As Speculative Bullish Bets Surge, Is Rice The Next Silver (And Manipulated In Kind?)

When we reported on last week's net spec contract position per the CFTC, we noted that speculators are expecting a roughly 50% hike in the price of rice based on comparable historical patterns. Updating for this week's data confirms that the upside price bets, which increased from 6,652 to 7,114 have just surged above the previous top hit in late 2009, of 6,773. Yet they are still just shy of the all time highs from February 2008 when they stood at 7,883. As the spec activity in rice predates major price moves rather efficiently, the continued bets on a price surge mean something is bound to snap. And with rice prices continuing to be rather sticky, considering the move in all other grains, we may be in for a very major break out in the coming week. Or not: as we have now learned the hard way, the banking cartel has way to keep commodity prices low, until explosive break outs confirm that one can only manipulate a price down for so long. With recent disclosures by Wikileaks that China had been imposing pressure on the Treasury and the US banking system to get what it wants, is it too surprising to assume that just as JPM has long been manipulating the price of silver, so Chinese interests in the US (remember - quid pro quo in a M.A.D. world) have been instructed to keep the price of Rough Rice as low for as long as possible. If that is the case, are the Rice vigilantes about to call the Chinese bluff? If rice succeeds in breaking out from its $13-$16 trading range, the move to the upside could make the recent doubling in cotton, and surges in corn and wheat seem like child's play.

47 Statistics That Indicate That Economic Stress Points In 2011 Could Be Setting The Stage For A Global Economic Meltdown In 2012

Is the world approaching a devastating global economic meltdown? Right now there are a large number of factors that are creating economic stress points all over the globe. All of the crazy money printing that the Federal Reserve and other central banks have been doing is putting inflationary pressure on agricultural commodities, oil and precious metals. Massive floods, horrific droughts and extreme weather patterns all over the globe are ruining crops and creating food shortages. Some nations are now actually hoarding food, and in other nations rising prices have sparked food riots. The price of oil has been moving back towards $100 a barrel, and if it stays at a high level for an extended period of time that is going to have very serious consequences for the global economy. In addition, the growing sovereign debt crisis could erupt again at any time. Half a dozen nations in Europe are on the verge of insolvency, Japan's national debt is now well over 200 percent of GDP, and the global financial system is growing increasingly concerned about the exploding national debt of the United States. The truth is that the entire world financial system is a house of cards balanced on a razor's edge and it could come down at any time.

Sadly, very little has changed since the world financial system experienced almost a complete meltdown back in 2008. Global financial markets are still a whirlpool of debt and speculation. One really bad week could put us right back where we were prior to the infamous Wall Street bailouts. Very little in our world is truly stable anymore. As we have seen recently in Egypt, the globe can literally change almost overnight. All it would take is for one really bad event to happen and world financial markets would instantly start imploding.

So when will the coming economic collapse happen? Nobody knows for sure, but the fact that the global economy is increasingly becoming less stable as we approach the year 2012 is making a lot of people very nervous.

The following are 47 statistics that indicate that economic stress points in 2011 could be setting the stage for a global economic meltdown in 2012....

#1 According to the United Nations, global food prices set a new all-time record during the month of January.

#2 In early February the worst freeze in 60 years wiped out entire crops all across the southwestern U.S. and northern Mexico. Already, it has been reported that some U.S. supermarkets have doubled or even tripled prices for certain produce items.

#3 It is being reported that due to the recent horrible freeze in Mexico cases of tomatoes that would usually cost shop owners between 12 and 15 dollars are now going for up to $40.

#4 One of China's key agricultural provinces is facing its worst drought in 200 years.

#5 The Food and Agriculture Organization says that up to two-thirds of China's wheat crop could be at risk of failing due to weather conditions.

http://endoftheamericandream.com/archives/47-statistics-that-indicate-that-economic-stress-points-in-2011-could-be-setting-the-stage-for-a-global-economic-meltdown-in-2012

The Day the Dollar Died

Why Isn't Wall Street in Jail?

By Matt Taibbi

February 16, 2011 9:00 AM ET

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

I put down my notebook. "Just that?"

"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Invasion of the Home Snatchers

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. "If the allegations in these settlements are true," says Jed Rakoff, a federal judge in the Southern District of New York, "it's management buying its way off cheap, from the pockets of their victims." (more)

5 Stocks to Play the Hottest Latin America Markets

Last year, Latin America was home of some of the best performing stock markets in the world. Peru, Chile and Colombia were the number two, three and four best-performing MSCI emerging market country indexes in 2010, driven primarily by the strength in commodity markets.

