Category Archives: Agrinomics

“The Great Commerce of every Civilized Society is that carried on between the Inhabitants of the Town and those of the Country.”- Adam Smith’s Wealth of Nations, 1776

HOWARD GRAHAM BUFFETT FOR TRUMP’S AG SECRETARY

Howard Graham Buffett serving meals in Sierra Leone in 2007. He spends up to 200 days a year on the road, doing foundation work. (Jeannie O’Donnell / The Howard G. Buffett Foundation)

Howard, Warren Buffett’s farmer son, is one man, a rich one man, working in all 54 African countries developing sustainable farming on the continent with the biggest problems in hunger, poverty, soil, infrastructure, economics and politics. Howard’s dad is bridge buddies with Bill Gates who is also saving Africa. There is hope in 2016 that the Bern fires up the base like Teddy Roosevelt and FDR, while the well informed Buffett Gates partnership puts their money where it’s needed – like not in Panama.

howard-b“USAID and others have been at this for decades,” he said. “By now, according to projections, we should have ended hunger. So my point is, what we’re doing isn’t working.”

“Don’t get me wrong,” Buffett told me. “I’m a farmer. I know what I can get from improved seed. I know what I get from fertilizer. They’re huge. But technology can’t build organic matter. It can’t create topsoil. It can’t magically protect water quality. It’s a quick fix, and Africa needs a long-term solution.”

Instead of a green revolution for Africa, Buffett favors what he calls a “brown revolution,” or, to quote the distinguished agricultural ecologist Sir Gordon Conway, a “doubly green revolution”—a focus on environmentally sustainable agriculture that minimizes erosion, preserves and regenerates soil, and makes the land more resilient, while also increasing yields. In contrast to the green revolution, the brown revolution is a tortoise-like approach: Its impact is gradual. Over the past decade, patiently, the Howard G. Buffett Foundation has spent hundreds of millions of dollars to identify and promote practical, low-cost methods of conservation farming—cover crops, no-till farming, locally bred seed varieties—that improve African soil quality and crop yields without chemical fertilizers and costly imported seeds. “If you take a place like Africa,” Buffett told me, “where they have the most degraded soils in the world, very limited nutrients, ground that is farmed to death—literally to the point where you have to move on and farm another piece of ground—and all you’re doing is throwing on synthetic fertilizer, it’s like trying to put an oxygen mask on a cadaver and expecting it’s going to start breathing again.”

1028-pmad-mbuffettThe foundation owns and operates four research farms—4,400 acres in Decatur, 1,000 acres in Nebraska, 3,900 acres in the high desert of southeast Arizona, and the farm in South Africa, spanning 9,200 acres—where scientists from Texas A&M, Penn State, and Purdue are conducting experiments on how best to grow crops in places with little water and poor soil. In South Africa, the foundation is testing 14 different cover crops—among them cowpea, lablab, and pigeon pea—to learn which ones best reduce erosion and improve soil fertility. In Arizona, the foundation replicates the conditions faced by poor African farmers: drought, little or no fertilizer, oxen tilling the land. Tests are under way to measure the precise relationship between water and crop yields. http://www.theatlantic.com/magazine/archive/2016/05/how-warren-buffetts-son-would-feed-the-world/476385/

 

12_f_buffett-0011Established in 1999, his Howard G. Buffett Foundation’s (HGBF) primary mission is to improve the standard of living and quality of life for the world’s most impoverished and marginalized populations. It apparently spends $50 million a year on various programs around the world, particularly in Africa.

Not surprisingly one of his biggest projects is improving lives of poor farmers, themselves often starving. His goal is to help teach them methods that they can afford to implement after his programs end. He also insists they learn accounting.

This is apparently in contrast to the approach used by the Bill & Melinda Gates Foundation, the organization to which his father has pledged more than $30 billion, which relies more heavily on introducing technology to third world farming. “He’s really pushing a system that is similar to what we have outside this door in America,” explained Howard to Leslie Stahl on 60 Minutes, “I told him that we have got to stop doing it like we did.”

