Perhaps you should ask, how long until we become a third world country?

I wrote this last night.

Sabbath eve, December 5, 2008

The first real killing freeze will arrive tonight; we’ve had frosts but this is the real deal. All warm season plants that have not succumbed to the cold, will tonight. For those of you that live further north, you’d consider this a minor event. It’d suggest cold is cold.

I have to watch for compaction colic in weather like this. Horses sometimes don’t drink enough water with the first cold spell—lack of moisture and a belly full of dry hay stops them up. Colic kills horses.

On the way home from Belmont I saw a panhandler walking down the road with a backpack and a plastic five gallon bucket in hand. I wonder where he’s spending this night? How will he stay warm? Peraps I should ask, Will he stay warm?

The newspaper told me we graduated from extreme drought to exceptional drought; the drought map shows a red hole right in the middle of my state. Of course, I didn’t need the newspaper to tell me that.

Pastures are parched. I sold (and loaded) almost 500 bales of hay today at a dollar per bale less than the same hay sold for picked up out of the field earlier this year.

Why sell at that price?

With the drought there’s a shortage of hay. But there’s an overriding shortage of money that seems the more powerful force at the moment. Or perhaps it’s a shortage of confidence that has people hoarding money. Either way, price something too high, it will sit unsold.

Calves that brought $1.40 a pound six months ago now fetch 80 cents a pound. If not, then less. This Wednesday a full-sized horse sold for $50 through the sale ring. A burro sold for $3. The coggins test required to legally sell a horse or burro costs $35. Then there’s the sales commission…

The corn I didn’t want to sell for $5.70 a bushel (thinking the price too cheap) is now valued at $3.09; oil an abysmal $40 a barrel. I don’t know about anyone else—what I do know is that I cannot produce these products at these prices.

I am told the US spent less on Christmas gifts than any time in the last 35 years. That, without adjusting for inflation.

ABC’s Charlie Gibson said over 500,000 people officially lost their job last month on the evening news.

Of one thing I am sure. The real number is higher.

Tim Ervin, a horse trainer I know came by to pick up a check. He says Retama Park, the race track in San Antonio is a graveyard. A gallop hand he knows only got 9 rides for the week. Normally he’d gallop nine or more horses in a single day. Nine rides times $10/ride. The man earned $90. He is employed.

Trainers have horses that need to be galloped, but the horses’ owners have stopped paying their bills. Luxury items are the first to fail in a market like this.

The trainers are employed. They may not be getting paid but they are employed.

The stock market gained over two hundred points.

Nice to see our goddamned government cared enough to bail out Wall Street.

People ask, “What will happen?”

Well, I never would have guessed that oil would sell this cheap again, that grain would be this cheap. I am learning the law of supply and demand does not function in this economic climate. So I am not the one to ask.

But if you require an answer, here’s the best I can come up with:

Expect the unexpected.

These are strange and I fear, terrible times.

I would like to reply to this but there is so much angst in the posters comments that I am hesitant.

I mostly speak on TOD of the hinterlands and what I see here in Ag.

In 2007 hay was unfindable and almost unbuyable. The prices were astronomical. A large round bale could be sold for over $100 in Florida and some here took bales to Florida to sell but we ran out here. We ran out real real bad. I used to bale and sell a lot of hay but gave it up as a losing proposition back in the 80's. I even gave away a 24 acre field last year that produced 60 round bales. Gave it away to get it cut but if I had kept it? I wouldn't have owed a single penny to anyone after selling it. I was out of my mind to give it away as I found out when the real crisis hit. Due to the spring of 2007 and the winter preceeding it when all the wheat was lost,the same events shattered the hay crops.

So it goes. Right now all bets are off. I am expecting something unplanned for 2009 and maybe worse.

"Times are strange"? Indeed they are becoming stranger as unexpected events twist thru the time continuum and wreck havoc in unplanned ways.

Some observations: No birds. They appear to all be pretty much gone.
No geese sighted and by now I would have seen many v wings flying overhead. Not a single honk have I heard so far and last year it was bad but not this bad. I live right close to a flyaway. A very big one.

No ducks to speak of. Woods ducks used to overfly my ponds and raise young there. No more wood ducks do I see. Zippo. Nada.

