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Thread: totally unintended consequence or Machiavellian scheme ?

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    Default totally unintended consequence or Machiavellian scheme ?

    (snip)"A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.

    "It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."

    Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.

    "The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically," he said.

    The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.

    Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.

    Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.

    At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.

    This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.

    "You're going to have real problems in countries that are food short, because we're already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they're embargoing exports," he said, citing Russia and India as examples.

    "Those who have food are going to have a big edge."

    With 54% of the world's corn supply grown in America's mid-west, the U.S. is one of those countries with an edge.

    But Mr. Coxe warned U.S. corn exports were in danger of seizing up in about three years if the country continues to subsidize ethanol production. Biofuels are expected to eat up about a third of America's grain harvest in 2007."(snip)

  2. #2
    Jay Zeno
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    Default Re: totally unintended consequence or Machiavellian scheme ?

    totally unintended consequence or Machiavellian scheme ?

    There's a few other alternatives:

    Blowing panic smoke.
    Good guess, but wrong.
    Bad guess.
    People pay him for this?

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    LOL! JayZeno, I am starting to really enjoy your comments

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    There's a few other alternatives:

    Blowing panic smoke.
    Good guess, but wrong.
    Bad guess.
    As with all predictions, I guess we'll really only know about 12 months from now !

    In the meantime, I'm considering taking the author's 'unstated' advice and investing in stock shares of a fertilizer company

    I do still wonder about the Machiavellian angle though, because while the US can 'burn' food, the middle east cannot 'eat' oil !

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    I am really interested to see what happens as America begins to consume more of its agricultural products, rather than exporting them.

    How will it affect the Economic Aid we give to foriegn countries?

    I think it will radically affect the world market.

    I thought we already lived in interesting times...

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    They'll just burn down more forests to make room for farms.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    I am really interested to see what happens as America begins to consume more of its agricultural products, rather than exporting them.

    How will it affect the Economic Aid we give to foriegn countries?

    I think it will radically affect the world market.

    According to recent articles, the 2008 US gov't mandate for use of ethanol as a gasoline additive will require the dedication of 33% of America's farmland toward the production of corn to serve as feedstock for ethanol refineries. All else being equal, this is exactly the same in regard to the food market as losing 33% of America's food production capacity. As such, food prices will be driven upward even more, and food may actually wind up being in short supply if any 'natural' events such as storms / droughts etc. interfere with normal agricultural productivity levels per acre.

    Is it possible for American farms to add extra capacity ? The answer is yes, but ... with the 'but' being that any land added to total farm acreage is going to have some negative factor attached (otherwise it would already be in use). Those negative factors span the gamut from soil requiring huge amounts of fertilizer in order to be productive, being short of water, being inefficient to automatically plant and harvest due to slope / shape etc. Bringing this additional 'marginal' farm land into production will require an even greater price increase to offset the higher inherent costs involved to produce the same bushel of corn / wheat / whatever.

    As to foreign aid, from the standpoint of the US giving away surplus food ... and as of last year there isn't any more surplus sitting in grain elevators anywhere since previous surpluses were drawn down as an unintended consequence of rising demand / prices for ethanol feedstock corn. So foreign aid takes the form of X million dollars instead of X bushels of corn. But the problem is that the world market prices of corn / wheat / whatever are now twice as high (or more) than they were last year meaning that X million dollars only equals 1/2 as much food as it did last year.

    They'll just burn down more forests to make room for farms.
    not likely ... the environmentalists would rather starve the 3rd world instead of deliberately clearing US forest land for commercial farming purposes.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    nobody should be shipping food to the third world. they should be letting third world farmers grow and sell their own foodstuffs. even with relatively non-modern equipment, yields can be pretty high. but the dictators stockpiling the airlifted food for insanely high reselling to the locals needs to stop. and it won't as long as people keep airlifting in 'free' food.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    well, there may be some other ideas ...



    (snip)"Price hikes are being caused by the lowest global food stocks ever recorded, combined with severe droughts and floods in 2007 in major crop exporters including Australia, high oil prices which are pushing up shipping costs, and increasing demand from humans and animals in Latin America and Asia.

    Growing demand for crops like sugar cane, cassava and cereals such as corn, for use in the production of bio fuels, has also influenced the markets.

