gold is difficult to comprehend….

There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).

Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.

At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.

Combined, Soros and Paulson dumped more than three quarters of a billion dollars into gold during the second quarter of 2012 alone.

So what are they anticipating?

The central banks of the world have been very busy hoarding gold as well.  According to the World Gold Council, global central banks were net buyers of 157.5 metric tons of gold during the second quarter of 2012.

Over the past 20 years there has never been a time when global central banks have accumulated that much gold during a single quarter.

So just what in the world is going on?

#6 Recession In The UK

Everyone knew that Greece was in deep trouble.

And everyone knew that Italy and Spain were in deep trouble.

But it was a surprise to see the UK economy plunge deep into recession.  During the second quarter of 2012 alone, the UK economy shrunk by 0.7 percent.

At this point the British economy has contracted for three quarters in a row.

Hopefully things will not get even worse over there.

#7 Major Economic Slowdown In The United States

Considering the fact that the U.S. economy never even came close to recovering from the last recession, it is a bit disheartening to see that it looks like we are headed for another major downturn.

According to Michael Panzer of Financial Armageddon, measurements of economic activity compiled by the Federal Reserve Bank of Philadelphia indicate that the U.S. economy is rapidly heading into another recession.  If you doubt this, just check out this chart.

And for a lot more reasons why the U.S. economy is entering another recession, check out this article.

#8 Hauled Off To A Mental Institution For What You Believe

Do you ever worry that what you post on Facebook could get you involuntarily committed to a mental institution?

Well, that is exactly what happened to one military vet recently.

A former Marine named Brandon Raub was hauled off to a mental institution because of what he posted on his Facebook page.

This is how the Economic Policy Journal summarized what happened to Raub….

The muscle used to grab Brandon Raub was local Chesterfield County, VA police. Also present during the grab were agents of the FBI and of the Secret Service.

Both the FBI and the Secret Service claim that they were only observing and not participating in the grab. The Chesterfield County police initially stated that they were only carrying out a request from the federal agencies.

The police also claim Raub is not under arrest, even though he was led away in handcuffs and is not permitted to leave the psychiatric ward of a hospital—even though it appears that Raub is not in  any way in need of psychological care.

I note this happened in the United States of America, with local police, FBI agents and Secret Service taking part.

The claim that Raub is “not under arrest” is completely and totally ridiculous.  The authorities came to his door, slapped handcuffs on him and are holding him in a mental institution against his will.

And now he has been transferred to a facility that is 3 hours away from his family, his supporters and his legal team.

What in the world is America turning into?

The Rutherford Institute is defending Raub, and the following is an excerpt from a statement about this case on their website….

“This is not how justice in America is supposed to work—with Americans being arrested for doing nothing more than exercising their First Amendment rights, forced to undergo psychological evaluations, detained against their will and isolated from their family, friends and attorneys. This is a scary new chapter in our history,” said John W. Whitehead, president of The Rutherford Institute. “Brandon Raub is no different from the majority of Americans who use their private Facebook pages to post a variety of content, ranging from song lyrics and political hyperbole to trash talking their neighbors, friends and government leaders.”

This is the kind of thing that we have seen under brutal totalitarian regimes in the past.  Dissidents are grabbed by authorities and taken to mental institutions where they are conveniently “disappeared”.

This kind of thing is not supposed to happen in America.

But it is happening.

And you know what?  Before the authorities start attacking people for exercising free speech on Facebook perhaps they should clean up their own house.

It turns out that thousands of DHS employees have been convicted of crimes in recent years.  The following is from a recent CNS News article….

There have been 2,527 Department of Homeland Security (DHS) employees and co-conspirators convicted of corruption and other criminal misconduct since 2004, according to a federal auditor.

Our world is becoming a very crazy place.

One thing that most people did see coming this summer was the continuing economic decline in Greece.

At this point Greece is experiencing a full-blown economic depression and it gets worse by the day.

If you can believe it, 1,250 companies have shut down in the second largest city in Greece in 2012 alone.

Ouch.

And many in the financial world believe the the situation in Greece is going to go beyond the breaking point fairly soon.

In fact, analysts at Citibank believe that there is a 90 percent chance that Greece will leave the euro over the next 12 to 18 months.

90 percent?

They sound pretty sure of themselves.

Not that the rest of Europe is in such great shape either.

According to Bloomberg, it looks like Europe will soon be losing about half a million auto industry jobs….

Efforts by PSA Peugeot Citroen (UG) and Fiat SpA (F) to end losses in Europe could cost more than 500,000 people their jobs as automakers and parts suppliers grapple with the effects of the European sovereign debt crisis.

We live in very unusual times.

Things are falling apart all around us and we seem to be rapidly approaching another major economic crisis.

Central banks, governments and Wall Street insiders all seem to be preparing for the worst.

Are you?

The Mississippi River Is Drying Up

The worst drought in more than 50 years is having a devastating impact on the Mississippi River.  The Mississippi has become very thin and very narrow, and if it keeps on dropping there is a very real possibility that all river traffic could get shut down.  And considering the fact that approximately 60 percent of our grain, 22 percent of our oil and natural gas, and and one-fifth of our coal travel down the Mississippi River, that would be absolutely crippling for our economy.  It has been estimated that if all Mississippi River traffic was stopped that it would cost the U.S. economy 300 million dollars a day.  So far most of the media coverage of this historic drought has focused on the impact that it is having on farmers and ranchers, but the health of the Mississippi River is also absolutely crucial to the economic success of this nation, and right now the Mississippi is in incredibly bad shape.  In some areas the river is already 20 feet below normal and the water is expected to continue to drop.  If we have another 12 months of weather ahead of us similar to what we have seen over the last 12 months then the mighty Mississippi is going to be a complete and total disaster zone by this time next year.