I think someone is surely realizing something is very wrong! But no. Its not getting much play. Just like the honey bees.

We are right now utterly destroying this planet. Way way beyond tipping points. We have no one really to fight this madness.

I once expected our countries youth to mount up in protest and assemble. They won't. They weren't raised in such a manner as to go that route.

We are alone. All of us old codgers. Those who protested in the 60s?
They won't be doing anything for their time has come around and now gone. They can just dream of how it once was.

Todays yuppies and genXers are going to do nothing. They were raised to let other people take care of their wants and needs. They kissed mgmt ass for far too long to view it otherwise. They believe in the mighty gummint.

So be it. Ka has spoken(whatever that is). We have no sinews left in us. It would likely do no good anyway. The tragedy has gone on too long. Too deep it has ran and far too wide.

Who can bring back wildfowl or honey bees or the big grandfather oak trees or the wild nut trees or even stop the relentless cutting and destruction? No one.

Ag is busy stripping out the land. The runup in grain prices brought this on. The dollar seems to be all that anyone cares about.

Airdale-who hears in the background the haunting strains of 'Waltzing Maltilda'....and wonders...

Thanks Airdale -

I appreciate your posts. (I almost said "I love to read them..." but to love to hear that which you observe would be perverse.) There's been some discussion of hunting in the last week. I believe, based on my experiences and knowledge, that folks are completely deluded if they think ANY edible North American creature could last more than 1 season if even a fraction of our current population decided it was time to hunt and gather.

One thing humans do well is to hunt. Our state of overshoot would be abundantly clear in about 2 days if even a fraction of the population made an effort. This goes for any resource - deer to mushrooms, ducks to trout. We could drive any species to extinction in 2 or 3 years. Fantasies about living off game are just that, utter fantasies.

Fried Green Tomatoes ... it'll be like that.

Funny thing is- lots and lots of deer running around here, everybody has killed one with a car, usually to tune of big bucks for repair ( groan!), and yet people who bitch about too many deer DON'T hunt them!

Right at the moment I have three split carcasses hanging in my coldcave, awaiting my work, and a lot more of my wife's work, to put them into nice little bags for the year's meat.

I tell people we eat no meat but deer and chickens. They shudder in disgust, as if I have confessed to cannibalism-- Jeez. I am sure that in need they would eat deer, or for that matter, rats -or students, but not now, still high on petroleum, they scorn anything but fat sizzling beafsteak.

So, I agree with Orlov- the higher we are flying now, the harder we hit the rocks when we run out of juice. So, for goddssake, people, let's get down to a lower altitude fast, please.

But then I keep coming back to that old bad, bad thought lying back there in my reptile brain- maybe people aren't worth saving anyhow.

My lifestyle doesn't include hunting ATM, but I have in the past and probably will in the future.

Some of my community college classmates and instructor were discussing the different taste of deer. I've always had corn fed deer (Nebraska).

One said his brother had cooked up some deer from, I think, Colorado. The deer's staples were scrub brush and what not. His brother thought the meat was great but classmate strongly disagreed - but didn't have the heart to say anything derogatory about the meat to his brother.

Hi wimbi,

re: "eating deer and chickens"

Something I've wondered about...

The agricultural system is supported by a cadre of soil scientists and other specialists who can advise farmers on both organic and commercial farming.

When it comes to hunting and fishing, (and poultry-raising) there's a similar issue, in the sense of the health of wildlife populations - that they need to be monitored, and also, someone(s) have to understand how to do this.

This is a quote from an undated article on the problem of information.

“While humans have places such as the National Center for Infectious Diseases and the Center for Disease Control and Prevention, biologists aren't as fortunate. Organizations such as The American Association of Wildlife Veterinarians, the National Wildlife Health Center and Wildlife Diseases Association exist to help monitor wildlife diseases. But the weak link in the chain is getting reliable, consistent, quality data to these organizations.”

http://www.createstrat.com/muledeerinthewest/diseases.html

And here are some links on the subject, more generally.

http://wdfw.wa.gov/wlm/cwd/gametrails.htm
http://www.cws-scf.ec.gc.ca/cnwds/ann2_e.cfm
http://www.mnr.gov.on.ca/en/Business/FW/2ColumnSubPage/STEL02_168752.html

So, the question then becomes: How does "peak oil" and the economic consequences of same affect our ability to feed ourselves, eg., specifically, in this case, how do we maintain our ability to apply the benefits of science to our food supply?

