Destabilization around the world. Consider the nexus So between O Slime pushing the Treasury to push the feed on QE2.. and crop failures and massive flooding in Austraila and Brazil.. You can expect to see your food budget go over the top
iamnothere
2011/01/17 18:08:58
Australia is in big trouble.. with the floods.. And here we are OSLIME has just signed into law burning corn ethanol.. what a waste of food
++++++++++++++++++++++++++++++++++++++++
Floods decimate food production—farm debt moratorium NOW!
The government must enact an immediate farm debt moratorium, both to save the family farmers wiped out by the floods, and to mobilise the rest of the nation’s farmers to step up food production to meet the chronic food shortages facing Australia—and the world, demanded Citizens Electoral Council leader Craig Isherwood today.
“It is imperative that the government apply the Glass-Steagall principle to this crisis, by enacting a debt moratorium,” he said.
“Glass-Steagall is the principle, enacted by U.S. President Franklin Roosevelt in 1933 to begin to bring the U.S. and the world out of the Great Depression, that the government is responsible for protecting the functionality of the productive, physical economy from predatory bankers and speculative parasites.
“If we are to rescue our food production capability, to preserve our national food security, and to secure our essential contribution to the food supplies of a chronically food-short world, then our family farmers must be freed through a debt moratorium, from the crushing debt burden that is driving them off the land,” he said.
The Queensland floods have wreaked havoc in major food production areas all up the coast, washing away crops and precious topsoil, and destroying the farm machinery and transport infrastructure—roads and rail—that is necessary to transport goods.
The dramatic flash flood in Toowoomba and surrounding districts on Monday decimated the state’s last functioning food bowl, the Lockyer Valley, the major supplier of fresh fruit and vegetables to Brisbane.
When combined with the demoralised state of the family farmers targeted for political annihilation in the national food bowl, the Murray-Darling Basin (including the deliberately-shackled irrigators in South Australia’s Riverland limited to 67 per cent of their water entitlement while the swollen Murray River rushes by their farms), as well as the drought-ravaged wheat growers in Western Australia’s wheat belt, it is clear that Australia itself is in a dire food crisis, let alone our crucial contribution to a food-short world.
Central Queensland cattle and wheat producer and former CEC National Chairman Maurice Hetherington today backed Craig Isherwood’s call for a debt moratorium, and said the crisis demands “a new system”.
“[Farmers] have lost everything,” he said on 13th January. “We’re going to have a chronic food shortage here in Queensland—chronic. The first thing I think has to be done is we have to keep the farmer on the land and the small businessman in their small business. That’s an absolute priority.
“We need a debt moratorium and low-interest credit pumped in at two per cent to kickstart them and get them going … That’s the first light that will give the farmers the incentive to get in the mud … .”
He concluded, “This is reality. People have to eat, and if they haven’t got people producing food there’ll be nothing to eat.”
=Queensland floods: The economic impact
The floods in Queensland and the rest of Australia have besieged an area larger than France and Germany combined. The floods will have a significant impact on the Australian economy, in addition to world commodity and agriculture prices.
No longer the poor cousin of the more prosperous southern states, Queensland accounts for approximately 20% of the Australian economy, 60% of global coking coal exports and 28% of Australia’s fruit and vegetable production. As a result of the floods, IBISWorld has downgraded its GDP forecast for 2010-11 from 2.9% to 2.6%.
The floods are expected to have a negative short-term effect on economic growth. IBISWorld estimates that the floods will subtract 0.6 percentage points from our previous GDP forecast for the third quarter of 2010-11 (which ends March 31).
Agriculture will be hit hard, with an estimated $1.6 billion worth of crops having been destroyed. Sugarcane, cotton, some vegetables and grains have also suffered major losses. This is expected to flow on to a short-term price spike for food, with prices expected to rise by up to 200%.
The lost wheat production is expected to exacerbate existing global wheat shortages, caused by poor production worldwide, particularly in the US and Russia. This is likely to cause a further increase in global wheat prices.
Agriculture, however, is expected to benefit in the long run from increased soil moisture.
All levels of government have pledged support for the recovery. The Federal Government has begun distributing emergency assistance grants of up to $1,000 per person, which should begin to have an immediate stimulatory effect. The Federal Government is responsible for funding 75% of repairs and rebuilding. However, the Federal Government has maintained its pledge to return the budget to surplus by 2012-13, which means that other budget savings must be found. Queensland Government will be responsible for 25% of rebuilding. This will place pressure on the state’s budget, as revenue decreases through March, due to lost production.
