Yesterday afternoon, at the Goldman Sachs US Financial Services Conference in New York City, Capital One's Chairman and CEO, Richard D. Fairbank, wowed the crowd with a dizzying collection of grim assessments and forecasts. In no particular order, Fairbank observed:

1) "The storm is not over and we continue to face several significant risks."
2) "With respect to commercial real estate, I believe we cannot see line of sight to the peak yet... I kind of feel
it's going to get worse before it's better."
3) "The housing market remains severely dislocated."

Fairbank placed this last observation in the context of an economy that is still wobbling on its feet and unable to generate employment growth...

"Despite last week's modest improvement [in the jobs report]," he observed, "the average time to find a new job remains very high, a sign that the job market is more frozen than in past recessions. Similar to labor markets, the housing sector remains severely dislocated, despite some signs of stabilizing home prices. There is a growing backlog of foreclosures. Inventories of homes in foreclosure or with severely delinquent mortgages are increasing. This is likely to put downward pressure on home prices as the foreclosure inventory hits the market. Continued weakness in housing puts pressure on the broader economy and makes any emerging recovery fragile. And some of the apparent improvements in the economy may not be sustainable. As government stimulus programs like Cash for Clunkers, first-time home buyer tax credits and other direct cash payments to consumers may have only fleeting effects."

During his presentation, Fairbank also sprinkled in a few dashes of optimism about the economy's prospects...and several dollops of confidence about Capital One's ability to "weather the storm."

Investors seemed to like what they heard, as Capital One's stock jumped more than 2% yesterday afternoon. Curiously, however, the insiders at Capital One cannot seem to find any reason whatsoever to buy the stock. In fact, they have been unloading it at a very rapid clip during the last few months.

Fairbank, for his part, has not made a single open market sale since May of 2008. But most of the other company insiders have shown no such restraint. Ryan Schneider, for example, President of the Card division, sold 31,848 shares of COF (worth $1.18) during the last four months, and just announced his intention to sell another 84,518 shares. All totaled, these sales would represent more than half his holdings. Over in the accounting department, CFO Gary Perlin, just sold $2.3 million worth of COF stock, or about one quarter of his holdings. (For perspective, the last time Perlin sold stock was in May of 2007 - less than one month before COF began its swoon from $81 to $8.)

The recent flood of insider selling at Capital One is no guarantee that conditions will soon worsen at the large consumer lender. But as a rule of thumb, insiders do not sell when they believe their stock will be going UP.

Eric Fry
for The Daily Reckoning Australia

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Of course there is. George Soros is picking up more shares of gold and potash producers. Mineweb reports that, "Billionaire investor George Soros' Soros Fund Management substantially raised its shares in PotashCorp as well as invested in gold ETFs during the third quarter. In Form 13F documents filed with the SEC, Soros Fund raised its PotashCorp from 1.98 million shares to 2.95 million shares with a fair market value of $266.4 million."

And while China and America bicker over currencies, Chinese firms are scrambling to buy real assets. And while Aussie banks source foreign borrowing to lend in local real estate, Aussie mining firms go begging for bits of capital that would bring world-class ore bodies (and key strategic resources) into production...by local producers and owners.

Take Moly Mines. It's aiming to operate a 10 million tonnes per annum copper and molybdenum mine at Spinifex Ridge in Western Australia. Prior to the credit crisis last year, things were going swimmingly. Molybdenum is a hardening agent used in steel-making. There aren't a lot of economic ore bodies in the world. Moly, according to the research we published in April of 2008 in Diggers and Drillers, had one of the most economic deposits.

But it all went off the rails with the credit crisis. The company couldn't secure the funding it needed to bring the project into production. And the share price fell. That made management amenable to any offer that would secure financing and rescue what was still, by all accounts, an immensely valuable and lucrative resource.

Yesterday, the Foreign Investment Review Board (FIRB) approved a $200 million investment in Moly by China's Sichuan Hanlong Group. It gives the Chinese group majority control in Moly and could see the development of the project at Spinifex Ridge begin in the middle of next year.

Good on the Chinese for finding a great project to invest in at a bargain price. The truth is, Australia has more good mineral and energy projects than the local capital markets can realistically fund (given the preference by the banks for investing in/spruikin property). BHP CEO Marius Kloppers made this point yesterday in a lecture to the Lowy Institute in Sydney.

Kloppers said there are 74 separate resource projects worth $80 billion the advanced stages of planning. Those projects need capital. "'Although clearly not simple," Kloppers said, "a part of the solution lies in continued foreign investment, meaning that both Australia and Australian companies need to be open to this kind of investment, despite its immediate and strategic implications."

What are those "immediate and strategic implications?" Well, up to now, existing Australian shareholders are being clobbered. Those who owned equity in these projects before the credit crunch have been diluted as the firms in question raised money with rights issues or institutional placements.

That's fair enough. Owning shares implies an assumption of risk. The stock market is not a savings account. But the other immediate implication is the transfer of majority ownership of these key projects to overseas owners (including the transfer of a big chunk of income from the assets).

This is what it is. And in most cases, it is not an issue of national security. The truth is, many of these projects won't get off the ground without foreign capital. They will create Australian jobs, export earnings, and share price gains for Australian investors. They will also secure key resources for foreign manufacturers.

There's no sense getting all lathered up about it. The status quo is a result of Australia's status as a net capital importer and the investment decisions made with the money Aussie banks have borrowed. The banks could have chosen to invest in Australian mines. But mining is a risky business.

Is it as risky as property? We don't think so. But the way the Australian property market is currently structured - with the government supporting prices directly through grants and indirectly through miserly land releases, and the banks channeling new lending into the market - it's a rigged game for the banks. Why wouldn't they invest in property? It's certainly in their interest.

Whether there is a national interest at stake in the mining industry is another question. You'd certainly think so, given how much government revenue is derived from royalties and exports. But most state governments and the Federal government seem happy with the current arrangement.

The large producers have an unassailable competitive position. And the smaller explorers and developers are left to their own devices to find capital for their projects. Hey...that's why they call it capitalism!

For investors with the patience to investigate the smaller fry, it's a great market. Our new editor of Diggers and Drillers, Alex Cowie, looks like an insomniac in a coffee shop when he comes to the office each morning. There are literally more good stories than he can possibly research.

The important point is that what might be a national problem - selling of mining projects to foreign investors - is an individual investor's opportunity. You always want to invest where you have an advantage. And as an Aussie resource investor looking at the mid and small caps, you DO have an advantage.