“Your father gives money to Gates. You come out and say it’s all wrong. Is this sibling rivalry?” asked Stahl. Gates and Buffett, the country’s two richest men, have become good friends, often playing bridge, celebrating birthdays and traveling together on vacations. Howard responded that Bill, who they call brother Bill, is the smartest guy in the world besides his dad, but pointed out that he understands agriculture quite well and had used a similar approach unsuccessfully when first starting to give away money.

warren-howardSome details about Howard that Stahl didn’t cover include the fact that Buffett’s son is a writer of more than half a dozen books; sits on the board of Sloan Implement, a privately owned distributor of John Deere agricultural equipment; and also previously served on the boards of food processor Archer Daniels ADM +0.74% Midland; Coca-Cola Enterprises Inc, the largest Coca-Cola bottler in the world; and ConAgra Foods. He has also traveled to more than 95 countries documenting the food and conservation challenges. In 2005, he received the Will Owen Jones Distinguished Journalist of the Year Award, and in 2007, he was appointed a United Nations Goodwill Ambassador Against Hunger on behalf of the World Food Programme. In 2011, he received the World Ecology Award.

It could be a long time before Howard succeeds his father – “He won’t leave until he’s buried in the ground,” Howard told Stahl – and even longer before anyone knows if he proves to be a decent successor. Still he’s certainly proven himself to be a worthy scion of an admirable man, one who has his feet firmly planted in the earth.

http://www.forbes.com/sites/luisakroll/2011/12/11/who-is-howard-buffett-60-minutes-gives-glimpse/#6b099cdd6c03

INFRASTRUCTURE IS SPELLED WITH A ‘P’ AS IN PERMACULTURE

permaculture-hobbit-houseAs I was pontificating about how you could have an urban income and a rural lifestyle by raising 50 goats on five acres, my fellow teachers were educating others on Permaculture. Not wanting to expose my blissful state of ignorance to embarrassment I avoided my right of tuition free class attendance. However, Shelby, the sustainable agriculture and “Five Acres to Independence” advocate, took their course including the farm visit.  When Shelby raved about the farm’s sawdust toilet I discounted Permaculture, whatever it was about was not for me.

Currently living the expat life of the idle Social Security recipient in Antalya, Turkey I’m more interested in the debate between Fiscal and Monetary policy. Slow learner that I am, I have learned that the government deals with the Fiscal while the Federal Reserve monkey’s around with the Monetary. The debate synopsis is that the world and the US are going to hell in a sawdust toilet.

bernake-wheelbarrowThe FED since Greenspan has printed at least $10 trillion of ‘thin-air’ paper money with zero results and is now begging the politicians for Fiscal stimulus in Infrastructure. Trump is right there with them wanting to build walls, bridges and airports. Since 80% of the voters live in the city and another 19% live in the burbs the real 1%’s are still down on the farm. Alas alack rural redmeat farmers didn’t take classes in Permaculture, let alone practice Regenerative Agriculture because the Fiscal poohbahs don’t see the NEED!

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“What are you going to do when the well runs dry?”

  • Eliminate all Agricultural Subsidies
  • Organic only farming – no Monsanto, no pesticides, no herbicides, no chemical fertilizers
  • Outlaw Factory Farming – pigs, dairy, poultry, fish
  • Legalize Raw Dairy – if California can do it, every state can do it

HEDGEFUND GURU BUYS FARMLAND

dwight-anderson

When a commodity trading guru like Dwight Anderson, founder of the iconic Ospraie Management, has something to say on the market outlook, people tend to listen, especially when he’s consigning the last great commodity bull run to the dustbin of history and buying gold and farmland for the next crisis.

Anderson is the former Tiger Cub, whose Ospraie Management at one time ran the world’s biggest commodity hedge fund, with close to $4 billion at the peak.

deflationBuy the Farm to Avoid a Crisis

While we have previously discussed the plight of the US farming sector, with astounding increases in debt and the erosion of farmland values, Anderson sees more than just value here. 

“I think farming, in terms of the productive side of the industry, is still an incredibly under-appreciated asset and business in that you’ve got land where every single year, on average, you’re going to grow more. You maintain your water table, your soil, the nutrients there, and I get productivity growth every year. That is awesome. Every other one of the productive businesses, you produce less every year.”

3pettis-breakfast-at-trevas-for-website

“It’s hardest to get real pricing power in agriculture, because you actually are growing productivity per year, versus the decline rates in the others. But as an asset to own for currency protection, inflation protection, just a general income, yes, yield, farming is phenomenal.”