The floods are also likely to result in upward pressure on inflation and interest rates. Rising food prices are forecast to add up to 0.8 percentage points to the Consumer Price Index, which would fuel inflation higher than the 2% to 3% target range in the short term. However, the Reserve Bank of Australia is unlikely to increase interest rates on this basis unless higher food prices are sustained.
Agriculture
The recent heavy rainfall and flooding in Queensland will devastate the Australian agriculture sector this year, causing losses of up to $1.6 billion. The recent deluge has caused widespread damage across many agriculture industries including food, crops and livestock.
Major problems for these sectors include crop loss, rain damage, waterlogging, quality downgrades, delays or disruptions to harvests, and transport problems due to flooded fields, roads and damaged infrastructure.
Fruit and vegetables
The Queensland horticulture industry is a crucial link in Australia’s food chain. Queensland supplies 28% of Australia’s fruit and vegetables, making it the leading producer of fresh produce in the country.
The recent flooding threatens to reduce Australia’s supply of fresh fruit and vegetables, given that 14% of the nation’s produce is sourced from many flood affected areas.
It is believed that the flooding and consistent rainfall across Queensland’s food-producing regions has resulted in widespread loss, damage and disrupted harvests for fruit and vegetables like pumpkins, tomatoes, capsicum, celery, avocados, lettuce, zucchini, broccoli, certain types of potatoes, mangos bananas, melons, tropical fruit, grapes and seedless watermelon. All these factors combined suggest that industry revenue for Australia’s fruit and vegetable growers is likely to decline by 10% overall for 2010-
11, representing a combined loss of approximately $561 million.
Sugar
Australia is a leading exporter of sugar on the global market, and Queensland sugarcane growers produce 95% of the country’s annual sugar crop. This is one of the worst affected agriculture industries, and IBISWorld expects a 27% decline in revenue for sugarcane farmers. Sugarcane fields are now waterlogged in some areas, thereby preventing this year’s sugarcane harvest for many growers.
As a result of these declines, leading exporter Queensland Sugar Limited has already started purchasing sugar from Brazil and Thailand to supplement the fall in Australian production. This also means that many Australian growers have not been able to capitalise on rising sugar prices that recently hit a 30-year high. Looking ahead, it is likely that rain damage to many fields will also destroy a considerable portion of Australia’s crop in 2011-12.
Grains
IBISWorld research indicates that the impact of the Queensland floods is likely to reach $400 million for the grain industry. This will have a limited effect on industry revenue as a whole, given that the Queensland grain crop accounts for only 10% of national grain production in Australia.
Agricultural body AgForce, the recent deluge has hit all of Queensland’s broad acre crop-growing areas with some parts of southern Queensland virtually written off before harvest. Analysts are expecting grain losses of up to 500,000 tonnes, including wheat, barley and sorghum.
The biggest problem for grain agriculture exporters has been shipment delays due to the closure of critical ports, such as those in Brisbane, due to flood risk and damage. This means grain farmers fortunate enough to complete their harvest before the worst of the recent deluge are currently unable to capitalise on the current spike in global grain prices. On the bright side, there is a possibility that farmers may be able to re-plant crops if weather conditions improve, thus recouping some of their current losses.
Livestock
IBISWorld expects a mixed impact on the meat and livestock sector, with some farmers managing to move livestock from flood-affected areas before flooding. However, the true extent of the effect is yet to be felt, with farmers likely to return to farms over the next week. Moreover, news reports do confirm some livestock being washed away and some being isolated as a result of the floods.
Finally, transporting livestock to slaughter houses seems to be the most imminent problem for farmers, given flooded roads and damage to transport infrastructure. IBISWorld expects that this will put further strain on the supply.
=======================================================
Michael Babad
These are stories Report on Business is following today. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Food prices at record high
World food prices have hit their highest on record, and there are fears that the devastating floods in Australia could push them even higher.
The Food and Agricultural Organization, an arm of the United Nations based in Rome, said today its food price index climbed in December to its highest since it began collecting data in 1990. The measure, which tracks costs of items such as rice, wheat, corn, sugar meat, rose more than 4 per cent from a month earlier.
That will raise fears over the possibility of another crisis like that of 2007-2008, when countries such as Bangladesh and Haiti were the scene of riots, The Financial Times reports. The index has now topped those levels.