Sure, you may be investing alongside the Chinese, who may be getting a better deal. But there are dozens of smaller projects across the resource spectrum that - as long as the world does not plunge into a second great manufacturing depression - make compelling investment stories.

Murray got back to us with his U.S. dollar index chart. You may recall that the other day we published a chart of the dollar index showing that the short-term and long-term moving averages were in danger of crossing. Murray, a full time technical analyst, basically said our chart looked nice but didn't communicate any useful information to traders about when to enter or exit positions affected by the dollar's decline (or rise).

Murray sent over his chart with a note that begins, "The US dollar index is still in strong downtrend. My last update (to Slipstream readers) said that we needed to keep an eye on the 10 week/35 week Moving Average as the confirmation for any change of trend. Also we needed to see a close above around 81 to confirm a re-entry into the distribution between 78 and 89 formed over the last year."

"None of these indicators are close to being confirmed. So, from a long term perspective, you have to remain bearish the dollar although entry into any short positions is highly risky at this point. Have a look at the chart and you can see that the lowest dotted blue line comes in around a price level of 73 which is close to where we are now."

Click to enlarge

"The meaning of the lower dotted blue line is just that it is an area where a false break can occur. So even though the current price action doesn't look like it is related to the distribution between 78 and 89, it still could be so beware. You can see from the other ranges that I have shown in the chart that a break through the low of the range saw a move to around that lower blue dotted line and then saw a squeeze from there. The first one saw a move all the way back to the top of the range and the second one tried to re-enter its range but ultimately failed.

"The point being, if you had sold down at the lower dotted blue line on either occasion you would have ended up in a difficult position. The market usually looks terrible at those points, but all too often you will see a reversal there which will at least move back to the bottom of the range.

"In this case that would see a move back to 79ish. And from there a re-entry into the range could see a quick move to the point of control at 84 and on to the highs at 90. I think we will see the Dollar create a low somewhere between 67 and 74 and then we will see a big short squeeze to take out traders in what has become a very overcrowded trade.

"Don't get me wrong," he concludes. "I still think the US Dollar is toilet paper, but it doesn't mean it won't buck around like a wild bronco on its way to fiat currency heaven."

Yee haw!

Dan Denning
for The Daily Reckoning Australia

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Throughout history, no empire has managed to rule forever. Instead, empires rise to power, they prosper and spread their influence. Thereafter, they over-extend themselves and then break down in some fashion. In fact, all the glorious empires of history had one thing in common - a spectacular collapse.

Now, there can be no doubt that America ruled the economic world for the better part of the previous century. However, this powerful nation has now entered a terminal decline. The recent credit crisis and the failure of some of the largest American financial corporations is compelling evidence that the world's largest economy is well past its prime.

Today, America finds itself heavily in debt and to make matters worse, its demographics are also worsening. Unfortunately, the American leaders are attempting to postpone the day of reckoning by taking on even more debt! It is noteworthy that over the past year alone, America's federal debt increased by approximately US$2.1 trillion and its projected budget deficit over the next decade is now slated to be almost US$9 trillion! If this does not shock you, then consider the chart below which shows the total obligations of the US government.

As you can see, over the past six years, American unfunded obligations increased by almost 50% from US$79 trillion to US$114.7 trillion! Alarmingly, over the same period, American government revenue rose by only 12%! Now, you do not have to be a genius to realize that no entity can continue to increase its liabilities by more than four times the rate of its revenue. If this spending frenzy continues, commonsense dictates that at some point in the future, the solvency of the American government will come into question. When that happens, foreign capital will flee America, interest-rates will skyrocket and we will witness an epic currency crisis.

Furthermore, it is worth noting that apart from the American government, the Federal Deposit Insurance Corporation (FDIC) is also in serious trouble. In an ironic twist of fate, the FDIC's Deposit Insurance Fund has spent so much money covering bank failures over the past three months that it has completely run out of money! This implies that there is no capital available now to insure bank deposits held at American banks.

Given the horrendous deficits and ugly debt obligations, the American government is now left with the following options:

a. Raise taxes (not sufficient to meet obligations)
b. Cut back on spending (highly unlikely)
c. Default (unimaginable)
d. Print money (only viable option)

Remember, America is the largest debtor nation the world has ever seen and the only way it can repay its obligations is through a process known as quantitative easing (euphemism for printing money). In fact, this stealth confiscation of savings is already well underway. A recent report published by the Federal Reserve revealed that the American central bank purchased half of the newly issued US Treasuries in the second quarter of this year. Needless to say, the Federal Reserve financed these purchases by creating dollars out of thin air - a short- term fix but a long-term disaster.

Let us put it bluntly; the days of American hegemony are drawing to a close and within the next two decades, China will become the world's most dominant economy.

If you are sceptical about our claim, you may want to note that twenty years ago, China's economy was worth only US$342 billion and as of last year, its GDP had grown to US$4.4 trillion; representing an annual growth rate of 13.6%. Now, if China succeeds in growing its economy by roughly 8% per annum over the next two decades, its GDP will grow to US$20.5 trillion by 2029. At that point, China may well replace America as the world's largest economy.

It is worth keeping in mind that whereas American households are up to their eyeballs in debt, their Chinese counterparts have a savings rate of almost 40%! Furthermore, at a time when America and other nations in the West are struggling to stay afloat, China's foreign exchange reserves have surged to US$2.3 trillion!

Now, we are aware that many commentators are criticising China for the sheer size of the stimulus unleashed by its leaders. In our view, this ridicule is baseless because instead of spending printed or borrowed money, at least the Chinese are spending their savings.

In any event, the stimulus applied by the Chinese policymakers seems to be working. Over the past seven months, money-supply growth in China has risen by 26% and loans have surged by 32%. In turn, this inflationary orgy is creating a residential construction boom. All this economic activity is in stark contrast to America, where despite all the policy-actions, private-sector credit is contracting.

Look. The Chinese economy is roaring along...and you can be pretty certain that the country's rapid growth will cause domestic consumption to explode. Already, roughly 900,000 cars are sold each month in China and by the end of this year, the Asian powerhouse will replace America as the world's largest market for automobiles. Interestingly, similar trends of rising consumption can be observed in various household items such as refrigerators, motorbikes, mobile phones and so forth.

So it seems to us that in this low-growth world, investors would do well to take a good hard look at high-growth opportunities like China.

