We know that Federal Reserve Chairman Ben Bernanke has stated "The worst may be over"-, and he may be right, but with floods disrupting the Mid-West and crops being lost on a massive scale, his predictions seem to be optimistic at best, and downright deceptive at worst! The United States wheat stocks are at an all time low, and now the US is being criticized for donating less wheat than usual, however, Americans need to eat too - and while we need to assist other countries that are suffering from famine and high food prices, we cannot allow ourselves to wind-up with a shortage that could easily become a national security issue! The recent flooding, which is massive, is adding to an already dire forecast of this year's harvest, and Chuck Hagel's remarks to Congress bear-out the possibility that food prices in the US, in conjunction to gas prices that are adding to the misery of millions of Americans could easily get much worse in the coming months:
SENATOR HAGEL EXPLAINS DIRE STRAITS FACING U.S. FARMERS
Supply & demand reports and private market analyses inform market participants about weather situations impacting wheat supply, but hearing the facts delivered on the floor of the U.S. Senate can drive home the utter enormity of challenges facing the American farmer. This week, Senator Chuck Hagel spoke about the severe drought gripping much of the nation.
"Last week, I met with farmers and livestock producers in Nebraska, and witnessed firsthand the devastation caused by this drought,"- Sen. Hagel explained. "For many agricultural producers - in Nebraska and throughout America - hope is gone for this growing season. Their crops are wilted and their pastures are scorched and bare."-
Hagel then itemized the factors in the drought situation. "Drought is not just a Nebraska problem. It is a national problem. According to the National Drought Mitigation Center at the University of Nebraska in Lincoln, about 15% of the country experiences drought in a typical year. Today more than 40% of the country is suffering a drought."- MUCH MORE
In the same report cited above, it states the US just sold "275,000 metric tons of wheat from the Bill Emerson Humanitarian Trust last week"-, and when you consider that US grain reserves are at an all-time low, we may be facing massive food shortages ourselves if Mother Nature keeps up her rampage:
U.S. Has No Remaining Grain Reserves
Posted by Mark Frauenfelder, June 10, 2008 1:17 PM
Is the U.S. Running out of emergency grain reserves?
"According to the May 1, 2008 CCC [USDA's Commodity Credit Corporation] inventory report there are only 24.1 million bushels of wheat in inventory, so after this sale there will be only 2.7 million bushels of wheat left the entire CCC inventory,"- warned [Larry Matlack, President of the American Agriculture Movement (AAM)].
"Our concern is not that we are using the remainder of our strategic grain reserves for humanitarian relief. AAM fully supports the action and all humanitarian food relief. Our concern is that the U.S. has nothing else in our emergency food pantry. There is no cheese, no butter, no dry milk powder, no grains or anything else left in reserve. The only thing left in the entire CCC inventory will be 2.7 million bushels of wheat, which is about enough wheat to make 1?2 of a loaf of bread for each of the 300 million people in America. LINK
After reading the above information, consider this report from The Royal Bank of Scotland:
RBS issues global stock and credit crash alert
By Ambrose Evans-Pritchard, International Business Editor 6-18-08
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.