    Diouf emphasised that the fund is meant as a short-term fix, and must be accompanied by medium and long term projects to ensure the sustainability of food production in poor countries

    “The only way to face the situation is to increase national and local production”, Diouf urged, calling for policies to support fertilisers in particular.

    According to the FAO, only 4 percent of farms are irrigated in sub-Saharan Africa compared to 38 percent in Asia, with the rest relying on annual rains to provide a short growing season.

    “We must move away from the agricultural lottery that consists of putting all our resources into fertiliser, equipment and seeds and then praying for rain,” Diouf said.

    He warned of “social consequences” and economic problems for poor countries and other food importers that ignore the impact of increasing prices.

    We are concerned that if price rises continue at this rate and we do not adopt measures to increase production in importing countries, above all in the least developed countries, we may come to a situation when people cannot purchase food even though they have money”, Diouf said.

    The FAO says unrest linked to high food price has already occurred in Morocco and Yemen in North Africa, Uzbekistan in Central Asia, and Guinea, Mauritania and Senegal in West Africa.

    We could be faced with more and more conflicts in certain countries” Diouf warned. "(snip)
    Last edited by Melonie; 01-16-2008 at 03:07 PM.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    Yikes. Maybe Malthus was right after all.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    ^^^ which PART of Malthusian theory are you referring to ?

    (snip)"Charles Darwin, from his autobiography. (1876)

    This often quoted passage reflects the significance Darwin affords Malthus in formulating his theory of Natural Selection. What "struck" Darwin in Essay on the Principle of Population ( 1798 ) was Malthus's observation that in nature plants and animals produce far more offspring than can survive, and that Man too is capable of overproducing if left unchecked. Malthus concluded that unless family size was regulated, man's misery of famine would become globally epidemic and eventually consume Man. Malthus' view that poverty and famine were natural outcomes of population growth and food supply was not popular among social reformers who believed that with proper social structures, all ills of man could be eradicated.

    Although Malthus thought famine and poverty natural outcomes, the ultimate reason for those outcomes was divine institution. He believed that such natural outcomes were God's way of preventing man from being lazy. Both Darwin and Wallace independantly arrived at similar theories of Natural Selection after reading Malthus. Unlike Malthus, they framed his principle in purely natural terms both in outcome and in ultimate reason. By so doing, they extended Malthus' logic further than Malthus himself could ever take it. They realized that producing more offspring than can survive establishes a competitive environment among siblings, and that the variation among siblings would produce some individuals with a slightly greater chance of survival.

    Malthus was a political economist who was concerned about, what he saw as, the decline of living conditions in nineteenth century England. He blamed this decline on three elements: The overproduction of young; the inability of resources to keep up with the rising human population; and the irresponsibility of the lower classes. To combat this, Malthus suggested the family size of the lower class ought to be regulated such that poor families do not produce more children than they can support. Does this sound familiar? China has implemented a policy of one child per family (though this applies to all families, not just those of the lower class)."(snip)

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    snip

    The World Food Situation
    New Driving Forces and Required Actions
    Joachim von Braun
    December 2007
    Press Materials
    Rising Food Prices Threaten World's Poor People
    December 4, 2007
    Press release, fact sheet, and related resources. IFPRI's Biannual Overview of the World Food Situation presented to the CGIAR Annual General Meeting, Beijing, December 4, 2007

    The main findings of this update on the world food situation are:

    • Strong economic growth in developing countries is a main driver of a changing world food demand toward high-value agricultural products and processed foods.
    • Slow-growing supply, low stocks, and supply shocks at a time of surging demand for feed, food, and fuel have led to drastic price increases, and these high prices do not appear likely to fall soon.
    • Biofuel production has contributed to the changing world food equation and currently adversely affects the poor through price-level and price-volatility effects.
    • Many small farmers would like to take advantage of the new income-generating opportunities presented by high-value products (meat, milk, vegetables, fruits, flowers). There are, however, high barriers to market entry. Therefore, improved capacity is needed to address safety and quality standards as well as the large scales required by food processors and retailers.
    • Poor households that are net sellers of food benefit from higher prices, but these are few. Households that are net buyers lose, and they represent the large majority of the poor.
    • A number of countries—including countries in Africa—have made good progress in reducing hunger and child malnutrition. But many of the poorest and hungry are still being left behind despite policies that aim to cut poverty and hunger in half by 2015 under the Millennium Development Goals.
    • Higher food prices will cause the poor to shift to even less-balanced diets, with adverse impacts on health in the short and long run.

