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Hedge Farm! The Doomsday Food Price Scenario Turning Hedgies into Survivalists

By Foster Kamer
May 17, 2011 | 8:16 p.m

Hedge Farm! The Doomsday Food Price Scenario Turning Hedgies into Survivalists

On the rare occasion that New Yorkers talk about farming, it’s usually something along the lines of what sort of organic kale to plant in the vanity garden at the second house in the Adirondacks. But on a recent afternoon, The Observer had a conversation of a different sort about agricultural pursuits with a hedge fund manager he’d met at one of the many dark-paneled private clubs in midtown a few weeks prior. “A friend of mine is actually the largest owner of agricultural land in Uruguay,” said the hedge fund manager. “He’s a year older than I am. We’re somewhere [around] the 15th-largest farmers in America right now.”

“We,” as in, his hedge fund.

It may seem a little odd that in 2011 anyone’s thinking of putting money into assets that would have seemed attractive in 1911, but there’s something in the air-namely, fear. The hedge fund manager and others like him envision a doomsday scenario catalyzed by a weak dollar, higher-than-you-think inflation and an uncertain political climate here and abroad.

The pattern began to emerge sometime in 2008. “The Hedge Fund Manager Who Bought a Farm,” read the headline on one February 2008 Times of London piece detailing a British hedge fund manager’s attempt to play off the rising prices of grains in order to usurp local farmland. A Financial Times piece two months later began: “Hedge funds and investment banks are swapping their Gucci for gumboots.” It detailed BlackRock‘s then-relatively new $420 million Agriculture Fund, which had already swept up 2,800 acres of land.

Even Michael Burry, the now-defunct Scion Capital founder and star protagonist of Michael Lewis’ The Big Short-who bet against the housing bubble in 2008 with credit default swaps to enormous profit-gave a rare interview on Bloomberg TV last year, explaining that he’s thrown his hat into “productive agriculture land with water on site” as it’s going to be “very valuable in the future.” (Like most of those asked to comment for this story to The Observer, Burry declined to discuss his investments in farmland.)

Three years later, the purchase of farmland both in America and abroad by outside investors has increased-so much so that in February, Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, warned against the violent possibilities of a farmland bubble, telling the Senate Agriculture Committee that “distortions in financial markets” will catch the U.S. by surprise again. He would know, because he’s seeing it in his backyard: Kansas and Nebraska reported farmland prices 20 percent above the previous year’s levels and are on pace to double values in four years. A study commissioned by the Organization for Economic Cooperation and Development and released in January estimated the amount of private capital currently committed to farmland and agricultural infrastructure at $14 billion. It also estimated that future investments will “dwarf” what’s currently being thrown into land, by two to three times. Further down, the study makes a conservative projection that the amount of capital potentially entering the sector over the next decade will fly past $150 billion.

When asked if this is an end of the world scenario, the hedge-fund manager replied, “It really is. I tell my fiancée this from time to time, and I’ve stopped telling her this, because it’s not the most pleasant thought.’

This is happening in part because investors see their play as a hedge against hyperinflation. While the rest of the world uses the current calculation of the Consumer Price Index as a proxy for the cost of goods, some farmland investors are using a different equation, one from 1980. These investors assert inflation should be calculated the way it was before the Boskin Commission’s 1996 reworking of the CPI formula-in which case, it would be much, much higher.

“The CPI supposedly today is something like 1.5 percent,” says the hedge fund manager. “We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis. It’s also not about what it’s been over the last 10 years; it’s about what it’s going to be over the next 10 years.”

Projections show both the value of food and water to grow dramatically in the future. Anyone rich in both will have the only wealth that matters. Remember, he who has the Gold makes the rules. Or, he that can feed his family survives.

So the logic is that not only is the dollar worth far less than we think it is, but everything is more expensive and will only move further in that direction. Especially food, the value of which may have risen due to population increases, especially in places like China, where a consumer-happy middle class has finally started to emerge.

The rising cost of food can be seen even in New York’s yuppiest enclaves, where prices are high to begin with. Bloomberg food critic Ryan Sutton has been running a blog called The Price Hike wherein he measures the shifting costs of food at the plate in Manhattan restaurants. Mario Batali’s Del Posto is charging 21 percent more per meal since October. Gordon Ramsay at The London? Sixty-nine percent more since last month. Michelin favorite Bouley? Forty percent. The Breslin, at the Ace Hotel? Thirty-three percent. And so on.

But farmland isn’t an option for most investors. Farming is still mostly made up of family-run businesses, in the U.S., at least. Much of the farmland being purchased in America is purchased at estate sales. Pure-play farming isn’t a readily available product.

