High Commodity Prices Lead to Clearing of Amazon in Brazil

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In the world of money, everything still looks pretty good – that is, if you don’t look too hard. The Dow rose again on Friday. The euro is still over US$1.40. Wheat, soybeans, oil, gold – and a whole host of other items – are at all-time highs.

These high prices are transforming the physical world.

In Brazil, the Amazon jungle is being pushed back so planters can grow soybeans. Environmentalists all over the planet are whining about it, but the Brazilians reply: “Hey, this is our jungle; we’ll do what we want…besides, we need the money.”

In neighbouring Argentina, the poor cattle are being pushed back too – up to the north…to drier, less fertile land. The regular stock often can’t stand the shock…so the breed is being mixed with hardier races, such as the Indian Brahmin. The mixed-breed beasts can cope with the tougher conditions, but they yield a meat of lower quality. Why take the cows off the good land? Because it is being used to grow wheat and soybeans, of course.

Ireland has gotten rich, too – thanks to a property boom. There, the ugly, old cement-grey houses of the pre-boom era are being replaced by ugly, new cement-grey houses.

London seems to change everyday…with new restaurants…new buildings…new hedge-funds. There is so much money bubbling around the city that hustlers work overtime to figure out how to take it from its rightful owners.

Bill Bonner
The Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
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Comments

  1. If the rich countries had any guts they would purchase a kind of environmental lease use over the remaining Amazon. In other words pay the Brazilian Government to preserve it.

    We all need air to breath. In any case, preservation is a lot cheaper than planting new rain forests.

    In pure economic terms, rainforest is worth more to the capital markets than a few new cow paddocks and soybean crops.

    Coffee Addict
    September 25, 2007
    Reply
  2. Coffee addict, if that is truly the case, then the markets will make it happen.

    Reply
  3. To most economic students, von Mises’ term “misallocation of resources” is an enigmatic, academic term, but the damage to the Amazon is a perfect example of the phenomenon. Governments tinker with money supply and inflation soars, causing not only misuse of resources, but OVERUSE of them. Nevermind the fact that the next generations may have hoards of our debt to deal with… they may not even have the resources they need to live their lives!

    Reply

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