Knowing Your Local Farmers

Photo by Watershed Post

Meat recalls... I get bulletins almost every day from FSIS (the USDA Food Safety and Inspection Service) about meat recalls. It's disgusting. This month, Cargill recalled 29,000 pounds, (more than 14 tons) of ground beef as a salmonella outbreak sickened dozens of people in seven US states. 

I follow a blog about permaculture written by a medical doctor serving in the US military, and he also writes for AgriTrue.com, where he posted some interesting comments about beef recalls.

"First, this is a lot of meat. I wondered how many steers (or old dairy cows) it takes to make 14 tons of ground beef. This is not such a simple question to answer. Was the beef made from mostly old dairy cows, which would be used almost entirely for ground beef, or was the beef from large-breed, healthy steers, which would be used for steaks, roasts, and other cuts, with a much smaller portion going into ground beef production? Let’s for arguments sake pick a weight number somewhere in the middle of the two realms… 500 lbs. This would mean that it would take 56 animals to produce 14 tons of ground meat.

Unfortunately, this recall pales in comparison to the 71,500 tons of beef recalled in 2008. Using our math, that would be over 280,000 animals “wasted”.  

 

I also thought about how these types of recalls are really a product of large scale agriculture. Is there anything inherently wrong with large scale agriculture? Well, I don’t know. I do know that there are a lot of problems that arise from the practices associated with it. I know that there is a lot of waste. I know that there is a lot of environmental damage. I know that the product being produced is typically far inferior in flavor and nutrition. I know that when a mistake is made, that mistake is proportionately as large as the corporation behind it. So, yeah, maybe there is something inherently wrong with large scale agriculture.

Now, I also had to admit that there can be contamination and illness issues from small, local producers. However, these issues are going to be significantly smaller. They will affect substantially fewer people. In addition, when it is a smaller operation, fewer mistakes are made. This is just logical. When you are only processing five animals from your farm, you will have much greater attention to detail. Your mind won’t start to drift and daydream because you are doing something new the whole time. You will not be lulled into autopilot as you do the same thing over and over again. Unfortunately, this is exactly what happens on the factory floors of the large animal processing facilities. Of course I understand that the small scale beef producer rarely processes his own meat, but the point is that smaller is usually safer."

His point is well taken by me. I buy beef from a man who slaughters only half a dozen beef a year. I know how he raises them, and I know how he amends the soil that grows the grasses they eat. I don't much like the processing facility he uses, but it's the only one for many, many miles around. (The USDA inspector has a permanent office there.) They make as much money from the non-meaty parts (offal, hides, hooves, etc.) sold to outside buyers as they do processing the meats for local farmers.

This leads me into our drought conditions and the price of feed for CAFO beef, which are mostly grain-fed, but that's for another post. 

The 99 Percent Declaration

I've been watching the growing "Occupy" movement for several weeks with some curiousity, even though there seemed to be no particular agenda. Now a Working Group that includes pro bono lawyers and university students arrested in NYC for their peaceful demonstrations, have drafted The 99% Declaration. 

I will be following this closely because among other things, it addresses the greed prevalent in corporations that affect the laws of this country via political contributions and influence, which means they affect me. (Think BigAg, BigPharma, etc.)

The Working Group wants to draws up a formal petition of grievances voted by to-be-elected representatives of all congressional districts. The US Constitution provides for a petition of a list of grievances to present to the government, but apparently by Constitutional Law only a duly elected body can legitimize a list of demands from the People. Their proposal is only a starting proposal and sample list of just demands on the government, plus how they hope to accomplish it via elected representatives.

Their posted sample proposal includes a fair tax across the board (and cutting ALL tax loopholes), eliminating the contributions (open or hidden) that buy politicians, and a host of other proposals that sound sensible to me, from the War Machine to Health Care and Jobs. 

I encourage you to read the whole declaration... it's short and to the point. Who knows, it may even gain wide-spread support!

Federal Reserve Ponzi Scheme?

Recently CNBC reported that the Federal Reserve bought aprox. 80% of the US Treasury securities issued in 2009.

What does that mean? Well, when the US government needs more money, they go to the Federal Reserve Bank (a PRIVATELY-owned bank, not government-owned bank). The Federal Reserve prints some greenbacks (Federal Reserve Notes... look in your wallet), and the US government issues US Treasury notes (called T-Bills) for the same amount in return.

Normally the Federal Reserve sells these Treasury notes, but last year no one wanted to buy many, so the Federal Reserve sold itself about 80% of them. Now, please note that the US Treasury notes are normally sold at a discount, but pay interest.

So the Ponzi scheme is this: the Federal Reserve creates 'money' out of nothing but a printing press and special paper. Then they loan those greenbacks to the US Government for interest, and 'buy' back the US Treasury notes which also pay interest. If they sell them, great. If they don't sell them, they are out some paper and ink, and the government still owes the full value plus interest.

Nice gig, eh?

Selling an Idea

Sometime back in my career days, I was in a workshop and this example about selling an idea came up. The tale (back in the days of the Cold War) goes like this:

The Russians and the Americans met at a bargaining table. The Russians put their demands on the table, and the Americans became indignant saying, "No Way"... and walked out.

A year later they met again, and the Russians put the same demands on the table. The Americans refused them, and left.