Most Americans simply do not understand how vitally important the Mississippi River is to all of us.  If the Mississippi River continues drying up to the point where commercial travel is no longer possible, it would be an absolutely devastating blow to the U.S. economy.

Unfortunately, vast stretches of the Mississippi are already dangerously low.  The following is an excerpt from a transcript of a CNN report that aired on August 14th….

You might think this is some kind of desert just outside of Memphis. It’s not. I’m actually standing on the exposed bottom of the Mississippi River. That’s how dramatic the drought impact is being felt here. Hard to believe, a year ago we were talking about record flooding. Now, they are worried about a new kind of record: a record low. The river was three miles wide here, it’s now down to three tenths of a mile. And that’s causing all kinds of problems. There are some benefits, I mean, take a look over here: new beach front. In fact, some quip that now the Mississippi River has more beaches than the entire state of Florida, which would be funny if it didn’t have an impact on trade.

A lot of stuff we use goes up and down the Mississippi River. We are talking steel, coal, ore, grain. The problem is now a lot of those barges have had to lighten their loads, and even doing that, they are still running aground. There is a real fear that there could be a possibility of closing the Mississippi River. If that happens, well, all that product that used to be carried cheaply by barge is now going to be carried more expensively by truck or train. And guess who is going to pay for all of that.

You can see video footage of what is happening along the Mississippi right here.

It really is amazing that last year we were talking about historic flooding along the Mississippi and this year we are talking about the Mississippi possibly drying up.

As I mentioned earlier, there are some areas along the river that are already 20 feet below normal levels.  The following is from a recent article posted on inquisitr.com….

Just outside of Memphis the river is 13 feet below normal depth while the National Weather Service says Vicksburg, Mississippi is 20 feet below normal levels. Overall the Mississippi is 13 feet below normal averages for this time of year.

The drying up river is forcing barge, tugboat and towboat operators to navigate narrower and more shallow spots in the river, slowing their speeds as they pass dangerously close to one another. In some parts of the Mississippi the river is so narrow that one-way traffic is being utilized.

A lot of barges have been forced to go with greatly reduced loads so that they will sit higher in the river, and other commercial craft have been forced to stop operating completely.

For example, the Mississippi has dropped so low at this point that the famous American Queen Steamboat can no longer safely navigate the river.

Down south, the Mississippi River has gotten so low that saltwater is actually starting to move upriver.  The U.S. Army Corps of Engineers is fighting hard to keep that contained.

Other waterways in the middle part of the country are in even worse shape.

For example, a 100 mile stretch of the Platte River has already dried up.  Millions of fish are dying as rivers and streams all over the country continue to get shallower and warmer as a result of the ongoing drought.

The last time the condition of the Mississippi River was this bad was back in 1988.  At that time, a lot of barge traffic was stopped completely and the shipping industry lost approximately a billion dollars.

If a similar thing were to happen now, the consequences could potentially be far worse.

As I wrote about recently, a standstill along the Mississippi would cost the U.S. economy about 300 million dollars a day.

In fact, one towing company that works on the Mississippi says that it has already been losing about $500,000 a month since May.

In the end, who is going to pay for all of this?

You and I will.

In fact, this crisis could end up costing American consumers a whole lot of money….

So here’s the math. If you want to raise the average barge one inch above the water, you’ve got to take off 17-tons of cargo. To raise it a foot, you’re talking 200 tons.

And since, according to the American Waterways Operators, moving cargo by river is $11 a ton cheaper than by train or truck. The more that now has to be moved on land, well, the more the costs go up. Steven Barry says, “And, eventually, the consumer’s gonna pay that price somewhere along the line.”

And considering the fact that we are already facing a potential food crisis due to the drought, the last thing we need is for the Mississippi River to dry up.

So is there any hope on the horizon for the Mississippi?

Unfortunately, things do not look promising.

The fall and the winter are typically drier than the summer is along the Mississippi River.  That means that conditions along the river could actually get even worse in the months ahead.  The following is from a recent Time Magazine article….

But without significant rainfall, which isn’t in any long-range forecasts, things are likely to get worse. As summer turns to fall, the weather tends to get drier. Lower temperatures generally mean fewer thunderstorms and less rainfall.

“Take away the thunderstorm mechanism and you run into more serious problems,” says Alex Sosnowski, expert senior meteorologist for AccuWeather.com. And while droughts tend to be a temporary setback, longer-range forecasts are troublesome. Sosnowski says he is anticipating an El Niño weather pattern next year, which would mean below-normal snowfall and above-average temperatures.

Let us hope and pray that we don’t see another 12 months similar to the 12 months that we have just been through.

The U.S. economy is already in bad enough shape.

We don’t need any more major problems on top of what we are already dealing with.

So what do you think about this?  Please feel free to post a comment with your thoughts below….

Dead Crops, Extreme Drought And Endless Wildfires Are Now The New Normal In America

As you read this, the United States is experiencing the worst drought it has seen since the Dust Bowl days of the 1930s.  As you read this, nearly half of all corn crops in the United States are in “poor” or “very poor” condition.  As you read this, 38 major wildfires are ripping across the central and western United States.  The brutal wildfires in Oklahoma have been so bad that they have made national headlines.  The price of corn has hit a brand new record high this summer and so has the price of soybeans.  More than half of all the counties in this country have been declared to be “natural disaster areas” by the U.S. Department of Agriculture at this point.  Things are so bad for ranchers that the CEO of Smithfield Foods is projecting that meat prices will rise by “significant double digits” in the months ahead.  Sadly, this drought is projected to continue throughout August and into September.  As you will read about below, some meteorologists are even openly postulating that there may not be enough moisture to avoid another drought next year.  Yes, things are really bad this year, but when you step back and take a look at the broader picture they become truly frightening.

