January 25, 2013
- “Food fraud”: Milk diluted with hydrogen peroxide, thanks to currency diluted with more currency
- Guenthner on why the stock market needs to take a step back before it can take two more forward
- From Russia with love for gold: one more prop under the Midas metal
- “A revolutionary form of data storage”: Mainstream latches onto DNA breakthrough weeks after 5 readers…
- Proof that people in Washington have too much time (among other things) on their hands… Latest Canadian currency meltdown… “Ignorance,” “fear” and other answers to our where’s-the-outrage query… and more!
In the United States, we’re getting used to shrinking boxes of breakfast cereal and the like, the better to mask the impact of a shrinking dollar.
We should count ourselves lucky. In India, milk is being diluted… sometimes with things like hydrogen peroxide. In Latin America, the fat in milk is sometimes replaced with vegetable oil. In China, waste oil sometimes turns up as cooking oil.
Those are among the unappetizing details that turn up in the latest report from the U.S. Pharmacopeial Convention (USP), an independent science nonprofit that tracks “food fraud.”
“The database is made up of 1,300 scholarly and news reports of food fraud spanning the 30-year period between 1980 and 2010,” The Guardian reports. “But the updated database records 800 new examples of food fraud published in 2011 and 2012.”
The USP fails to make the connection between diluted food and diluted currency.
The spike in food fraud coincides with the United Nations’ food price index reaching a new plateau in 2011 and 2012.
Still, the index ended 2012 at a lower level than it began the year. Falling prices for sugar, dairy and oils led the way. Grains and meat hardly fell at all.
Thus, the National Chicken Council is warning of a drop in wing consumption for this year’s Super Bowl.
“Chicken companies produced about 1% fewer birds last year, due in large part to record-high corn and feed prices,” says the council’s chief economist Bill Roenigk.
“Corn makes up more than two-thirds of chicken feed,” he goes on, “and corn prices hit an all-time high in 2012, due to two reasons: last summer’s drought and pressure from a federal government requirement that mandates 40% of our corn crop be turned into fuel in the form of ethanol.”
The council projects Americans will scarf down 1.23 billion “wing portions” on Feb. 3 — a 1% drop from last year.
[Just in: An addition to USP’s “food fraud” file: Burger King has dumped one of its suppliers in Ireland after discovering its “beef” included horsemeat.]
The S&P is making another run at 1,500 this morning. At last check it’s up to 1,497. All the major indexes are up slightly.
“Right now the market needs some obstacles, instead of perpetual blue skies,” writes technician Greg Guenthner.
That is, if the broad rally is going to carry on, the indexes need a healthy pullback at some point.
“Investors need good and bad news to help the ebb and flow of stocks as they continue their respective climbs.
“After a positively giddy January, some gloom is starting to enter the mainstream chatter.” There’s Apple. There’s more kicking the can with the debt ceiling. “This is a good thing,” says Greg. “If fear still pulls the rating, we have much less to worry about. If we see some more stories about a potential market top before the weekend, then it’s possible the news cycle has come full circle.
“Hopefully, bleeding leads on CNBC will help push this red-hot market below the fold. If the bulls can stay undercover for a bit, we can enjoy a stealth rally with less volatility and a better chance at taking a few low-risk trades.”
Make it two days that precious metals have been on a slide. At last check gold is down to $1,657, silver to $31.22.
In contrast, platinum is holding its own and once again higher than gold at $1,679.
The plot thickens: It appears the Royal Canadian Mint is following the U.S. Mint’s lead, rationing one-ounce silver bullion coins.
No official confirmation yet, but several independent reports cite North American bullion distributors saying the rumors are true. “If the U.S. Mint can’t provide enough to meet demand then perhaps the Royal Canadian Mint coins will do as a substitute!” says Mineweb’s Lawrence Williams, offering one possible explanation.
Back stateside, the U.S. Mint is still scheduled to resume shipments of Silver Eagles to its dealer network next week.
The world’s fourth-leading holder of gold says it will continue loading up.
“We are buying metal and will continue to pursue this course,” said the Bank of Russia’s first deputy chairman Alexei Ulyukayev at the World Economic Forum in Davos, Switzerland.
Russia has doubled its gold stash in less than five years to nearly 31 million ounces.
By now, Russia is approaching a long-stated target: gold holdings that make up 10% of the nation’s foreign exchange reserves. Pressed to specify whether that target would increase, Ulyukayev would not say.
Heck, would you?
“Scientists in Britain,” AFP reports, “announced a breakthrough in the quest to turn DNA into a revolutionary form of data storage.”
Clearly, the globe-spanning wire service isn’t a subscriber… our tech maven Patrick Cox announced this in our virtual pages back in early December.
If you missed it, Patrick found one company set to monopolize on the $400 billion global counterfeiting problem spiraling out of control. Now the breakthrough is beginning to show signs of life in the mainstream.
“We already know that DNA is a robust way to store information because we can extract it from the bones of woolly mammoths, which date back tens of thousands of years, and make sense of it,” says Nick Goldman of the European Bioinformatics Institute (EBI).
The scientists were able to make short strings of DNA codes and insert, according to the Herald, “an MP3 recording of Martin Luther King’s I Have a Dream speech, a digital photo of their lab, a PDF of the landmark study in 1953 that described the structure of DNA, a file of all of Shakespeare’s sonnets and a document that describes the data storage technique.”
