Date: Fri, 25 Apr 2008 19:34:00 -0700 (PDT)
Subject: Fwd: Catch of the Day -- CANADIANA
I now officially declare the great rice crisis to be a sham and a fraud. All of the big three rice producing countries had bumper crops last year. Stocks are high. It is simply that their countries have declared export embargoes to see how high the price will eventually go. Shoppers at COSTCO, etc. are after the high end bhasmasti and fragrent varieties and these are in short supply. Hoarding by individual traders also contributes. The silver lining: the most affected country is Iran which consumes vast quantities of rice and grows very little of its own. Hah.
The Goracle and his foolish biofuel craze. Time for Big Al to send in his resume to Nancy and Howard and go for the Presidency again. Actually there is something called The Denver Plan which is circulating around. After the primaries are over, Big Al will declare and be supported by all of the Great and Good. Popular vote winer gets the VP "bucket of spit" as Henry Wallace described it when he was VP.
But that was not my point. Distracted. Must focus. This is a little window into how farm subsidies work and the insanity that results. And all perfectly legal. In this case we cast an eye on the biodiesel tax credit of $1 per gallon. It goes like this. You are an American corporation in the energy business. You charter a tanker and load up 10 million gallons of biofuel in Brazil. You have the boat driven to Corpus Christi. You have cunningly left room for an additional 1,000 gallons. You top the boat up with 1,000 gallons of diesel. This earns you a $10 million tax credit. You have now created 10 million gallons of blended product eligible for the tax cred. You then have the boat driven to Europe and sell the blended product there. EUros have a bigger market for diesel. Return boat to Brasil and repeat. A scam created by an IOWA senator.
It reminds me of how some oil companies used to do an in and out. We'll call it SHell Oil's shell game: short and easy to spell. Shell Oil Nigeria fills up a Shell Tanker Corporation ship which sails to one of the Caribbean islands with virtually no corporate tax. The oil is then sold to Shell Bermuda for a price close to the American price. A vast profit is realized but is largely untaxed because Bermuda don't have no stinking corporate tax. The oil now continues on to Corpus Christi where it is pumped off and sold to Shell USA but the profit is small because the price difference between Bermuda and Corpus CHristi is small. Beautiful.
Finally, I have been reading about Naples, Lord Nelson and the brief Jacobin Republic which was declared and crushed with most of the leaders hung by the mob, their livers torn out, roasted and eaten. What's your point, you may say? Well, the way they hung people was you were dropped in the conventional way and then the hangman slid down the rope onto your shoulders while his assistants pulled on your legs. Made it quick and sure. A team effort. So a perfect political cartoon came to me. Obama perched on the neck of the Democratic Party while Bill and Hill pull on the legs. Hah.
Note from Marty:COUNTERPOINT:1. "RICE CRISIS SHAM".....".......export embargoes to see how high the price will eventually go." Total NONSENSE.
Some facts: World rice production is in the area of 700M tonnes but the world trade market is only about 30M tonnes. Since Australia has been in the throes of a 6 year drought, their rice production is practically nil and their exports represented about 5% of the world market. The major fertilizer for rice, urea, has increased in price from 200% to 300% in the last 2 years. We all know the price of oil...and it takes a lot of fertilizer and energy to grow and harvest a rice crop. Combine these factors with billions and billions of dollars chasing hard assets as an inflation hedge, hell, the conservative CALPERS, the largest public employee retirement fund, has almost $10B invested in ag commodities..something unheard of a few years ago...mix all this with world and local speculation and you have a problem......countries then restrict their domestic growers from exporting in order to curtail local inflation and assure domestic supply...and the result is a world trade market SUPPLY constriction...its very real for those high consumption, high rice importing countries such as the Phillipines. Interestingly, Thailand, the world's #1 exporter, and the most desired strain of rice, Jasmine, is NOT restricting their exports in any manner, either is the U.S. (U.S. rice production is estimated to cost $1,200/a vs 8K# avg yield).
As to Iran, contrary to your claim that "the MOST AFFECTED country is Iran which consumes vast quantities of rice and grows VERY LITTLE OF ITS OWN." (my emphasis). This is total bullshit. The fact of the matter is that Iran is getting close to total self-sufficiency in rice production/consumption. They instituted a national improvement program, primarily aimed at modernizing rice processing facilities and minimizing waste, several years ago with this goal in mind...and at THAT TIME were producing about 78% of their rice needs..I can't imagine anyone that would consider 78% of ANYTHING as "very little"....their rice shortfall is estimated at only 450,000 tonnes, and with their money they couldn't care less what the price of rice is...there sure as hell won't be anyone going begging for rice in Iran. Incidentally, I take umbrage with your obvious glee in the prospect of Iranians suffering for lack of rice...I have no use for anyone that considers that situation being a "silver lining", that's a centuries old requisite of genocide...ask the British, they were master practitioners of the tactic. COSTCO, Wal-Mart, et al are not the expert marketers they are for nothing....tell someone he can only have so much of a staple and he'll want to hoard it..its a marketing ploy...in the long run, the U.S. per capita rice consumption isn't going to change a measurable iota...save the price of wheat/noodles keeps soaring and people buy an alternate starch... we probably waste more cooked rice than some countries eat.