    Business as usual could mean increased misery, especially for the world's poorest populations. A mix of policy actions that avoids damage and fosters positive responses is required. While maintaining a focus on long-term challenges is vital, there are five actions that should be undertaken immediately:

    1. Developed countries should facilitate flexible responses to drastic price changes by eliminating trade barriers and programs that set aside agriculture resources, except in well-defined conservation areas. A world confronted with more scarcity of food needs to trade more—not less—to spread opportunities fairly.
    2. Developing countries should rapidly increase investment in rural infrastructure and market institutions in order to reduce agricultural-input access constraints, since these are hindering a stronger production response.
    3. Investment in agricultural science and technology by the Consultative Group on International Agricultural Research (CGIAR) and national research systems could play a key role in facilitating a stronger global production response to the rise in prices.
    4. The acute risks facing the poor—reduced food availability and limited access to incomegenerating opportunities—require expanded social-protection measures. Productive social safety nets should be tailored to country circumstances and should focus on early childhood nutrition.
    5. Placing agricultural and food issues onto the national and international climate-change policy agendas is critical for ensuring an efficient and pro-poor response to the emerging risks.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    Quote Originally Posted by Melonie View Post
    ^^^ which PART of Malthusian theory are you referring to ?

    (snip)"Charles Darwin, from his autobiography. (1876)

    This often quoted passage reflects the significance Darwin affords Malthus in formulating his theory of Natural Selection. What "struck" Darwin in Essay on the Principle of Population ( 1798 ) was Malthus's observation that in nature plants and animals produce far more offspring than can survive, and that Man too is capable of overproducing if left unchecked. Malthus concluded that unless family size was regulated, man's misery of famine would become globally epidemic and eventually consume Man. Malthus' view that poverty and famine were natural outcomes of population growth and food supply was not popular among social reformers who believed that with proper social structures, all ills of man could be eradicated.

    Although Malthus thought famine and poverty natural outcomes, the ultimate reason for those outcomes was divine institution. He believed that such natural outcomes were God's way of preventing man from being lazy. Both Darwin and Wallace independantly arrived at similar theories of Natural Selection after reading Malthus. Unlike Malthus, they framed his principle in purely natural terms both in outcome and in ultimate reason. By so doing, they extended Malthus' logic further than Malthus himself could ever take it. They realized that producing more offspring than can survive establishes a competitive environment among siblings, and that the variation among siblings would produce some individuals with a slightly greater chance of survival.

    Malthus was a political economist who was concerned about, what he saw as, the decline of living conditions in nineteenth century England. He blamed this decline on three elements: The overproduction of young; the inability of resources to keep up with the rising human population; and the irresponsibility of the lower classes. To combat this, Malthus suggested the family size of the lower class ought to be regulated such that poor families do not produce more children than they can support. Does this sound familiar? China has implemented a policy of one child per family (though this applies to all families, not just those of the lower class)."(snip)
    I think the Earth is a finite place with mostly finite resources. Unchecked population growth coupled with economic growth in the 3rd World is going to cause a food shortage. This is compounded when food supplies are converted to energy production especially using corn to make ethanol. It is something like eight times ( 8x ) more efficient to use sugar cane and too much sugar is certainly bad for us, yet for political reasons we shortsightedly subsidize ethanol production from corn. We eat corn.Cattle, hogs and chickens eat corn and thus the price has gone up dramatically.

    This is one of a number of reasons why I think the Pope is sometimes living on another planet when he opposes population controls as does G.W. btw. Religious faith trumping science and global economics ; faith over facts.

    Our lands are being over-cultivated and overgrazed and the seas are being emptied of fish. Is there enough "new" arable land to grow enough food to support all the world's people ? I don't think so.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    ^^^ which brings us right back to my original question. Do you suppose it's possible that a deep dark factor in the heavy promotion and gov't mandates re US ethanol was the advance knowledge that doing so would also create food shortages thus create political unrest in other parts of the world ... and particularly so in certain countries that have more population than agricultural capacity ... which also happen to be primarily non-white countries and/or countries on the opposite end of a big US trade deficit ?