In fact, something I’ve talked about recently is the “New Silk Road,” which is an expression that has been used to describe the growing commercial interaction between the emerging markets of Asia, the Middle East, Africa and Latin America. This new, 21st-century version of the Silk Road effectively connects China and its voracious demand for commodities with commodity-producing countries.

But Latin America is so much bigger than just commodities. In Latin America, we have positive demographics, relative political stability and pro-business policies — save for Venezuela and Bolivia — as well as the development of consumer economies as prosperity trickles down to the masses.

Let’s take a look at five Latin America investments that are offering some very interesting opportunities:

#1 – AFP Provida

Chile is the most advanced market in Latin America with a GDP per capita of $11,600. The country has been benefiting from years of conservative budgetary policies that aim to save surpluses in a stabilization fund for a rainy day (like 2009), which contributes greatly to macroeconomic stability. And you better believe there are plenty of ways to play the boom here.

The first is AFP Provida (NYSE: PVD), a pension fund administrator that is expanding in new financial services and regional markets. The company has a highly stable fee business, which allows it to pay a 7% dividend with a valuation of nine times earnings. As plan assets grow, the company fee income grows. Rapidly developing Latin American economies allow for bigger pension contributions over time, which is a long-term positive for AFP. (more)

DOLLAR ON THE EDGE OF THE ABYSS

The dollar is now poised on the edge of the abyss.

The current intermediate cycle has rolled over and is making lower lows and lower highs. The current daily cycle has formed a swing high and is in jeopardy of rolling over into a left translated cycle. If the dollar breaks below the November intermediate bottom of 75.63 it will be an incredibly bearish sign as not only will the current intermediate cycle have topped in only 4 weeks but the larger yearly cycle will also have topped in only 4 weeks.

If that happens there is little chance the dollar will be able to hold above the March 08 lows as the crash down into the three year cycle low begins in earnest.

This will not only drive the final leg up in gold's huge C-wave it will also drive a huge spike in inflation in all other commodities. Food riots world wide will intensify. The rest of the world will be in an uproar over the collapsing dollar. Spiking commodity prices will collapse discretionary spending just like it did in 08 and 09.

The phony economy driven by Ben's printing press will roll over when he's forced to turn off the presses to halt the dollar collapse. (Just like it started to do last summer when QE ended and the stock market started to collapse.)

The dollar's rally out of the three year cycle low should correspond with stocks beginning the next leg down in the secular bear market and the next brief deflationary period just like the bounce out of the 08 three year cycle low drove the second leg down in the secular bear market.

The rally out of a three year cycle low usually lasts about a year to a year and a half. The next 4 year cycle low in the stock market is due in 2012. I expect that year long rally out of the coming three year cycle bottom to drive stocks down into the next major 4 year cycle trough and drive the CRB into it's next major cycle bottom.

A lot is riding on the next 2/3 weeks. If the swing high in the dollar yesterday does signal the top of the dollar's daily cycle then the November low will almost surely be broken and the chain of events I laid out will be set in motion.

SPX Targeting 1375

US equity markets have continued to make higher weekly closing highs, climbing relentlessly in defiance of calls for a pullback or a resumption of the bear market. Treasuries broke down from a month long consolidation and resumed their downtrend as capital continued to exit the perceived safety of fixed income for risk assets. Gold appears to have completed a correction of its recent decline and may be set to join Treasuries in a downtrend as investors exit safe haven plays. The Japanese Yen may have finally made a significant, long term top (and a bottom for Dollar.Yen) and if it breaks out soon it may signify a resumption of the carry trade, which would mean that another major liquidity stream is coming online to power the stock market rally even higher. The US Dollar Index may have found a bottom and there is some potential that it may climb together with US stocks as investment demand for big cap, developed nation companies appears to be the emerging story. There are some technical considerations which suggest a minor top may be due sometime soon. The worst case of the likely scenarios is a correction akin to the August 2010 decline. The likelihood of a top to this run resulting in a resumption of the bear market is low, but as always we must keep our minds open to the possibilities and keep one eye on the mouth of the bear cave.

Certain world markets--largely in Asia--have been in a downtrend since November and others, such as Korea's KOSPI, have experienced strong selling very recently. This has placed many traders and analysts on alert for a big decline. Indeed it is worth keeping a sharp lookout to determine whether these divergent markets are leading a topping process. A dramatic divergence between US and other developed market equities (Europe and Japan) and much of the Emerging Markets and BRIC markets has developed since the November bottom. At this moment I actually regard this as a bullish development. (more)