According to the U.S. Drought Monitor, as of July 31st close to two-thirds of the continental United States was experiencing at least some level of drought….

Keep in mind that brown is “severe drought”, red is “extreme drought” and dark brown in “exceptional drought”.

This is truly a historic drought.  We have never seen anything like this in modern times in the United States.

The week before, this is how the U.S. Drought Monitor described conditions in the center of the country….

“Over 90 percent of the topsoil was short or very short of moisture in Oklahoma, Kansas, Nebraska, Missouri, Iowa, Illinois, Indiana, and Ohio, with virtually all (99 percent) short or very short in Missouri and Illinois”

There had been some hope that rain would bring relief to farmers in the central part of the country, but instead things just keep getting worse and worse.

At this point, close to half of all corn being grown in the U.S. is either in “poor” or “very poor” condition.

For ranchers, the outlook is even more dismal.  The following is from a recent CNN article….

Nearly three-quarters of the nation’s cattle acreage is now inside a drought-stricken area, as is about two-thirds of the country’s hay acreage, the agency reported.

What that means is that a lot of animals are being slaughtered now and the price of meat is going to be moving substantially higher later in the year.

The following is what the CEO of Smithfield Foods, Larry Pope, recently told the Financial Times….

Beef is simply going to be too expensive to eat. Pork is not going to be too far behind. Chicken is catching up fast. Are we really going to take protein away from Americans?

He also told the Financial Times that he expects meat prices to rise by “significant double digits”.

Those are very frightening statements.

The CEO of a major food company says that beef is going to “be too expensive to eat”?

That doesn’t sound good at all.

Meanwhile, this drought is absolutely devastating farmers and ranchers all over the United States….

“When I was a kid in the ’50s … it got real dry, but nothing like this,” said Marvin Helms, a 70-year-old farmer and rancher in central Arkansas who was compelled to sell his beef cattle after being short on feed.

His thousand acres of farmland near Arkadelphia include corn and soybeans, which Helms says is normally sufficient to sustain his family and provide for his cattle.

“We’ve got some insurance on the crops, but it’s not enough,” he said. “It will help, but it won’t pay the bills.”

Of course the federal government is going to step in and try to help these farmers and ranchers, but the truth is that the federal government is already drowning in debt.  Any additional help will have to be done with more borrowed money.

It is hard to describe how oppressive the heat and the drought have been in the middle part of the nation this year.  We have seen some unprecedented things happen.

Another major problem throughout the central part of the country right now is all of the horrible wildfires that are ravaging the wilderness areas.  The following is from a recent Chicago Tribune article about the recent fires in Oklahoma….

Wildfires burned out of control on Friday in Oklahoma, destroying homes and shutting down highways in a state that has suffered 18 straight days of 100-plus degree temperatures and persistent drought.

Emergency officials counted 11 different wildfires around the state, with at least 65 homes destroyed in parched areas north and south of Oklahoma City and south of Tulsa.

Oklahoma joins several states that have been plagued by wildfires this summer, including Colorado, Arkansas and Nebraska. Fires are being fed by a widespread drought.

But these fires in Oklahoma are only part of a very distressing long-term trend.  As I have written about previously, 6 of the 10 worst years for wildfires ever recorded in the United States have all come since the year 2000.

Another major change that we have seen is that massive dust storms called “haboobs” are becoming much more frequent in the southwest part of the country.

Just the other day, a dust storm that was approximately 2,000 feet high and nearly 100 kilometers wide ripped through the city of Phoenix, Arizona at 35 miles an hour.

Such events were once very rare in Phoenix.

But not anymore.

Meanwhile, much of the central and western United States is rapidly running out of water.

And I am not just talking about surface water.

A lot of the key aquifers that have allowed us to build cities and irrigate crops in the western half of the United States are being drained completely dry.  The following is from a recent San Diego Union-Tribune article about what is happening in California….

Few places in Southern California is that more evident than the desert sands of Borrego Springs, where residents, farmers and golf course operators are sucking about four times as much water from the ground each year as nature replaces.

They’ve been pumping so hard for so long that the community’s main aquifer could essentially run dry after a few more decades. That’s a dire possibility: A recent study showed it would be prohibitively expensive to build a pipeline to an outside source.

Did you catch that last part?

The truth is that someday entire cities may have to be abandoned because it will be “prohibitively expensive” to build water pipelines stretching hundreds of miles to bring them water.

Sadly, this is not just happening in California.  This kind of thing is going on all over the nation….

Similar concerns are bubbling up along San Diego County’s backcountry and across the nation — particularly in places such as the Central Valley and the Great Plains, where residents have dug deep to withstand a drought that has squeezed the nation’s midsection dry.

“It took Mother Nature in some cases thousands of years to accumulate the water in the aquifers, but we are pumping it out in mere decades,” said Robert Glennon, a law professor and water expert at the University of Arizona. “It’s a huge national and international problem. … It is utterly unsustainable and scary.”

I have previously written about how the largest underground water source in the United States, the Ogallala Aquifer, is being drained at an almost unbelievable pace.  You can read my previous report about the Ogallala Aquifer right here.

So even when this summer ends our problems will be far, far from over.

But right now the most immediate concern is the condition of our corn and our soybeans.

Corn is found in about 74 percent of the products we buy in the supermarket, and it is used to feed livestock all over the country.

In addition, the United States exports more food to the rest of the world than anyone else does.

So if our crops fail that is a very big deal.

Right now, it is being reported that this drought “will likely cost the U.S. food export industry billions in lost revenue.”

Considering the fact that the “employment rate” in the United States is lower than it was during the last recession and that the U.S. economy is in the midst of a horrible long-term economic decline, this is the last thing that we need.

And what happens to all of the countries that are depending on us for food?

A recent Wired article had this startling headline….

