Farmer Diaries

Well today, November 3 are the midterm elections across United States, where every representant from Congress will be running for election as well as 1/3 of all senators. In addition, numerous governors and other elected officials are running for office today. The American electoral system is both strange and very democratic and ensures that the pendulum doesn’t move too fast or too quickly in any direction. The problem, and it’s serious, is that the Republican leaders have been some of the most ineffectual government agencies for the past 24 months. It is quite an indictment of the political process in America that they legislative body has been paralyzed. The question is, has the electoral population had enough of the bums? It’s always hard to say, because so many Americans do not follow politics. Americans are amazed when they get a participation rate of 50%. In most other countries more than 80% of voters present themselves at the ballot box. Today, the will of the people will ...

First, what is a data centre?  It's simple, it's a large array of computers with very powerful graphic cards.  If you have a computer for gaming (or your son has one), you know that they run hot, and need a lot of cooling. So the first thing is that data centers need a lot of cooling, it can be open or closed, but in either case data centers need a lot of water – because in 99% of cases water cooling is the best solution.   The next thing is that data centers need energy, a lot of energy, first to run their graphic cards but also to cool the cards.   Right now the ONLY solution is the grid, there is no other solution.  You could build a coal plant next to a data centre, but the fundamentals are the same, data centers are large energy consumers, full stop.  There have been "stories" about nuclear reactors for data centres, but the world is at least a decade away from such a thing happening. Data centers are ubiquitous, far more than people believe ...

This is not from me, but from a Canadian based, American political scientist called Tim Snyder, who a few months ago, at the Council of Foreign Affairs brought out this new "definition" of a superpower that does almost anything to destroy itself. The story of Trump and his followers, carpetbaggers and wannabe dictators, but of another democracy that "gave up" now the context is different but some of the elements are surprisingly similar in the outcome. The Treaty of Vesaille forced upon Germany and its population massive repayment obligations that were nearly impossible to achieve – which was largely the objective.  It is important to note that Germany in the 1920s was simply the "center" of scientific research – just look at the Oppenheimer movie to understand the importance of the country to fundamental research.   The first world war was not a "global war" in the same way as WWII was, conflicts were very regional, granted all over Europe, but ...

 separatist movements have always existed, as unions between different antiques do not always match people‘s expectation. To us here in Great Britain. It is a link with Europe that has always felt unnatural for some good and not so good reasons. For some reason, the United Kingdom has always felt a closer kinship to the United States, then to Europe. Unfortunately, Great Britain is discovery that there’s no reciprocity. Yesterday, one of the richest provinces in Canada, Alberta, underwent A referendum with regards to whether Alberta should seek to separate itself from the Canadian entity. In addition to that question, there were an additional 12 questions that were there to appease most people from Alberta. Today, the results are out. In a nutshell, a route, the yay only scored 23%. The knees scored over 76%. In addition, and like they refer them and quebec several decades ago, it was essentially asking the population for a mandate to negotiate with the rest of Canada. I suspect, t...

 Paris has many qualities, first it’s a pretty city, and the centre once you get used to it is well organized. The French are relatively civilized people. Slightly less pompous than the BRITs, and somewhat more fun than The Germans. France’s biggest weakness Is the entitlement. This is not a new thing, and has been a feature of the country for a long time. In France, everything gravitates towards Paris. In actuality, until very recently virtually all aircraft that went into the region had to fly by Paris. There’s also a mindset within the population, that they have signed a social contract, which is Entirely one-sided. The state as a portion of GDP, is one of the largest in Europe, and even dwarfs the Germans. In addition, in the 1970s, France, and Germany actually broke a social contract to make things easier and push the problems further into the future. Effectively, French pensions are paid directly out of the state coffers. The problem with this method is that there’s no concep...

 After about a week, the real news out of Washington with regards to the meeting between Xi and Donald Trump Can finally be analyzed. On one side, the Chinese media have been saying that chairman Xi Is in great shape and ready to beat the Americans and the president in particular at every level. Like everything else with Donald Trump, everyone knows that aside from immense bluster, he’s not equipped or even willing to negotiate with anyone unless they 100% abide by his desires. And even then he will change his mind. So what actually happened? The truth is that chairman Xi Looked very diminished and although he’s spending substantial amount of time in the White House, according to people who were involved the majority of his time he was spent alone with his wife and not with the president. In the end, two minor and inconsequential agreements were reached in the two nations. What is important to understand, is that the summit between China and America has been on the books for more t...

 At first I thought it was a joke, the US treasury is issuing one dollar coin with the face of the current US president for $2.10 each. In fact, you have to buy a roll of 25 for about $62. It is quite remarkable, that Donald Trump is doing such a thing. In addition, these coins are legal tender for a dollar each. That means, that if you go to Starbucks, and buy a four dollar coffee, with a Trump coin, the coffee will cost you eight bucks.  Now, if it was a real commemorative thing, they wouldn’t sell them in roles of 25. Instead, that would make a plaque in which you put the coins and somehow somewhere the coins would eventually be worth more than $2.10 each. But no, it seems that US treasury wants real Americans to buy something for two dollars that is valued at one dollar.  It’s hard to believe that people will do so? On the other hand, it’s not the first scheme that Trump introduced. Finally, is it even legal for an image of the current sitting president to be on a coi...