Regards,

Puru Saxena
for The Daily Reckoning Australia

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The credit crisis seems to have exploded the traditional equilibrium between cash and debt. Of course, this "equilibrium" was no such thing, as corporate cash levels have been perilously low for years...at least in the finance sector.

But corporate chieftains are becoming attentive to danger, at least for now.

"The credit crisis seems to have put fear back in their spines," Chris remarks. "The 500 largest US companies - excluding financial firms - hold the largest cash hoard as a percentage of assets since 1960. The Wall Street Journal reports today that cash hoard is nearly $1 trillion, or about 10% of total assets. That was in the second quarter, for which we have full numbers. So far in the third quarter - with 248 of the 500 firms reporting - cash has increased to 11.1% of assets.

"Cash is the financial equivalent of a big, soft pillow," Chris continues. "It helps you sleep better at night. After the credit crisis turned small balance sheet leaks into lethal holes, executive suites around the country seem determined not to let that happen again. The Wall Street Journal highlights the case of Alcoa, the big aluminum producer. It sits on $1.1 billion in cash, up 28% from a year earlier. It cut its dividend, even though it is making money. The CFO said, 'We're just going to be extremely prudent.'

"But there might be another reason why the bigwigs sit on all that cash," Chris reasons. "They might just not see many good opportunities to invest in right now. In other words, the piling up of cash in America's corporate treasuries may just mirror the weak economy."

But Chris suspects these corporations won't pile up cash forever. Eventually, they will start itching to launch takeover deals. In fact, Chris points out, "We are already seeing a pickup in takeovers and mergers. Just last week, CF Industries, the fertilizer company, upped its bid for rival Terra Industries. The new offer is worth $200 million more and is mostly cash. Also last week, Denbury Resources offered $50 per share for Encore Acquisition - about $15 in cash and the rest in stock."

So even though the overall market seems richly priced at current levels, Chris has been setting his sights on a handful of names that look to him like ideal takeover candidates. T3 Energy Services is one of his favorites. He believes this leading oilfield services company would make a good fit with the likes of National Oilwell Varco or Cameron Intl.

Tesco (TESO:nasdaq) would be another juicy target, Chris believes. The stock trades slightly below book value, only 11 times earnings, and also has a clean balance sheet. In today's edition of The Daily Reckoning, Chris provides a few other scintillating details about Tesco.

Eric Fry
for The Daily Reckoning Australia

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There are some pretty big issues we left hanging with yesterday's DR. Are the Western Welfare States (the U.S., Japan, and EU nations) really going bankrupt? Things were headed that way before the credit crisis began. If Rogoff and Ferguson are right and the GFC is becoming a sovereign debt crisis, it will worsen an already bad situation.

How bad? We'll show you three of the charts we showed the folks in Canberra on Sunday. This is the condensed version of a forty-five minute presentation. So we'll have to leave out the colour commentary. And we're pleased to offer another contribution from Dr. Steve Kates on how government policy is destroying public wealth.

But first, check out the chart below from the 2008 annual budget audit by the U.S. Government Accountability Office. It shows that the U.S. government must roll over $3.4 trillion in debt over the next four years. This $3.4 trillion does not include any additional borrowing that may be required for other government programs (wars, healthcare, wars, school lunches).

What's the big deal? $3.4 trillion is a small number by today's standards, isn't it? Not exactly.

The chart shows how incredibly interest-rate sensitive U.S. government borrowing now is. Not only is it a big ask to ask the world's creditors to continue funding such large deficits (there are only so many savings available to borrow, after all), but the interest expense on that debt is likely to go up as the fiscal position of America deteriorates.

And if America can't find anyone willing to finance its deficits, what then? Well, the luxury of issuing debts in the currency you also print is that you can print money to pay for them. Technically, you can never become insolvent when you enjoy this privilege. The Fed, for example, can create new money to buy debt issued by the Treasury, funding deficits ad infinitum.

But this monetisation of the debt is another way of saying that international creditors are no longer willing to pick up America's spending tab. They will be betting against the American economy, not on it. Even if the Fed takes the unusual step of moving out further along on the yield curve to set interest rates (and keep the bond vigilantes from sending yields to the moon) this is a clear signal to owners of dollar-denominated assets and holders of dollar currency reserves to get out.

Another scenario to watch for is when creditors begin asking the U.S. to issue debts in currencies other than its own (Yuan, Euros). That would be something. In the meantime, they will look to lessen their dollar reserves.

That may not be such an orderly process. And the urgency to get out of the greenback and into something better will only pick up pace as it becomes clear the politicians in America (along with the Fed) are not likely to suddenly rediscover fiscal prudence.

You never know. The Fed may assert its independence and baulk at more quantitative easing. But we wouldn't count on it. And we reckon tangible assets and possibly emerging market equities would be the biggest beneficiaries of capital flows out of the dollar...and into anything else.

The next chart is for you, Paul Krugman. Krugman, among others, continues to insist that larger public sector deficits are necessary if the Western world is to avoid a Japanese-style deflationary "Lost Decade." He claims the government must increase spending as households and businesses deleverage and reduce debts.

Advocates of this idea claim that public sector deficits, as a percentage of GDP, have no real limits. And the example they cite is Japan. As you can see from the chart below, Japan's debt to GDP ratio is nearing 200%. America's isn't even half of that yet (it's about 98%, or $13 trillion). If Japan can finance a deficit at 200% of GDP, then why are we worried that U.S. deficits half that size would threaten interest rates or the dollar?

First off, it's worth pointing out that high public sector-debt-to GDP ratios haven't worked in Japan, if by work you mean pave the way to a stable recovery. Advocates might say-as advocates of the stimulus here in Australia often say-that the public spending made things less worse. But the opposite is true. It's made things more bad!

Or just worse, if you prefer. We mean that the public spending has done two things, neither of which is productive, and both of which, in fact, waste capital and resources. First, public sector spending to prop up financial firms with dodgy assets prevents the needed reckoning in asset prices that would produce market clearing prices for commercial and residential real estate. You get zombie banks and a zombie economy and zombie house prices.

Secondly, there's no indication that all the infrastructure spending in Japan has produced any kind of lasting growth for the economy. It may have built some great roads and bridges. But we wonder if it solved any of the underlying problems? What' more, the capital and resources that went into those projects was directed by political considerations and not available for the private sector, which could have put them to some use at least designed to produce a return on the capital.

