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| The ‘slower’ global economic growth comments from the G7 meeting triggered some trip wires yesterday as did the mini meltdown in the equities markets.
I am reviewing these acreage projections of late last week and while not yet refined, the preliminary data suggests uncomfortably tight USA supplies.
While the price of crude oil is of major concern to world policy-makers, it would be most fool hardy to assume they are not also looking at the price of bread. We are within global markets, the next step is to review other areas of the world vulnerable to supply and/or demand disruption.
The yesterday ‘shot across the bow’ in regard to a possible 50% tariff on USSR wheat is either a political balloon or may become reality, who knows? I do have an acquaintance who operated a tanker brokerage in Moscow for several years & he indicates the leverage which will be used in regard to their oil supplies will happen, sooner perhaps than later. His private view is the Western world will, in the not too distant future, look at $100 oil as cheap. I caution this is his private opinion. While he owns agricultural property in the USA, he recently began a large energy self-sufficient residential development in Panama, is moving there, as he and his wife are 65+ and desires low taxes, a stable economy (area is fast becoming a major financial center), and a constitution modeled after the USA.
I located my old charts from the 1973-77 period and am reviewing them, carefully; I continue to maintain the view we are yet in the midst of an aging big bull market of which has not yet put in a final top, but it is time to be cautionary. I feel the next days and few weeks are critical. The soybean market is hampered by the presence of a large speculative long open interest; wheat is hampered by a prevailing opinion the 'top is in.' Corn struggles in a area of large price resistance. Additional back and fill or shakeout may yet be required.
There are a lot of hot irons in this bed of coals and am not convinced of our capability in addressing some of these matters. Too often, some of us assume our policy makers ‘know what they are doing.” That, of course, has proven fallacious as we seem to do a lot of ‘reacting’ to events versus strategic planning.
Perhaps some will recall the great debate during the LBJ term in regard to spending: can’t have Guns and Butter’ absent some economic impact. I don’t read much of this type of commentary anymore even though our spending seems out of control. Therefore, in reviewing some thoughts of “folks actually on the ground” in a couple of the current hot areas, I believe it is prudent to include in our thinking we continue in the midst of an international mess. While I try to keep my opinions close to my vest I do recall, as an adolescent, neighbors taking turns to man platforms to ‘watch the sky for unidentified aircraft.’ Today, that seems absurd, but those were the times.
Opinion One Excerpt
But it would be unwise to dismiss the Turks’ saber-rattling as nothing more than a school-yard test of nerves. This is a very serious problem for the U.S. since 70 percent of all American air cargo bound for Iraq passes through Turkey, mainly through the Incirlik Air Base, a crucial logistical hub for U.S. forces. And the Turks clearly know who their friends are. Or at least they’re saying they do. Ankara has said that just because Wednesday’s vote in parliament authorizes cross-border incursions, they’re not imminent. All the big players involved - Iraq, Turkey and the United States went to great pains to play down an immediate invasion.
Opinion Two Excerpt
The remote and inaccessible mountains in Turkey, Iran and Iraq have never been the exclusive territory of one state. These are dark and difficult mountains where anyone can hide but no government or force can find. Therefore, the transfer of Turkish Kurdish guerrillas to one of Iraq’s mountains does not mean that the nearly 30-year old Turkish crisis has immediately become an Iraqi issue, with its consequences boomeranging on the conditions in the country as a whole. In the shadow of U.S. occupation of Iraq, this issue cannot practically be separated from the U.S. agenda. Ankara can directly negotiate with Washington over the Turkish Kurdistan Workers Party or PKK because the Americans are the ones who possess a good picture of PKK’s movements and horizons. And Ankara should remember that the American side has outstanding interests in Turkey whose tide may rise and ebb depending on circumstances. This state of affairs became quite clear when the Turks turned down a U.S. request to use the Incirlik Air Base for attacks on Iraq in 2003. A few days ago, the strain in relations entered a new stage when a U.S. congressional panel, in defiance of President George W. Bush, approved a measure calling the killings of Armenians early in the last century “genocide.” There are obviously a number of cards whose use the two friends and allies have opted to defer for the time being. They may not become enemies but certainly these cards will introduce a new concept to their alliance.
Soldier just returned from Iraq.
During my own yearlong tour in Iraq, the bad boys of Blackwater twice came closer to killing me than did any of the insurgents or Al Qaeda types. That sort of thing sticks with you. It enraged me ... and Blackwater is, at least nominally, on our side. But imagining that incident from an Iraqi perspective made it clear to me that though Blackwater USA draws its paycheck from Uncle Sam, it's not working in Uncle Sam's best interests. If I was this angry, I can only imagine the reactions of the tens of thousands of Iraqis who encounter Blackwater personnel on a regular basis.
Excerpt from latest Pat Buchanan Column:
At the Cold War’s end, the United States was given one of the great opportunities of history: to embrace Russia, largest nation on earth, as partner, friend, ally. Our mutual interests meshed almost perfectly. There was no ideological, territorial, historic or economic quarrel between us, once communist ideology was interred.
We blew it.
We moved NATO onto Russia’s front porch, ignored her valid interests and concerns, and, with our “indispensable-nation” arrogance, treated her as a defeated power, as France treated Weimar Germany after Versailles.
Point: we are stretched thin, the world is walking a supply tightrope which could, if certain events are disruptive, place bread on the same supply/demand list as oil. But, some of the clouds may clear shortly.
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Thoughts