You can invest in John Deere for equipment; you can invest in Monsanto for seeds and agricultural tech. You can even invest in Kraft, which puts the plants on the supermarket shelf. But for now, it’s difficult to invest in a one-stop-shop farm. Additionally, there isn’t much arable land out there, it’s not increasing, and the quality of the land varies from parcel to parcel. And to make money off a farmland investment, you can’t just sit on it. You have to know what to do with it. “If you farm it like we do, you can generate a yield,” says the hedge fund manager. “We think the farmland will be worth 5 to 10 percent more every year, and on top of that, you get the commodities yield.” In other words, hedge funds are growing, picking and selling corn.

Asked if the American public would eventually see a chance to invest in Old McHedgeFund’s farm one day, the manager replied in the affirmative: “Yes. Without a doubt.” He estimated it would be only a few years before this happened. Just two weeks ago, Bloomberg Businessweek reported that El Tejar SA, the world’s largest grain producer, is planning on selling $300 million of bonds this year before a planned IPO. The plans for the IPO will be fast-tracked pending the sale of the bonds. If farming IPOs begin to emerge en masse, then farming-already often a dicey proposition simply on the basis of its being difficult to do correctly, the volatility of the weather and the possibility of entire crops going bad-may be vulnerable to a bubble.

There is, of course, a slightly more sinister reason to develop a sudden interest in agriculture. Last year, Marc Faber recommended to anyone: “Stock up on a farm in northern Norway and learn to drive a tractor.” He sees a “dirty war” on the horizon, playing on fears of a biological attack poisoning food supplies. Those sort of fears drive capital into everything from gold (recently at an all-time high and a long-time safe haven for investors with currency concerns) to survivalist accoutrements. In this particular case, one might buy the farm in order to avoid buying the farm.

That may seem extreme, but even the lesser scenarios are frightening to some. When asked if this is an end-of-the-world situation, the hedge fund manager replied: “It really is. I tell my fiancée this from time to time, and I’ve stopped telling her this, because it’s not the most pleasant thought.” He pauses for a moment. “We just can’t keep living the way we’re living. It’ll end within our lifetime. We’re just going to run out of certain things. We’ll just have to learn how to adjust.”

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Open Border with Mexico: A Study in Contrast

Open Border with Mexico
A Study in Contrast

by D13

There has been much said about the “open border” concept along the Mexico border. Some have the opinion that there should be no control and some are of the opinion that there should be closed borders and some fall in the middle. The purpose of this article is to lay out some facts and figures and you decide what the best procedure would be. Since I am on the “front lines” so to speak, I feel that I can speak authoritatively. I will do my best to present both sides of the concern and then present my analysis and opinion. The issue is not to look at this in an emotional state but rather look at it in the form of reality….what is…and not what we wish it would be. Never should a decision be made from emotion but rather, it is my belief that all decisions should be made from fact and from realism.

First, let me begin by saying that this article is not anti immigration. I have absolutely no problems with immigration. I have all sorts of problems with illegal immigration; consequently, this article will be aimed at the illegal immigration that takes place, its effects on the economy, both local and federal, its effects on health issues, and its criminal element. So, in order to proceed with the article, please accept the fact (as it is fact) that we are a nation of laws. Some of those laws directly affect immigration. It matters not whether you agree with those laws. If you disagree with our laws, I will be the first to say…great…you have an inherent right to disagree but change them if you do not like them. To break the law in order to change the law is wrong… legally, morally, and philosophically. So, deal with the fact that we have laws and the laws should be obeyed until changed.

The popular perception of illegal aliens crossing our southern border is that they are merely poor Mexicans trying to find a better life here. But increasingly, the border is being crossed by hardened, often violent criminals. During the past five months, more than 54,000 of the illegal aliens caught at the border were convicted criminals or people being sought in connection with crimes, according to federal officials. About 139,000 of the illegal aliens arrested last year fell into the same category. The main stream media has been instructed to not write articles about the issue of the criminal elements that have consistently been coming into this country disguised as poor immigrants. Yes…. instructed and the hammer is that they will not have a seat on Air Force One if they do not follow that rule. The criminal element knows that we are not actively engaged in stopping the immigrants because it is known that the liberal (progressive) establishment wants the votes and wants a voting block, therefore, it is a well known among those of us that patrol and fight on the border that the law is deliberately avoided and sanctioned by the progressive faction in this country. The first thing that I will deal with in the article is the gang influence and the criminal element that is prevalent on the border and in our cities.