“U.S. Drought Could Cause Global Unrest”

When people cannot feed their families, they tend to lose it.

Unfortunately, this year might just be the beginning.

According to a recent article in the Guardian, some scientists say that the drought has been so bad this year that it is going to take a “freak event” to avoid catastrophic damage to next year’s corn crops….

What matters now is whether there will be enough rain to get next year’s crops off to a good start.

“This drought isn’t going anywhere,” he said. “The damage is already done. What you are looking for is enough moisture to avert a second year of drought,” he said.

However, Svoboda conceded that might require a freak event, especially in the mid-west which has already passed its rain season. “In the entire corn belt, from Indiana to Nebraska to the Dakotas, we have already reached the maximum precipitation periods for year. From here on in, it’s all downhill,” Svoboda said.

“As far as widespread general relief for the whole region it would take a really freakish dramatic change to make that happen. That doesn’t appear to be in the cards, given the time of year we are in.”

The skies are dry and our fields are scorched.

Our crops our failing and millions of acres are burning.

Our groundwater supplies are being rapidly depleted and giant dust storms are sweeping across some of our major cities.

Welcome to the new normal.

It isn’t going to be pleasant.

The Corn Is Dying All Over America

All over America the corn is dying.  If drought conditions persist in the middle part of the country, wheat and soybeans will be next.  Weeks of intense heat combined with extraordinarily dry conditions have brought many U.S. corn farmers to the brink of total disaster.  If there is not significant rainfall soon, many farmers will be financially ruined.  This period of time is particularly important for corn because this is when pollination is supposed to happen.  But the unprecedented heat and the extremely dry conditions are playing havoc with that process.  With each passing day things get even worse.  We have seen the price of a bushel of corn soar 41 percent since June 14th.  That is an astounding rise.  You may not eat much corn directly, but it is important to realize that corn or corn syrup is just about in everything these days.  Just look at your food labels.  In the United States today, approximately 75 percent of all processed foods contain corn.  So a huge rise in the price of corn is going to be felt all over the supermarket.  Corn is also widely used to feed livestock, and if this crisis continues we are going to see a significant rise in meat and dairy prices as well.  Food prices in America have already been rising at a steady pace, and so this is definitely not welcome news.

The weather conditions in the middle part of the country during the last couple of months have been highly unusual.  The following is from a recent article in the Los Angeles Times….

It’s not that the Midwest hasn’t been extremely hot before, and it’s not that it hasn’t been incredibly dry.

But it’s unusual for a vast swath of the Midwest to be so very hot and so very dry for so very long — particularly this early in the summer.

The current heat wave — which is spurring comparisons to the catastrophic heat of 1936 —  is “out of whack,” meteorologist Jim Keeney said Friday in an interview with the Los Angeles Times.

Corn crops typically pollinate and mature in June and early July.  That is why this time of the year is so vitally important for corn.  We have reached a make it or break it moment.

The following is how an Accuweather.com report described what is happening right now….

Either heat or drought can stress the stalks, but both can basically shut down the pollination process. When this happens few, small or no ears of corn form.

According to AccuWeather.com Agricultural Meteorologists, you can’t raise a corn crop with less than an inch of rain over six weeks, combined with 100-degree and higher temperatures. However, these conditions have taken place in much of the southern corn belt through the week of July 4, 2012.

If pollination does not happen, corn farmers might as well give up.

Just check out what agricultural economist Chris Hurt said the other day….

“Pollination problems just can’t be overcome, even if the weather turns. There’s no turning back. There’s just failure.”

At this point, half of all corn in the state of Indiana is already in poor shape.

With each passing day, the condition of the corn gets even worse.

As a recent article in the Chicago Tribune detailed, many farmers feel completely helpless at the moment….

Dave Kestel, who farms about 1,300 acres in Manhattan about 40 miles southwest of Chicago, said he feels helpless.

“Every day you get out there and it’s the same heat and cloudless sky,” he said. “You see your corn just withering out there, knowing you can’t do anything about it.”

The United States is suffering from a severe lack of rain.  Just look at the chart posted below.  According to the U.S. Drought Monitor, most of the country is experiencing drought conditions right now….

These drought conditions have also played a major role in the huge number of wildfires that we have seen lately.

There are a few northern states that are not feeling the drought right now, but otherwise the rest of the country is extremely dry.

So what does all of this mean for you and I?

A recent article by Holly Deyo summarized why we should all be praying for rain….

Since 75% of grocery store products use corn as a key ingredient, expect food prices to skyrocket. Corn is also a staple in many fast foods. Corn is in ethanol and the main food source or chickens. In addition to this, maize is in many things that aren’t obvious like adhesives, aluminum, aspirin, clothing starch, cosmetics, cough syrup, dry cell batteries, envelopes, fiberglass insulation, gelatin capsules, ink, insecticides, paint, penicillin, powders, rugs and carpets, stamps, talcum, toothpaste, wallpaper, and vitamins. That’s just for starters…

This is a huge heads up for you to purchase corn-using products NOW before these conditions reflect in grocery goods. It will be a narrow window of opportunity.

These thoughts are being echoed by many agricultural economists as well.  According to Businessweek, the outlook for U.S. food prices is bleak….

“When people look at rising prices for hamburger, butter, eggs and other protein sources from higher corn costs, that’s when more money ends up in the food basket,” said Minneapolis- based Michael Swanson, a senior agricultural economist at Wells Fargo & Co., the biggest U.S. farm lender. “We were hoping for a break, and we aren’t going to get it.”

Unfortunately, the fact that the corn is dying all over America is not just a problem for the United States.

As Businessweek also recently noted, the fate of U.S. corn affects the entire globe….

