Monday, August 13, 2012

Jim Rogers, Commodities Trader, Profits From Drought-Driven High CornPrices - Huffington Post

Jim Rogers said that he's making money from the drought and happy to see higher corn prices.
Across the Midwest, one of the worst droughts in decades is ravaging crops and driving the price of corn and other basics to record heights. It’s bad news for consumers, who will pay more at the supermarket as crops whither in the punishing heat.

But famed commodities trader and finance author Jim Rogers is making money.
Since the beginning of June, the index he owns -- the Rogers International Commodities Index for Agriculture, or RICIA, has jumped 18 percent. The index, which tracks the price of crops globally, is up roughly 10 percent for the year.

"I’m ecstatic to see prices going higher because [that] might save the day,” said Rogers by phone Tuesday. “People like you are sitting around saying ‘Oh my God, evil speculators are making money at the expense of [consumers]. ... If you’re worried about evil speculators making money, go to the field and drive the price down.” He added: “Who’s going to produce this food if the prices don’t go higher?”

Agricultural commodities prices are so low that farmers can’t make a good living, Rogers argued. And as this generation of farmers gets older, low prices mean less incentive for others to join the profession. All this is a recipe for a global crop shortage due, in part, to cheap corn, he said.
“America produced 200,000 MBAs last year and fewer than 10,000 agriculture [school] graduates,” said Rogers, echoing a point he’d made to Business Insider earlier in the month.

“Are [farmers] going to work for nothing? You better hope prices go higher and people make money. If they don’t, we’re not going to have any food.” Rogers added: “For the first time in recorded history, we don’t have anyone to go plant the crops.”
Asked how the farmer shortage he described relates to the current Midwest drought -- a function of weather, not labor supply -- Rogers responded that if there were more incentive for farmers to produce more, they would be dumping corn onto the U.S. market to make up for the shortfall. "That’s what happened in the past,” he said.
Scott Irwin, professor of agricultural economics at the University of Illinois, said skyrocketing corn prices will hit supermarket goods like milk, meat and eggs in particular, because corn is central in livestock diets. “It will be the equivalent of a regressive tax on consumers,” he said. “Those who spend a greater percentage of their income on these basic goods will hurt the worst.”
Irwin said he agrees that the low price of corn helped contribute to the current drought-induced crisis. “The prices were too low,” said Irwin, and farmers had little incentive to plant more than enough in previous seasons to make up for a possible future drought. But he disputed the idea that low corn prices led to a shortage of farmers. “I don’t know of any agricultural economist in the world who would agree" with Rogers, he said. “We have plenty of farmers.”
Irwin said short term prices are likely to continue to rise. That may mean more tough luck for consumers and, as Rogers pointed out, bad news for commodities traders who bet on normal harvests this season.
But it’s good news for some farmers and for investors like Rogers, who said there’s nothing wrong with what he’s doing.

"Until the prices go high enough and stay high enough long enough, we’re not going to have any farmers," Rogers said. "Where is the food going to come from, unless 'evil speculators' make a lot of money? Unless somebody invests a lot of money in agriculture?"

Jim Rogers, Scientists, Economists, and Geopolitical Analysts IssueDramatic ... - ETF Daily News (blog)

Terry Weiss: Money Morning In a riveting interview on CNBC, legendary investor Jim Rogers warned Americans to prepare for “Financial Armageddon,” saying he fully expects the economy to implode after the U.S. election.
Rogers, who for years has been an outspoken critic of the Feds policies of “Quantitative Easing,” says the world is “drowning in too much debt.” He put the blame squarely on U.S. and European governments for abusing their “license to print money.” In the U.S. alone, the national debt has surged to nearly $16 trillion, that’s more than $50,000 for every American man, woman and child.
“[They] need to stop spending money they don’t have,” Rogers said. “The solution to too much debt is not more debt… What would make me very excited is if a few people [in the government] went bankrupt…” Rogers added.

"Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors."
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Rogers also charged Obama and German Chancellor Angela Merkel with promoting dangerous policies that create the illusion the economy is stable… but are really only intended to buy time before their upcoming elections.
“Mrs. Merkle has an election next year,” Rogers said. “Mr. Obama has an election in November. The Americans and the Germans – they want to do everything they can to hold the world up until after the next election.”
“It’s going to be bad after the next election.” 

In a newly released documentary that went viral last month, a team of influential economic experts say they have discovered a “frightening pattern” they believe points to a massive economic catastrophe unlike anything ever seen in the history of the world.

The work of this team of scientists, economists, and geopolitical analysts has garnered so much attention, they were brought in front of the United Nations, UK Parliament, and numerous Fortune 500 companies to share much of their findings. Click on the short video above to see the eerie pattern.
And according to these experts – who have presented their findings to the United Nations, the UK Parliament and a long list of world governments – the catastrophe may happen well before Americans hit the polls in November.
“What this pattern represents is a dangerous countdown clock that’s quickly approaching zero,” said Keith Fitz-Gerald, the Chief Investment Strategist for the Money Map Press, who predicted the 2008 oil shock, the credit default swap crisis that helped bring about the recession, and the Greek and European fiscal catastrophe that is still wreaking havoc until this day.
“The resulting chaos is going to crush Americans.”
Another member of this team, Chris Martenson, a global economic trend forecaster, former VP of a Fortune 300, and an internationally recognized expert on the dangers of exponential growth in the economy, explained their findings further:
“We found an identical pattern in our debt, total credit market, and money supply that guarantees they’re going to fail,” Martenson said. “This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible.”
“And what’s really disturbing about these findings is that the pattern isn’t limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well.”
According to Martenson, these systems could all implode at the same time.
“Food, water, energy, money. Everything.” GET A FREE TREND ANALYSIS FOR ANY STOCK HERE!
Dr. Kent Moors, one of the world’s leading energy analysts, who advices 16 world governments on energy matters and who currently serves on two State Department task forces on energy, also voiced concerns over what he and his colleagues uncovered.
“Most frightening of all is how this exact same pattern keeps appearing in virtually every system critical to our society and way of life,” Dr. Moors stated.
“It’s a pattern that’s hard to see unless you understand the way a catastrophe like this gains traction,” Dr. Moors says. “At first, it’s almost impossible to perceive. Everything looks fine, just like in every pyramid scheme. Yet the insidious growth of the virus keeps doubling in size, over and over again – in shorter and shorter periods of time – until it hits unsustainable levels. And it collapses the system.”
Martenson points to the U.S. total credit market debt as an example of this unnerving pattern.
“For 30 years – from the 1940s through the 1970s – our total credit market debt was moderate and entirely reasonable,” he says. “But then in seven years, from 1970 to 1977, it quickly doubled. And then it doubled again in seven more years. Then five years to double a third time. And then it doubled two more times after that.
“Where we were sitting at a total credit market debt that was 158% larger than our GDP in the early 1940s… By 2011 that figure was 357%.”
Dr. Moors warns this type of unsustainable road to collapse can be seen today in our energy, food and water production. All are tightly connected and contributing to the economic disaster that lies directly ahead.
According to polls, the average American is sensing danger. A recent survey found that 61% of Americans believe a catastrophe is looming – yet only 15% feel prepared for such a deeply troubling event.
Fitz-Gerald says people should take immediate steps to protect themselves from what is happening.
“If our research is right,” says Fitz-Gerald, “Americans will have to make some tough choices on how they’ll go about surviving when basic necessities become nearly unaffordable and the economy becomes dangerously unstable.”
“People need to begin to make preparations with their investments, retirement savings, and personal finances before it’s too late,” says Fitz-Gerald.

Jim Rogers

Warren Buffett

Nouriel Roubini