Mexican Drug Cartels

Mexico’s drug gangs have been highly successful in the past two decades, gradually replacing Colombian gangs in the United States to control the profitable distribution of cocaine from coast to coast. Colombia remains the world’s largest producer, but Larry Holifield, the DEA’s past director for Mexico and Central America, says Mexican cartels are now the most powerful in the world. In 2003, Mexican traffickers supplied 77 percent of the cocaine that entered the US. Last year, 2009, it was 95 percent, a top DEA intelligence official, told a congressional panel. Now, in 2010, Mexican Drug Cartel trafficking has increased to 96% according to acting administrator Ms. Michelle Leonhart in a circular sent to all border agencies in February, 2010.

Mexican gangs have also dominated the growing methamphetamine trade, producing 53 percent of the drugs on the market in “super-labs” in Mexico as the U.S. tightens its laws. Much of the rest is made in clandestine labs mostly in amnesty safe California, also run by Mexicans, according to U.S. officials. And as has been the case for nearly 100 years, Mexico is the biggest marijuana supplier to the United States and produces nearly half the heroin consumed north of the border, behind only Colombia.

The drug trade permeates life in Mexico. In Ciudad Miguel Aleman, drug traffickers boost the local economy and rule with a combination of fear and awe, threatening or bribing anyone who dares to try to stop them. In this city of 35,000 across from Roma, Texas, hit men are easily identified by their bulletproof pickup trucks and sport utility vehicles. The traffickers have lookouts at every entrance to the city and informants on bicycles looking for anyone suspicious, townspeople say. They will photograph newcomers, including reporters, and question strangers. This can be further verified by the local National Guard Units that help patrol the border and by Department of Defense officials that are in observance. Quite often, these bullet proof pickup trucks and SUV’s, come across the border and are involved in shoot outs on the US side and it goes unreported….yes, that is UNREPORTED on a consistent basis. Again, it is not reported through heavy handed intimidation by the current administration. (Let me add a side note. It was also unreported in the Bush Administration as well but I have not seen written instructions from the Bush Administration as I have seen from the present administration.)

Armed gangs dressed in military uniforms often illegally cross the U.S.-Mexico border, providing cover for the trafficking of drugs and illegal aliens into the United States. U.S. government officials and sheriffs from border areas told a Senate panel of U.S. lawmakers these intruders were becoming more sophisticated and ruthless, often clashed with U.S. Border Patrol agents and committed crimes in the United States.

We are indeed aware of criminal organizations that wear military-style uniforms, use military-style equipment and weapons and employ military-style vehicles and tactics while conducting illegal activity in border areas,” Border Patrol chief David Aguilar told a joint hearing of the Senate subcommittees on immigration and terrorism.

The Border Patrol has intercepted over 400,000 aliens trying to cross the border in the first two months of this year, compared to around 100,000 a month – 1.2 million — last year. About 120,000 or 10% of those caught had criminal records. That’s 40,000 with criminal records caught so far this year!!!!! How many have not been caught?

One other NON REPORTED ITEM that has happened from the Mexico side. Mexican President Felipe Calderon tacitly turned his head as Mexican prisons officials “released” over 52,000 known felons and drug traffickers, rapists, murderers, and a variety on the Texas, New Mexico, Arizona, and California borders over a period of 6 months in 2008/2009. These “released” inmates were driven to remote areas outside of Piedras Negras, Ojinaga, Juarez, Monument 67, Nogales, and Tijuana, Mexico and told to not come back. They were given back packs of food, water, maps of sanctuary locations, and money. In January of 2010, three bodies, now identified as drug cartel members, were found in the Big Bend area of Southwest Texas. All three had walked off a cliff in the middle of the night trying to find their way through. All three had brand new Mountain West backpacks, three sets of clothes, 7 weapons (3 US, 2 Russian, and 2 Chinese origins), over $4,000 cash (collectively), maps of the region, and pick up points.

Terrorist Ties

It is common knowledge that Criminal Gangs and Al Qaeda are also merging along the Mexican Border

A Bangladeshi Muslim man named Fakhrul Islam was among a group of 13 illegal aliens arrested near Brownsville, Texas, just across the border from Mexico. Border Patrol agents have said that one of the men detained along with Islam was a member of Mara Salvatrucha, a violent Salvadoran criminal gang with more than 300,000 members across Central and North America, including powerful enterprises in several major U.S. cities. Adnan El-Shukrijumah, a high-ranking Al-Qaeda leader and one of the most wanted terrorists in the world, was spotted in Honduras meeting with members of MS-13. Former Attorney General John Ashcroft has said that El-Shukrijumah, who he has described as a ‘clear and present danger to America,’ is seeking ways to infiltrate the U.S. via the Mexican border, and is willing to pay top dollar in order to do so. Erik Holder, the current attorney General, disavows any knowledge of said meetings.