I pause in my little chore of cutting up the meat to note that I am a descendent of a very long line of deer eaters, all of whom lived long enough to get to me. In other words, everything is risky, for sure, and maybe I won't make it past my next chomp on a haunch.

My wife worries a lot more about this sort of stuff so I will somewhat reluctantly pass your good links (we thank you for your kind attention) on to her to worry about, hoping she will not shut down our present cosy relation with those deer out there staring soulfully in the window at their passed-on siblings.

The risk I worry about is getting nailed by the toyota piloted by that boozer at the end of the road.

I wonder about crawfish and nutria. In part because of their habitat(s) and limited human access to some of them.

Alan

This is a pretty good read in line with the current "mood".

"Food Is Different"
by Jim Goodman

http://www.madison.com/tct/opinion/column/guest/317215

"The book is dedicated to Lee Kyung Hae, the Korean farmer who took his life in protest against the World Trade Organization on Sept. 16, 2003, at the WTO protest march in Cancun, Mexico."

"Most farmers I know, myself included, have a strong attachment to our farms, the land, our heritage, but it is a life-or-death attachment for very few of us. These peasant farmers are different; they will die for what they believe."

"How could we have let our world slip so far? Why must people die for their right to feed themselves? At what point did the profits of multinational corporations become more important than the lives of farmers? We must get agriculture out of the WTO."

At what point did the profits of multinational corporations become more important than the lives of farmers?

More important than the lives of everyone who isn't part of the rentier class.

If you think about it, we've not only been mining out the last of the oil, ores, and top soil, but even the health of our people. We feed them an all-corn-all-the-time diet, raised with Frankenchemicals on nutritionally depleted soils, and then suck the people who eat this crap into the for-profit health industry (Big Pharma) for the rest of their lives. (Chris Rock: The money isn't in the cure. It's in the come-back.) The people are malnourished and obese, and to deal with their symptoms we sell them drugs that destroy their livers. Then we sell them drugs to handle the symptoms of their destroyed livers.

All so the rentier class can get a cut of everything we do.

The other day x put up a comment in which he said that the key to dealing with peak oil was increasing utility--what that basically means is we need to get the rentier class off the backs of the people, and put the resources in the hands of the many, where they can do the most good. That's what westexas's ELP prescription actually comes down to as well. If we actually did that, I think peak oil could actually improve the quality of life of most people.

Of course, so far we're doing exactly the opposite--at the moment, the government is throwing everything we've got left at the rentier class.

what that basically means is we need to get the rentier class off the backs of the people

Yeah. Eat the rich...or compost them if you are on a low-fat diet.

Thanks Airdale. I don't think I could stand to live with ya, but always enjoy reading your posts :-)

I'm glad you are still with us, for now.

Appreciate your comments Airdale.

To follow on the thread of There are No Birds

I'm writing from the heart of the tallgrass prairie-- the duck factory of North America. Geographcially at the confluence of Minnesota, North Dakota, South Dakota.

There was no migration this year. No geese. No duck. No egrets. No pelicans. No cormorants. In other years the sky and wetlands are full of waterfowl. I've called around to my Ducks Unlimited neighbors and talked with hunters. There are no migrating waterfowl this fall.

Local thought is that the migration has moved further north. That could make sense with the warming climate-- but this is the pothole prairie. The shallow lakes region where these animals feed enroute. That landscape doesn't extend much further north.

So Airdale- not sure where you are located. But the same observation holds here on the prairie.

I believe Airdale hails from W. Kentucky.

Hi all,

Now this is just one observation, but here in Vancouver, BC, I overlook an urban park with lots of open grassy fields where the kids play baseball and soccer. Three bird species are in strong supply at this park: geese, gulls and crows. Just yesterday evening, as the cool blue light of dusk began to fade I took a walk around the park, and watched the geese take off, group up in their classic V-formations and head south, probably to the wetlands around Richmond. Recently, I took my daughter to visit a pumpkin patch, and we saw a healthy population of ducks in a local pond. Also, bald eagles continue to occupy the forested areas around the University of British Columbia, with a host of other species.