The "Denver Plan" is something akin to a conspiracy theory....cooked up by people that still think a boogy man is under their beds. It ain't gonna happen. Either is a ticket with Bloomberg on it, dammit.
You should be so foolish as Al Gore. He has repeatedly cautioned against the negatives of ethanol and biofuel from discounting any benefits vis-a-vis fossil fuels...he has particularly stressed harmful emissions, destruction of rain forests, exploiting labor, etc, and the need to do things right...of course the profit motive intrinsic in corporacricies will eventually take the 'green' issue as their own and fuck it up.
Your fantasy scenario on farm subsidies, 10M gallons of Brazilian biofuel, tanker charter, Europe sale, etc is ridiculous in the extreme. I'm getting tired of this. I think lawyers can have a witness's entire testimony disregarded, thrown out or whatever..if they can impeach but one witness claim...1. where do you get $1.00 tax credit for biofuel manufactured outside of the country...for that matter, explain the $1.00 tax credit for stuff made within the country...isn't it $0.51?. 2. If you might claim that when the 1000 gallons of diesel is added to the 10M at Corpus Christie makes it a domestic manufactured fuel, the 10M gals would be subject to the import tariff of 2.5% duty PLUS $0.54/gal.. 3. What makes you think 1/10,000th blend would qualify for anything? 4. What about the EU 70% tariff on imported biofuels? 5. I don't know A. if Brazil exports biodiesel fuel..which is an oil based product, or B. if diesel fuel is compatible with ethanol. In any event, ethanol is currently $2.51/gal at the distillery, with tariffs, shipping, distribution, insurance, interest, charters, labor, back and forth across the world, taxes and god knows what else, what would the expected sale price be at retail, in what country and how would that price compare with diesel or gasoline? Don't forget the 30% or so inefficiency of ethanol vs gasoline and more for diesel.
The "in and out" shell game. You've got the gist of this right...but it is nothing new, its not a game, nor is it limited to oil companies..all mega-global companies operate with a variation of this...wouldn't you? Wouldn't you rather claim the bulk of your revenue in a low rate taxing, high inducement, abatement country, say Ireland, which is used by most hi-tech U.S. companies, then park those low taxed earnings on the Isle of Man, among other havens, which I believe has more bank repository companies than population, have your lobbies grease Congress for a waiver on the repatriation of money tax, which they do every few years, then bring the dough home? I would. What the fuck, global corporations are sovereigns unto themselves...they don't care if they make euros, swiss franks, dinars, yuans, zlotys, bahts or whatever...in fact, they prefer anything but dollars....the U.S. parent sells the components of say, a technical measuring device for $5.00, barely above cost for a net loss of, say, $0.50, to its Irish sub...which pays for it in euros....the Irish sub assembles the product and then sells it to European customers for $10.00 for, say, a 50% net margin..$2.50..and pays taxes of, say, 20% for a net profit of $2.00 which they promptly park in an interest bearing eurodollar account on the Isle of man with a few keystrokes..and that deposit not only earns interest but the exchange rate adds to their value the longer they are there....the U.S. parent reports a loss...applicable to fully diluted earnings and only repat the dough when conditions and the tax situation warrants....meanwhile benefiting from the cash flow, the leverage, the interest accumulation and the appreciated stock price of the Irish company which may enable them to buy another company and do the same thing over again. Now think in terms of Hong Kong for banking, Bejing for apparel, India for service, Malaysia for vegetable oils, Korea for computers and so on. Corporations are NOT patriotic.
As luck would have it, French Revolutionary history was my favorite undergrad class...I loved the professor, Robert Irrman, and I loved his teaching of that class...couldn't wait to get to it 3 times a week. Had I not maxed out departmental hours, 34, I would have repeated the class. Getting back to the "impeaching"....the leaders of the Jacobins "...most hung (sic) by the mob, their livers torn out, roasted and eaten." is patently FALSE. When Robespierre, schizophrenic at the end, gave his last speech to the Convention, he was so far gone and his words so threatening, to everyone, the Convention refused to print it and circulate it. Robespierre stomped out and the next day the Convention president basically told him to "shut his god damned mouth", as professor Irrman put it, in French. When Robespierre went on ranting he was arrested. Later that night his followers from the Hotel de Ville, fought with the Convention soldiers and 'rescued' Robespierre but after fighting back and forth, the Commune soldiers betrayed Robespierre and the Convention soldiers stormed his hold out at the hotel...several of the Jacobin leaders jumped out windows and impaled themselves on fencing but lived...Robespierre was shot in the jaw...I thought rather fitting...and he, along with about 20 other Jacobin leaders, were guillotined 17 days later. The Reign of Terror was over. He was not HANGED. I believe this account is indisputable...I've never heard mention of the human pate foie gras.
Everything I've read here is nothing but crackpot stuff.
