Prices jump

Remember this post? Here? The title in question was: Countries most at risk in case of a Food Shortage

It seems someone could see the future. Did you see country #6 on the list? Egypt. Or #18? Tunisia. Both have overthrown their governments in the last little while. There have also been rumblings in #3. In part, these have been due to rising food prices.

So, what causes food prices to rise? There are a few things which tend to do that - 1.increased demand, 2.reduced supply, and 3.the decreased worth of money. While there hasn't been much of an increased demand, the other two are certainly factors.

Why is food so much? Because there are additional uses for it - government-subsidized uses (think Ethanol). With the competition of demand (vehicles here act as additional mouths to feed), the price goes up - or the reverse, that Ethanol siphons some of the food supply away so there is reduced supply. Either way, it puts upward pressure on food prices.

The other factor in this is the debasement of money. Do you remember when a candy bar cost 25 cents? or less? What about a gallon of gasoline? When we put more money into our closed system, we lessen the value of each dollar. The flip side of that is that the price goes up. If each dollar can buy less, it takes more dollars to buy the same thing. Once again upward pressure on the food prices. Think Quantitative Easing (QE). Think billions and billions of dollars added to the system of the last 2 years. This factor is going to be true for pretty much every commodity. Guess what has happened to the price of cotton? Guess what will happen to the price of clothes?

So, for the people who cannot afford the new food prices, maybe they will be saved by the price in clothing - if they happen to have lots of clothes to sell.

News

Would you trust this man...with your money?

Way back in 2009 - the year after the stock market collapse - the stock markets had a remarkable recovery year. They were up (according to one index, S&P) over 25%. The person pictured on the right is a fund manager. He solicits funds from people who trust him to manage their money. The idea is that he manages the money so well that the investors get a greater return for having hired him as the manager - greater than just an average selection of stocks. Regrettably, his return for the year was -12.29%. So far in 2010, his fund's returns are in the negative teens % (my sources don't agree). The expenses that an investor pays for hiring him are a paltry 1.50%.

Why pay some else to lose money for you when it could be so much more fun to lose it yourself?

His fund's symbol is PRGRX.

He sure does have a winning smile, though.

More on poor performers of 2009.

They lied?

Now Hungary joins the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) as 'troubled economies' in Europe.

But the world is aghast because "a previous government lied about the economic situation". Clutch the pearls. Say it ain't so. A government actually put forward something untrue.

While reprehensible (shame on them) can we ever get to the "so I'm not going to trust government" (so we can avoid the shame on me)?

Don't let the Hungary PIIGS eat you.

Greece is the word

Actually, for BP, "grease" is the word. Looks like they finally got the hole plugged up. Hope it holds.

What I wanted to blog about today is the country Greece. It is the "G" in the PIIGS of the Europe. These are the countries that have been identified as being close to the brink, financially, in the European Union. Portugal, Italy, Ireland, Greece, and Spain. Greece was the first to tiptoe to the edge. Why? The Greek government was spending too much. When that happens, it becomes more and more difficult to repay loans that the government takes out - especially after their credit rating fell. (The credit rating is a measure of risk about the borrower and their ability to repay.) So now, Germany has put together a financial package (lots of money) to help Greece out. But here's the catch - Greece must adhere to Austerity Measures. The leader of Greece has just become one of the most unpopular people in his country because he has slashed government spending. Seems like nearly everyone was on the government payroll. So they are protesting in the streets and demanding to not be included in the Austerity Measures. When the next elections roll around, does anyone actually believe that the Austerity Measures party will win? The German population doesn't - and they're rightfully worried that they won't get their money back.

Question. If governments can "consume like there's no tomorrow" and buy off votes, why would the population vote in anyone else? What happens when other countries or other lenders stop lending and the nation goes bankrupt? Last one out is left holding the trillion Euros of debt. They will not repay the debt if my notions of human nature do not fail me.

I used to have a lot of respect for Jeffery Sachs. That has diminished somewhat based on his comments in the discussion below.

Some notable quotes:

"I would recommend you panic."

"Let's purge the system of the rottenness."

"Do you think in 3 years time, Greece is going to be able to repay its debt?" JS replies, "I think there is a reasonable chance.... Absolutely, there's a reasonable chance at that."

more intelligent comments that I could compose

In related thoughts: An Austerity Encounter:

Taking Control of My Money

Earlier this year, I left the Financial Broker that I had been with for a decade or so. I had my accounts transferred to ScotTrade, where I would have much "ownership" of my retirement accounts. If I want to buy (and I have the funds to do it, I can do it). Same with selling. No appointments, no phone calls - everything online.

I started out way back before college, with Edward Jones. My parents used EJ. When I lived in Cambridge, I had a friend and colleague who just started up his own EJ brokerage. I went with him. Most of my money was put into Mutual Funds - specifically American (company, not country) Mutual Funds. They did fine, I suppose. I wasn't paying very much attention because I wasn't particularly interested.

I followed my broker as he switched away from EJ to be more independent and incorporate his son into the business.

My wife said that I had to leave because of a conflict of interest. The relationships of personal and professional needed to be unwound. I wanted to, but I kept putting it off for fear of offending. And I hate change. But I eventually overcame my inertia. So now I'm at ScotTrade. I'm selling many of my Mutual Funds (don't like their extra charges). I'm selling off many of my American funds because I can't shake feeling that in some way I was used.

I feel better, more responsible - and I'm taking the time to care and get educated.

(Image ripped off http://www.acf-fr.org/)

Saving Money through Gift Cards

When I came across this article from TechCrunch.com, an idea popped into my head to save me some money. The article discussed a couple websites that bought and sold Gift Cards. If you bought, they were at a discount from the buying power on the card. If you sold, then you got some (not all) of the money from the card back that you weren't going to use anyway. Back to my thought, why not buy a Gift Card for myself at a discount and use it to make purchases I already intended to make.

I'm only in the middle of my first maneuver, so it is not all tested and true, but here is how the story has unfolded thus far. amyrei and I had been discussing getting a trampoline for the kids. Tres expensive. Then I came across this. Someone did the research for me. Great. But still, it's $200. Sears, Sears, Sears, Oh yes, those Gift Cards. I can buy a Gift Card for $200 at an 10% discount. OK, that's only $20. Is there more? Sure. When I purchase the trampoline from Sears, I'll use my Gift Card as well as checkout codes for more savings! Where do I find those? Here (or other places, but the savings codes are pretty much the same).

So in the end, I'll buy a trampoline (Regular Price =$349.99) for less than $180. (Hope the kids don't get bored with it after a couple times jumping.)

This might be an option for you to consider if you are going to be making purchases at Best Buy or WalMart or Target or going to see a movie (and on and on). If you can wait a week for your card to arrive, you could save some dough.

[UPDATE]
You might also direct some of the money that you used to purchase your products to your favorite charity. There are programs set up like Charity Blast, which have partnered with various companies. The plan works like this: You buy the product from the company, the company gives a percentage of the sale to the charity that you choose. (Of course, that charity needs to be signed up for it, but that is usually free.)
...let the wheels turn ...would that count towards my tithe?

(imaged swiped from PlasticJungle.com)