RAW DAIRY

moonshine-still

Finding a source of raw dairy products is akin to looking for ‘moonshine’ during prohibition. It’s the ‘speakeasy’ in the city or the ‘still’ in the country.

Whole Life Buying Club, Louisville, KY has established the first legal speakeasy in the country. They have solved the Buyer’s Dilemma driving out to the farm for a gallon of raw milk. WLBC returns 80% of sales to the farmer solving the Farmer’s Dilemma, making an urban income from a rural lifestyle.

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Anala Goat Company got our license in March 2003, We happily paid Ken 25% commission and danced around the Houston Farmers’ Market parking waving $986 in cash to celebrate free and not quite legal enterprise. The ‘not quite’ part, our  grade ‘A’ raw dairy license permitted the sale of raw milk only on the farm, 50 miles out of town.

Kentucky on the south side of the Mason-Dixon line has always resisted all the Yankee laws they didn’t like and Prohibition of Mother Nature’s most important product is second only to Bourbon on the list of unforgivables.

Whole Life Buying Club occupies a storefront in Louisville and like a country club is for members only. The farmers can bring the non GMO, certified organic produce, licensed grade ‘A’ raw dairy, to their store, where the members can pick and choose what they want.  No more CSA good, bad and ugly bags of vegies.

As a native Cincinnatian my dairy hero was Carl Lindner, who dropped out of high school to run his father’s United Dairy Farmers store in Norwood all the way to #167 on Forbes billionaire list.  Teddy Roosevelt outlawed raw dairy in 1912 with the creation of the Food & Drug Administration. Prohibition lasted from 1920 to 1933 real food prohibition has gone on for over a hundred years, impoverishing farmers and leaving the US the most malnourished industrialized nation on earth.

organic pastures
Organic Pastures Every batch of milk is tested by three different entities: the Fresno County Health Department, California Department of Food and Agriculture (CDFA), as well as a third party laboratory for your safety. https://www.organicpastures.com/
Prohibition
Did you hear how Monsanto lost a $289 million judgement against Roundup causing Cancer. The Food & Drug Administration has Prohibited the consumption of Raw Milk since 1912 b/c of the Law of Unintended Consequences.

The Government Is Not Our Friend

BOB STRYK

The Stryk Jersey Farm 629 Krenek Stryk Rd Schulenburg, TX 78956 is a 100 miles west of Houston. Houston could start a WLBC style buying club inside Loop 610, allowing Bob Stryk to deliver real cream, butter, cottage cheese, aged cheese and of course raw milk. Houston is the highest per capita eating out city in the world, trendy cuisine and restaurants are their thing. Whole Foods was invented by two wahoos from Houston who had to move to Austin for political correctness.

Whole Foods invited us to set up shop out front of their store, until they discovered we couldn’t sell raw dairy products inside, alongside or outside. Now, that Bezos owns Whole Foods, soon organic vegies will be delivered by drone but not raw milk. It’s Karmic payback for Teddy Roosevelt and the FDA. Why? It’s Prohibited!

It’s Catch 22 writ large, Louisville’s WLBC ‘members only’ concept works because it’s the only way to buy raw milk, if they were selling arugula, no big deal. You can buy organic produce at Wal-Mart, cheap.

This is such a fantastic idea, why didn’t I think of it – because I was born and raised on the Yankee side of the Ohio River. As we say in goat speak: Louisville’s WLBC is a real food Bellwether – the leading sheep of a flock, with a bell on its neck.

Well, the government and Big Ag for starters. Joel Salatin, refers to himself as a ‘lunatic farmer’ because so many of the changes he thinks our food system needs are either illegal under the current law or mightily resisted by the deep-pocketed corporations controlling production and distribution.

OCCUPY FARMERS’ MARKETS

Milk March

When our sale of raw goat’s milk depended on Yuppie couples driving out to our farm fifty miles southwest of Houston the “invisible hand” of desperation slapped me upside the head with my MBA diploma. Granted, I was not an honor, or even a near honor graduate of Case Western Reserve’s Weatherhead school of business but Anala Goat Company’s on-the-farm sales of $200/week versus a $500/week feed bill foretold, a future going-out-of-business sale. Maybe with a catchy tagline e.g. “Had Milk.”