When rain doesn’t fall in Iowa, it’s not just Des Moines that starts fretting. Food buyers from Addis Ababa to Beijing all are touched by the fate of the corn crop in the U.S., the world’s breadbasket in an era when crop shortages mean riots.

This year they have reason to be concerned. Stockpiles of corn in the U.S. tumbled 48 percent between March and June, the biggest drop since 1996, the U.S. Department of Agriculture said last week. And that was before drought hit the Midwest.

The United States is the world’s biggest exporter of corn by far, and if there is a massive corn crop failure in America it is going to be felt to the four corners of the earth.

Just check out what Abdolreza Abbassian, a senior economist with the U.N. Food & Agriculture Organization, said the other day….

“Everyone watches the U.S. because they can rely on it. Without it, the world would starve.”

Back in February, I wrote an article that suggested that we could see dust bowl conditions return to the middle part of this country in the years ahead.

A lot of people were skeptical of that article.

Not quite as many people are skeptical today.

The following is from a recent article posted on MSNBC entitled “Fears of new Dust Bowl as heat, drought shrivel corn in Midwest“….

Crop insurance agents and agricultural economists are watching closely, a few comparing the situation with the devastating drought of 1988, when corn yields shriveled significantly, while some farmers have begun alluding, unhappily, to the Dust Bowl of the 1930s. Far more is at stake in the coming pivotal days: with the brief, delicate phase of pollination imminent in many states, miles and miles of corn will rise or fall on whether rain soon appears and temperatures moderate.

As I wrote about last week, if the weather does not turn around soon the implications are going to be staggering.

Even if we got some significant rainfall at this point a tremendous amount of damage has already been done according to the Washington Post….

Jay Armstrong, owner and operator of Armstong Farms in Kansas, flew his small plane over a portion of the affected area and landed with the impression that the potential damage is far worse than is commonly understood.

“At this time of year, when you look down in a place like Indiana or Illinois, you should see just lush green fields,” Armstrong said. “I saw bare soil. I just thought to myself, the market has no idea what’s coming.”

So is there significant rain in the forecast?

Unfortunately, the answer is no.

The National Weather Service says that the corn belt will experience “above-normal temperatures” and “below-normal rainfall” over the next week.

At this point it does not look like there will be any significant rainfall for the foreseeable future….

“We got a break in the temperatures over the weekend but no rain of significance is in sight for next seven days,” said Jim Keeney, a meteorologist for the National Weather Service the US central region based in Kansas City, Missouri.

Needless to say, that is really bad news.

Right now we just have more heat and more dryness to look forward to.  The skies are like iron and the earth is like brass.  We like to think that we have conquered nature, but at moments such as these we see that is not true at all.

A couple of weeks ago I wrote an article about all of the reasons why we should be concerned about the second half of 2012.  In that article I did not even mention drought and crop failures.  Sometimes major problems have a way of piling on top of themselves.

The U.S. economy is already in bad enough shape without adding major crop failures to the mix.  This is something that we just don’t need right now.

But it looks like we are going to have to deal with it.  Unless there is a major change in the weather, food prices are going to go up even more and large numbers of farmers and ranchers are going to be absolutely devastated.

Let us all pray for rain.  We desperately need it.

25 Signs That A Horrific Global Water Crisis Is Coming

Every single day, we are getting closer to a horrific global water crisis.  This world was blessed with an awesome amount of fresh water, but because of our foolishness it is rapidly disappearing.  Rivers, lakes and major underground aquifers all over the globe are drying up, and many of the fresh water sources that we still have available are so incredibly polluted that we simply cannot use them anymore.  Without fresh water, we simply cannot function.  Just imagine what would happen if the water got cut off in your house and you were not able to go out and buy any.  Just think about it.  How long would you be able to last?  Well, as sources of fresh water all over the globe dry up, we are seeing drought conditions spread.  We are starting to see massive “dust storms” in areas where we have never seem them before.  Every single year, most of the major deserts around the world are getting bigger and the amount of usable agricultural land in most areas is becoming smaller.  Whether you are aware of this or not, the truth is that we are rapidly approaching a breaking point.

If dramatic changes are not made soon, in the years ahead water shortages are going to force large groups of people to move to new areas.  As the global water crisis intensifies, there will be political conflicts and potentially even wars over water.  We like to think of ourselves as being so “advanced”, but the reality is that we have not figured out how to live without water.  When the water dries up in an area, most of the people are going to have to leave.

And yes, it will even happen in the United States too.  For example, once Lake Mead dries up there is simply no way that so many people are going to be able to live in and around Las Vegas.

Right now, most of us take for granted that we will always have access to an unlimited amount of clean water.

But when you take a hard look at the data, it quickly becomes clear that everything that we have always taken for granted about water is about to dramatically change.

That following are 25 signs that a horrific global water crisis is coming.  The first 12 facts are about the United States, and the last 13 are about the rest of the world….

#1 Today, the United States uses approximately 148 trillion gallons of fresh water a year.

#2 According to the U.S. government, 36 U.S. states are already facing water shortages or will be facing water shortages within the next few years.

#3 Since 1998, the level of water in Lake Mead has plunged by more than 50 percent.  Lake Mead supplies about 85 percent of the water used in Las Vegas, and at this point the lake has 5.6 trillion gallons less water than it used to have.  Lake Mead is falling so fast that some believe that the Hoover dam could actually stop producing electricity in a few years.  Needless to say, that would be a total disaster for that entire region of the country.  In addition, if things continue at the current pace, it is being estimated that Lake Mead will run completely dry some time around the year 2021.

#4 According to the U.S. National Academy of Sciences, the U.S. interior west is now the driest that it has been in 500 years.

