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Wanted - For Premeditated Murder of American Farming

July 5, 1999

WANTED: Greenspan (FRB), Camdessus (IMF) and Eddie George (BOE) for premeditated murder of American Farming


CHICAGO (Reuters) - Fading worries that a crop-damaging heat wave could hit the Midwest Corn Belt drove corn, soybean and wheat prices to the lowest levels in years.

At the Chicago Board of Trade, soybeans led the drop in grain prices and sank to 26-year lows on the bleak outlook for a third record U.S. crop in a row and already burdensome stockpiles globally.

Soybeans for July delivery closed 11-3/4 cents a bushel lower at $4.30-1/2, the lowest futures close since January 9, 1973. Both soybeans and soybean oil set life-of-contract lows for all futures traded for delivery this year and next.

Struggling U.S. farmers, responding to a U.S. government crop loan program that pays higher rates for soybeans than for other crops, are expected to produce 2.8 billion bushels of soybeans this year, a third consecutive record high.

Both corn and wheat prices also dived, as crop prospects brightened while price outlooks darkened due to slow world export demand, good crops overseas and large stockpiles.

A few will understandably ask what plunging farm product prices have to do with gold. "EVERYTHING," says no less an authority on U.S. Farming than Dean Kleckner, President of the American Farm Bureau Federation. Earlier this year Mr. Kleckner went on public record emphatically warning:

"The Federal Reserve Board must end the deflationary spiral in commodity prices by pegging U.S. interest rates to GOLD and other commodity prices."

Last January American Farm Bureau Federation president, Dean called upon the aid of Fed Chairman Greenspan. The American Farm Bureau Chief implored:

"Lowering interest rates has been a good plan of attack," he said. "But the Fed now has to stabilize commodity prices by using GOLD and other commodity prices as benchmarks to set monetary policy."

Despite Kleckner's fervent plea for government FARM SUPPORT, internationally coordinated efforts forced the price of Gold to decline 13% in value from $300 to $260, while the Fed orchestrated the rise of nearly 100 basis points in U.S. Treasury bond yields. Consequently, soybeans plunged to 26-year lows -- hurling the U.S. Farmer close to the brink of total insolvency and bankruptcy.

Highly suspect is the coincident timing of gold sale announcements by the IMF and the Bank of England (BOE), which makes one wonder if there is some sinister collusion and connection with rising yields in the U.S. 30-year bond market. The concurrence of these pernicious events are driving food commodity prices to dangerously low levels.

Kleckner implores: "…the Fed now has to stabilize commodity prices by using GOLD and other commodity prices as benchmarks to set monetary policy." Inconceivably, Kleckner's plea to Mr. Greenspan has fallen on deaf ears. Moreover, not a single U.S. Congressman has taken up the fallen banner of the American Farmer.

In addition to threatening the livelihood of the American Farmer, proposed gold sales by the IMF and the BOE will generate intolerable unemployment amongst many poor and damnified countries of the world, which ironically produce GOLD but suffer under crushing load debt.

While Wall Street Brokers Guzzle Champagne US Farmers Drown in Sweat and Burgeoning Debt

The fruit of Wall Streeters' labor is obscene opulence, while the bitter fruits of the American Farmer's labor are sweat, toil and growing debt. PATHETICALLY, irrational bubble exuberance goes hand in hand with perennial governmental abandonment of the U.S. Farmer. Consider what has transpired during the last 60 years.

Wall Street - In 1939 the DOW was finally beginning to crawl out of the Great Depression and recover from the 1929 Market Crash. The Industrial Index stood at about 150. Since this humble start Wall Street and nearly every American prospered. With only brief periods of respite stocks flourished relentlessly during the next 60 years. The DOW rose to an all-time high of 11139 on July 2, 1999. Think of it! During the last six decades Wall Street stocks appreciated 7.4% COMPOUNDED YEARLY. We may all rejoice in the enrichment of corporate America, because it translated to more jobs and a higher standard of living for all. All Americans prospered… all but the U.S. Farmer!

U.S. Farmer - In 1939 the price of wheat was $0.96 a bushel. In the same year a new Farm-all Model-A tractor cost about $700. Therefore, a farmer had to produce 729 bushels over and above his farming costs in order to pay for his tractor.

Fast forward 60 years of accelerating economic growth in nearly all America. The price of wheat last Friday was $2.40. Wheat's price increase during the last six decades was a mere 1.5% per annum. While wheat prices snailed along, the cost of farming skyrocketed. Per trade sources a standard new tractor today costs approximately $55,000. Obviously, the cost of farming increased 7.5% COMPOUNDED YEARLY (ironically equal to Wall Street's annual appreciation) vis-à-vis a miserly wheat price increase of only 1.5% per year. But the economic dis-equilibrium does not stop here.

Today, the American Farmer is forced to produce almost 23,000 bushels of wheat over and above his farming costs to pay for his new tractor. It bears repeating that in 1939 it took 729 bushels, today 23,000 bushels is required!! In essence the U.S. Farmer's costs measured in bushels of wheat are forcing him into insolvency and bankruptcy. His production costs skyrocket while his revenues relentlessly diminish.

By no stretch of the imagination could anyone accuse American Farm Bureau Kleckner of being a 'goldbug' per se. Consequently, his objective opinion that a new GOLD policy will bring direly needed relief to the American Farmer must be taken seriously by the U.S. government.

Proposed gold sales by the IMF and BOE must be stopped - as they are yet more nails in the coffins of American Farmers. Furthermore, downward manipulation of the price of GOLD must also be terminated forthwith.

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