Shelby, the CPA Systems Analyst brains of the outfit, had already poured money, not milk, into building the dairy, buying the goats, dogs, cows, the land and equipment in order to obtain a Grade ‘A’ Raw Dairy License. In addition to rigorous monthly testing of our product, the Texas Department of Health limited sales to on-the-farm only. The delivery of raw dairy to retail stores, farmers’ markets, or even door-to-door was subject to all kinds of bad things like revoking our license.

salt march

Over a double stack order of nachos and fajitas, I asked myself, “what would Gandhi do?” He said, mirror my ‘Salt March to the Sea’ by occupying the Houston Farmers’ Market. I learned at Case Western to look to Harvard Business School case studies for further guidance. Of course, I found zippo raw goat’s milk case studies but Gandhi’s protest of England’s Salt Tax led me to the Boston Tea Party’s, “taxation without representation” caper.

I admit, even as an architect, it was a challenge to connect salt and tea tax revolts to barriers to entry of off the farm sales of raw milk. After all, our neighbors trucked that nasty arugula and okra to the market, waving their ‘organic’ cred banners.

My third data point was the 1920 Prohibition Act.

Prohibition in the United States was a nationwide constitutional ban on the production, importation, transportation and sale of alcoholic beverages that remained in place from 1920 to 1933.

The sale of raw dairy has been Prohibited since 1912 to the present day. California never eliminated raw dairy from retail stores. Texas, Oregon and five other states allow on-the-farm sales only. I joined the Weston Price Foundation, listed analagoatcompany.com on their website www.realmilk.com and setup my 10 x 10 tent on Saturdays at the Houston Farmers’ Market.

Agrinomics

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Why pay this guy $15 for a gallon of milk when you can go to Wal-Mart and grab a Great Value jug for just $2.89? Truth is you need his raw – not pasteurized, not homogenized – goat’s milk more than he needs your money.

My Houston Farmers’ Market buddie, Bob Stryk http://texascheese.com/ and I were the two Raw Milk vendors at the market, until a knucklehead board member turned us in to the Texas Department of Health. Even though we were both visited monthly by Vince, the State inspector, our grade “A’ raw dairy license was limited to on-the-farm sales. My farm to market trip was fifty miles up the Southwest freeway. Bob’s sixty head of Jerseys grazed on his 310-acre farm 8 miles past Schulenburg, a 100 miles west out I-10.

BOB STRYKAfter our eviction, I bailed and shortly thereafter moved to China, while Bob relied on ‘drops’ at friendly driveways in Katy and Sugarland. At the market we charged $10/gal. Today, Stryk’s at the farm price was listed at $7.50/gal. That’s fresh raw Jersey cow milk, not pasteurized, not homogenized, pure not-adulterated, 100% digestible nutrient dense butter, cream, yogurt, milk and cheese.

organic pasturesThe raw milk movement (the largest form of  civil disobedience in America) is led by Mark McAfee of Organic Pastures in Fresno, California. Raw milk can be purchased legally on the farm and more importantly in stores. Organic Pastures’s raw milk, butter, kefir, cheddar, cream, and yogurt is available in over 200 stores in the Bay area alone, including Whole Foods. Brace yourselves, the fresh grass-fed 100% organic milk goes for $12.00/gal.     

Why pay the guy at the top $15for a gallon of milk? He’s selling raw goat’s milk the closest thing to mothers’ milk – any species of mammal, save Flipper the  dolphin, can thrive and survive on goat’s milk – but works harder than Stryk and McAfee. Their cows have four teats pumping out 8-10 gallons a day versus two teats and one gallon for the goat.

 

A RETURN TO THE GOAT STANDARD

3Pettis - Breakfast at Trevas for websiteEarly in my goat farming career I bought 6,000+ pounds of goats from a scalper named Floyd Thompson in neighboring Higgins, TX. – At the age of twelve, Will Rogers ran away from his Oklahoma home to Higgins to learn how to be a cowboy. – I agreed to pay 80 cents a pound for Floyd’s 68 rag-tag collection. We drove truck and trailer to the grain silo for an empty weigh-in and returned an hour later for the loaded tally. Wrote a $5,000 check from Shelby’s account and started my two-month saga to resell those puppies for at least 85 cents a pound.