The underlying problem which deficit spending does not solve is compounded by demographics. Japan's government is hoping that continued borrowing can be financed at low rates by pensioners who will be cashing out of their pensions but seeking safety. However, we suspect that Japanese pensioners will begin to consume their savings as they downsize their lives into their twilight years (which tend to last much longer in Japan, as the number of Japanese centenarians shows).

That means interest on Japanese bonds-which already one fifth of the Japanese budget-will consume even more of the nation's resources, if the older population clams up with its money. And like in the U.S., you'll see the government borrowing more and more of every new yen spent, with more of that borrowed yen going to pay a previous creditor. That's bordering on Ponzidom.

Japan has been able to run a higher-than-average public debt-to-GDP ratio because it has had such a high personal savings rates. This kept borrowing costs low for the government. But we'd expect that to change soon. A debt-to-GDP ratio of 200% will be very difficult to finance in the world as it is-much less in a world where those rates begin to rise and when Japanese savers begin to consume their savings.

Finally, what about Europe? Our argument here is simple: Europe's monetary union is going to come unstuck. Why? Europe has one interest rate for twelve different economies. That does not leave national governments with the flexibility to print money and inflate away political problems. This will be intolerable, the monetary union will break up.

The sign to watch for is a spike in the yields on euro-denominated debt. As the chart below (from Stratfor) shows, earlier this year bond yields did in fact begin to widen. Germany Bunds have the most stable rates, as Germany has traditionally the most stable fiscal and monetary policies in Europe (they did not go hog wild for stimulus).

But for Spain, Ireland, Greece, Portugal, Italy and Austria (whose banks lent large for real estate in Eastern Europe), another round of falling asset values really would show that the GFC has become a sovereign debt crisis. And will Germany bail out these nations? Can it afford to?

We don't know the answer to those questions. But it is worth pointing out that by assuming or guaranteeing the liabilities of the financial sector, national governments have also assumed the risk. And the bond markets will be left to decide how to price this risk.

How it ends is anyone's guess. But our take is that the Super Cycle in fiat money is at its peak. And as it unwinds, it's going to take national governments and their financing model with it. They will be forced to adopt a new model and take a new form to survive.

This means a great deal of political and economic upheaval. It's no coincidence that the last time the world faced such monetary upheaval was when it went off the gold standard and straight into essentially thirty two years of military and economic conflict (1913-1945). If the world is about to become that disordered again, you'll need a plan to deal with it.

Dan Denning
for The Daily Reckoning Australia

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"What?" we replied to one of our analysts this morning.

"He's the only Storm Trooper named in the Star Wars movie. I bought a card board cut out of him pointing his laser rifle at you. It was on sale the Science Works exhibit. I've put him behind your desk to remind you that you're under the gun."

True enough. It's not just your editor under the gun, though. What's at stake this week is whether attempts by governments and central banks to prevent more credit writedowns have succeeded. If they have, it could prevent the further transmission of the credit crisis from the financial sector to the real economy. And for investors, it could kick off a Great Releveraging.

Are we changing our tune, then, about what to expect from markets? Not one bit. But the question now is timing. The collapse of 2008 was so severe because of the sudden reduction in leverage in the financial sector. As assets fell in value, the most highly leveraged firms (or lenders who raised money by selling debt) went out of business.

This kicked off a chain reaction in which other market players were forced to sell assets and preserve capital. Banks preserve capital by not lending. This is how the credit crisis "jumped" from the financial sector the medium and small businesses (those not big enough or politically connected enough to qualify for government bailouts). And from businesses the deleveraging crisis went straight to households, who began saving more and cutting back spending.

And now it comes full circle. When households cut back, it eats into corporate profits and bank profits. Households with members who've been fired get behind on bills. Securitised credit card receivables, car loans, and mortgages - a large chunk of bank assets - start to go pear shaped. And banks face more credit writedowns, accelerating the cycle.

This is the cycle the Feds and global monetary authorities set out to short circuit this time last year. Their main objective: increase asset prices to stabilise bank balance sheets and prevent the spread of the credit crisis. How did they do it? TALF, TARP, CAP, the suspension of mark-to-market accounting rules, and the maintenance of low interest rates (in the States especially).

All these clearly did support asset prices, and especially allowed banks to post a quarter two of quarter over quarter earnings growth. This has created the appearance of stability. But what has not improved one bit is the quality of those bank assets purchased with borrowed money. There will be more writedowns to come. But when?

We should entertain the possibility that the Feds can support asset prices for some time. Take Australian housing for example. This week the Federal government announced that it would chuck another $8 billion in taxpayer money to purchase residential mortgage-backed securities (RMBS). Treasurer Wayne Swan says he's doing it to support "the home lending market."

We'd say he's doing it to keep money flowing into the housing sector so builders stay busy, banks stay profitable, and house prices stay high. Remember, this subsidy to non-bank lenders in the RMBS market is there because other investors won't fund these lenders. And why would they when the government is happy to put your money on the line.

The government says the securities are collateralised by high-quality residential real estate. But that's what pretty much anyone who was hawking this kind of debt said in the U.S. for the three years of peak mortgage issuance. This is how real estate - traditionally a local industry where prices vary from place to place - becomes a national market - through the nationalisation of the mortgage bubble. A national mortgage bubble can inflate house prices across the board-making the entire country vulnerable to higher interest rates and/or a credit crisis.

Here you see the public sector adding debt while the private sector scales back. Also, in Australia, there is still widespread public belief that house prices only ever go up. That means the government can support lending because borrowers are still borrowing. This just makes the inevitable house price correction much more devastating. The borrowers with the smallest margin for error are going to be hurt the most.

Here's something else to think about: what happens when the stimulus spending dries up? Treasury Secretary Ken Henry says that the economy could lose another 100,000 jobs and that the withdrawal of stimulus spending will shave 1.5% off Australian GDP in 2010. This is another way of saying the peak effect of the stimulus (in terms of supporting both consumer demand and employment) was in middle two quarters of the year.

So how will Aussie consumers and businesses behave when the stimulus is withdrawn? Did the Rudd government give the economy just enough free money smack to keep its credit high going? Or will the comedown be just around the corner around Christmas? If they're cautious, Australians will put away their wallets and cut up the credit cards and reduce spending growth to match income growth. The retail sector and retail stocks will be hit hard.