#5 The Ogallala Aquifer, which is a massive underground lake that stretches from South Dakota all the way to Texas, is rapidly drying up.  The Ogallala Aquifer is believed to be the largest body of fresh water in the world, and right now it is being drained at a rate of approximately 800 gallons per minute.  Right now it covers approximately 174,000 square miles, and since the 1950s we have drained enough water from it “to half-fill Lake Erie“.  Once upon a time, the Ogallala Aquifer had an average depth of about 240 feet, but today the average depth is just 80 feet.  If something is not done, we will definitely see a return of the Dust Bowl days of the 1930s.  We need to start listening to the experts.  Just consider what David Brauer of the Ogallala Research Service had to say when asked about the future of the Ogallala Aquifer….

“Our goal now is to engineer a soft landing. That’s all we can do.”

#6 A federal judge has ruled that the state of Georgia has very few legal rights to Lake Lanier.  Lake Lanier is the main water source for the city of Atlanta.  Millions more people are expected to move into the Atlanta area in the coming years, and this is creating an absolute nightmare for city officials.

#7 It is estimated that California only has a 20 year supply of fresh water left.

#8 It is estimated that New Mexico only has a 10 year supply of fresh water left.

#9 Things have gotten so dry in Arizona that now giant “dust storms” have been blowing through the city of Phoenix.

#10 Texas is has experienced one of the driest stretches that it has ever seen.  Right now, approximately 81 percent of the state of Texas is experiencing “exceptional drought” conditions, and wildfires have burned an astounding 3.6 million acres in the state.

#11 Approximately 40 percent of all U.S. rivers  and approximately 46 percent of all U.S. lakes have become so polluted that they are are now considered to be too dangerous to fish in, swim in or get drinking water from.

#12 Eight states in the Great Lakes region have signed a pact banning the export of water to outsiders – even to other U.S. states.

#13 It is being projected that by the year 2030, global demand for water will be 40 percent higher than it is today.

#14 Worldwide demand for fresh water tripled during the last century, and is now doubling every 21 years.

#15 According to USAID, one-third of the population of the earth will be facing severe or chronic water shortages by the year 2025.

#16 Of the 60 million people added to the world’s cities every year, the vast majority of them live in impoverished areas that have no sanitation facilities whatsoever.

#17 It is estimated that 75 percent of the surface water in India is now contaminated by human and agricultural waste.

#18 If you can believe it, according to a UN study on sanitation, far more people in India have access to a cell phone than to a toilet.

#19 In the developing world, 90 percent of all wastewater is discharged completely untreated into local rivers, streams or lakes.

#20 Every 8 seconds, somewhere in the world a child dies from drinking dirty water.

#21 Due to a lack of water, Saudi Arabia has given up on trying to grow wheat and will be 100 percent dependent on wheat imports by the year 2016.

#22 In northern China, the water table is dropping one meter every single year because of drought and overpumping.

#23 Incredibly, a new desert the size of Rhode Island is created in China every single year because of drought and overpumping.

#24 In China, 80 percent of all major rivers have become so horribly polluted that they do not support any aquatic life at all at this point.

#25 Collectively, the women of South Africa walk the equivalent of the distance to the moon and back 16 times a day just to get water.

To learn more about the coming global water crisis, check out the short video posted below….

Right now, more than a billion people around the globe do not have access to safe drinking water.

That number is going to keep increasing.

Without enough fresh water, people cannot grow enough food.  Global food prices are already starting to skyrocket, and the coming global water crisis certainly is not going to help matters.

A massive, massive disaster is on the horizon.  The era of gigantic amounts of cheap food and “unlimited” amounts of clean water is over.

A horrific global water crisis is coming.

You better get ready.

Drought Of 2011: The Southern United States Is Desperate For Rain As The Middle Part Of The Country Continues To Get Scorched

2011 sure has been a wild year for America so far.  First we had unprecedented tornado outbreaks, then we had horrific flooding along the Mississippi and Missouri rivers, then we had record setting wildfires and now we are facing a crippling drought all over the southern United States.  From Arizona all the way to Georgia there are vast areas that have been declared to be experiencing “exceptional drought” by the National Weather Service.  Crop failures are widespread and ranchers are having a very difficult time trying to feed their cattle.  If the southern United States does not receive a significant amount of rain soon, the drought of 2011 is going to be one of biggest natural disasters that we have seen in a long, long time.

Right now, approximately 29 percent of the country is experiencing some level of drought.  About 12 percent of the U.S. is experiencing “exceptional drought”, which is the highest level of drought.  The combination of very little rain and scorching heat over much of the nation has been absolutely devastating.  Many areas have been dealing with high temperatures in the 90s and the low triple digits for weeks.

Between October and June, the state of Texas experienced one of the driest stretches ever recorded.  Already, the drought of 2011 is considered to be the third-worst drought ever experienced in Texas.

Currently, approximately 72 percent of the state of Texas is dealing with “exceptional drought” conditions.  It has been estimated that 30 percent of the wheat fields in Texas will be lost.  Agricultural losses from the drought of 2011 are projected to be $3 billion in the state of Texas alone.

The U.S. Department of Agriculture has already designated all 254 counties in the state of Texas as natural disaster areas.  The farmers and ranchers down there are going through hell right now.

But Texas is not alone.  Most of Arizona, all of New Mexico, all of Oklahoma, most of Arkansas, all of Louisiana, most of Mississippi, most of Alabama, most of Georgia, most of Florida, most of South Carolina and most of North Carolina are also dealing with drought conditions.

This drought is hitting many of our most significant agricultural areas.  If we don’t get a significant amount of rain in some of these areas soon the losses are going to be catastrophic.

At this point, Oklahoma has just had 28 percent of the rainfall that it normally gets during the summer.  Many other areas are experiencing similar problems.

Just check out the map below.  The areas that are the darkest are the areas that are experiencing “exceptional drought”….

Needless to say, the drought of 2011 is absolutely devastating a lot of hard working farmers and ranchers.

