bank run blog

In uncertain economic times, suspicious citizens may shun currencies, particularly modern fiat currencies like the US dollar, seeking out more reliable, time-honored stores of value, such as precious metals or commodities. The Toronto Star reports :

“Researchers say they have located the world’s oldest stash of marijuana, in a tomb in a remote part of China.

The cache of cannabis is about 2,700 years old and was clearly ‘cultivated for psychoactive purposes,’ rather than as fibre for clothing or as food, says a research paper in the Journal of Experimental Botany.

The 789 grams of dried cannabis was buried alongside a light-haired, blue-eyed Caucasian man, likely a shaman of the Gushi culture, near Turpan in northwestern China.

The extremely dry conditions and alkaline soil acted as preservatives, allowing a team of scientists to carefully analyze the stash, which still looked green though it had lost its distinctive odour.

‘To our knowledge, these investigations provide the oldest documentation of cannabis as a pharmacologically active agent,’ says the newly published paper, whose lead author was American neurologist Dr. Ethan B. Russo.”

Toronto Star : 2,700-year-old marijuana found in Chinese tomb

MSNBC : World’s oldest marijuana stash totally busted

World Bank President Robert Zoellick predicted yesterday that food prices will remain high until at least 2012. Zoellick also said that energy prices will remain volatile for the next several years. Reuters writes that Zoellick said;

“with food and fuel prices in a “danger zone” there was a need for $10 billion to provide food and cash handouts for the world’s poorest.He added that several countries had made substantial contributions towards the $10 billion sum, but funds would be needed continuously over the next years”

The New York Times reported that Zoellick “estimated that this year $10 billion would be needed to ease the effects of food inflation, including $3.5 billion for “short-term safety net” projects, such as school lunches and work-for-food programs, in more than 50 countries.”

see articles-
New York Times : World Bank Head Issues Call for Food Aid
Reuters : World Bank’s Zoellick: Food prices high until 2012

With the price of commodities continuing to rise, incidents of copper theft are being reported with more frequency. An earlier bank run blog post noted an incident where authorities in Chicago had difficulty identifying a thief who perished as he tried to steal copper wire from an active electrical transformer. Many municipalities have been hit by similar thefts leaving them forced to make costly repairs.

The Newark Advocate reports that municipal buildings have been hit by copper thieves;

“The most costly was the cutting of copper coils from air condensing units on the roof of the Midland Theatre…The estimated cost to fix the problem, which includes removal and placement by crane, was $50,000.”

Thieves in Jackson, MS targeted the Cedar Grove Missionary Baptist Church twice in a single week, WLBT News reported;

“We came out for service yesterday afternoon and we noticed the church was a little warm, so we went outside and checked and sure enough two of the air conditioning units had been torn apart.”

According to the Waterloo Record, copper thieves in Waterloo, Canada were captured “tending to injuries that police called significant but non-life-threatening” after cutting through wire carrying more than 13,000 volts of electricity.

This report from a Sarasota Florida ABC affiliate focuses on the cost borne by municipalities that are victims of copper theft;

“In just Sarasota county alone copper crooks have cost tax payers more than $40,000, that’s how much money has gone into replacing copper and aluminium from county owned buildings”-Monica Buchanan, ABC news

see stories-
bank run blog : independent commodities speculators can get burned
Newark Advocate : Copper thieves target business, landmarks
WLBT News : Copper Thieves Hit House of Worship
The Waterloo Record : Alleged copper thieves get burned

Based upon a deal being negotiated with the government oil ministry in Iraq, several of the world’s largest petroleum producing companies will gain exclusive access to Iran’s vast oil fields for thefirst time since oil production was nationalized by the former Iraqi regime more than 30 years ago.

When approved, the no-bid oil field servicing contracts will give Exxon, Shell and BP initial access to Iraq’s producing oil fields. It was these same companies who were members of a small cartel of companies that established the Iraq Petroleum Company that had exclusive control of oil production in Iraq between 1925 and 1961 and who lost oil production contracts when Iraq’s oil fields were placed under the control of a the state run Iraqi National Oil company. 36 companies were selected to receive contracts. Several companies from China, India and Russia were excluded from the deals.

The no-bid contracts are novel in the oil-producing world in that they are simple pay-for-service contracts as opposed to agreements held between the petroleum companies and other nations, which generally are licenses to drill for oil. The contracts are intended to be a stopgap measure to get Iraq’s oil fields producing as the Iraqi Oil Law is being debated by the Iraqi National Assembly. The oil companies would be paid directly in oil instead of cash.

The Iraqi government is negotiating the agreements, ostensibly, outside of the influence of the occupying US government, but as previously reported by redstateupdate.net, the Iraqi Oil Law was drafted in cooperation with the same oil companies now receiving no-bid contracts, and the US required that the Iraqi Oil Ministry include representatives of western oil production firms in its membership. Although the deals currently being negotiated will last for only one or two years, experts agree that being the first companies to have access to oil production in Iraq will certainly give the companies an advantage in consummating future deals with the government.

Iraq also awarded 6 service contracts to state owned oil companies from nations including Turkey and Pakistan. The ministry hopes to increase oil production by half over the next few years as new oil fields in the country are exploited. It is estimated that Iraq’s oil reserves exceed 300 billion barrels.

cross posted at

redstateupdate.net

A director at Pimco asserts that the government is systematically understating inflation, and that the economic crisis will be more severe and more protracted for average Americans than for Wall Street. CNBC reports :

“The standard of living has decreased for many Americans, a trend that will reverse only after the troubles in the housing market work through, Pimco Managing Director Paul McCulley said on CNBC.

‘For the average American, inflation as measured by the government is understated,’ McCulley said in a wide-ranging interview. “The economy is still in a heap of trouble.” Pimco is the world’s largest bond-trading firm.”

full story

Well-known Pimco fund manager Bill Gross assailed the accuracy of US government inflation figures in a newsletter to investors in late May. According to MarketWatch :

“Gross argued that inflation rates in the rest of the world have averaged nearly 7% over the past decade, while the U.S. official inflation rate has averaged 2.6%. ‘Does it make any sense that we have a 3% to 4% lower rate of inflation than the rest of the world?’ Gross wondered.

Investors are finally waking up to the notion that ‘U.S. inflation should be and in fact is closer to worldwide levels than previously thought,’ he said.”

full story