In the last 6 months, we have captured several immigrants that are linked to Muslim factions in Europe and South America. Everyone knows that our borders are porous and that it is easy to get into the United States and get on our welfare roles and actually get jobs often times in federally classified areas because of the lack of background security checks. In November of 2009, a security sweep of the Federal Border Patrol personnel in Laredo, Texas resulted in 23 firings of US Border Patrol agents that were NOT US Citizens and not on work visas or in the US legally. They were hired with fake birth certificates and social security numbers and the lack of background checks allowed them to work almost unrestricted. One of the “fired” agents was a three time convicted felon in the United States and released on treaty with Mexico only to have him come back and get hired.

Drug gangs could be acquiring weapons from contacts in drug rings operating on U.S. military bases near the border. Ongoing operations in Iraq, Afghanistan and elsewhere have made fighting drug use by soldiers a lower priority within the military. In addition, the constant flow of material back and forth between the U S and combat theaters has made it increasingly difficult to account for every piece of ordnance. With pressure to recruit more troops, standards have been lowered, which has opened the door to recruits with prior drug convictions. The Mexican gangs, then, could be involving in-house dealers in weapons-for-drugs schemes.

Laredo is increasingly becoming a sanctuary for members of Mexico’s various drug cartels. Nuevo Laredo drug gangs use Texas the same way the Taliban and al Qaeda use Pakistan: as a refuge from the fighting; a place where they- theoretically can rest, regroup and plan further operations. The gangs also use Laredo as a transshipment point for drugs going north and weapons coming south.

A new report is out that shows the costs imposed on Texas taxpayers by illegal aliens. The report was released by the Federation for American Immigration Reform (FAIR). The current estimates show there are 1.5 million illegal aliens in Texas. The costs, when broken down, come to a total of $725 a year per taxpaying household to cover the costs of education, health care and incarceration of illegal aliens throughout the state.

The more than $4.7 billion in costs incurred by Texas taxpayers annually result from outlays in the following areas:

Education. Based on estimates of the illegal immigrant population in Texas and documented costs of K-12 schooling, Texans spend more than $4 billion annually on education for illegal immigrant children and for their U.S.-born siblings. About 11.9 percent of the K-12 public school students in Texas are children of illegal aliens.

Health Care. Taxpayer-funded medical outlays for health care provided to the state’s illegal alien population amount to about $520 million a year.

Incarceration. The uncompensated cost of incarcerating illegal aliens in Texas’s state and county prisons amounts to about $150 million a year (not including local jail detention costs or related law enforcement and judicial expenditures or the monetary costs of the crimes that led to their incarceration).

The fiscal costs of illegal immigration do not end with these three major cost areas. The total costs of illegal immigration to the state’s taxpayers would be considerably higher if other cost areas such as special English instruction, welfare programs used by the U.S.-born children of illegal aliens, or welfare benefits for American workers displaced by illegal alien workers were also calculated.
Media Coverage

An award winning reporter has detailed an ongoing media blackout concerning a major issue of national security on the southern border.

Sara A. Carter, National Security and Pentagon reporter for the Washington Times, spoke to the Alex Jones show today regarding consistent incursions into the U.S. by armed Mexican troops aiding illegal smugglers.

Ms. Carter has won several national prestigious awards for her coverage of border issues north and south, including the 2006 Eugene Katz Award for Excellence in the Coverage of Immigration, presented annually by the Center for Immigration Studies.

There are a lot of people who don’t realize how serious the situation is on the southern border.” Ms. Carter said. “Even to the extent when sometimes some of our own government officials choose to ignore it, even though they know it’s going on.”

This is a very serious national security issue in many respects and it deals with an array from smuggling humans, to smuggling narcotics, and the whole mix up is that there’s many people within the Mexican government and military that have already been bought and sold out to the drug cartels.

“It’s very difficult to distinguish between those that are really trying to do the job, and those that are sell outs to the drug cartels. I’ve seen it with my own eyes, I’ve been down in many of the same border cities, I’ve spent an enormous amount of time in Mexico working with intelligence officials and others, and I have many Mexican sources who had said ‘please get the truth out’.” Ms. Carter continued.

Ms. Carter pointed out that although such activity has been ongoing for years, there has essentially been a news blackout in America.

It is a huge story. It is bigger than most of us even know, and people are afraid of covering the story. We hear reports but we don’t see in depth detail.” Carter said.