A recent article posted on CNBC described some of the effects that this drought is having on farmers….

“The heat and the drought are so bad in this southwest corner of Georgia that hogs can barely eat. Corn, a lucrative crop with a notorious thirst, is burning up in fields. Cotton plants are too weak to punch through soil so dry it might as well be pavement.”

So what is going to happen if this drought continues for the rest of the summer?

Ranchers are also having a very hard time right now.  All over Texas, as pastures die off ranchers are selling their herds because soon they will not be able to feed them any longer.

Right now cattle are being slaughtered in record numbers due to the drought.  But after all of these cattle are gone will we be facing a cattle shortage?

Thanks to the recent wildfires and the tremendous drought, it is getting very difficult for ranchers to feed their cattle.  Just check out the following statistics from a recent article in the Christian Science Monitor….

Most Texas pasture and range lands – 86 percent – are currently “poor” or “very poor,” according to the US Department of Agriculture’s National Agricultural Statistics Service. The same rating applied to 69 percent of Oklahoma and 40 percent of Kansas.

During this month, high temperatures of over 110 degrees have been very common in cattle country.  There is not enough for these cattle to eat and there is not enough for these cattle to drink.  If things do not turn around soon, even more ranchers will be racing to sell off their herds while they still can.

But it is not just cattle that are being devastated by this drought.  Just check out what this drought is doing to deer….

Pregnant does are having problems carrying fawns to term, and most of them born prematurely aren’t surviving, according to the Texas AgriLife Extension Service. Other does are abandoning their newborns because drought-induced malnutrition has robbed them of their ability to produce milk.

Abandoned fawns found all over the Panhandle and South Plains have been brought to the South Plains Wildlife Rehabilitation Center. Ten had been brought to the Lubbock wildlife center by the end of last week.

This drought has also had some other dramatic effects.

For example, a gigantic “wall of dust” recently rolled through Phoenix, Arizona.  Take a moment and watch the video posted below.  Does this remind anyone else of the “Dust Bowl” of the 1930s?….

In economic terms, the drought of 2011 could end up having a huge impact on average American families.

Ultimately, American consumers are likely going to feel some significant pain from this crisis as a recent CNBC article noted….

That means grocery shoppers will feel the effects of the drought at the dinner table, where the cost of staples like meat and bread will most likely rise, said Michael J. Roberts, an associate professor of agricultural and resource economics at North Carolina State University in Raleigh, N.C. “The biggest losers are consumers,” he said.

All of this wouldn’t be so alarming if we were not already on the verge of a global food crisis.  Global food prices continue to hover around record highs.  Somalia, Ethiopia and Kenya are experiencing the worst drought conditions that they have seen in 60 years.  Tonight there are 10 million people living in the Horn of Africa that are facing severe food shortages.  Hunger and starvation are spreading again in east Africa and in many other areas of the world as well.

That is one reason why so many Americans are working so hard to prepare for disaster right now.  All over the United States (and around the world), “preppers” are storing up food and supplies in case things go really bad.

Some Americans are taking things to extreme levels.  For example, a man named Steven Huff is constructing a 72,000 square foot “home” (some call it a fortress) in Missouri.  Huff is the chairman of Wisconsin-based TF Concrete Forming Systems.  Apparently the goal is to show off what his firm is capable of.  It is claimed that this will be “a home that uses very low energy, as well as having strong resistance to tornadoes, hurricanes, earthquakes, fire, flood and insect damage”.

It kind of looks like a castle to me.  You can see a picture of this remarkable “home” right here.

Unfortunately, most of us cannot afford to build 72,000 square foot fortresses.  So we will just have to do the best that we can with what we already have.

The world is becoming more unstable every single day.  Global financial markets are getting extremely nervous and jumpy.  More chaos or more war could erupt in the Middle East at any time.  Natural disasters continue to get more frequent and more intense.  We certainly do live in interesting times.

It is imperative that we all watch carefully as these global events unfold.  None of us knows for sure what is going to happen next.  But those that are prepared are going to have the best chance to make it through when disaster does strike.

Will 2012 Be The Year That We See Mass Starvation In Africa? 12 Signs That The World Is Running Out Of Food

Tonight millions of American families will shovel huge piles of food into their mouths without even realizing that starvation is rapidly spreading in Africa.  Right now Somalia, Ethiopia and Kenya are experiencing the worst drought conditions that they have seen in 60 years.  Tens of thousands of African families have abandoned their homes as they desperately search for food and water.  Hundreds of thousands of farm animals have died because of the drought.  Considering the fact that approximately two-thirds of the people living in the region “make their living by raising goats, sheep, cattle and camels“, the word “catastrophic” just is not sufficient to describe what is happening.  Every single day, thousands more head to Dadaab, the biggest refugee camp in the world.  Dadaab was originally designed to hold 90,000 people, but now over 360,000 precious people are camped there.  In addition, approximately 30,000 desperately hungry people are standing outside the fences waiting to be admitted.  It is projected that by the end of the year there will be over a half million people living in Dadaab.  Sadly, this is just the beginning.  According to the United Nations, there are already 10 million people in the region that are facing severe food shortages, and many fear that if the drought continues we could actually see mass starvation in Africa in 2012.

Hopefully the world will be very generous as they hear about what is happening in the Horn of Africa.  But the truth is that food is getting tight all over the globe.  Last summer an unprecedented heat wave caused Russia to put restrictions on the export of wheat.  Some of the key agricultural areas of China, Pakistan, Brazil and Australia have experienced unprecedented flooding over the past 12 months.  Natural disasters have hit U.S. crops hard in many states as well.  Crop diseases such as UG99 wheat rust continue to spread.  The world continues to lose topsoil at an alarming rate.  Things simply do not look promising.