There's one other big question for investors heading into the end of the year. We know the government can support some sectors more effectively than others. Big ticket items like housing and cars can be subsidised with tax rebates or, in the case of housing, with a fresh injection of credit to support politically connected non-bank lenders in the RMBS market.

But you have to reckon the economy boosting effects of supporting the housing market are limited. The main beneficiaries are the banks and the builders. Granted, if you're a politician, those are two important constituencies to keep happy. But what about the rest of the economy?

The basic question is how much of it will stand on its own two feet once you remove the stimulus. The stimulus, the FHOG, the government backing of the RMBS market...these are all attempts to revive an economic growth model that's dependent on asset inflation and credit bubbles. That's the model that led to the bubble that led to the bust.

Papering offer the holes blasted in bank balance sheets by the credit crisis seems to have worked in terms of restoring confidence. Call it a successful psychological operation by the government spin doctors and their buddies in the media and banking. The whole purpose of the operation was to appear to recapitalise banks to healthy levels. But really it was to prevent the banks from having to take further credit writedowns, which itself feeds the process of forced asset sales, declining asset prices, and more household deleveraging.

One immediate risk to watch for is Australia's resource export industry. Export volumes are down year. But for the largest export categories, last year's contract prices are still in effect. Looking forward, 2010 could see lower export volumes AND lower prices for bulk commodities like iron ore and coal (especially if Chinese inventory restocking is complete). This would make the current valuations on resource earnings look pretty generous. You'll read more this week on which sectors are going to thrive and fail in this Great Releveraging.

Back to gold and the dollar and the new world currency order. A simple question: what was all the fuss about last week with a new reserve currency anyway? Here is an answer. If OPEC demands payment for oil in something other than U.S. dollars, then people who buy oil (and who doesn't?) have to stockpile the other currencies in which oil is priced and traded. That would be pretty tough on America.

To support its oil appetite, the U.S. would have to buy the currencies in which oil is priced. It couldn't use good old greenbacks. How do you buy foreign currencies?

Well, you can sell your assets (gold, real estate, stocks) and use the money to pay for oil. This is what Australia does. Or you can borrow in a foreign currency (did anyone say future Chinese bond market?) It's also possible you can use earnings on your foreign-owned assets - provided those assets generate enough money to support your oil habit.

These are all options within the free market system. The main point is that all other things being equal, you have to sell something to pay for something. This is why the foundation for economic health is always wealth production, not consumption. Production creates the goods that facilitate the trade that creates the profits to increase purchasing power for the things you don't produce.

But outside the free market system, you could opt for just taking the oil by force. By that we meant that should the U.S. be put in the position of having to pay for oil with new borrowings or asset sales, it might take the geopolitical path of least resistance and resort to a good old fashioned overt resource war. The declining Empire will strike back with its principal remaining asset, its military.

Likely candidates for an oil war? Not Iran. It's too far away. There are too many U.S. troops in Iraq and Afghanistan that would become targets. And the effect of a Middle East war would be too destabilising on oil prices. But Venezuela, on the other hand, is much closer to home.

Granted, comrade Obama is a peace maker. He was a won a price for it. Peace be upon him. And it would not seem like he's not likely to attack his good friend Comrade Chavez.

But if the current president flounders in the fiscal morass he finds himself in, he'll be a one term savior. Some pundits are already calling him "America's Gorbachev." He's the man who will preside over the swift fall from grace of a Superpower.

There will be no second coming (term). And that leaves room for a challenge from a more hawkish member of his own party (Hillary Clinton) or a populist Republican with a handy doctrine of liberty within the hemisphere (let's call it the Palin Doctrine). If Obama is America's Gorbachev, who is America's Putin? That's what Glenn Reynolds at www.instapundit.com is asking.

Naturally all of this is pure speculation. But our main point is that the oil game is not just a currency game. It's a power game. And it's silly to think the U.S. would relinquish its control over the oil market so easily. There will be a fight.

Not that the U.S. could maintain the reserve currency status quo by force. But sooner or later someone at the policy level in America is going to realise that once the reserve currency status is lost, the country loses a huge strategic and competitive advantage. Its standard of living, already in major decline, would face a major body blow.

Just how American policy makers plan on maintaining that advantage is yet to be seen. Of course maybe they don't plan on it at all. The Empire could be so narcissistic and full of false confidence that few people fail to see the inevitable chain of events the country faces. You'll just get more spending and more chest-thumping and more fiddling. Or more war.

Dan Denning
for The Daily Reckoning Australia

• Banks Could Face Larger Asset Writedowns and Losses than IMF has Modelled
• Gold Sales Cost Europe’s Central Banks Billions
• Biggest Factor Affecting Consumer Price Inflation is Growth in Bank Credit
• Everyone is Busily Debasing Their Currency
• Shadow Banking System: A Murky World of Credit, Securitisation and Derivatives

This caused the federal debt clock to add a 14th digit (by breaking the $10 trillion dollar mark).

We've also got an out-of-control trade deficit. For having a 40% share of the world's economy, we certainly don't produce that many goods.

Finally, we have a credit crisis that is causing many to worry that our lenders, like China and Japan, will turn off the tap.

With this nightmarish scenario we find ourselves in, it wouldn't surprise us if the US' credit rating fell. That would cause an immediate panic in the currency markets and send the buying power of the dollar into a tailspin.

I guess what we're saying is get out of the dollar as fast as possible!

There are a couple of ways to go about this:

Currency Protection Strategy No. 1: Sell the Dollar

The easiest way to get out of the dollar is to trade in the cash you don't need to live on for another currency. You might even be able to hold other currencies in your brokerage account.

Here at Lifetime Income Report, we don't recommend currencies directly. We're here to help you find income, not to pick currencies.

Exchanging currencies is one way to protect your wealth from a potential dollar disaster. But it's not the only way...

Currency Protection Strategy No. 2: Buy Precious Metals

There's probably no safer way to protect your wealth in the world than to own gold and silver. There are many Web sites and exchanges where you can do this, as well as coin dealers that can help you make this move.

While we personally think precious metals are going to continue increasing in value, you probably shouldn't just spend all your money on gold nuggets. There's a big difference between the spot prices and what you would pay. Gold coins, for instance, are trading at a hefty premium over spot.

Currency Protection Strategy No. 3: Buy US Companies With International Exposure

Again, this shouldn't be a surprise. We have many US companies in our portfolio. After all, we are here for income, not to be global traders. But you'll probably notice that most of our US companies have plenty of international exposure.