    From a certain point of view, the US gov'ts ethanol mandates create a de-facto embargo on food exports by simply mandating that 1/3rd of US agricultural capacity will be 'shut down' in regard to food products. From that same viewpoint, there's very little difference in effect between the US gov'ts ethanol mandates and the Arab Oil Embargo of the 1970's. Both created an artificial shortage, jacked prices sky high, and fundamentally dragged down the economy of 'buyer' countries while boosting the economy of 'seller' countries.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    Quote Originally Posted by Melonie View Post
    ^^^ which brings us right back to my original question. Do you suppose it's possible that a deep dark factor in the heavy promotion and gov't mandates re US ethanol was the advance knowledge that doing so would also create food shortages thus create political unrest in other parts of the world ... and particularly so in certain countries that have more population than agricultural capacity ... which also happen to be primarily non-white countries and/or countries on the opposite end of a big US trade deficit ?

    From a certain point of view, the US gov'ts ethanol mandates create a de-facto embargo on food exports by simply mandating that 1/3rd of US agricultural capacity will be 'shut down' in regard to food products. From that same viewpoint, there's very little difference in effect between the US gov'ts ethanol mandates and the Arab Oil Embargo of the 1970's. Both created an artificial shortage, jacked prices sky high, and fundamentally dragged down the economy of 'buyer' countries while boosting the economy of 'seller' countries.
    The problem with your scenario is that history has proven that no one is that smart. The world economy is so dynamic, flexible and ever changing that it is impossible to plan out and implement these grand conspiratorial strategies. They depend on too many variables; the economies of too many nations; weather;crop and human diseases etc.

    It is certainly true that Midwestern corn farmers have never had it so good and thus the political pressure to maintain ethanol subsidies will be enormous. This is shameful because such subsidies are not necessary. Even without them; farmers would be in the pink.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    The world economy is so dynamic, flexible and ever changing that it is impossible to plan out and implement these grand conspiratorial strategies. They depend on too many variables; the economies of too many nations;
    time to dig out my own 'tin foil hat' and mutter one word ... BILDERBERGERS


    It is certainly true that Midwestern corn farmers have never had it so good and thus the political pressure to maintain ethanol subsidies will be enormous. This is shameful because such subsidies are not necessary. Even without them; farmers would be in the pink.
    Actually it is the OWNER of midwestern corn farm land that gets the subsidies. Yes in many cases this still means Midwest farm owner / operators. But in a growing number of cases it also means AgriBusinesses like Archer Daniels Midland, or 'uber-rich' property investors that live in Manhattan or So. California that are suckling at the public trough ...



    (snip)"The Farm Bill provides subsidies. These subsidy programs tax all of us, working Americans, to award millions to millionaires and provide profitable corporate farms with money that has been used to buy out family farms.

    For decades, American taxpayers have provided tens of billions of dollars in federal farm subsidies to some of the largest and wealthiest farm businesses in the nation. But thousands of people who benefited from the subsidy flow were shielded from public view behind layers of partnerships, joint ventures, limited liability corporations, cooperatives, and other business structures that obscured their personal subsidy claims."(snip)

    (snip)""While two-thirds of U.S. farmers receive no farm subsidy payments, American taxpayers have been writing farm subsidy checks to wealthy absentee land owners, state prison systems, universities, public corporations, and very large, well-heeled farm business operations without the government so much as asking the beneficiaries if they need our money," says Ken Cook, president of the Environmental Working Group.

    "Even if you live smack in the middle of a big city, type in a ZIP code and you'll find farm subsidy recipients. Surely we can come up with a smarter investment portfolio for agriculture and rural America than the list of 1.5 million subsidy beneficiaries we are publishing today," Cook said. "America's farm subsidy system is broken. It's time for change."
    Most small farmers do not receive subsidies or payments.

    Most farmers and ranchers do not benefit from federal farm programs, as they are written now. Only 30% of farmers and ranchers qualify for subsidies tied to commodities such as rice, corn, wheat and soybeans.

