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Monday, April 21, 2014

Economic Stories of Relevance in Today's World -- April 20, 2014

Are You Ready For The Price Of Food To More Than Double By The End Of This Decade? - The Economic Collapse Blog - Michael Snyder - April 18th, 2014 - Do you think that the price of food is high now?  Just wait.  If current trends continue, many of the most common food items that Americans buy will cost more than twice as much by the end of this decade.  Global demand for food continues to rise steadily as crippling droughts ravage key agricultural regions all over the planet.  You see, it isn't just the multi-year California drought that is affecting food prices.  Down in Brazil (one of the leading exporters of food in the world), the drought has gotten so bad that 142 cities were rationing water at one point earlier this year.  And outbreaks of disease are also having a significant impact on our food supply.  A devastating pig virus that has never been seen in the U.S. before has already killed up to 6 million pigs.  Even if nothing else bad happens (and that is a very questionable assumption to make), our food prices are going to be moving aggressively upward for the foreseeable future.  But what if something does happen?  In recent years, global food reserves have dipped to extremely low levels, and a single major global event (war, pandemic, terror attack, planetary natural disaster, etc.) could create an unprecedented global food crisis very rapidly.
A professor at the W. P. Carey School of Business at Arizona State University named Timothy Richards has calculated what the drought in California is going to do to produce prices at our supermarkets in the near future.  His projections are quite sobering...
  • Avocados likely to go up 17  to 35 cents to as much as $1.60 each.
  • Berries likely to rise 21 to 43 cents to as much as $3.46 per clamshell container.
  • Broccoli likely to go up 20 to 40 cents to a possible $2.18 per pound.
  • Grapes likely to rise 26 to 50 cents to a possible $2.93 per pound.
  • Lettuce likely to rise 31 to 62 cents to as much as $2.44 per head.
  • Packaged salad likely to go up 17 to 34 cents to a possible $3.03 per bag.
  • Peppers likely to go up 18 to 35 cents to a possible $2.48 per pound.
  • Tomatoes likely to rise 22 to 45 cents to a possible $2.84 per pound.

Behind the cornucopia of higher food prices - CNBC - John W. Schoen - April 19, 2014 - Alert shoppers are accustomed to watching food prices go up and down. But a string of forces—from droughts to diseases—is raising the cost of a trip to the grocery store at a rapid clip.                        And it looks like it will be a while before the price pressure eases.                         Some of that pressure is coming from California—the source of roughly half the nation's fruits and vegetables—where a long-running drought is forcing farmers and ranchers to cut production. After the driest year on record, large sections of farmland are expected to lay fallow this year as the Golden State copes with an ongoing water crisis...                       Smaller cattle herds have forced meat prices higher in March—up more than 5 percent from a year ago, as demand remained strong despite tightener supplies. Ranchers are getting higher prices for cattle and food companies are able to pass them along..                             Pork prices also have been rising after higher feed costs last year forced hog farmers to cut production. The upward price pressure on pork intensified this winter when a deadly virus thinned pig herds. That's expected to bring even higher prices for this summer's grilling season, when demand typically picks up...                         "I think consumer should expect record high meat prices his year," Tyson Foods CEO Donnie Smith told CNBC last month. "You should expect to see very high prices for your ground beef, your other meat cuts, all the pork cuts will be higher this year."   (Check out the maps of interest at the link provided).

Soaring Food Inflation Full Frontal: Beef, Pork And Shrimp Prices Soar To Record Highs - Zero Hedge - Tyler Durden - April 15, 2014 - We previously noted that both beef and pork (courtesy of the affectionately named Porcine Epidemic Diarrhea virus) prices have been reaching new all time highs on an almost daily basis. It is time to update the chart. Below we show what a world in which the Fed is constantly lamenting the lack of inflation looks like for beef prices...

... pork

... shrimp

18 Stats That Prove That Government Dependence Has Reached Epidemic Levels - The End of the American Dream - Michael Snyder - April 17th, 2014 - Did you know that the number of Americans getting benefits from the federal government each month exceeds the number of full-time workers in the private sector by more than 60 million?  In other words, the number of people that are taking money out of the system is far greater than the number of people that are putting money into the system.  And did you know that nearly 70 percent of all of the money that the federal government spends goes toward entitlement and welfare programs?  When it comes to the transfer of wealth, nobody does it on a grander scale than the U.S. government.  Most of what the government does involves taking money from some people and giving it to other people.  In fact, at this point that is the primary function of the federal government.                     Just check out the chart below.  It comes from the Heritage Foundation, and it shows that 69 percent of all federal money is spent either on entitlements or on welfare programs…

Why Jesus Was REALLY Killed: Challenging the Money Changers - WashingtonsBlog - - Preface: If you are an atheist and believe that religion is crazy, please remember that some 85% of the American population identifies itself as Christian and millions more identify themselves as Jewish. Very few Americans are atheists … and the majority don’t trust atheists. Therefore, knowing a few bible verses might be helpful for atheists speaking to people of faith...