Aside from Carter herself it has been left entirely to the alternative media to expose the reality of the situation on the border. The mainstream media cautiously began reporting on the issue two years ago when Sara Carter uncovered Department of Homeland Security documents and maps showing that Mexican military has crossed into the United States 216 times in the past nine years. In the documents U.S. officials claimed the incursions are being made to help foreign drug and human smugglers into the United States. Those of us that work the border know that this is a crock of 24 carat BS. The efforts at strengthening the border and the efforts at getting the word out are, once again, being completely stifled. Any United States Military officer risks his career when voicing his thoughts and letting out information that is not “cleared” through Erik Holder and the Justice Department……………in violation of military protocol and rules. There is no freedom of speech and there is no right for the public to know in the minds of our current administration.

Many incidents have seen Mexican troops fire on U.S. border agents and our rules of engagement do not allow us to fire back. (That is as the rules of engagement for FEDERAL troops.) The State National Guard is under the command of the Governor until activated by Federal Order. President Obama is not the Commander in Chief of National Guard units exercising under state authority. Texas is the ONLY independent National Guard Unit in the United States (meaning that it does not “round out” active duty units. It stands alone) and the Texas Governor does not give up jurisdiction. The rules of engagement are completely different for the Texas National Guard. The Governor has the right to declare a State Emergency and, hence, National Guard Units can defend themselves in open combat….even when fired upon by Mexican Military Units. The state of Texas now employs armed drones, infra red detection equipment, ground patrols (utilizing ranchers with night vision support), intelligence operatives in Mexico, and armored units allowed by private land owners to patrol the more rugged areas.

Human Trafficking

This is, by far, the most despicable event that is happening on the entire Mexican border, but the El Paso area is the roughest so far. Most people think of human trafficking in terms of “coyotes” infiltrating the United States with hordes of illegal immigrants. It used to be this way….not anymore. A seldom reported fact are the abductions for ransom, prostitution, drug running, and slave trade from Mexico, Guatemala, Honduras, Costa Rica, El Salvador, Panama, and even the border areas on the United States side. The worst of the areas on our border is Juarez, across from El Paso. Known as the city of “Femicides”, from 2005 through 2009, it is estimated that over 5,000 female deaths (ages 12-22) have occurred. The latest find was on a ranch 12 kilometers outside of Juarez in Northern Chihuahua province, wherein one mass grave, 612 female bodies were discovered….tortured, burned, sexually abused, and dismembered. Average age…..16 years old.

It is common knowledge that families “sell” their off spring to human cartels for food money. Scores of children are abducted from immigrants traveling to the United States seeking work and hooking up with “coyotes” who, in turn sell them at the border. Open borders are an invitation to “take a chance” to travel to Norte America and play into the hands of the criminal element.

The latest personal observation was July, 2009 on a remote stretch of road outside of Del Rio, Texas. A refrigerated van was stopped at a remote unmarked check point. After a shoot out with the drive and its escorting vehicle, the 18 wheeler was transporting 32 young girls to Chicago, Illinois and New York City. Their ages ranged from 8 years to 16 years for use in prostitution and sweat shops. Despicable!!!! (For the record, the driver of the truck and the escort did not survive the gun fight).

Conclusion

Today, our great American nation is being invaded by millions of illegal immigrants who are fundamentally changing American society. Notably, a massive influx of illegal immigrants from Mexico and Central America is changing the face of the American Southwest. For some Mexicans, the motivations in this migration are pure – to secure a better life in a better place. However, not only is this illegal immigration illegal to begin with, it is also precipitating a host of problems for the United States of America. This influx is bankrupting state and local governments, hospitals, school districts, prisons, and social services across the Southwest. The influx is also fueling a wide range of criminal activities in the United States, from the simple, such as the hiring of illegal aliens by American companies, to the serious, such as drug running, human trafficking, organized criminal activity, gang activity, weapons violations, burglaries, auto thefts, etc., etc. In addition, terrorists from overseas nations are gaining entry to the United States through our porous borders.

“William Gheen, president of Americans for Legal Immigration, states that this is “the end of America as we know it. At least 10 million illegal immigrants are in the U.S. now, and that’ll double in five years.” (Dallas Morning News, Rancher in border case backs Minuteman, 04/03/2005) FOXNews.com reports that “public health care in Los Angeles is on life support, where sixty percent of the county’s uninsured patients are not U.S. citizens. More than half are here illegally. About 2 million undocumented aliens in Los Angeles County alone are crowding emergency rooms because they can’t afford to see a doctor.” (L.A. Emergency Rooms Full of Illegal Immigrants, 03/17/2005). The National Research Council estimates that the net fiscal cost of immigration ranges from $11 billion to $22 billion per year, with state and local governments bearing most of the costs. California’s tab is estimated at $3 billion alone. Richard D. Lamm, former governor of Colorado, writes in the Denver Post that “illegal immigration today isn’t cheap labor, except to the employer. The average family of illegal immigrants has two to four school-age kids. It costs U.S. taxpayers more than $7,000 a child just to educate them in our public schools.” (There’s nothing cheap about immigrant labor, 04/03/05) In the end, the American taxpayer pays many times the amount the cheap hourly wage was worth to a vagabond American company.”