Meanwhile, the price of oil has absolutely soared over the past year.  The methods that we use to produce and transport our food take a lot of oil.  If the price of oil continues to climb that is going to make it very hard to feed the entire planet.

Most Americans have no idea how desperate things are becoming in many areas of the globe already.  Just check out what a recent article in The Guardian had to say about the situation at Dadaab….

Every day 1,000 Somalis stream across the Kenyan border to Dadaab, which is full to bursting with 367,000 people and already constitutes the largest refugee settlement in the world. They arrive malnourished and dehydrated but – after a walk lasting weeks – grateful that they have made it to a point where they will get food and water.

Sometimes words alone are not enough to convey an accurate picture of what is really going on.  Take a couple of moments to watch the video posted below.  Imagine if you and your family had to go to a camp like this….

Sadly, the suffering is not limited to one refugee camp.  There are millions of Africans that are now in danger of starvation.

A recent article in The Telegraph described how bad things are getting in parts of Somalia, Ethiopia, Kenya, Djibouti and Uganda….

“Two consecutive poor rainy seasons have resulted in one of the driest years since 1950/51 in many pastoral zones,” Elisabeth Byrs, spokeswoman of the UN Office for the Co-ordination of Humanitarian Affairs, said. “There is no likelihood of improvement [in the situation] until 2012,” she added.

A lot of these people don’t have any money.  If aid was not rolling in from elsewhere they would be dropping dead all over the place.

Food prices are rising so quickly in these areas that it is becoming difficult for anyone to be able to afford to buy food.

TEAR Fund executive director Steve Tollestrup says that food prices in the region are really getting out of control…..

“For example, yellow maize prices in the Ethiopian Jiiga grain market had risen by 117 per cent from May 2010 to May 2011, while white maize at the Mandera market in Kenya had risen by nearly 60 per cent.”

In some areas of the Horn of Africa we are starting to see food riots.  For example, the following is a very brief excerpt from a recent Reuters report….

Kenyan police fired tear gas to disperse people protesting in the capital on Thursday against high food and fuel prices and a shortage of maize which has enraged many in east Africa’s biggest economy.

When people cannot even feed themselves they have nothing left to lose.

Today, there are approximately two billion people that spend more than half of their income on food.

So what are they supposed to do when the price of food doubles?

Are they supposed to spend every penny they have just on food?

Most Americans have no idea what it is like to have to scratch and claw just to survive each day.

There are hundreds of millions of people around the globe that are engaged in a desperate struggle to survive.

Meanwhile, the speculators and the big Wall Street banks feel no guilt at all when they drive up the price of food in order to make a few extra bucks.

Look, the truth is that what we are seeing in Africa right now is just the beginning.

When the global economy crashes, things are going to get a lot worse.

Right now a significant percentage of the global population can barely afford to buy enough food to eat.  Most people do not realize this, but when the global financial system totally collapses there is a very real possibility that we could see mass starvation.

The following are 12 signs that the world is running out of food….

#1 More than 3 billion people, close to half the world’s population, live on less than 2 dollar a day.

#2 Over the past year, the global price of food has risen by 37 percent.

#3 Just about every major agricultural commodity has been skyrocketing in price.  Check out what a recent Bloomberg article had to say about what has been happening to many key agricultural commodities over the past year….

Corn futures advanced 77 percent in the past 12 months in Chicago trading, a global benchmark, rice gained 39 percent and sugar jumped 64 percent. There will be shortages in corn, wheat, soybeans, coffee and cocoa this year or next, according to Utrecht, Netherlands-based Rabobank Groep. Prices also rose after droughts and floods from Australia to Canada ruined crops last year. European farmers are now contending with their driest growing season in more than three decades.

#4 According to the World Bank, 44 million more people around the globe have been pushed into extreme poverty since last June because of rising food prices.

#5 Sadly, rising food prices is not a new trend.  According to the UN Food and Agriculture Organization, the global price of food has gone up by 240% since 2004.

#6 To a large extent, this global food crisis has been brought on by the greed of the wealthy.  A study by the World Institute for Development Economics Research discovered that the bottom half of the world population owns approximately 1 percent of all global wealth.

#7 The average income per person in the poorest countries on the continent of Africa has fallen by one-fourth over the past twenty years.

#8 It is estimated that over 80 percent of the world’s population lives in countries where the income gap between the rich and the poor is widening.

#9 Approximately 1 billion people throughout the world go to bed hungry every single night.

#10 Every 3.6 seconds someone starves to death and three-quarters of them are children under the age of 5.

#11 It is estimated that the entire continent of Africa only owns approximately 1 percent of the total wealth of the world.

#12 According to the most recent “Global Wealth Report” by Credit Suisse, the wealthiest 0.5% of the global population controls over 35% of all the wealth on the planet.

Those of us that live in wealthy countries have it really good.

We get to shovel huge amounts of food into our faces whenever we want.

But eventually things are going to change for us as well.

Global food supplies are getting really tight.  If something does not change we are going to have some real problems.

Renowned investor Jim Rogers recently put it this way….

“We’ve got to do something or we’re going to have no food at any price at times in the next few years.”

We all saw what happened during the aftermath of Hurricane Katrina and during the aftermath of the tsunami in Japan.  When a major crisis occurs, food can disappear from store shelves overnight.

The frightening thing is that global stockpiles of food continue to go down.  Just check out this report from a recent Financial Post article….

Global stockpiles of corn, the most-consumed grain, are forecast to drop to 47 days of use, the fewest since 1974, data from the U.S. Department of Agriculture show. Inventories are declining as demand continues to outstrip production that’s forecast to rise to a fifth consecutive year of record.

Most Americans simply do not understand how close we potentially are to a major global food crisis.

Hopefully we will not see one any time soon.

But you might want to get ready just in case.

 

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