The big banks have engaged in systemic, continuous ongoing criminal fraud.                Allowing the banks to commit crime with impunity is not what Jesus would do. What would Jesus do? Turn over the tables of the money-changers. (economists agree.)                 Moreover, the giant banks manipulate currency through the use of schemes such as manipulating interest rates (gaming interest rates in different regions – Libor, Eurobor, etc. – can in turn drive their currencies up or down), high frequency trading and artificially suppressing gold prices (which artificially inflates the value of fiat money) ...                            The Bible condemns oppression of the poor for the benefit of the affluent: He that oppresses the poor to increase his riches, and he that gives to the rich, shall surely come to want. (Proverbs 22:16)                       To the extent that the giant banks have oppressed the poor to increase their riches, they are violating scripture.                          Due to their looting, inequality is now worse in American than in Egypt, Tunisia, Yemen, most Latin American banana republics … and ancient Rome...

How The Recession Changed America's Car-Buying Attitudes  - Forbes - Micheline Maynard - April 17, 2014 - EDITOR’S NOTE: Forbes has just published Curbing Cars: America’s Independence From The Auto Industry, an eBook investigating why a growing number of Americans are giving up their cars. Written by Forbes contributor and former New York Times Detroit bureau chief Micheline Maynard, this illuminating account of our changing automotive habits is available for download now. Here’s an excerpt looking at the impact of the recession on attitudes towards automobiles.                             It’s easy to blame the economy as a reason why some people have declared their independence from their automobiles. Six years after the worst times in recent memory, a good share of the people hit by the recession still have not recovered, and as with their parents and grandparents, may never recover from the psychic impact of what roiled the country.                     The changes these consumers made during the worst of the recession have become permanent parts of their lives. Even as the stock market soared in 2013 and 2014, and as some economists declared that America had recovered (statistically at least), the feeling that all could be lost at any moment still resounds in a number of corners.                         Plenty of evidence supports that feeling, and the economy provides a major reason why people have cut back on driving, looking instead at other types of transportation. But when I say the economy, I don’t simply mean macroeconomic indicators.                 If the economy alone explained the drop in vehicle miles traveled, the number by now would have rebounded to pre-recession levels. But annual sales have not yet reached their previous highs, and in fact, the percentage of working adults buying new cars is also below where it stood 10 years ago. (See the statistics in the Curbing Cars ebook.)                                  Automobiles, which have never been higher quality, were an easy place to cut back. For those whose pride depended on owning the latest model, such economizing might have stung. But for families who needed to count every penny, they could stretch the life of a dependable car for another year, or two, or three, or indefinitely.                          The average price of a new vehicle now hovers around $33,000, which can easily mean payments of $500 or more a month, without some kind of subsidized deal.

La-Z-Boy cutting 100 jobs in North Carolina - AP through Detroit Free Press - April 17, 2014 -
MONROE — La-Z-Boy Inc. is closing two facilities and eliminating 100 jobs in North Carolina as part of a larger restructuring of its business.                  The Monroe-based furniture maker said Wednesday that it will idle two North Wilkesboro facilities and put them up for sale. It will move warehouse and repair functions from those sites to another North Carolina plant, in Hudson.                 La-Z-Boy is ending production of some of its bedroom furniture at the Hudson facility in the quarter that ends in October in 2014, as it shifts to importing all of its wood furniture.                      The company said that its North Carolina facility was too big given the level of demand in the U.S.
It also plans to exit a division that sells furniture to hotels and will put its youth furniture business up for sale.                       As a result of these changes, the company expects to take $13 million to $15 million in pre-tax charges, or 15 to 17 cents per share after tax, over the fourth quarter and first half of its next fiscal year.

Are more job cuts coming at Wake Forest Baptist Medical Center? - Triad Business Journal - Amy Dominello Braun - April 14, 2014 - More cuts — including layoffs — could be announced at Wake Forest Baptist Medical Center as early as this week, the Winston-Salem Journal reports.
Sources tell the newspaper that between several hundred to 1,000 positions could be eliminated.
In late 2012, the Winston-Salem medical center began trimming 950 jobs, about half of them filled, a move that played out through the first half of 2013.                        The medical center has 13,000 full- and part-time employees and is the largest employer in Forsyth County.                      A statement issued to the newspaper said the medical center was in the midst of its budgeting process and it would be premature for officials to comment.

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