But one has to figure that these costs are just a drop in the bucket. The Arizona Automobile Theft Authority for example reports that there were 56,222 stolen vehicles in Arizona in 2003. These thefts in many cases are tied to a host of other problems, including smuggling, illegal drug trafficking, human trafficking, burglaries, fraud, and drive-by shootings. The costs to these associated problems are immeasurable, both in dollar amounts (auto insurance, law enforcement costs, etc.) and in terms of general personal security.

In Dallas, Texas, we are witness firsthand to some of the problems associated with illegal immigration. Business owners in predominantly Hispanic areas are scared for their safety. Recently, a member of a family that owns several local restaurants was kidnapped in broad daylight, held for ransom, and then killed. The perpetrator fled back to Mexico. Mexican graffiti covers everything from houses and fences to businesses and highway signs. The City of Dallas, at great costs – up to $2,000 per sign, is currently either cleaning or replacing graffiti-marred highway signs across the area. One bridge overpass colorfully says it all: “Welcome to the Barrio, Bitches.” For Dallas Public Schools, Spanish proficiency for teachers is almost mandatory in many sections of the city. The enormous cultural and budgetary problems associated with educating children of illegal aliens denigrate the education of our American children.

Fed up by the deluge of trespassers and the lack of attention by the U.S. Government, ordinary Americans are now fighting back. A host of organizations, some listed on this page, are sprouting to deliver information about this travesty. Other organizations, such as Ranch Rescue, and the Minuteman Project, are taking a more proactive approach such as patrolling ranches and borders.

As wide-ranging as the problem of illegal immigration is, the solutions are simple.

First, we as Americans have to make it where it is not worth coming to America. We can do this by legally requiring proof of citizenship or legal residency for jobs, education and benefits. Unable to obtain jobs and services in America, many if not most immigrants would stay at home. As part of this effort, penalties would be more severe for American companies and organizations that knowingly provide jobs and services to illegal immigrants. In a way, providing jobs to illegal immigrants is treasonous.

Second, America needs a comprehensive guest worker program. This program would be funded primarily by Mexicans wishing to work in America and by American companies who can prove they need foreign workers because American workers are not available. In such a program, Mexicans (or American companies) would pay a processing fee to the federal government, instead of a smuggling fee to the Coyotes (human smugglers).

Third, America needs to physically secure its borders. We must get the Southwest region of the United States under control. Either we need a beefed-up Border Patrol, or we need the military to patrol the border in sufficient numbers, or both.

And fourth, eliminate the automatic United States Citizenry to children of undocumented and illegal immigrants,

The time to act is now. Each day, 5,000 to 10,000 new illegal immigrants enter the United States along the Mexican border. Each day, the costs associated with this influx escalate.

Lastly, do not play the race card on this one. It matters not what nationality these illegal immigrants are….it only matters that they are here in violation of our laws. There is no “natural right” or no “natural law” that justifies such illegal activity.

http://standupforamerica.wordpress.com/2010/04/02/guest-commentary-open-border-with-mexico/

Shaken: 10 Economic Disasters Which Threaten To Rip World Financial Markets To Shreds

Shaken: 10 Economic Disasters Which Threaten To Rip World Financial Markets To Shreds

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Yes, things really are that bad. The mainstream media has been really busy downplaying the economic impact of the disaster in Japan and the chaos in the Middle East, but the truth is that these events have huge implications for the global economy. Today our world is more interconnected than ever, so economic pain in one area of the planet is going to have a significant effect on other areas of the globe.

Falling World Economy - Abstract Painting

The following are 10 economic disasters which could potentially rip world financial markets to shreds….

#1 War In Libya

Do you think that the “international community” would be intervening in Libya if they did not have a lot of oil? If you actually believe that, you might want to review the last few decades of African history. Millions upon millions of Africans have been slaughtered by incredibly repressive regimes and the “international community” did next to nothing about it.

But Libya is different.

Libya is the largest producer of oil in Africa.

Apparently the revolution in Libya was not going the way it was supposed to, so the U.S. and Europe are stepping in.

Moammar Gadhafi is vowing that this will be a “long war”, but the truth is that his forces don’t stand a chance against NATO.