Six months later, they met yet again. The Russians put the same demands on the table, and after some consultations, the Americans agreed to think about it.

The point? When we first hear something that seems unacceptable, we dismiss it. When we keep hearing it over and over, we become more used to the idea. Eventually we come to believe it.

Keep that thought in mind as you hear glowing reports on the news; carefully re-check the reality around you for comparison. Are houses selling in your neighborhood? Are folks finding jobs again? Are your banks lending?

Do These Dots Connect?

I've spent several days reading and trying to understand the Derivatives Market, and I still barely have a clue. I do not begin to qualify as any kind of financial analyst, but I do read. And, some things stand out in recent news making me wonder if there is any connection between them?

First, we all know China holds a huge stake in the USA. I don't know how much of a stake, and I'm not sure I want to know.

Then last week China made this blip on the Financial Market radar: “BEIJING, Aug 29 (Reuters) - Chinese state-owned enterprises (SOEs) may unilaterally terminate derivative contracts with six foreign banks that provide over-the-counter commodity hedging services, a leading financial magazine said.

China's SOE regulator, the State-owned Assets Supervision and Administration Commission (SASAC), had told the financial institutions that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying, "On September 1, 2009 Reuters said that the Banks, not the commodities would be at risk if China followed through."

Then, in several other unrelated reports:

1. Sep 3 HONG KONG (MarketWatch) -- Hong Kong is pulling ALL its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at Hong Kong's airport, in a move that won praise from local (Chinese) traders Thursday.

2. China pushes silver and gold investment to the masses.

3. The IMF (International Monetary Fund) said last Wednesday China has agreed to purchase approximately $50 billion worth of bonds denominated in Special Drawing Rights (SDR's, the IMF's own currency), a fundraising effort that is part of a broader push to bolster the IMF's resources.

Many analysts had expected China would sell some of its more than US$2 trillion in foreign-exchange reserves to buy the IMF bonds, in order to reduce its exposure to the U.S. dollar. But according to the agreement posted on the IMF Web site, China will use its own currency, the RMB, called the renminbi.

"The addition of the SDR-denominated bonds to China's assets should help the nation painlessly diversify its foreign-exchange reserves, the world's largest. U.S. dollar assets now account for a good portion of their reserves, but because China's positions are so large it would be difficult for it to switch out of the dollar and into something else without causing market turmoil."

In a research note, Barclays Capital economist Wensheng Peng said the currency used for China's payment will eventually come back into China, as the funds are lent out to member nations who then convert them to major currencies such as the dollar.

4. ChinaDaily ran this story: The national flag of the People's Republic of China (PRC) will be hoisted at the South Lawn of the White House in Washington on September 20, 2009.

Chinese associations in the United States had applied to hold a ceremony in front of the US President’s residence to celebrate the 60th anniversary of the founding of PRC.

Chen Ronghua, chairman of Fujian Association of the United States, told reporters that their application was approved not only because of the sound Sino-US relations but also because China is a responsible country.
"Many Americans admire China due to the success of last year’s Beijing Olympics," said Chen.

More than 1,000 people will attend the ceremony and the performances held after it, according to Zhao Luqun, who will direct the performances. Zhao said the performances will demonstrate the friendship, magnanimous spirit and kindness of modern Chinese people.

5. That brings me to the IMF itself, the World Bank, and other IFI (International Financial Institutions). These groups control the world's finances. All the loans are made with strings attached, and usually as political as monetary. They controlled all the world's money, until recently... and now, still "mostly" although there are other movements rising on the wind that may affect each of us.

Understanding the history and global reaches of monetary policies a bit better just might help each of us individually, and I will cover some of it in another post.

But for now, I would buy gold (if I had any money!). Not investments in gold funds, but real gold (coins, mini-bars) to have in your own possession. It is a valid, world-wide medium of exchange. The Wall Street Journal reports gold just increased another 2.3% as the USD continues to drop.

Fed urges secrecy on banks in bailout programs

Remember just a couple of days ago I said that I have noticed that almost all the bank closings have been announced after banking hours on a Friday... and some kind of shell game going on?

Well, now Reuters reports that the Fed has gotten a delay in revealing bank information requested under The Freedom of Information Act.

"NEW YORK, Aug 27 (Reuters) - The U.S. Federal Reserve asked a federal judge not to enforce her order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received, saying such disclosure would threaten the companies and the economy.

The central bank filed its request on Wednesday, two days after Chief Judge Loretta Preska of the U.S. District Court in Manhattan ruled in favor of Bloomberg News, which had sought information under the federal Freedom of Information Act.

Underlying this case and a similar one involving News Corp's (NWSA.O) Fox News Network LLC is a question of how much the public has a right to know about how the government is bailing out a financial system in a crisis.

The Clearing House Association LLC, which represents banks, in a separate filing supported the Fed's call for a delay. It said speculation that banks' liquidity is drying up could cause runs on deposits, and trading partners to demand collateral.

The next day after the above story, Rueters posted the update story that the Fed’s received a delay. Preska directed the Fed's board of governors to file a notice of appeal and an emergency stay application with the 2nd U.S. Circuit Court of Appeals.

The Fed was not immediately available for comment."

My thought is that the money the government is using is our money, and we have a right to know how it is being used. 'Nuff said.