There are also fears that the flooding in Australia, a key producing region for sugar, for example, will boost prices even more.
“Recent flooding in Australia’s northeast has added to supply concerns in a number of farm commodities, which began to emerge last summer with weather problems in key producing areas (e.g., Russia, Canada),” said Kenrick Jordan of BMO Nesbitt Burns, adding that prices of wheat and corn have surged 17 per cent and 11 per cent, respectively, since the beginning of December.
“The price spike has raised fresh concerns about food price inflation,” he said.
He added, though, that while higher grain and oilseed prices will pressure overall food prices in the longer term, the historical relationship between foodstuffs and prices suggests no marked inflation in industrialized countries in the near term. “In developing countries, where food accounts for a much more significant part of household budgets, the inflation threat is much greater,” he said.
Bloomberg News reports today that cane growers in Australia suggest that sugar production capacity could see curbs for two to three years given the hit to crops that were planted, and the nature of regrowth.
“The production capacity for the industry will be greatly diminished as a result of the extremely wet conditions,” Ron Mullins, acting chief executive officer of Canegrowers,” told the news agency.
The floods in Australia's Queensland region have also pushed up coal prices as they shut down mines and hit rail transport. They could also affect monetary policy at the Reserve Bank of Australia, Scotia Capital economists Derek Holt and Gorica Djeric said today, noting the country's currency has lost more than two cents against the U.S. dollar this week.
"Australia's fortunes have taken an abrupt turn for the worse, with RBA implications," the economists wrote.
"The floods that have swept through an area the size of France and Germany combined pose a potentially sharp shock to exports and production. Comments by RBA board member Donald McGauchie late yesterday have brought RBA policy into the picture in terms of justifying a prolonged pause until the damage - and a potential reconstruction recovery - can be assessed."
=========================================================
Overheating emerging markets, in China in particular, pose the biggest threat to the market and political situation in 2011 according to Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
Food prices will contribute to rising world inflation, analysts warned.
“These economies are clearly overheating and governments are putting measures in place to slow them down to fight inflationary pressure. More than anything else, food inflation is a problem," Gijsels told CNBC.com.
"In countries were 70 percent to 80 percent and sometimes more of a family's budget goes to food, explosive price rises risk to destabilize these societies. Remember the old saying: 'hunger starves civilizations,’” he added.
“We believe that some of these governments will be quite aggressive in their inflation fight. And we do not even want to think about the consequences if this year were to have a disappointing monsoon,” Gijsels said.
He is worried that everyone is so bullish on China’s ability to engineer a soft landing.
“There is almost no emerging market bear to be found. And that in itself is already scary," Gijsels said.
"Nobody will be surprised when we see more (economic) volatility in Europe or even the US. A stronger slowdown in emerging markets than we currently expect would take everybody by surprise. Therefore its market impact would be much more violent,” he added.
Watch the Central Banks
Gijsels said he was surprised how quickly the market tested Portugal and the EU’s resolve to protect it in 2011 but believes the ECB has now drawn a line in the sand.
“The ECB responded by supporting the bond markets of the weaker countries and were able to make the first couple of important auctions of the year into a success. It looks like the ECB has drawn a line in the sand around Portugal, first and foremost to defend Spain,” he said.
“They just cannot let one or more countries fail for they would risk a repeat of the Lehman Brothers' debacle on a national level,” Gijsels added.
Last year, the main positive development was the central banks and governments were able to "keep the system afloat," but the main disappointment was that they were unable to normalize monetary conditions and had to put more exceptional measures in place, according to Gijsels.
“Still, the resolve to not let the world economy slip into a Japanese or US depression of the '30s scenario is also very clear….in 2011 we will be more than anything else Fed, ECB and PBOC watchers,” he said.
Like many environmentalists, Lester Brown is worried. In his new book "World on the Edge," released this week, Brown says mankind has pushed civilization to the brink of collapse by bleeding aquifers dry and overplowing land to feed an ever-growing population, while overloading the atmosphere with carbon dioxide.
If we continue to sap Earth's natural resources, "civilizational collapse is no longer a matter of whether but when," Brown, the founder of Worldwatch and the Earth Policy Institute, which both seek to create a sustainable society, told AFP.
What distinguishes "World on the Edge" from his dozens of other books is "the sense of urgency," Brown told AFP. "Things could start unraveling at any time now and it's likely to start on the food front.