Initially we were told that NATO would just be setting up a “no fly zone”, but there have already been reports of Libyan tank columns being assaulted and there has even been an air strike on Moammar Gadhafi’s personal compound in Tripoli.

So since when did a “no fly zone” include an attempt to kill a foreign head of state?

Let there be no mistake – the moment that the first Tomahawk cruise missiles were launched the United States declared war on Libya.

Already the Arab League, India, China and Russia have all objected to how this operation is being carried out and they are alarmed about the reports of civilian casualties.

Tensions around the globe are rising once again, and that is not a good thing for the world economy.

On a side note, does anyone recall anyone in the Obama administration even stopping for a moment to consider whether or not they should consult the U.S. Congress before starting another war?

The U.S. Constitution specifically requires the approval of the Congress before we go to war.

But very few people seem to care too much about what the U.S. Constitution says these days.

In any event, the flow of oil out of Libya is likely to be reduced for an extended period of time now, and that is not going to be good for a deeply struggling global economy.

#2 Revolutions In The Middle East

Protests just seem to keep spreading to more countries in the Middle East. On Friday, five Syrian protesters were killed by government forces in the city of Daraa. Subsequently, over the weekend thousands of protesters reportedly stormed government buildings in that city and set them on fire.

Things in the region just seem to get wilder and wilder.

Even in countries where the revolutions are supposed to be “over” there is still a lot of chaos.

Have you seen what has been going on in Egypt lately?

The truth is that all of North Africa and nearly the entire Middle East is aflame with revolutionary fervor.

About the only place where revolution has not broken out is in Saudi Arabia. Of course it probably helps that the United States and Europe don’t really want a revolution in Saudi Arabia and the Saudis have a brutally effective secret police force.

In any event, as long as the chaos in the Middle East continues the price of oil is likely to remain very high, and that is not good news for the world economy.

#3 The Japanese Earthquake And Tsunami

Japan is the third largest economy in the world. When a major disaster happens in that nation it has global implications.

The tsunami that just hit Japan was absolutely unprecedented. Vast stretches of Japan have been more thoroughly destroyed than if they had been bombed by a foreign military power. It really was a nation changing event.

The Japanese economy is going to be crippled for an extended period of time. But it is not just Japan’s economy that has been deeply affected by this tragedy.

According to the Wall Street Journal, the recent disaster in Japan has caused supply chain disruptions all over the globe….

A shortage of Japanese-built electronic parts will force GM to close a plant in Zaragoza, Spain, on Monday and cancel shifts at a factory in Eisenach, Germany, on Monday and Tuesday, the company said Friday.

Not only that, GM has also suspended all “nonessential” spending globally as it evaluates the impact of this crisis.

The truth is that there are a whole host of industries that rely on parts from Japan. Supply chains all over the world are going to have to be changed as a result of this crisis. There are going to be some shortages of certain classes of products.

Japan is a nation that imports and exports tremendous quantities of goods. At least for a while both imports and exports will be significantly down, and that is not good news for a world economy that was already having a really hard time recovering from the recent economic downturn.

#4 The Japan Nuclear Crisis

Even if the worst case scenario does not play out, the reality is that the crisis at the Fukushima Dai-ichi nuclear plant is going to have a long lasting impact on the global economy.

Already, nuclear power projects all over the world are being rethought. The nuclear power industry was really starting to gain some momentum in many areas of the globe, but now that has totally changed.

But of much greater concern is the potential effect that all of this radiation will have on the Japanese people. Radiation from the disaster at the Fukushima Dai-ichi nuclear plant is now showing up in food and tap water in Japan as an article on the website of USA Today recently described….

The government halted shipments of spinach from one area and raw milk from another near the nuclear plant after tests found iodine exceeded safety limits. But the contamination spread to spinach in three other prefectures and to more vegetables — canola and chrysanthemum greens. Tokyo’s tap water, where iodine turned up Friday, now has cesium.

Hopefully the authorities in Japan will be able to get this situation under control before Tokyo is affected too much. The truth is that Tokyo is one of the most economically important cities on the planet.

But right now there is a lot of uncertainty surrounding Tokyo. For example, one very large German real estate fund says that their holdings in Tokyo are now “impossible to value” and they have suspended all customer withdrawals from the fund.

Once again, let us hope that a worst case scenario does not happen. But if we do get to the point where most of the population had to be evacuated from Tokyo for an extended period of time it would be absolutely devastating for the global economy.

#5 The Price Of Oil

Most people believe that the U.S. dollar is the currency of the world, but really it is oil. Without oil, the global economy that we have constructed simply could not function.

