Food Shortages, Sub-Prime Failures,China

Food Shortages, Sub-Prime Failures, and China
A Brief update on the News of December 19, 2007

By C.L. Luce

December 19,2007

In the past four days since my last article on debt and dependency, a virtual wave of headlines have hit the wires warning of food shortages and sub-prime mortgage failures. As these issues become experienced reality people will begin asking how to solve these global problems. This article will not attempt such a task as answering these questions but I will attempt to bring people up to speed on our current situation.

On December 17th the United Nations announced a global food shortage, which made headlines internationally. In the days since, a broad spectrum of excuses and explanations have arisen and most, if not all, fall short of understanding even the most basic foundational fault leading to the current food security crisis. In other news, the sub prime housing market is rapidly deteriorating as defaults mount and banks scramble in the face of multibillion-dollar losses. My last report stated that the Fed was preparing a $40 billion auction for banks that have been crippled by sub-prime losses. This auction has been divided into two, with both auctions offering $20 billion to the highest bidders.

The first of these auctions occurred today. Already banks have sent requests for additional credits exceeding three times the $20 billion offered at today’s auction. As I reported in my last article, the market is facing losses and defaults far above the $40 billion mark, making the current auctions seemingly pointless. Of course the reality is that this is just another attempt to consolidate loan power over US banks in an ongoing agenda to reduce U.S. sovereignty, and the illusion thereof, by the European central banks and the Bank of England. To these ends, the auction had been a whopping success.

Morgan Stanley announced today that it has sought additional security from China by selling a $5.5 billion stake of its shares, over 9.9%, to a sovereign wealth fund called China Investment Corporation. This move occurs after Morgan Stanley announced a loss of $6.48 billion in pretax profits compared to a $2.2 billion dollar profit in 2006. This loss is due to the collapse of the sub-prime market. This is another example of China’s emergence as a coming economic superpower alongside Russia. American industry has been rapidly outsourced to China while imports from China have skyrocketed over the past few decades. China’s bailout of Morgan Stanley also relates to my previous article in that it gives China more power over the American economy, which rests on the housing market.

In other news today, Congress approved another $70 billion for the war effort in Iraq as part of a “compromise” between congress and the White House. Bush gets another $70 billion and Congress gets approval on the year-end budget.

As we enter a time of economic crisis it is important for people to begin to understand how and why we have reached this point in order to understand the solutions to these problems. It is our desire to see the people prosper and thrive under a stable and loving economic environment, but this can only occur when people begin to wakeup as to the realities of the times. Due to the announcement of the U.N. admitting global food shortages the prices on foods will now begin to rapidly rise due to increased demand closing the window of opportunity for private individual food stockpiles. The housing market will continue to crash as the sub-prime losses bleed into prime markets in the form of increased rates, all while the buying power of the dollar continues to decline. These compounding factors will ultimately result in major economic recession, mass displacement, and starvation.