Farmer Diaries

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America –Again

I must be a glutton for punishment but my wife and I are just back from a trip to America. Again the wedding of the daughter of a friend of my wife, and so we went to Georgia for five days. We landed in Atlanta, and the whole process was as unpleasant as it had been in the past. Many questions about why we were in the US, and that I appear to go to the US very often. They did not like our home address, somehow they still have issues with addresses in the UK. Still after an hour, we made it into the country. Weddings are weddings, they change and they look different. Some of it is cringing, but there’s a rhythm to the things and usually by 1 AM you’re done. We underestimated the welcome we received in Georgia. To be perfectly honest, the entire weekend was lovely. Both my wife and I stayed away from any political conversation. Nevertheless, we were both surprised by the ignorance of the people of the party, in particular the young ones. I have no...

300,000 tonnes of Beef

Trump's desire to reduce the price of beef is a last minute reflex, that is understandable considering how much the American population doesn't want to understand what is happening. The fundamental problem is that beef production is the lowest it has been for nearly 70 years, and the reason is drought. 31 US states are operating in a severe drought environment, and a cow will consume at least 15 gallons of water per day. No water, no cattle. It was evident months ago that there was a fundamental problem in the United States when large slaughter houses started shutting down. At first the reason was that most operated with illegal labor and that ICE was active. However, the compliant slaughterhouses did not have a good 2025 year anyway. The problem was massive herd culling. How do I know? I am a farmer, and these things are discussed. So Donald Trump wants to import the equivalent of 1.2 million head of cattle for ham...

Bond Prices

Forty trillion dollars is a lot of money! Even on planet earth its a lot of money. The problem is that America is not the only one borrowing, moreover, more than three trillion dollars worth of maturing bonds have to be refinanced. That's a lot of money. The other factor that is important to understand is that America is not the only one borrowing, but it is the only one that is trying to kill its trade deficit. What American policy makers fail to understand is that a trade deficit is basically a situation where you get stuff and you give sellers little pieces of paper that they keep in safes. About 40% of all new treasury bonds are purchased by foreign holders. The two largest holders are the Japanese government and the Chinese government. The latter is reducing its holding quickly because it needs liquidity. The reality of China that most don't seem to understand is that it is quickly aging and about 25% of its economy is dis...

Deodollarisation -- is it even possible?

An often asked question is, could the US dollar's hegemony be at an end? Could another method of exchange be used, and could commodities be priced in things other than dollars? The short answer is YES, the long answer is IT COULD take a long while. The problem is that the dollarisation of the planet for trading has been in place for nearly five decades. The convergence of very specific factors (a) the American economy eclipsed the rest of the world in the 1950 and 1960s (gold was still an important benchmark then). (b) A large percentage of trade was directed to the United States, and (c) many currencies were not freely exchangeable or very liquid. The only real debt markets were the UK (the old standard of exchange) and the United States. In short it became "convenient" to price things in US dollars. The first American President to weaponise the US dollar was Bush after the World Trade Center attack. People forget that once th...

Artificial Intelligence a slightly deeper diver

OK first, I have no skin in the game, but what is remarkable is that I had completely understated the amount invested in the AI sector. To give you a sense of how large the investment in the sector is, the Bank of England in a recent study indicated that for AI investment to meet the current stated rate of return, the entire sector would need to generate nearly $2.5 trillion in revenues per annum. To give you a sense of perspective, it's equal to 140% of the total revenues from the global tech sector. BTW, that's a lot of money! Today, right now, (and from the same study) corporate executives use AI for about 100 minutes per week, they pay small amounts and have generally indicated that they have not seen any real value to the product. Still they pay the minimum (a few hundred dollars a year). The second group are small businesses that have been able to scale up their operation using AI instead of human staff. Again, not nothing, but not a...