I enjoy the antics of the three bird species that dominate the park--especially the crows as they are always getting into everything, with a focus on the garbage cans. Occasionally, we are treated to some other bird species, more often than not chickadees, and one time recently a woodpecker. From the urban "frontier" on the Pacific coast, the limited selection of birds that I see appear to be doing fine. At least for now.

Maybe some migration routes are indeed shifting in your area...

-best,

Wolf

Now that you mention it, it's unsettling. Haven't seen or heard the Snow or Canadian geese this fall. This is the time. I hope it's just late. Been warm, relatively snowless.

Checking, Waterfowler says the mallards should have started moving last week with the cold, they don't show much goose movement. Still in Canada.

http://www.waterfowler.com/inportal/index.php?env=-map#

"Haven't seen or heard the Snow or Canadian geese this fall."

I've been schooled not to call them Canadian as the do not hold passports.

Canada geese.

Nit pik out

GenX believe in the government? Riiiight.

Seriously. Anyone my age thinks government is pretty much completely useless. Lying weasels employing lazy bums.

Even the stuff government does relatively well (roads, sewers, policing) doesn't get much credit.

We've never seen an honest politician (although, reading from any time period from ancient Greece to Twain, neither has anyone else). We've never seen a government program do what it was supposed to, end when it was supposed to, or be much of anything other than a way to steal our money.

We, mostly, aren't yet sick or feeble enough to care about the social safety net. We don't remember a time when it didn't exist. We know that the "homeless" are still collecting welfare checks, even if they choose to drink or inject it rather than use it to eat.

Rely on the government? Hardly. Cluelessly dependent on it? Perhaps.

I had a short piece in yesterday's DB on falling land and commodity prices.

As of last spring, the sale barn won't accept horses without a deposit. They are tired of feeding abandoned horses that no one can sell at any price. Between new regulations and closure of an older rendering plant, it is impossible to get rid of them even for a slaughter market.

Feeder calves are lucky to get .80/lb, maybe 250-300 for nice ones. Sheep/lamb $15-20/head in lots, for the fortunate ones. We really don't have a large enough market to test for sheep, they all must be be shipped on to larger sale rings. But try raising at 15/head. I have yet to see anything for a pasture lease. Those cows ate expensive grass all summer, now can't finance it. Welcome to farming.

There's nowhere else in this DB that this fits into, but it has to do with gold being in backwardation, and that being a very, very bad economic omen.

But I don't understand this stuff worth a darn. Anyone can put this in everyday English? If prices go up and down, doesn't a commodity HAVE to go through backwardation regularly? Help a guy out: why is this such a bad thing?

http://www.safehaven.com/article-12012.htm

...the gold basis is a pristine, incorruptible measure of trust, or the lack of it in case it turns negative, in paper money. Of course, it is too early to say whether gold has gone to permanent backwardation, or whether the condition will rectify itself (it probably will). Be that as it may, it does not matter. The fact that it has happened is the coup de grâce for the regime of irredeemable currency. It will bleed to death, maybe rather slowly, even if no other hits, blows, or shocks are dealt to the system. Very few people realize what is going on and, of course, official sources and the news media won't be helpful to them to explain the significance of all this. I am trying to be helpful to the discriminating reader.

Gold going to permanent backwardation means that gold is no longer for sale at any price, whether it is quoted in dollars, yens, euros, or Swiss francs. The situation is exactly the same as it has been for years: gold is not for sale at any price quoted in Zimbabwe currency, however high the quote is. To put it differently, all offers to sell gold are being withdrawn, whether it concerns newly mined gold, scrap gold, bullion gold or coined gold. I dubbed this event that has cast its long shadow forward for many a year, the last contango in Washington -- contango being the name for the condition opposite to backwardation (namely, that of a positive basis), and Washington being the city where the Paper-mill of the Potomac, the Federal Reserve Board, is located. This is a tongue-in-cheek way of saying that the jig in Washington is up. The music has stopped on the players of 'musical chairs'. Those who have no gold in hand are out of luck. They won't get it now through the regular channels. If they want it, they will have to go to the black market.

Even tho I don't get it, this is one of those articles that makes the hairs on the back of my neck stand up... tell me why.