"We've got to get our act together quickly. We don't have generations or even decades -- we're one poor harvest away from chaos," he said.
"We have been talking for decades about saving the planet, but the question now is, can we save civilization?"
In "World on the Edge", Brown points to warning signs and lays out arguments for why he believes the cause of the chaos will be the unsustainable way that mankind is going about producing more and more food.
Resources are already beginning to be depleted, and that could cause a global "food bubble" created by overusing land and water to meet the exponential growth in demand for food -- grain, in particular -- to burst.
Two huge dustbowls have formed in the world, one in Africa and the other in China and Mongolia, because of soil erosion caused by overplowing.
In Lesotho, the grain harvest has dropped by more than half over the last decade or two because of soil erosion, Brown said.
In Saudi Arabia, grain supplies are shrinking as a fossil aquifer drilled in in the 1970s to sustain domestic grain production is running dry after years of "overpumping" to meet the needs of a population that wants to consume more meat and poultry.
Global warming is also impacting the global supply of grain, which Brown calls the foundation of the world food economy.
Every one-degree-Celsius rise above the normal temperature results in a 10 percent fall in grain yields, something that was painfully visible in Russia last year, where a seven-week heatwave killed tens of thousands and caused the grain harvest to shrink by 40 percent.
Food prices soared in Russia as a result of the poor harvest, and Russia -- which is one of the top wheat exporters in the world -- cut off grain exports.
Different grains are staple foods in most of the world, and foods like meat and dairy products are "grain-intensive."
It takes seven pounds (3.2 kilograms) of grain fed to a cow to produce a pound of beef, and around four pounds (1.8 kilograms) of grain to produce a pound of cheese, Brown told AFP.
In "World on the Edge", Brown paints a grim picture of how a failed harvest could spark a grain shortage that would send food prices sky-rocketing, cause hunger to spread, governments to collapse and states to fail.
Food riots would erupt in low-income countries and "with confidence in the world grain market shattered, the global economy could start to unravel," Brown warned.
But Brown still believes civilizational collapse can be averted, if there is a mass effort to confront threats such as global warming, soil erosion and falling water tables, not military superpowers.
++++++++++++++++++++++++++++++++++++++++
Floods decimate food production—farm debt moratorium NOW!
The government must enact an immediate farm debt moratorium, both to save the family farmers wiped out by the floods, and to mobilise the rest of the nation’s farmers to step up food production to meet the chronic food shortages facing Australia—and the world, demanded Citizens Electoral Council leader Craig Isherwood today.
“It is imperative that the government apply the Glass-Steagall principle to this crisis, by enacting a debt moratorium,” he said.
“Glass-Steagall is the principle, enacted by U.S. President Franklin Roosevelt in 1933 to begin to bring the U.S. and the world out of the Great Depression, that the government is responsible for protecting the functionality of the productive, physical economy from predatory bankers and speculative parasites.
“If we are to rescue our food production capability, to preserve our national food security, and to secure our essential contribution to the food supplies of a chronically food-short world, then our family farmers must be freed through a debt moratorium, from the crushing debt burden that is driving them off the land,” he said.
The Queensland floods have wreaked havoc in major food production areas all up the coast, washing away crops and precious topsoil, and destroying the farm machinery and transport infrastructure—roads and rail—that is necessary to transport goods.
The dramatic flash flood in Toowoomba and surrounding districts on Monday decimated the state’s last functioning food bowl, the Lockyer Valley, the major supplier of fresh fruit and vegetables to Brisbane.
When combined with the demoralised state of the family farmers targeted for political annihilation in the national food bowl, the Murray-Darling Basin (including the deliberately-shackled irrigators in South Australia’s Riverland limited to 67 per cent of their water entitlement while the swollen Murray River rushes by their farms), as well as the drought-ravaged wheat growers in Western Australia’s wheat belt, it is clear that Australia itself is in a dire food crisis, let alone our crucial contribution to a food-short world.
Central Queensland cattle and wheat producer and former CEC National Chairman Maurice Hetherington today backed Craig Isherwood’s call for a debt moratorium, and said the crisis demands “a new system”.
“[Farmers] have lost everything,” he said on 13th January. “We’re going to have a chronic food shortage here in Queensland—chronic. The first thing I think has to be done is we have to keep the farmer on the land and the small businessman in their small business. That’s an absolute priority.