American Icebreaker – a small problem

There were two American icebreakers, the Polar Star and the Healey. The first one has been in drydock for over three years, but the work has now stopped, it has now been determined that the 50 year old hull is simply not up to the challenge. The Healey was supposed to be the answer, in 2024 it suffered from a massive fire, and limped back to port. In its recent sea trials it had a massive engine room fire. It is not clear at this stage if the vessel can be rehabilitated. In short, the US navy needs new icebreakers. So far so simple, one tiny fly in the ointment, there are no US shipyards that are currently able to build a new military vessel (the shipyards that could, are booked until at least 2031). The solution is to purchase new hulls from other nations. The problem: the two shipyards that have the ability and capacity to build such vessels are in Canada and Finland. Not exactly good friends right now. The first is obv...

The end of the American empire – Stage 6 of 7

It has been evident that the era of scientific achievements has now passed, it has taken two Republican governments to seal the faith of science as a cornerstone of the American system. Don't believe me, look at who leads the nation today; lawyers and idiots – think Robert Kennedy or the recent candidate to the CDC – obvious examples of people who are driven by ego and "truthiness" rather than the cold reality of science. The seven stages are: The Age of Pioneers: Small, energetic nations burst onto the world stage with high courage, dynamic leadership, and a strong sense of collective purpose. The Age of Conquests: Territorial and political expansion through military might, building upon the momentum of the pioneer phase. The Age of Commerce: Great enterprise and trade flourish, bringing massive influxes of wealth and transforming the nation into a global economic hub.The Age of Affluence: Wealth peaks and comfort becomes widespread; however, greed begins to replace ...

$17.50

That's how much it costs now for a big mac, a french fry and a coke. In 2019, the same meal would cost $7.50. What happened? The reality of the fast food industry in America is fascinating, the country is awash with fast food restaurants and low value chains. The reality of the game is two fold: first the corporations that run the fast food industry have run against a fundamental large number problem – there's simply no room for expansion. The franchise that operates new restaurants cannot find "interesting opportunities" which translates into areas where there is a shortage of supply. In order to keep their stock prices up they have resorted to increasing the price of ingredients that the franchises have to purchase (including services). Over the past five years, despite virtually no additional outlets, and stagnant sales figures, companies such as McDonald have increased margins through higher prices, which translates into a 160% increase in the ...

Reflecting Pool fiasco, Department of Interior and Health – can it get worse?

First, its been obvious for weeks that the stories around the deterioration of the Washington Reflection Pond were completely made up but a morally bankrupt administration. Now the head of the Justice Department and the head of the department of interior are fighting about who is more at fault, especially now that it has been proven that not only did the Park service testimony was that there was no evidence of willful destruction. In addition, those who have been accused of damaging the reflection pool are now seeking legal redress – it's going to cost a few people some serious coin. Now the head of the department of health, an anti-vaxxer had a total meltdown on television over the weekend, where he accused the interviewer of not being a scientist…which is true, but he is not a scientist either. The public health crisis, the complete stupidity of those being sent up to the Hill for confirmation. The person that was nominated to head the CDC had never heard or rM...

FIFA WORLD CUP -- rumors of sale

I don't care about football. However, I do know one thing. Inside the European football union (whatever they call themselves) they never agree to anything, ever. When it was announced that FIFA was selling out to investors the rights to the world cup for $20 billion, the reaction was almost immediate. 55 members said that if there was a sale, they would not participate in any world cup event, ever! It took the 55 members exactly one hour over a Zoom call to agree to this. That dog don't hunt – as my American friends would say

Artificial Intelligence and civil servants

In my opinion, the biggest change to the world over the next five years will be the application of AI to government services. Let's be honest here, Governments provide services, much of which are pushing bits of paper from A to B. A lot of the "work" is a reflection of a world before computers. If an accountant, trader, banker and a lawyer can be replaced by AI then civil servants should be the first to go. From my experience (and it has been limited) the vast majority of civil servants are there to collect and collate information, and disseminate the results of new rules and laws as drafted by politicians and senior civil servants. In a nut shell, probably in excess of 40% of current civil servants could be replaced by AI. Now, the tricky part, as the US government has recently discovered, is who are the essential bits and who are the redundant bits. Part of the problem is identifying the right one, and again this is wh...