Currency Protection Strategy No. 4: Buy American Depositary Receipts

We saved the best for last. This is the theme we have been hitting the hardest in recent months. ADRs have been a cornerstone of this newsletter. From the very first issue, we had at least two ADRs in our portfolio. This month, we are adding another.

There's a huge reason why we buy ADRs instead of the currencies themselves. Instead of just the upside of foreign currency to US dollars, we also get the benefit of fast-growing emerging markets and mega income from international players.

You see, foreign markets, especially now, have huge dividend yields.

The US is near the bottom of the list of places for income investors to look. The smart money is in companies staying out of the dollar.

Regards,

Jim Nelson
for The Daily Reckoning Australia

• What Happens to Gold When High Inflation, Excess Cash, and Falling Dollar Jolts Economy?
• Gone Fishin’ Investment Strategy
• US Dollar Declining as China’s Currency Rises
• The Problem With a Well-Diversified Portfolio
• Citizens Easily Coerced into Using Government Currency

Here's something to think about: farm land. Granted, it has not exactly been a great year for managed investment schemes in the agricultural sector. But it's not because the underlying assets-food, livestock, forests, fruit-are less valuable than expected. It's because the structure of the schemes themselves was flawed.

There are two things to like about the idea of investing in farmland right now. First, with Timbercorp and Great Southern both going into administration, this is a hated asset class. You might be able to find some bargains (if you can find a business that makes both sense and money). The second reason is that Jim Rogers and George Soros are talking up farmland too.

The world's population is expected to go from six billion to nine billion in the next forty years. Frankly, that sounds like way too many new mouths to feed. Arable land isn't something you can buy down at the corner shops. But it is a fruitful world. And there is much multiplying.

So what's the investment angle? "Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050," says Joachim von Braun in Fortune. He's the director general at the International Food Policy Research Institute. "With limited land and water resources, this will automatically lead to increased valuations of productive land. And it goes hand in hand with water. Water scarcity will probably increase even more than land."

Hmm. Well this could be a problem in Australia (the water). And of course, there is always the possibility that there is no way on God's green earth the world can feed, clothe, fuel, and plasma-TV another three billion people. But it looks like we're going to try!

By the way, we haven't paid much attention to "Ute gate." It looks like it's just politicians doing what they always do: lying, cheating, and stealing when they think no one's looking. Business as usual, isn't it? But indirectly, you can notch another casualty up from the credit crisis.

That's right. The whole thing started with car dealers struggling to find finance during the credit crunch. The government-in its infinite wisdom and generosity-set up a facility to match dealers with creditors. Strictly a middleman role, of course.

But had it not been for the credit crisis and the difficulty auto dealers are having buying cars on credit to stock the lots, we probably wouldn't be looking at the possibility of resignations in Parliament today. But the more resignations the better, we say!

Meanwhile, in the housing market, the government is seeking new ways to keep the bubble from deflating. "Stamp duty on housing loans is set to be abolished after the Henry tax review, which is likely to recommend states be given a share of income tax to make up the difference," reports today's Australian.

Stamp duty is a cash cow for the States. And boy do they need the cash. The trouble-as they seem to be grokking now-is that if the housing market stops booming, a vital source of State revenue disappears just when the States are facing increasing liabilities AND borrowing costs. According to the Australian, "One of the world's leading experts on federal taxes, Canada's Richard Bird, said the states were heading for a financial crisis because they did not have a sufficient tax base to support their burgeoning health and education costs, which were all rising much faster than the consumer price index."

This is the nexus of the demographic and credit crises. As populations age and get larger, the cost of generously promised government benefits goes up. If the government cuts one tax you can be sure it's going to raise another. But you wonder if it's ever occurred to anyone that it's not a question of getting the right mix of taxes and excise, it's a question of reducing unrealistic promises the government can't keep without going deeply into debt or crushing economic growth with higher taxes.

Finally, a third party weighs in on Australia's banking sector. Dow Jones newswires reported last week that, "Veteran banking analyst Brian Johnson has warned of more bloodletting in Australia's banking sector. He recommends investors go underweight in banking stocks as loan defaults begin to climb."

"Mr. Johnson, an analyst at CLSA, says that for the first time in 17 years, Australia is facing a loan loss cycle, where growth in bad debts outpaces growth in lending. In a markedly bearish 200-page report, Mr. Johnson has slapped price targets on the four major banks that are dramatically lower than their current trading levels. 'Having largely avoided the pitfalls associated with securitization assets that have plagued global institutions, Australian banks are now facing their first loan-loss cycle since 1992,' said Mr. Johnson."

There's nothing new in the analysis. There are still heaps of bad loans in commercial and residential real estate around the globe. Those loans don't improve if people feel more confident about them. It's an asset value problem. And it's a debt problem. The debt households and businesses used to build up their assets now has to be wound down.

So let's see...it's still a balance sheet recession...politicians are still liars...you still can't get something for nothing...and investors looking for bargains now should look at hated assets that are on the right side of long-term trends. Until tomorrow...

Dan Denning
for The Daily Reckoning Australia

• Boris Johnson is the New Mayor of London
• UN Notes Food Production Must Increase by 70% by 2050
• Aussie Housing Market Actually Leads the U.S. by Three Years
• One in Four US banks Announce Unprofitable Quarter
• Water Usage by Big Companies

We saw yesterday that the chattering classes are moving towards inflation. Rising prices are no longer seen as evil; they are good.

Of course, it takes time to overcome well-established taboos, prejudices and good sense. But every day, the talkers are on the TV stations...the writers are in the newspapers and magazines...and the blowhard economists are in parliaments worldwide.

"Inflation is good," they say.

We're ready to do "whatever it takes" to get prices rising again, says the new U.S. Treasury Secretary, Tim Geithner.

What will it take? Economists and policymakers debate...but gradually a consensus is taking shape: it takes inflation!

The Dow fell 227 point yesterday. Gold rose $25 - it's back over $900.

Records were broken. New houses didn't sell in December - at a record pace. Consumer confidence fell to a record low. And the number of people getting jobless benefits rose to a record high.

Kodak said it was letting 3.5 to 4.5 thousand people go. Sprint cut 8,000. Corning axed 4,900. Unemployment is up in every state, reports the Wall Street Journal.

And the airline industry said it lost $5 billion last year.

There is a report at CNN about a woman who lost her $80,000 a year job and then couldn't find anything nearly as good. She's earning less than a quarter that amount, working at some make-do employment. "I never imagined in a million years," that something like this could happen to me, she said.