For my first attempt I set-up shop on the highway outside Booker complete with a chain-hook scale. Three hours later $20 bucks for one lousy 20lb. goat sold to a Mexican slaughterhouse worker. Next try was a six pack at the Dodge City livestock auction for a whopping 75 cents a pound. A week later it was the same story at El Reno, the auction west of Oklahoma City, where scalper Floyd had purchased most of the sorry critters weeks before.

Before embarking on another furtive sales venture my goat buddy from up-the-road in Slapout, OK – called Slapout because when the general store was out of stock their response was, “sorry we’re slap out.” – Danny Nord, claimed that slaughter goat buyers wanted ‘wethers’ or neutered ‘billies.’ Taking out his pocket knife he performed the surgery on ten ‘billies’ who post op, laid around the pen with sorrowful facial expressions. Four subsequently failed to survive the experience. Dead goats brought zero cents thereby adding to my cost of goods sold.

mills

It was then suggested that I try selling the remaining stock at the sheep & goat auctions in Texas. Goldthwaite was the closest, seven hours straight south of Follett. Friday afternoon the deed was done, 75 cents for the motley ones and 85 cents for those showing Boer blood influence. When I got home to total all the damage I had sold my collection of hand me down goats for an average of 70 cents on the dollar. Of course the diesel fuel, chicken fried steak and cheeseburger lunches were not included. However, sale barn, livestock auction cuisine beats the truck stop any day.

koreshYou would think that like Adam Smith, the father of Economics who gathered his wisdom of the law of supply and demand at the Glasgow, Scotland sheep auction, I had learned my lesson. But after Shelby and I relocated the Anala Goat Company to Kendleton, TX, 50 miles southwest of Houston I became incentivized by the West African need for $1.25/lb. billy goats. Mrs. Kettler and her husband had over 200 Nubian goats on two acres in Waco, TX. They were a legend in Texas dairy goatdom for selling $7/gal. raw goat’s milk to David Koresh and his Branch Davidians. The ATF put an end to Mrs. Kettler’s number one customer and to top it off Mr. K, who did all the milking by hand, died.

The opportunity to purchase 40 of the best Nubian breeding stock billies for only a dollar a pound, was too much to resist. Borrowing another $5,000 check from Shelby, I loaded those bad boys up in Waco and drove straight back to the Nigerian chop shop in Houston. Woe is me the deal was off, that $1.25/lb. was good for the Christmas rush, and no longer applicable in January especially since Africans don’t celebrate the Super-Bowl.

Dairy goats in general are docile. Does for sure, Bucks not so for sure but Nubian Bucks are the noisiest, rowdiest, most obnoxious breed known to man. Now, Anala Inc. had forty of them in our backyard. Accidents, described as self-punishment in Louise Hay’s book Heal Your Body came to mind when I fed Shelby’s English Mastiff in the barn stall and all forty bad boys rushed in. The Mastiff sunk his two bicuspids into my thigh muttering under his fangs, “that’s for squandered five grand on ill-gotten ventures.”

teeth checkBecause Allah, like God, protects children, drunks and architects, I was spared from complete failure by my Palestinian goat vendor in Katy, who needed two-tooth billies for the Eid al-Fitr festival celebrated by Muslims around the world, marking the end of the holy month of Ramadan. Alhamdulillah, in 2002 Eid was in February. Eid al-Fitr in Arabic literally means “festival of breaking the fast” and back then it meant saving my ass.

After, the Houston Islamic community had opened every Nubian’s mouth to verify that they were two-toothed yearlings they accepted 39 of the four legged devils. One, the prettiest, had a limp and went home with me. Later, swept up in the biblical sense I branded the dappled fawn colored boy buck, Joseph “coat of many colors.” Although, the Palestinian paid me the over a barrel price of $1/lb. I eventually sold Joseph for $500.

josephYou see, Juan Valdez – he looked like a Juan Valdez, only taller – came out to our farm as the Goat Marketing Rep of the Texas Department of Agriculture and inquired about the handsome “coat of many colors” Joseph. “Did you get that buck from Mrs. Kettler?”