That is why it was so alarming when the price of oil went above $100 a barrel earlier this year for the first time since 2008. Virtually everyone agrees that if the price of oil stays high for an extended period of time it will have a highly negative impact on the world economy.

In particular, the U.S. economy is highly, highly dependent on cheap oil. This country is really spread out and we transport goods and services over vast distances. That is why the following facts are so alarming….

*The average price of a gallon of gasoline in the United States is now 75 cents higher than it was a year ago.

*In San Francisco, California, the average price of a gallon of gasoline is now $3.97.

*According to the Oil Price Information Service, U.S. drivers spent an average of $347 on gasoline during the month of February, which was 30 percent more than a year earlier.

*According to the U.S. Energy Department, the average U.S. household will spend approximately $700 more on gasoline in 2011 than it did during 2010.

#6 Food Inflation

Many people believe that the rapidly rising price of food has been a major factor in sparking the revolutions that we have seen in Africa and the Middle East. When people cannot feed themselves or their families they tend to lose it.

According to the United Nations, the global price of food hit a new all-time high earlier this year, and the UN is expecting the price of food to continue to go up throughout the rest of this year. Food supplies were already tight around the globe and this is certainly not going to help things.

The price of food has also been going up rapidly inside the United States. Last month the price of food in the United States rose at the fastest rate in 36 years.

American families are really starting to feel their budgets stretched. According to the U.S. Labor Department, the cost of living in the United States hit a brand new all-time record high in the month of February.

What this means is that U.S. families are going to have less discretionary income to spend at the stores and that is bad news for the world economy.

#7 The European Sovereign Debt Crisis

Several European governments have had their debt downgraded in the past several months. Portugal, Spain, Greece and Ireland are all in big time trouble. Several other European nations are not far behind them.

Right now Germany seems content to bail the “weak sisters” in Europe out, but if that changes at some point it is going to be an absolute nightmare for world financial markets.

#8 The Dying U.S. Dollar

Right now there is a lot of anxiety about the U.S. dollar. Prior to the tsunami, Japan was one of the primary purchasers of U.S. government debt. In fact, Japan was the second-largest foreign buyer of U.S. Treasuries last year.

But now as Japan rebuilds from this nightmare it is not going to have capital to invest overseas. Someone else is going to have to step in and buy up all of the debt that the Japanese were buying.

Not only that, but big bond funds such as PIMCO have announced that they are stepping away from U.S. Treasuries at least for now.

So if Japan is not buying U.S. Treasuries and bond funds such as PIMCO are not buying U.S. Treasuries, then who is going to be buying them?

The U.S. government needs to borrow trillions of dollars this year alone to roll over existing debt and to finance new debt. All of that borrowing has got to come from somewhere.

#9 The U.S. Housing Market

The U.S. housing market could potentially be on the verge of another major crisis. Just consider the following facts….

*In February, U.S. housing starts experienced their largest decline in 27 years.

*Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.

*Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months. Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.

*In September 2008, 33 percent of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure. Today that number has risen to 48 percent.

#10 The Derivatives Bubble

Most Americans do not even understand what derivatives are, but the truth is that they are one of the biggest threats to our financial system. Some experts estimate that the worldwide derivatives bubble is somewhere in the neighborhood of a quadrillion dollars. This bubble could burst at any time. Right now we are watching the greatest financial casino in the history of the globe spin around and around and around and everyone is hoping that at some point it doesn’t stop. Today, most money on Wall Street is not made by investing in good business ideas. Rather, most money on Wall Street is now made by making shrewd bets. Unfortunately, at some point the casino is going to come crashing down and the game will be over.

Most people simply do not realize how fragile the global economy is at this point.

The financial crash of 2008 was a devastating blow. The next wave of the economic crisis could be even worse.

So what will the rest of 2011 bring?

Well, nobody knows for sure, but a lot of experts are not optimistic.

David Rosenberg, the chief economist at Gluskin Sheff and Associates, is warning that the second half of the year could be very rough for the global economy….

“A sharp slowing in global GDP in the second half of the year cannot be ruled out.”

Let us hope that the world economy can hold together and that we can get through the rest of 2011 okay. The last thing we need is a repeat of 2008. The world could use some peace and some time to recover.

But unfortunately, we live in a world that is becoming increasingly unstable. With the way that the world has been lately, perhaps we should all just start to expect the unexpected.

But world financial markets do not respond well to instability and unpredictability. In fact, investors tend to start fleeing to safety at the first signs of danger these days.

Most Americans simply have no idea how vulnerable the world financial system is at this point. Nothing really got “fixed” after 2008. If anything, global financial markets are even more fragile than they were back then.

So what do all of you think about the state of the global economy? Please feel free to leave a comment with your opinion below….

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