Little by little, the gravity of the situation is sinking in. The economy is weakening. But government is strengthening. Money, power...and hopes for the future...are flowing in its direction.

Yesterday was a day of strikes throughout France. Elizabeth reports

"I got to Paris on the train. The metro wasn't running...or at least, that's what it said on the sign. So, I stood in line for about an hour to get a taxi. Then, the taxi got caught up in a traffic jam and it took another hour to get home.

"As usual, the unions were protesting all sorts of things. They each have their own complaint. But they becoming very active... They see that capitalism has been weakened, and its leaders are confused, so they're moving to the attack. They think they have an opportunity to get more privileges...more benefits... And they're probably right."

Yes, dear reader, capitalists have been whacked so hard they are dizzy. They wobble on their pins... slur their words and speak incoherently. The world improvers see their chance. They're moving in with their rabbit punches and haymakers. They hope to wallop the rich hard... "squeeze them until the pips squeak," as a British Labor prime minister once put it.

Yesterday, President Obama, seeing Wall Street on the mat, walked over and gave it the boot.

The $18 billion in bonuses, paid out on to Wall Street honchos last year, were "shameful," said he. It was the "height of irresponsibility" to take so much capital out of the system when it was losing money, he pointed out.

Of course, he's right. It was certainly irresponsible. And the Wall Street crowd deserves the boot, no doubt about it. But it's a shame no one mentioned it in 2006 or 2007 - not even Mr. Obama - when the bonuses and the irresponsibility were even higher. In 2006, the bonuses rose to $62 billion...as the street sold trillions worth of CDOs, MBSs, and other unmentionables.

But that's just the way it works. As we keep saying, the 'innocent fraud' of the market is OUT. Armed robbery is IN.

Government - in the hands of the world improvers - doesn't flimflam investors like Dick Fuld and Hank Paulson did. Instead, it creates a Bernie Madoff fraud - a pyramid scheme that even the Egyptians would envy. And, unlike Wall Street, Washington takes money from people even without asking...like a convenience store stick-up man without the stocking on his head.

And now - in the confusion of the credit crisis - their hour has come round at last...the politicians and world improvers are coming out swinging, grappling, kicking - getting all the power and money they can, while the getting's good.
*** While the capitalist system is de-leveraging, the public sector is leveraging. First, the government is taking debt away from the private sector banks and investment houses...moving it onto its own books. Second, it is borrowing like there's no tomorrow. (Leading us to humbly predict that there are relatively fewer tomorrows than yesterdays for the dollar-based international monetary system.)

David Leonhardt, writing in the New York Times, announces:

"Once governments finally decide to use the enormous resources at their disposal, they have typically been able to shock an economy back to life. They can put to work the people, money and equipment sitting idle, until the private sector is willing to begin using them again. The prescription developed almost a century ago by John Maynard Keynes does appear to work."

Not to us it doesn't. But that won't stop Leonhardt, Obama, Frank, Pelosi, Bernanke - or anyone else. Leonhardt goes on to cite economist Mancur Olson, who noticed that things change in a crisis. The bigger the crisis, the more they tend to change.

Leonhardt completely misses Olson's point. Olson explained how losing WWII actually helped the Germans and Japanese. They were able to restructure their governments and their economies; they became the two most successful economies of the 2nd half of the 20th century. The New York Times columnist thinks this happened because they fixed the system. He thinks that's what Olson was talking about. Leonhardt even entitles his article, "The Big Fix." And he uses it to urge the Obama administration to put into place such big 'fixes' as a new system of national health care...and a better, national system of education.

But Olson wasn't talking about fixes at all. The Germans did not fix their system. Neither did the Japanese. Instead, WWII fixed them both. Their industry and their government were destroyed - by bombs, artillery, tanks and aircraft. Olson noticed what comes after destruction: Renaissance.

America is a long way from that. Its politicians and opinion mongers - such as Leonhardt - are still in their bunkers...still directing what is left of their troops. Still raising money. Still taxing. Still spending. Still fixing. They hope to save the system, not rebuild on the ruins.

Here at The Daily Reckoning, we believe their fixes actually make the situation worse...and hasten the day when the whole thing collapses.
*** "I'm not optimistic about the global economy," says our old friend, Marc Faber. "The next Madoff case - the next Ponzi scheme - is the U.S. government. It will go bust. It is only a question of time."

When will the U.S. government go bust? When the weight of all the fixes finally crushes it. That is when the last bubble of the entire bubble cycle finally explodes - when the government itself is de-leveraged...when U.S. Treasury bonds crash...and the dollar comes down.

What do you do to protect yourself? There aren't too many choices. Because you never know when or how it will happen.

"Gold functions as a protection against your central bank doing stupid things," says Felix Zulauf.

"One day the price of gold will be higher than the Dow Jones," adds Faber.

Faber, in Barron's makes a couple other suggestions:

Short the Treasury bond market, using the Pro-Shares Ultra-short Lehman 20+ Yr. ETF. It moves twice as much, inverse to the long Treasury market.

Buy Gabriel Resources. It's a Canadian company that could "go ballistic," says Faber, when the mining sector takes off.

Keep reading for today's essay,

Bill Bonner
for The Daily Reckoning Australia

• After the Bailout of Wall Street, Everybody Wants Cash
• Wall Street Snubs Obama
• Ranting Against Free markets and Wall Street
• Biggest Bankruptcy in Wall Street History
• Bailout on Wall Street Has Left the Door Open for Other Industries

It seems like every day we get some news of a new bank failure, or takeover or some revelation that reminds us that all is not well. And the markets keep sinking...

The U.S banking system lies in shambles, like the U.S. fleet at Pearl Harbor in '41. This is no garden-variety downturn, no little dip in the road to higher prices.

I've given a lot of thought to what might be a good spot to hide out - and even prosper - during this crisis. Precious metals immediately come to mind: Owning some gold or silver is a comforting thought. But what else?

I keep coming back to something really basic: farmland.

Recently, I spent a few days in an old chateau in the countryside of Normandy, France. There is a tiny town about a mile from the chateau, but otherwise, it is a picture of things pastoral - green meadows... cows cropping grass and taking in the sun... a Jacobin farmhouse... miles of farmland all around... Since I've been writing and talking about farmland, I had a deeper appreciation for just how useful such land is.