Yes, I did.

“That’s great cause she raises the best Nubians in Texas.”

I wondered if the Muslims thought they tasted good too?

At the end of my 400 days and 400 nights of selling goats door to door, I was convinced that a dollar a pound was a good price for any goat as long as it was still alive. Shelby, the CPA Systems Analyst brains of the analagoatcompany.com begged to differ and sent me and Rudy, my polka-dancing Czech-American goat buddy neighbor, off to San Angelo to deliver a dozen or so of our full blood Black Boer goats for $11,000 COD.

ali the turkThe COD part turned out to be a bad check but Rudy and I got to tour the Producers Livestock Auction, where every Tuesday 4,000 goats and 6,000 sheep are auctioned off.  Ali the Turk is the big buyer of sheep and goats in Texas. On Mondays, he’s in Junction, Tuesday he’s front and center in San Angelo, he ends his work week buying for the East Coast ethnic market on Fridays in Goldthwaite. He has his purchased sheep and goats loaded on four level cattle trucks for deliver to New Holland, Pennsylvania.

There are three million goats, six million sheep and 100 million cows in America and 80% of those live in Texas. Save for a couple hundred thousand in Dallas and Houston, the hardcore caprine eaters live in the New York, New Jersey area. Ali either sells direct to a slaughter house or is forced to re-auction them off in New Holland. As Adam Smith and I learned livestock auctions are the  Real World of price discovery.

US dollar Value 3-value-of-the-dollarNo longer in the goat business per se I’m still interested in economics and especially the value of my fixed income dollar. I was on a jet plane to Rio on August 15, 1971 when the flight was grounded in Panama because Nixon closed the ‘Gold Window.’ At the time I thought that was cute. My 1955 Social Studies teacher claimed the dollar was only worth 35 cents, in 1971 it was 25 cents and after Greenspan and Bernanke less than a nickel. I thought the great Satan Greenspan was having an Adam Smith moment when he recently touted the 1913 (when a dollar was a dollar) economy and a return to the gold standard.

I don’t know how much a goat was worth in 1913 or 1971 but in 2001, I know all too well. As of Wed Aug 10, 2016 according to the USDA Market News, an 80lb. wether – A bellwether is literally the lead sheep or goat wether that wears a bell – got $2.22 – $2.42 a pound or almost $200 at the San Angelo, Producers Livestock Auction.

The New Holland Sales Stables in New Holland, Pennsylvania is one of the most important livestock auctions in the country, due to its proximity to the northeast urban population. Twelve percent of all goats slaughtered in the United States will pass through this sale ring at New Holland, and 1.6% of all federally inspected sheep slaughtered in the United States pass through here. For sheep and goats, the New Holland market has national significance due to its proximity to the northeast region of the United States, where the greatest demand for sheep and goat products is located. Although 80% of all sheep are raised in the west and processed by four major packers, the prices set at New Holland are the benchmark that others look at. Because of the high prices at Eastertime, lambs from as far away as New Mexico will arrive in New Holland by the truckload for the Easter lamb sale. Auctions are an important way in which agricultural commodities are marketed; for small farmers, the auction is both a direct outlet for selling their products as well as the measure that sets prices for products sold privately.
The New Holland Sales Stables in New Holland, Pennsylvania is one of the most important livestock auctions in the country, due to its proximity to the northeast urban population. Twelve percent of all goats slaughtered in the United States will pass through this sale ring at New Holland, and 1.6% of all federally inspected sheep slaughtered in the United States pass through here. For sheep and goats, the New Holland market has national significance due to its proximity to the northeast region of the United States, where the greatest demand for sheep and goat products is located. Although 80% of all sheep are raised in the west and processed by four major packers, the prices set at New Holland are the benchmark that others look at. Because of the high prices at Easter time, lambs from as far away as New Mexico will arrive in New Holland by the truckload for the Easter lamb sale. Auctions are an important way in which agricultural commodities are marketed; for small farmers, the auction is both a direct outlet for selling their products as well as the measure that sets prices for products sold privately.