“We need a debt moratorium and low-interest credit pumped in at two per cent to kickstart them and get them going … That’s the first light that will give the farmers the incentive to get in the mud … .”
He concluded, “This is reality. People have to eat, and if they haven’t got people producing food there’ll be nothing to eat.”
=Queensland floods: The economic impact
The floods in Queensland and the rest of Australia have besieged an area larger than France and Germany combined. The floods will have a significant impact on the Australian economy, in addition to world commodity and agriculture prices.
No longer the poor cousin of the more prosperous southern states, Queensland accounts for approximately 20% of the Australian economy, 60% of global coking coal exports and 28% of Australia’s fruit and vegetable production. As a result of the floods, IBISWorld has downgraded its GDP forecast for 2010-11 from 2.9% to 2.6%.
The floods are expected to have a negative short-term effect on economic growth. IBISWorld estimates that the floods will subtract 0.6 percentage points from our previous GDP forecast for the third quarter of 2010-11 (which ends March 31).
Agriculture will be hit hard, with an estimated $1.6 billion worth of crops having been destroyed. Sugarcane, cotton, some vegetables and grains have also suffered major losses. This is expected to flow on to a short-term price spike for food, with prices expected to rise by up to 200%.
The lost wheat production is expected to exacerbate existing global wheat shortages, caused by poor production worldwide, particularly in the US and Russia. This is likely to cause a further increase in global wheat prices.
Agriculture, however, is expected to benefit in the long run from increased soil moisture.
All levels of government have pledged support for the recovery. The Federal Government has begun distributing emergency assistance grants of up to $1,000 per person, which should begin to have an immediate stimulatory effect. The Federal Government is responsible for funding 75% of repairs and rebuilding. However, the Federal Government has maintained its pledge to return the budget to surplus by 2012-13, which means that other budget savings must be found. Queensland Government will be responsible for 25% of rebuilding. This will place pressure on the state’s budget, as revenue decreases through March, due to lost production.
The floods are also likely to result in upward pressure on inflation and interest rates. Rising food prices are forecast to add up to 0.8 percentage points to the Consumer Price Index, which would fuel inflation higher than the 2% to 3% target range in the short term. However, the Reserve Bank of Australia is unlikely to increase interest rates on this basis unless higher food prices are sustained.
Agriculture
The recent heavy rainfall and flooding in Queensland will devastate the Australian agriculture sector this year, causing losses of up to $1.6 billion. The recent deluge has caused widespread damage across many agriculture industries including food, crops and livestock.
Major problems for these sectors include crop loss, rain damage, waterlogging, quality downgrades, delays or disruptions to harvests, and transport problems due to flooded fields, roads and damaged infrastructure.
Fruit and vegetables
The Queensland horticulture industry is a crucial link in Australia’s food chain. Queensland supplies 28% of Australia’s fruit and vegetables, making it the leading producer of fresh produce in the country.
The recent flooding threatens to reduce Australia’s supply of fresh fruit and vegetables, given that 14% of the nation’s produce is sourced from many flood affected areas.
It is believed that the flooding and consistent rainfall across Queensland’s food-producing regions has resulted in widespread loss, damage and disrupted harvests for fruit and vegetables like pumpkins, tomatoes, capsicum, celery, avocados, lettuce, zucchini, broccoli, certain types of potatoes, mangos bananas, melons, tropical fruit, grapes and seedless watermelon. All these factors combined suggest that industry revenue for Australia’s fruit and vegetable growers is likely to decline by 10% overall for 2010-
11, representing a combined loss of approximately $561 million.
Sugar
Australia is a leading exporter of sugar on the global market, and Queensland sugarcane growers produce 95% of the country’s annual sugar crop. This is one of the worst affected agriculture industries, and IBISWorld expects a 27% decline in revenue for sugarcane farmers. Sugarcane fields are now waterlogged in some areas, thereby preventing this year’s sugarcane harvest for many growers.
As a result of these declines, leading exporter Queensland Sugar Limited has already started purchasing sugar from Brazil and Thailand to supplement the fall in Australian production. This also means that many Australian growers have not been able to capitalise on rising sugar prices that recently hit a 30-year high. Looking ahead, it is likely that rain damage to many fields will also destroy a considerable portion of Australia’s crop in 2011-12.