Really, I can think of no better asset to own during any kind of financial crisis. In some ways, farmland is even better than gold or silver. At least farmland is an intrinsically useful thing. It provides a tangible yield in the form of good things from the earth. We all have to eat. As consumers trim their sails, they'll give up a lot before they give up their calorie intake. In fact, worldwide, the per capita calorie intake is likely to rise, as I'll get into shortly.

The problem with farmland is that it's not an easy thing to invest in as an individual investor. But I've found a fund that invests directly in farmland in Canada. The name of firm running these funds is Agcapita, based in Calgary, Alberta.

I'll get to the details below, but first, I want to flesh out this idea of investing in farmland, specifically Canadian farmland. I think you'll be surprised to learn how cheap it is and how well it's performed in the past...

First, we're essentially talking about three provinces in Canada's grain belt - Alberta makes up the western bookend, Manitoba the eastern one and Saskatchewan is between the two. While Canadian farmland in general looks cheap, it's Saskatchewan that really stands out.

Hard to believe that Canadian farmland is so much cheaper than even Brazil's or Argentina's. It's not as if yields are uncompetitive. Canada's wheat yield (in metric tons per acre) is about 1.0, which compares with 0.6 in Brazil and 1.0 in Argentina. The infrastructure in Western Canada is also very good. The whole economy there is geared around agriculture. There are miles of railroad tracks and grain elevators across the prairies.

So why the price disparity? Here we get to a quirky driver unique to these Canadian markets. For the longest time, there were all kinds of restrictions on who could own farmland. In the last several years, these restrictions have gone away.

For instance, in 2003, Saskatchewan finally allowed unlimited ownership by all Canadians. At one time, you had to be a resident of Saskatchewan to own farmland. No longer. Similar restrictions existed in the other markets. The governments loosened these restrictions or have done away with them altogether.

No surprise, then, that farmland prices started to tick up noticeably as these restrictions fell away.

Suddenly, you've got a much larger potential pool of buyers in a market in which agricultural assets are still in demand. In Saskatchewan, in particular, after years of going nowhere to down, prices immediately began increasing year over year after 2003. In 2007, prices increased 11%!

I've written to you several times before about the boom in agricultural markets. The dynamics of this change are pretty simple, though we might lose sight of them during these crazy markets. As the wand of prosperity has touched China and India and the rest of the emerging markets, so have the diets of the people changed. They tend to eat better, which puts pressures on the grain markets.

So what we see is grain inventories falling to lows not seen in more than 40 years. So at some point, we should expect to see rising prices for grains - and for the farmland that produces them.

Meanwhile, the amount of arable land per person is falling. I wrote about this in my newsletter Capital & Crisis ("The Topsoil Crisis"). The gist of it is that we are losing quality topsoil faster than we are replacing it.

There is a growing scarcity of good farmland. And you see countries that import grains - such as Saudi Arabia and China and South Korea - trying to lock down farmland.

Agcapita points out that the per capita amount of arable land on the planet has dropped sharply over the last 50 years, and is likely to continue dropping. From 2.8 acres per person in 1960, the amount of arable land has dropped to slightly more than one acre today.

Now, we don't need 2.8 acres per person anymore, because of advances in agriculture over time. But gains in yield per acre are slowing. Over the last 40 years, we've increased the yield per acre by 2.1% per year. But the pace of those gains is slowing. Since 2000, the increase in yields per acre has averaged less than 1% per year.

We may see new innovations in seeds or other technology that we can scarcely imagine now. But it also seems that any solution would take some time and money to implement.

Meanwhile, the world's agriculture markets just get tighter and tighter...

Demand is strong. In 1974, cereal crop consumption was about 1,500 bushels per second. Today, it's 2,600 bushels per second. So we have a double effect here. We have increasing population and increasing consumption per person. Agcapita estimates that cereal crop consumption will double again over the next 20 years. The amount of pressure on the global food supply network is enormous. This, again, is a reflection of people eating better and eating more meat - which requires exponentially more grains to produce.

There is another wrinkle to the story: Most every oil-consuming country has put in place biofuel targets that will kick in over the next five years. These places include the U.S., the EU, Canada, Japan, Brazil, India and China. To meet their targets, according to work by Agcapita, we'll have to commit some 240 million acres to biofuel production. That represents about 50% of the arable land in North America and about 6% of all the arable land in the world.

As you can see, the biofuel craze puts further pressures on farmland demand.

So that's where we are in a nutshell. For these reasons, I'm bullish on agriculture assets in general, and farmland in particular.

The other appealing aspect of farmland is how well it did in the inflationary environment of the 1970s. I think we're headed to another 1970s-style inflation. Right now, we're in the midst of a (temporary) deflation wave sweeping over commodity-land. But the dollar, as we know, is not hard to reproduce.

Governments, particularly in times of crisis - like now - have a tendency to flood the system with money in an attempt to "goose" the economy. Mostly, such efforts have succeeded in destroying the value of the currency in question.

Anyway, if you believe that we will continue to feel the bane of inflation, then farmland's performance in the 1970s will give you some comfort.

So you see that while you lost half of your money in the S&P 500, your farmland kept its value nicely. Again, I think that's rooted in the fact that farmland is intrinsically useful. It produces useful and needed things.

Now imagine what farmland might do in today's climate, in which you have not only the likely prospect of inflation, but also a tightening supply of farmland and rising demand for crops. I imagine you'll do quite a bit better than the 1970s.

If you are interested in investing in farmland, contact Stephen Johnston directly at sjohnston@agcapita.com and tell him I sent you. Johnston's funds invest in farmland. As stated simply on Agcapita's Web site: "Agcapita provides investors with the operating and capital appreciation returns from owning Canadian farmland." Jim Rogers, of Investment Biker fame, has recently agreed to join Agcapita's advisory board.

At a recent event in Toronto, Rogers suggested to the assembled investment bankers that they "sell their houses in the city, move to Saskatchewan, buy tractors and farmland and start farming."

It's a true special situation, and it's not for everybody, but maybe it's for you.

Check in tomorrow for the third and final installment on investing in the North American agriculture boom...And this time, we'll suggest a publicly traded stock.

Chris Mayer
for The Daily Reckoning Australia

• UN Notes Food Production Must Increase by 70% by 2050
• Are Farm Prices Destined to Rise as More People Compete for Food?
• Topsoil Crisis: The Race to Secure Fertile Farmland
• Top Resource Prices in 2008: Food, Water, Energy & Metal
• Of Soybeans and Silver