If Ali was forced to sell his goats at the New Holland sale barn in Pennsylvania on Mon Aug 15, 2016 he would receive a whopping $3.15 – $3.25/lb. or $250  for an unsubsidized, brush grazed, ruminant friend of the environment.

sheep goatsA Return to the Goat Standard says that inflation from a dollar a pound in 2001 to $3.00/lb. 15 years later in 2016 is close to 8% per year. Another way, the current price of our 80lb. wether in 2001 dollars is $2.18 the law of supply and demand at work.

Corn was $2.00/bushel for ever until the Ethanol subsidy goosed it up to $7.00/bushel in 2012 with the subsidy curtailed we’re back to $3.70 in 2016, which is still 40 cents a bushel higher than the 2001 price. The big big problem for the corn  producers is their need for $5.37/bushel just to break even.

The cattle price when I was in high school was 20 cents a pound but then a dollar was only worth 35 cents. Cows in Nixon’s 25 cent dollar era went for $0.28/lb. Cattlemen aren’t doing too well these days at $1.32/lb. for the less than a nickel Federal Reserve economy translates to $0.22/lb. in Nixon dollars and $0.15/lb. in my high school years.  Unlike goats, cows like alfalfa, feedlot corn and expensive anti-biotics to stay alive long enough to get to the auction. A mid-west farmer puts the cows and corn fiasco this way:

“Come on you guys just look around. I take a road trip every few years across America. Sometimes I cross the northern part of the country. Sometimes south. A few years (2008-11) ago I saw corn in every 3 cornered 3-acre patch of ground for a thousand miles. This year (Feb 2016) I saw cattle in every 3 cornered 3-acre patch. I no longer raise corn or cattle because I grew weary of mine and your predilection to produce ourselves into bankruptcy. If we could get the government out of agriculture, we would probably be ok. Get rid of all subsidies and I do mean all! Then we can let the market settle itself. Forget ethanol and CRP programs. We really don’t need them. The government does. Maybe the next regime will get out of our way…? Until then I will continue digging ditches.”

A Return to the Goat Standard or the Gold Standard as Greenspan calls it, is the only way to stop the Federal Reserve, Obama, Hillary etal. from taking our currency to infinity and beyond. Here is Nixon’s Gold Window fairy tale.

Gold should be $10,000/oz. to conform to amount of digital money that has been pumped into the world economy. It has been suggested that the US Treasury offer $5,000/oz. for gold to bring Nixon’s temporary solution to an end. If not Ali will be forced to pay $625/lb. for an 80 pound wether in San Angelo, Texas. A $50,000 goat sounds like a fair price to me but then what do I know.

 

Agrinomics

greenspan bbg interview

“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine.  Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard.  Between 1870 and 1912, a period of forty-two years, industrial production in the United States rose by 682%.

“The only time the American farmer made money was from the end of the Civil War to WWI.”

The United States actually did not return to a gold standard until 1879. However, by 1870, most of the rubble of the Civil War, including the floating “greenback” dollar, had been cleared up. However, the American farmer no longer had to compete with slavery and started receiving ‘hard currency’ for his production.

san angelo 1939Adam Smith, the forefather of all economists including Alan Greenspan, wrote in his 1776 Econ 101 text book, Wealth of Nations, that

“Agriculture, the Produce of the Land, is the SOLE or the PRINCIPAL Source of the Revenue and Wealth of every Country.”

Smith further states the four factors that destroy and degrade “agriculture, the sole source of wealth and revenue of every nation.”

  • Soil Husbandry: “the neglect of cultivation and improvement”
  • Subsidies & Tariffs: “the fall in the real price of any part of the rude produce of land”
  • Farmer Inputs: “the rise in the real price of manufactures”
  • Devalued Dollar: “the declension of the real wealth of the society”

All four tend to “lower the real rent of land, to reduce the real wealth of the landlord, to diminish his power of purchasing either the labor, or the produce of the labor of other people.”

The defrocked Central Banker, Alan Greenspan, whose easy-money policies of the Fed during his 1987-2006 tenure that have been suggested by some to be a leading cause of the subprime mortgage crisis, wants us to go back to the gold standard NOW!

MONETARY FEUDALISM

feudalism_then_nowAspirational career options for an ENFP on the Myers-Briggs personality test, were architect at the top and farmer at the bottom. After thirty years of very limited success trying to make my fame and fortune as an architect I gave farming a shot. My ten year goat farmer experience taught me how to survive and thrive as a member of the 98.5% Everyone Else proletariat.

