Obama cabinet building support for grain marketsI must not remember history well. Either that, a president-elect hasn’t normally held so many press conferences before being sworn in.
By: Sue Martin, Agweek
I must not remember history well. Either that, a president-elect hasn’t normally held so many press conferences before being sworn in.
President-elect Barack Obama held three such conferences the week of Nov. 24. I suspect he will continue to do so, laying the groundwork for when he is sworn in in such a way that it will feel like as if he has been there anyway. This helped to support and stabilize the grain markets as well as other markets this past week.
Situation in China
China’s government realizes the severity of the world’s economic crisis. If other countries are experiencing economic slowing, so will China by osmosis. This is especially true for the United States. After all, the United Stats didn’t grow its trade deficit without spending money for goods made in China.
It seems most everything comes from China. Now, with nearly two-thirds of its toy factories closed, Chinese workers are rioting and the government is trying its best to calm the situation.
China’s central bank lowered its key one-year lending rate Nov. 26 by 108 basis points to 5.58 percent. The one-year deposit rate was lowered to 2.52 percent. The gross domestic product fell to the lowest level in 18 years.
By most anyone’s standards, a growth of 7 percent would be awesome. However, this is not so for China. The government feels that growth needs to stay at 8 percent or higher to keep jobs available for the millions of peasants migrating into the cities from the countryside.
Meanwhile, the U.S. Fed continues to print dollars. The U.S. has lost trillions of dollars in assets on the real estate decline. It seems that the government is going to bail everyone out, even college loans, automakers and small businesses. I guess the government has become the biggest hedge fund now.
The weekly hatchery report showed eggs set down 8 percent and chicks placed down 9 percent from a year earlier.
In researching history of previous panics, I have found that the smallest amount of time before recovery was a year and a half and many took closer to four to five years. I think there is more contraction yet to be felt in the Midwest.
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