    Of this group, 10% (of the 30%) receive nearly 70% of all subsidy payments. Fruit and vegetable growers and livestock producers do not receive any subsidies. 75% percent of farmers and ranchers who want to participate in conservation programs are turned away due to lack of funding.

    In the U.S., a comparison between the 1930s and today tells a similar grim tale. Then, 25 percent of the population lived on the nation's 6 million farms; today, 2 million farms are home to 2 percent of the population. Small family farms have been overwhelmingly replaced by large commercial farms, with 8 percent of farms accounting for 72 percent of sales.

    Subsidies to the rich have had everything to do with this sea change."(snip)


    so the real bottom line here is that Midwest corn farmland is a hot tax-advantaged investment for multi-millionaires like David Letterman, Scotty Pippin and thousands of other uber-rich absentee landlords - with their resulting tax advantaged farm subsidy incomes being paid for by middle class taxpayers.



    ~
    Last edited by Melonie; 01-18-2008 at 10:47 AM.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    Quote Originally Posted by Melonie View Post
    time to dig out my own 'tin foil hat' and mutter one word ... BILDERBERGERS




    Actually it is the OWNER of midwestern corn farm land that gets the subsidies. Yes in many cases this still means Midwest farm owner / operators. But in a growing number of cases it also means AgriBusinesses like Archer Daniels Midland, or 'uber-rich' property investors that live in Manhattan or So. California that are suckling at the public trough ...

    http://www.everydaycitizen.com/2007/...e_rich_co.html

    (snip)"The Farm Bill provides subsidies. These subsidy programs tax all of us, working Americans, to award millions to millionaires and provide profitable corporate farms with money that has been used to buy out family farms.

    For decades, American taxpayers have provided tens of billions of dollars in federal farm subsidies to some of the largest and wealthiest farm businesses in the nation. But thousands of people who benefited from the subsidy flow were shielded from public view behind layers of partnerships, joint ventures, limited liability corporations, cooperatives, and other business structures that obscured their personal subsidy claims."(snip)

    (snip)""While two-thirds of U.S. farmers receive no farm subsidy payments, American taxpayers have been writing farm subsidy checks to wealthy absentee land owners, state prison systems, universities, public corporations, and very large, well-heeled farm business operations without the government so much as asking the beneficiaries if they need our money," says Ken Cook, president of the Environmental Working Group.

    "Even if you live smack in the middle of a big city, type in a ZIP code and you'll find farm subsidy recipients. Surely we can come up with a smarter investment portfolio for agriculture and rural America than the list of 1.5 million subsidy beneficiaries we are publishing today," Cook said. "America's farm subsidy system is broken. It's time for change."
    Most small farmers do not receive subsidies or payments.

    Most farmers and ranchers do not benefit from federal farm programs, as they are written now. Only 30% of farmers and ranchers qualify for subsidies tied to commodities such as rice, corn, wheat and soybeans.

    Of this group, 10% (of the 30%) receive nearly 70% of all subsidy payments. Fruit and vegetable growers and livestock producers do not receive any subsidies. 75% percent of farmers and ranchers who want to participate in conservation programs are turned away due to lack of funding.

    In the U.S., a comparison between the 1930s and today tells a similar grim tale. Then, 25 percent of the population lived on the nation's 6 million farms; today, 2 million farms are home to 2 percent of the population. Small family farms have been overwhelmingly replaced by large commercial farms, with 8 percent of farms accounting for 72 percent of sales.

    Subsidies to the rich have had everything to do with this sea change."(snip)


    so the real bottom line here is that Midwest corn farmland is a hot tax-advantaged investment for multi-millionaires like David Letterman, Scotty Pippin and thousands of other uber-rich absentee landlords - with their resulting tax advantaged farm subsidy incomes being paid for by middle class taxpayers.

    http://blogs.dailymail.com/donsurber...-farm-subsidy/

    ~
    Come on Melonie. You're better than this. Capital flows worldwide where investors
    think they'll get the best return at the lowest risk.

    High corn prices are going to result in higher corn production.Sadly, we are NOT
    doing the same with oil as we refuse to drill in ANWAR or off-shore. The Russians are going to drill under the North Pole and the Chinese are drilling off Cuba.
    Won't that be great ? Fidel awash in oil money. Just what we needed; another Chavez.