Grains
IBISWorld research indicates that the impact of the Queensland floods is likely to reach $400 million for the grain industry. This will have a limited effect on industry revenue as a whole, given that the Queensland grain crop accounts for only 10% of national grain production in Australia.
Agricultural body AgForce, the recent deluge has hit all of Queensland’s broad acre crop-growing areas with some parts of southern Queensland virtually written off before harvest. Analysts are expecting grain losses of up to 500,000 tonnes, including wheat, barley and sorghum.
The biggest problem for grain agriculture exporters has been shipment delays due to the closure of critical ports, such as those in Brisbane, due to flood risk and damage. This means grain farmers fortunate enough to complete their harvest before the worst of the recent deluge are currently unable to capitalise on the current spike in global grain prices. On the bright side, there is a possibility that farmers may be able to re-plant crops if weather conditions improve, thus recouping some of their current losses.
Livestock
IBISWorld expects a mixed impact on the meat and livestock sector, with some farmers managing to move livestock from flood-affected areas before flooding. However, the true extent of the effect is yet to be felt, with farmers likely to return to farms over the next week. Moreover, news reports do confirm some livestock being washed away and some being isolated as a result of the floods.
Finally, transporting livestock to slaughter houses seems to be the most imminent problem for farmers, given flooded roads and damage to transport infrastructure. IBISWorld expects that this will put further strain on the supply.
=======================================================
Michael Babad
These are stories Report on Business is following today. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Food prices at record high
World food prices have hit their highest on record, and there are fears that the devastating floods in Australia could push them even higher.
The Food and Agricultural Organization, an arm of the United Nations based in Rome, said today its food price index climbed in December to its highest since it began collecting data in 1990. The measure, which tracks costs of items such as rice, wheat, corn, sugar meat, rose more than 4 per cent from a month earlier.
That will raise fears over the possibility of another crisis like that of 2007-2008, when countries such as Bangladesh and Haiti were the scene of riots, The Financial Times reports. The index has now topped those levels.
There are also fears that the flooding in Australia, a key producing region for sugar, for example, will boost prices even more.
“Recent flooding in Australia’s northeast has added to supply concerns in a number of farm commodities, which began to emerge last summer with weather problems in key producing areas (e.g., Russia, Canada),” said Kenrick Jordan of BMO Nesbitt Burns, adding that prices of wheat and corn have surged 17 per cent and 11 per cent, respectively, since the beginning of December.
“The price spike has raised fresh concerns about food price inflation,” he said.
He added, though, that while higher grain and oilseed prices will pressure overall food prices in the longer term, the historical relationship between foodstuffs and prices suggests no marked inflation in industrialized countries in the near term. “In developing countries, where food accounts for a much more significant part of household budgets, the inflation threat is much greater,” he said.
Bloomberg News reports today that cane growers in Australia suggest that sugar production capacity could see curbs for two to three years given the hit to crops that were planted, and the nature of regrowth.
“The production capacity for the industry will be greatly diminished as a result of the extremely wet conditions,” Ron Mullins, acting chief executive officer of Canegrowers,” told the news agency.
The floods in Australia's Queensland region have also pushed up coal prices as they shut down mines and hit rail transport. They could also affect monetary policy at the Reserve Bank of Australia, Scotia Capital economists Derek Holt and Gorica Djeric said today, noting the country's currency has lost more than two cents against the U.S. dollar this week.
"Australia's fortunes have taken an abrupt turn for the worse, with RBA implications," the economists wrote.
"The floods that have swept through an area the size of France and Germany combined pose a potentially sharp shock to exports and production. Comments by RBA board member Donald McGauchie late yesterday have brought RBA policy into the picture in terms of justifying a prolonged pause until the damage - and a potential reconstruction recovery - can be assessed."
=========================================================
Overheating emerging markets, in China in particular, pose the biggest threat to the market and political situation in 2011 according to Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
Food prices will contribute to rising world inflation, analysts warned.
“These economies are clearly overheating and governments are putting measures in place to slow them down to fight inflationary pressure. More than anything else, food inflation is a problem," Gijsels told CNBC.com.
"In countries were 70 percent to 80 percent and sometimes more of a family's budget goes to food, explosive price rises risk to destabilize these societies. Remember the old saying: 'hunger starves civilizations,’” he added.
“We believe that some of these governments will be quite aggressive in their inflation fight. And we do not even want to think about the consequences if this year were to have a disappointing monsoon,” Gijsels said.
