Happy Turkey Day

I’m tapping this out while waiting for two loaves of Pane Rustica to bake in the oven… our family’s contribution to our Thanksgiving meal is the two loaves, some potatoes, and some whole wheat dinner rolls I made last night as an experiment.   The recipe for the rolls came out of the “King Arthur Whole Grain Baking” book my lovely wife picked up for me recently… it’s a good recipe, where the wheatiness is cut by a few tablespoons of orange juice, and some honey is added to give a touch of sweetness.

Having little to do but wait for the loaves to bake, I whipped out my trusty laptop to do a little surfing & check my email.  Lo and behold, there was a note from Matt Savinar’s email list noting a story in the Wall Street Journal this morning titled “Oil Officials See Limit Looming on Production.”  The WSJ article is behind a paywall, but it’s reproduced in full here.    As Matt notes in his listserv email,

“Some people will say this is a good thing, that it is evidence that “the word is getting out.” I beg to differ. What it indicates is that we are so close to plunging off the cliff that even the stalwart of establishment’s propaganda machine  – the Wall Street Journal – is no longer able to deny and obfuscate the truth.”  

While none of us have any idea how close to the proverbial cliff we are, Matt’s commentary makes sense to me, since papers like the WSJ have little reason to fan the flames of panic like this unless it’s becoming blatantly obvious that we’ve got some major problems looming ahead.   I don’t have a crystal ball, but I could see this being one of the last ‘normal’ holiday seasons we’ll have for some time, what with the dollar plunging, energy prices rising, and a general liquidity crunch slowly playing out in world financial markets.  What may pass for ‘normal’ when my children are grown may be quite different than what we are used to experiencing these days.

I spend too much time worrying about possible futures as it is, so I just wanted to simply note this story for all of you, and then get on with enjoying Thanksgiving with my family.   If you celebrate Thanksgiving, have a nice weekend.

“Agriculture for Energy is an Extremely Stupid Thing”

First there were news stories about skyrocketing tortilla prices in Mexico, thanks in part to the increased use of corn for making ethanol.  Now the same thing is happening with pasta prices in Italy.   Wheat prices have been rising along with corn and other staple crops, and Italians are protesting the average 20% increase in pasta prices this year.

As the article note, food prices are rising in many parts of the world due to a number of reasons including poor harvests, droughts, and increased production of biofuels.  The title of this post comes from Barilla Pasta chariman Guido Barilla:

“Wheat makes up 60% of the price,” he says, pointing to a box of penne on a table. What irks him is not so much the public fuss in Italy, which he dismisses with a shrug, but one of the reasons prices are rising in the first place: the growing use of agricultural crops to make ethanol and other alternative fuels. “Agriculture for energy is an extremely stupid thing,” Barilla says. “It’s very inefficient.”

 

Adventures in Retail

It was my wedding anniversary last weekend. To celebrate, my wife’s parents generously took in our two kids over the weekend, allowing us 24 hours of uninterrupted ‘us time.’ I made dinner reservations at 6PM on Saturday at a new restaurant we were interested in checking out. The meal was excellent, and we were out the door by about 8. We got back to our car, paid to get out of the parking ramp and drove through downtown Minneapolis in search of something to do.

The following is a loose paraphrase of our conversation…

Me: “Well, it’s 8:00. The kids are with grandma & grandpa. We have the night to ourselves. What would you like to do?”

Wife: “I’m not tired and I don’t want to just go home and veg out in front of the TV. This should be a special night.”

Me: “OK… what would you like to do?”

Wife: “I don’t know. Any ideas?”

Me: “Hmm… we could go see a movie, or go get some coffee, or hit a bookstore…”

Wife: “Hmmm… none of those things sound good. We just ate, and I want to do something together with you. Seeing a movie doesn’t really count.”

Me: “Umm… OK. We could go home and play a game. Cribbage?”

Wife: <stunned silence…followed by> “Cribbage???!!! We have a night to ourselves and YOU want to go home and play cribbage?”

Me: <backpedalling> “Hey! It was just a suggestion! And you like cribbage!!! Umm… we could go somewhere for a walk.”

Wife: “It’s cold and dark outside.”

Me: “OK… how about we go to a mall? It’s warm & bright in there.”

Wife: ” OK… so you want to spend our anniversary going for a romantic walk in a #$!#@# MALL?”

Me: “No, but I’m running out of ideas here. You’ve shot down every idea I’ve suggested!”

<A minute or two of silence passes while we drive vaguely Eastward towards home>

Wife: “Our daughter needs a hat & mittens for this winter. Head to Kohl’s.”

Me: “Righty-o! Happy Anniversary, dear.”

Wife: “Shut up”

Caught Between a Rock and a Hard Place

So, the Fed has cut interest rates again… this time by a quarter-point. This isn’t surprising to anyone, I think. The housing market is continuing to slide along with the Dollar, and Monsieur Bernanke was faced with only one realistic option, namely to cut, but not cut too much. Failing to cut rates would simply accelerate the implosion of the US housing market whereas cutting too much would give foreign holders of US dollars their signal to start dumping Treasury Bonds in earnest. The best decision was to cut just a little bit, which is what Bernanke & crew did. This move gives US homeowners a potential safety valve/reprieve on their ARM mortgages, while not sowing panic among overseas central bankers.