The smartest investment of the decade

http://www.sovereignman.com/expat/the-smartest-investment-of-the-decade-9556/

AGFLATION: World food prices surge to an all-time high

Inflation and food shortages:  unintended consequences of loose monetary policy, courtesy of the Fed.


http://www.thedailycrux.com/content/6609/Inflation/eml

Volcanic ash

http://volcanoes.usgs.gov/ash/agric/index.html

http://www.youtube.com/watch?v=C30AYe2xhFA

These are links to publicly available information. Perform your own due diligence.

Dr. Doom gets even gloomier

Here is Dr. Marc Faber's latest forecast. Hide the wife and kids.

http://www.bi-me.com/main.php?id=42214&t=1&c=35&cg=4&mset=1011

Drought in California

Despite heavy rains so far in 2009, California has experienced a devastating 3-year drought. Many farmers from the central valley have let crops die, or chose to irrigate with water costing $600/acre vs. the normal $30/acre.

From Fiona Ma, San Francisco City Councilwoman on her Facebook profile:

At the San Luis Dam with a ton of folks. We need water reform. Farms are drying up, we r losing jobs & economic $. Awaiting the Governor.

My translation: buy agriculture (crops, fertilizer), and water companies--equipment (pumps, filters) and technology (desalinization).

The economy, the dollar, and Wall Street bonuses

Jim Rogers told a crowd in Hong Kong that holding U.S. government bonds is a "big mistake" and will "end badly."

"If I were you, I would be worried about the U.S. dollar," said Rogers. "The Americans are printing U.S. dollars. The Americans are going to do whatever they can to revive their economy, even if it means destroying the U.S. dollar." Rogers favors holding agriculture, power generation, Chinese stocks, and the yen.

According to analyst Porter Stansberry:

While Americans are right to worry about the stability of the dollar, at least we don't have to worry about our currency disappearing overnight.

Over in Euroland, spreads on different European government debts are widening sharply, revealing the markets believe the euro will come unraveled as countries exit the currency union. Bonds issued from Greece are now trading at nearly 300 basis points over similar German bonds – the widest spreads between euro-member government bonds since the currency was introduced in 1999.

Less than four months ago, the 10 largest U.S. banks by asset size had a combined market capitalization of $722.73 billion, according to American Banker. As of January 20, it stood at just $237.83 billion, a drop of approximately two-thirds.

I wonder which of those numbers is closer to the real intrinsic value of those banks? It's probably good for the banks and the people who run them that nobody knows exactly what they own or has any clue what it's all worth.

At the end of 2007, the five largest U.S. securities firms paid their employees $66 billion in bonuses. All of it came from "profits" that we've since learned were horrendous losses. With the writeoffs from just these five firms now totaling much more than $100 billion, at what point do you begin to judge what these people did as not merely reckless and negligent, but calculating and criminal?

They had to have known by at least the end of 2007 that most of their mortgage securities were cooked. And yet, they took the biggest bonuses in the history of Wall Street, leaving taxpayers to pick up the mess

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