Scott Bessent is "called" a bean farmer but is nothing of the sort.   He worked at Brown Harriman and Soros fund, when things were serious. He was a young trader at Soros' when that fund attacked the pound sterling exchange rate against the newly formed Euro (and won).   Scott Bessent is many many things but he is not stupid… and then he does something incredibly stupid.  He bets against the bond market!    There is no doubt that Scott's descent into hell was at the prompting of his boss, the American President, another deluded idiot.   Scott's first announcement was that he was pledging tens of billions of dollars to defend bond prices (i.e. lower interest rates).   Now to be clear, 10 billion is about five minutes of trading in the international bond market. Anyway that's not the real drama, the real drama is that for the past 20 years two buyers have accounted for nearly ⅓ of all new international issuances (the international bon...

I was for 25 years an analyst in a very successful fund manager.  I was very lucky as was the fund.  The owners of the fund had been around for a while, the family behind the fund have been investment managers for the better part of three centuries.   They knew the value of people who work for them.   One of my closest friends at school took a very different path, and eventually became a member of Her Majesty's armed forces.   Our lives never really intersected professionally on a formal basis, but I had almost quarterly meals with my old school chum.   Over 30 years it adds up.   The truth is that I paid for most of these meals, the reason was that I was employed in the City, and my friend, well, had limited official income.   I didn't care!   He was smart and well informed; a foil against whom I could gauge my world views.    To this day, we meet on a quarterly basis, granted that the conversatio...

Farmers, as a whole, are price takers!   That cannot be a surprise, as a supplier of widely available staples.  The market is far larger and diversified, therefore, prices at which we sell our produces are dictated by the market and not by us, hence the prices in Q1 and Q4 when the vast majority of fruits and vegetables are imported, are a lot higher. That is true for about half of our turnover.   It is not true for our cheese or our butter, which are both produced on the farm.  Our butter is sought after by restaurants for several reasons, but primarily the fat content (don't ask, it's not important).  Both productions are severely limited and we sell to a small list of buyers that have been with us for a long time. The fruits, vegetables and animal protein we sell to our ancillary business are different, we still sell at market prices, as per our initial agreement with our partners, we also share in the upside in increased prices to buyers and consum...

In 1990 I purchased a Rolex submarine watch for about £1,500.  At the time I thought it was a fair price for a nice practical "sports" watch.   I saw it on the wrist of a friend while scuba diving in Australia.  36 years later I still own the watch.   I mention this because last week as a surprise my wife had it cleaned and maintained professionally in London, as a surprise delayed birthday gift. Now, I treat the watch as any watch I own. It's for work and little else, I stopped wearing it about three years ago because it did not keep time very well. I owned a seiko perpetual (which I bought ten years later) that was also automatic and kept time perfectly. The gift was thoughtful and also included an electric autowinding case for three watches, nothing outrageous but still.  What surprised me was the value of the watch.   A 1990 (which is the year my watch was manufactured) watch is worth between £9,500 and £14,000, down from nearly £20,000 –...

Three quarter of the financial year have now been completed, and for the farm and its ancillary businesses the year so far has been on budget, that is despite fuel costs being through the roof.  The average has been 127 pence per liter, which is about twice what it was last year.  Not insignificant.  All other energy costs have been stable for the year since 100% of our energy is produced on the farm.   We have not had to use the generator once this year and we have "given away" the waste gases our biodigestors produce that we cannot use.  All our farm equipment, aside from tractors, are now electric.  The range, price and quality is more than sufficient for our needs.   We have actually used my car once to drive down to London, but we did this only once, the train is far more convenient. In terms of profits, we are on budget for the year.  Granted, that most of our "real profits" are generated in Q1 and Q4 when produce prices across the...

After spending five days in the US, we flew to Calgary to see friends of ours. The province of Alberta is in the middle of an independence debate that is going badly, especially when the leader of the independence movement has just been served with a $100 million lawsuit by a US hedge fund that was backing his independence movement activities. It seems that the hedge fund was sold something that could not be delivered. Our stay in Canada was limited, but one thing we found amazing was the new Canadian identity that has been created since Donald Trump, the American president, began his trade war with the country.  Canada, like Germany at the beginning of the war in Ukraine, know that a trade war with America will be costly. Aside from a few crazy separatists, the vast majority of Canadians, even in Calgary had the same view, as they say "elbows up". Somehow that refers to ice hockey. In our two days stay in Canada, it was apparent that there was a strong anti-American sentimen...

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...

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...

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...

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...

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...

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...

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 ...

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 ...

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...

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

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...