Cheers

According to this Minyanville article, http://www.minyanville.com/articles/index.php?a=20126

Typically gold will only go into backwardation when either there is fear of a currency collapse and/or doubt as to whether counter parties will be able to produce gold as promised

There's plenty of fear of a global financial collapse and there's definitely not enough physical gold to meet actual demand if it arose of the need to produce the physical real stuff for the paper type on the futures market. Plus with all the central bank inflation (which may or may not work depending on which country you are in) Gold could easily spike big time.

Another way to look at it is speculators are being paid a huge premium to go long. Which means commercial traders--those who buy gold to make jewelry or whatever gold is actually used for, apart from its use by goldbugs as a store of value--don't expect to need much in the near future for commercial purposes.

It's probably both. Nobody expects to sell any jewelry after the holidays, and lots of people expect to see a major devaluation of currencies.

It means there is a "price" for gold and there is a real price, and the two have begun to diverge over the last six months or so. There's an ETF based on the "price" of gold, and it is manipulated through fancy financial engineering which I cannot begin to understand. Since no actual metal (or very little) was harmed in the making of the ETF it has only slightly more relation to reality than the price of AIG stock.

OTOH you can call up a broker, visit a coin dealer, or shop around on ebay. What you may find is that the real price hasn't declined nearly as much as the "price". Also, it means that people who have it are simply keeping it and not selling at the current "price". A broker whose web page I visit has no platinum, no palladium, and only intermittent supplies of silver and gold since last summer. You must expect to wait several weeks for delivery and pay a premium over spot price.

But that's just due to a shortage of small coins and the like. If you can take delivery of a greater amount of gold, you can easily get the lower price.

Agreed there is a general reluctance to trade small silver and gold for paper now on a retail basis at the spot. Big lag time on supply of small coins. To me this means individuals are looking for something 'liquid' with which to trade in case of a currency collapse. Locking in a 'strong' paper dollar at today's rates is getting real crowded. Contrast this situation with the other retail spaces in your neighborhood.

Seeing more stuff like this Trading a mint MGA for silver or gold Survival food for silver too.

Why would people having difficulty making mortgage payments go out and buy gold? They cannot pay their mortages in krugerands. As the price of gold went higher all sorts of gold mines opened, even as far away as China. When you buy gold you are paying for large scale mining operations. Huge trucks and shovels, heap leaching pads, gold refining, some middlemen, a whole bunch of employees and hangers on. When the bills come due you need money in the bank instead of paying to open another gold mine. In effect you have to hold currency in cash to pay the bills or borrow when lending standards are tighter, then you have to try to find money to buy gold to make the price go up, at the same time the mines dump cheap gold on the market. Then as backwardation progresses people see the price of gold is going down or as you say "backward" and they start to dump more on the market. Eventually the panic to buy the heavy yellow metal disappears and people panic to sell it. People standing in unemployment lines may need to sell their gold to some gold dealer. Gold was also the target of burglars. Many people did not expect the theif would come and then had great sorrow they were not better prepared.

This is an article written by a gold bug, and therefore is fatally flawed. Just look at the quote: "the gold basis is a pristine, incorruptible ..." There is no such thing. Gold is less useful than wheat (eatable) or crude oil (useful energy): you cannot eat gold, it has no energy content and the industrial uses are limited (more limited that e.g. platinum). Gold has fluctuated enormously in the past (previous peak of the 70s/80s bubble was over $800, then down to $250 in about 20 years, up to $1,000 in a few years and now down to 750.

In the current crisis, cash is king. If you believe in a total collapse, you need land and guns though. Move on to the survivalist sites in that case....

I think the author is referring to the fact that the price of coins is higher than it usually is over the spot price. Much more gold is traded on the paper futures market than is physically moved and delivered. The spot price is determined by these paper trades and as asset classes have been sold to rebuild balance sheets and cover debt the spot price has fallen.
It is true that the physical price of gold bullion coins currently carries a higher premium over spot than it historically has. Many believe this is because the supply of actual coins is less than the demand for them. It is easy to buy a paper contract for gold futures but some believe getting delivery of the underlying asset would be difficult because the different commodity markets do not have enough supply to make delivery if those that held the paper did not roll them over or take cash for their futures contract.

Living off of boiled acorn flour, boiled pokeweed salad, wild onions, and cattail roots is a collapse in the economy. Living off of guns is worse.