“We downloaded the files from the Web and used them to synthesize hundreds of thousands of pieces of DNA,” Emily Leproust of biotech firm Agilent told the rag. “The result looks like a tiny piece of dust.”
A similar procedure used by Harvard last year when they stored enough data to hold 70,000 movies in one gram of DNA.
[Ed. Note: Unfortunately, Patrick’s DNA pick was reserved for only a select few readers who jumped at the opportunity last year. But he did find one company set to monopolize on an even bigger industry. Don’t miss out on this one.]
Like a vampire rising from the grave, Bank of America is “girding for a new run at the U.S. mortgage business,” The Wall Street Journal reports.
That’s right. BofA’s fourth-quarter net income crashed 63% largely because it had to make good for its previous misdeeds in the mortgage market. But no matter: Evidently, the suits are jealous that Wells Fargo is collecting all those juicy refinancing fees made possible by the Fed’s EZ money.
We’re reminded of Tom Lehrer’s line about how satire died when Henry Kissinger won the Nobel Peace Prize…
What the heck is going on at the Bank of Canada? First they issue plastic-y $50 banknotes that melt in the heat.
Now their nifty new $20 bills feature a maple leaf. But not one of the 13 maple species native to Canada. Instead, it’s a Norway maple.
“It’s a species that’s invasive in Eastern Canada and is displacing some of our native species,” botanist Sean Blaney tells the CBC, “and it’s probably not an appropriate species to be putting on our native currency.”
In full CYA mode, the Bank of Canada insists the leaf is a “stylized blend” of Canadian maple species. Uh-huh…
“I think there are just a lot of Americans who have concluded that it’s more effective to let the system collapse than to futilely attempt to reform it.”
So reads one of many thoughtful replies to our query on Wednesday: Why is there no outrage over the fact no senior Wall Street figure has been prosecuted for blatant frauds leading up to the Panic of 2008.
“Too many Americans,” says another, “just shrug their shoulders and are getting used to this as ‘business as usual.’ There is nothing that the common people can do about it anyway, so it’s almost like a defeatist attitude. So it will continue to happen over and over again. It’s like the old saying ‘You can’t fight city hall.'”
“It’s Chinatown,” says a third, invoking a cinematic reference, “where stories of corruption disappear. And you know what happens to nosy people?”
“Well, let’s see,” writes a fourth. “As a recent national election demonstrates, half of the people were doing good to successfully negotiate high school. They receive a monthly check of some sort from the government, so why shouldn’t the banks? After all, it’s just government money. These folks will always be clueless. They do not have the capacity to be otherwise.
“As for the remaining half, 95% of those families are working two jobs to keep their head above water. Any spare time they have is consumed with TV relaxation (sports, Real Housewives, etc.) or their children’s lives (soccer, etc.). Reading is no longer practiced. Ergo, they don’t have ‘time’ to be an informed citizen.
“The remaining 5% is us — as in ‘Agora devotees,’ actual critical thinkers, raving tinfoil hat lunatics, etc….. and any freshman politician knows that 5% just doesn’t matter.
“I suspect that the common undercurrent with all the above groups is the innate understanding that the government has become so large that it serves only itself — and there is nothing the individual can do about that. Each of the above groups will deal with that issue in its own way.
“As an aside, government knows this too (they are corrupt — not stupid). Perhaps that is why there is a big push for gun control just now. Never let a crisis go to waste…….”
“There is one word,” suggests a fifth, “to describe what is happening in America right now: ignorance.
“The vast majority of the people, even the ones that are working, do not understand what the government is doing and how it is going to affect them in the coming years. These people equate the government with a money tree, and the term ‘devaluation’ is a foreign concept, not easily understood.
“Ever wonder why they do not teach basic economics in our public schools? My guess is the Keynesians running the system have determined most children will have a hard time comprehending how you can spend $10 while you only earn $6 and don’t want to frustrate them.”
“In a word, fear,” reads a different one-word answer.
“Those who have the means and ability to make a difference (myself included) don’t want to end up on a ‘no-fly’, IRS audit or whatever other blackball list exists to harass dissenters. As an owner of two small businesses (two and five employees, respectively) there is not a chance I’m going to involve myself in something that could bring serious repercussions to anyone affiliated with a ‘disturber of the peace.’
“I’m 99.9% sure that as book of both businesses, despite my best efforts to keep everything crystal clear, I have made an accounting error somewhere along the lines. I’m not old enough to recall Nixon at his best, using the strong arm of the IRS to audit those who weren’t in his favor, but I would imagine similar protocol exists today at lower levels of government. I’ll pass on chancing a random encounter with the tax man, thank you.”
“The bubble hasn’t burst yet,” says one more. “Most folks in Western economies are still too comfortably well-off to rebel.
“When you’re living in poverty in a third-world hovel, you have nothing to lose by rebellion. In the developed world, we’re still relatively rich and too lazy to launch a revolution.”
The 5: And the beat goes on: Lanny Breuer — the assistant attorney general who says upfront he lets off banks with token fines for serious crimes because they’re too “systemically important” to the global economy — is leaving the Justice Department, according to The Washington Post.
No doubt on his way to a cushy job in the so-called “private sector.”
Have a good weekend,
Dave Gonigam
The 5 Min. Forecast
P.S. Coin collector alert: The 2013 Chinese Silver Pandas are out… and our friends at First Federal have secured the entirety of the highest-quality First Strikes exclusively for Agora Financial readers. You get dibs on this selection through midnight next Tuesday — assuming they don’t run out before then.