It has been the most successful investor strategy over the past 30 years, but like everything it must come to an end.  For 30 years, hedge funds, private equity funds and other investors have been borrowing in Yen and investing all over the world.   The truth was that for the past 30 years the zero interest rates and the slowly depreciating Yen allowed the financial community to borrow massively (aka leverage) and generate higher returns.    How does this work?  Well you borrow $1 million in the tokyo market, effectively you borrowed Yen 100 million at a rate of exchange of 105 to the US dollar.  The interest rate on this loan is 1.3%.  That's the start, the risk is that the Yen rises, that's it.  You take that money and invest it at 4% (buying US treasury 10 year bonds for example), and you take the yield and declare it as your profit.   Now let's say that you do this for $100 million, and that you used $2 million of your own capit...

The new American CPI numbers came out yesterday and the news is excellent, inflation is down 0.5% which no one expected!    That's the good news, now the not so good news.   Oil prices are stripped from that dataset, its normal, fuel prices distort the "economic indicator".  However, the CPI figures have to be taken with a grain of salt (always mister negative – as the title indicates).  The 2020 pandemic led to massive consumer price increases.  What no one noticed is that since then prices have not fallen back, as a stupid example. In 2019, a brick of espresso coffee was £2.35.  Last week the same brick of espresso coffee was £6.75. Same brand, same size – almost three times as expensive.   Now, the point is as follows, and it's important, Americans have for years replaced revenues to meet their expenses with savings and debt.   This is not a secret to anyone in the world.   Americans have more debt today and less s...

Space X:  I don't know if collapse is the right word, but the shares are currently trading at $123.00 down from a peak of $201 and an issue price of $165.   The problem with SpaceX is that it generated no profits, in addition, the company has aggressively moved into the world of AI, which has little to do with its space venture. In fact, the free cash of the company appears to be destined to that endeavor rather than rocketry. Truth Social: In another note, I made the comment that Truth Social Media had increased the value of its intangible assets by nearly $1.1 billion (up from $25 million).   Apparently, there is an explanation, it's the brand. You see, Truth social is so valuable (despite generating no profits and declining revenues) that the company management (with the agreement of the auditors) has assessed that the company has an additional intangible value of $1.075 billion.  I'm just not interested enough to get to the bottom of all this.  Bo...

Nobody should be surprised by Europe's recent weapons' procurement announcements.  On one side, the word is out that Europe is looking, and has a verbal agreement with Donald Trump to manufacture Patriot missile systems under license.   However, Europe is also looking at short range missiles out of Ukraine.  Guess which system will be running first; sorry no contest, it will be the Ukrainian system, first its short range, (less than 1,000 NM) which matches the European theater of war (aka Russia), second, a deal with Trump is never real even when it is signed, looked at all the agreements he signed over the past two years, few lasted more than 90 days before Trump changed his mind.    The truth is that the Patriot deal is probably vaporware, and will never be implemented, but it gives Trump the oxygen he seeks with his base, which is the only thing that matters to him.  He can say that the Europeans are "begging" for US missile systems.  He probab...

Mitch McConnell is an American politician who faces some health challenges.  Apparently, his office released a photo of the man, with his wife, holding a newspaper…the amazing thing is that the article that is clear to read is from an article written in 2023.   Nearly three years ago. Now, it is understood that politicians are liars, it is the nature of the beast, you cannot govern if you let the electorate decide what the issues of the day are, because the electorate is fickle.  Take Brexit being an issue in the UK press in 2026.  It's a non issue, there is no possibility of Britain returning to the fold.  There is more hope for Canada to become a member of the EU, after all it has a border with Denmark… The sad truth is that after the death of Lindsay Graham the GOP's power structure is in trouble.  The funny bit is that the state of South Carolina has a very clear and clean process to replace the man.  It will be interesting if Trump and his ga...

The truth of the matter is that a deeply integrated economy to the United States is walking away.   First it is important to understand that about half of Canada's exports to the US are natural resources.  Some are mighty critical; oil, gas, electricity, timber and other minerals including Potash, where Canada sells about 90% of all potash used in the United States.   Tourism is another $40 billion.    Now, vehicles and parts are about $40 billion.  It is largely understood that the US's intention is to retrieve these operations from Canada. On the other side of the equation, what Canada imports from the US is foodstuff, vehicles and finished goods (do you know that there are other countries that sell finished goods).  The issue that the Canadian Prime minister raised is that he wants to diversify away from the United States its exports, imports will take care of themselves.   As an aside the Canadian Federal government has given gr...

There have been a number of reports that state that either the country is better off or worse off.  Right now in 2026 it is clearly worse off.   It stands alone with no allies, the dream of the Brexiters was that Britain would stand on its own two feet, and become a middle power courted by Europe and by the United States, plus they could get rid of all these pesky foreigners (which they never met…) The truth is complex, right now Britain is worse no doubt about it.  The economy is slowing faster than Europe and there is no lifeline from the Americans.  However, this is not a game of football, there is no end in sight to the process.  Europe has some massive challenges, already Italy, and Portugal are seeing the ravages of a falling population.  Germany has been better at hiding the impact, but they too face massive problems.  The truth of Europe is that it is highly dependent on the credit of Germany…there are implications going forward.  Ger...