He is worried that everyone is so bullish on China’s ability to engineer a soft landing.
“There is almost no emerging market bear to be found. And that in itself is already scary," Gijsels said.
"Nobody will be surprised when we see more (economic) volatility in Europe or even the US. A stronger slowdown in emerging markets than we currently expect would take everybody by surprise. Therefore its market impact would be much more violent,” he added.
Watch the Central Banks
Gijsels said he was surprised how quickly the market tested Portugal and the EU’s resolve to protect it in 2011 but believes the ECB has now drawn a line in the sand.
“The ECB responded by supporting the bond markets of the weaker countries and were able to make the first couple of important auctions of the year into a success. It looks like the ECB has drawn a line in the sand around Portugal, first and foremost to defend Spain,” he said.
“They just cannot let one or more countries fail for they would risk a repeat of the Lehman Brothers' debacle on a national level,” Gijsels added.
Last year, the main positive development was the central banks and governments were able to "keep the system afloat," but the main disappointment was that they were unable to normalize monetary conditions and had to put more exceptional measures in place, according to Gijsels.
“Still, the resolve to not let the world economy slip into a Japanese or US depression of the '30s scenario is also very clear….in 2011 we will be more than anything else Fed, ECB and PBOC watchers,” he said.
Like many environmentalists, Lester Brown is worried. In his new book "World on the Edge," released this week, Brown says mankind has pushed civilization to the brink of collapse by bleeding aquifers dry and overplowing land to feed an ever-growing population, while overloading the atmosphere with carbon dioxide.
If we continue to sap Earth's natural resources, "civilizational collapse is no longer a matter of whether but when," Brown, the founder of Worldwatch and the Earth Policy Institute, which both seek to create a sustainable society, told AFP.
What distinguishes "World on the Edge" from his dozens of other books is "the sense of urgency," Brown told AFP. "Things could start unraveling at any time now and it's likely to start on the food front.
"We've got to get our act together quickly. We don't have generations or even decades -- we're one poor harvest away from chaos," he said.
"We have been talking for decades about saving the planet, but the question now is, can we save civilization?"
In "World on the Edge", Brown points to warning signs and lays out arguments for why he believes the cause of the chaos will be the unsustainable way that mankind is going about producing more and more food.
Resources are already beginning to be depleted, and that could cause a global "food bubble" created by overusing land and water to meet the exponential growth in demand for food -- grain, in particular -- to burst.
Two huge dustbowls have formed in the world, one in Africa and the other in China and Mongolia, because of soil erosion caused by overplowing.
In Lesotho, the grain harvest has dropped by more than half over the last decade or two because of soil erosion, Brown said.
In Saudi Arabia, grain supplies are shrinking as a fossil aquifer drilled in in the 1970s to sustain domestic grain production is running dry after years of "overpumping" to meet the needs of a population that wants to consume more meat and poultry.
Global warming is also impacting the global supply of grain, which Brown calls the foundation of the world food economy.
Every one-degree-Celsius rise above the normal temperature results in a 10 percent fall in grain yields, something that was painfully visible in Russia last year, where a seven-week heatwave killed tens of thousands and caused the grain harvest to shrink by 40 percent.
Food prices soared in Russia as a result of the poor harvest, and Russia -- which is one of the top wheat exporters in the world -- cut off grain exports.
Different grains are staple foods in most of the world, and foods like meat and dairy products are "grain-intensive."
It takes seven pounds (3.2 kilograms) of grain fed to a cow to produce a pound of beef, and around four pounds (1.8 kilograms) of grain to produce a pound of cheese, Brown told AFP.
In "World on the Edge", Brown paints a grim picture of how a failed harvest could spark a grain shortage that would send food prices sky-rocketing, cause hunger to spread, governments to collapse and states to fail.
Food riots would erupt in low-income countries and "with confidence in the world grain market shattered, the global economy could start to unravel," Brown warned.
But Brown still believes civilizational collapse can be averted, if there is a mass effort to confront threats such as global warming, soil erosion and falling water tables, not military superpowers.
This was a Corn Lobby coup d' gras that raised the cost of tortillas everywhere in Latin America. Everyone pays more for gasohol than gasoline for less benefit. How long before we quit paying for this boondoggle?
Now the Fed wants to reward speculators for shorting the dollar by destroying its value and raising the price of everything even more. It is time to nationalize the Fed and dismantle it before it does irreparable harm to the nation.