    You're right about the Farm Subsidies. They're limited to a few crops; corn chief among them. Cattle ranchers;hog and chicken farmers don't get anything unless
    you count cheap water and electricity.

    Both political parties are at fault. The same Republicans who wil publicly flog a Food Stamp or Medicaid cheat throw their arms around agribusiness. The same Dems who whimper and whine about tax breaks for the "rich" support these same programs.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    Come on Melonie. You're better than this. Capital flows worldwide where investors
    think they'll get the best return at the lowest risk.
    Yes, but that best return is NET of taxes. When an uber-rich person living in a high tax state like New York or California can come up with a tax favored farm subsidy income that nets out at 10%, or can come up with production tax credits that can be used to directly offset other taxable earnings, investing in an ethanol refinery or ethanol corn farm land may provide a NET return after tax advantages that is very high ... while also avoiding virtually all risk of loss. This is of course the reason that many uber-rich people support Democratic candidates ... because SAYING they're going to raise taxes on the rich, and ACTUALLY collecting more tax money from the rich after tax favored / tax free investments are netted out, are two very different things !!!!!

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    Quote Originally Posted by Melonie View Post
    Yes, but that best return is NET of taxes. When an uber-rich person living in a high tax state like New York or California can come up with a tax favored farm subsidy income that nets out at 10%, or can come up with production tax credits that can be used to directly offset other taxable earnings, investing in an ethanol refinery or ethanol corn farm land may provide a NET return after tax advantages that is very high ... while also avoiding virtually all risk of loss. This is of course the reason that many uber-rich people support Democratic candidates ... because SAYING they're going to raise taxes on the rich, and ACTUALLY collecting more tax money from the rich after tax favored / tax free investments are netted out, are two very different things !!!!!
    There's NEVER been any disagreement whatsoever between you and I on this very point and plenty of other programs and policies that coddle the rich and enable them to avoid paying their fair share of taxes.

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    ^^^ all the more reason to lend creedence to the idea that the 'unintended consequences' of American biofuels policy are actually far from 'unintended' !

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    Default Re: totally unintended consequence or Machiavellian scheme ?

    hmmm ... it would certainly appear that Chavez is now having more trouble with potential food riots by his own citizens than if the US had sent CIA operatives to Venezuela ! It would also appear that Chavez is having to spend a ton of his US oil revenues to subsidize below world market food prices - which has of course caused outright shortages of some foods, which in turn has created a black market for world priced foods now being smuggled into Venezuela, and perhaps most importantly has prompted food supply companies to smuggle regulated below world price Venezuelan food supplies out of Venezuela for resale at the 'regular' price in Colombia (creating huge illegal profits for the food suppliers, and deeper shortages of below market priced food for Venezuelans)



    (snip)"The leftist Chavez this week created a state food distributor and loosened some price controls, seeking to end months of shortages for staples like milk and eggs that have caused long lines and upset his supporters in the OPEC nation.

    The highly publicised campaign has also included government crackdowns on accused smuggling, with the military seizing 1,600 tonnes of food and sending 1,200 troops to the border with Colombia.

    Jose Anzola, a director of food company Alimentos Polar, told reporters that troops stopped 27 of its trucks over the last three days and described the seizures as "illegal, arbitrary and irresponsible."

    Troops said they halted the transport of 350 tonnes of food to states along the Colombian border on suspicion of smuggling, he said. Another 165 tonnes were impounded in an eastern state on accusations of hoarding, he added.

    Venezuela's National Guard did not immediately respond to requests for comment on Polar's statements.

    Polar, one of the country's largest private employers and best-known brands, produces and distributes grocery products including corn flour, a central element of Venezuelan cooking, and the country's most popular beer.

    Business leaders say shortages of these products are caused by strict price controls, which have lagged inflation that is Latin America's highest.

    Chavez is focusing on practical issues like food supply and crime after losing a December referendum that would have let him run for re-election indefinitely and expand his self-styled revolution.

    He announced an increase of more than 30% in the retail price of milk in an effort to ease shortages that have created headaches for consumers of all social classes."(snip)

    ~
    Last edited by Melonie; 01-24-2008 at 04:39 PM.

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