My second wife and mother were both Aquarians, someone born between January 20 and February 19th. “Aquarians know too much about everything, which is a blessing and a curse.” They are like the teacher that knows all the right answers and everybody else are the students each with different levels of understanding. Fortunately for America, Abraham Lincoln was an Aquarian and held fast to his belief, that government of the people, by the people, for the people, shall not perish from the earth.”

BLOOM WHERE“Bloom where you are planted,” was my Aquarian wife’s mantra, her truth, her philosophy of life. It was one of the first cross stitch patterns she completed. She had it framed and intentionally hanging on the wall in our bathroom, as a daily reminder. I didn’t pay much attention or think much of it until we bought nine hectares of land, with a barn, in the countryside, 50 miles southwest of Houston. The acreage 150 years ago belonged to a plantation that was sold to the slaves that had been freed by that earlier Aquarian, Abraham Lincoln.

Shelby, my ENTJ Aquarian wife and livestock farming visionary, chose this location because it was the cheapest real estate in the Metropolitan Houston area.  ‘Race’ was the major cause for the low cost of land, Shelby and I, were the only white people in this poor farming community, surrounded on all sides by 3rd generation Czech  farms and businesses. Except for the Post Office, all grocery stores, gas stations, or anything you wanted to buy stores, were in the adjacent villages of Needville, East Bernard and Wharton. We didn’t care, we were there to raise dairy goats, not show horses. We were there to, bloom where Shelby planted us and blooming meant joining the 3% income crowd.  In 2001 that number was $150,000 ($200,000 in 2016 dollars).

Hilary-QueenToday, you need a $250,000 annual income to escape the maddening Everyone Else club. Wherever we are planted from Bangladesh to Boston, three percent is the magic number to be a player, but as in Las Vegas, the house odds guarantee that only two percent make it to financial independence. Half of those two per-centers never had to sweat it as they were born rich. George ‘W’ and Trump got their two per-cent creds at birth, while Obama and Hillary chose the Elected Officials route to Financial Independence.

I literally, slept in the barn, with fifty goats for a month until Shelby found a forty-foot park trailer in the “Thrifty-Nickel,” that we called home in our first “down on the farm,” year.  Although we planted ourselves in October 2000 we didn’t start to blossom until six years, later. That was a very long, long time and at least, a half million, pre Bush-O-Bama dollar investment. Only, an all-knowing Aquarian could find the funds, patience and resources to endure such a long growing season, two years longer than honest Abe took to free the slaves.

Shelby had carried with her, “Five Acres to Independence,” since high school, after university, she added “Your Money or Your Life” as her guide to financial independence.

Shelby and Abe are no longer with us and I have re-potted myself two, three and four times since ending my farming career to enjoy the expat lifestyle in Antalya, Turkey where “everyday is truly a holiday and every meal a banquet.” Unfortunately, I am still dependent on my PGBC pension and SSA income to continue endow my life of Riley retirement.

Seeds of discontent, aka worry, started sprouting when I began gambling on Binary Options to supplement my endangered entitlements income source. The good news, after three years of practice and six months for real, I’m at break-even status. The bad news, the more I learn about money the scarier it gets. Five and a half days a week five trillion dollars changes hands in the world currency market. That doesn’t include my daily $1 wager at  https://marketsworld.com/ because binary options are derivatives, bets on what the real money traders are betting.

untouchablesMy real worry is that the Central Bankers today’s Monarchs and the Bankers, the Landed Gentry of yore, don’t have a clue on what to do about the global economic situation. Remember when Alan Greenspan said that:

“his whole intellectual edifice had been destroyed?”

As an architect I tried to get the Corporate Elite to hire The Austin Company to design, engineer and construct their production facilities. This came to be an ever increasing challenge as manufacturing – Austin’s 100 year-old bread and butter market – moved overseas. China took the company’s bread and butter away and following bankruptcy and my pension was salvaged by the PGBC. Our Central Bankers, Bankers, Top Bureaucrats and even our Top Professional financial analysis say that the PGBC and SSA are broke. However, the scariest scary is our Elected Officials telling us, “not to worry about it.”