I have been worried about the global food supply, and I called up one of my friends who is an owner of an agricultural food import/export business.

I asked his opinions on how he thinks about the recent surge in food prices. He told me that it’s the first time that he is seeing everything in food going up at all fronts for an extended period of time. And he thinks that these trends are going to last and will be sustainable because of the following factors:

1. Government-mandated fuel additives of ethanol taking away lots of corn supplies.
2. Increased corn acreage is at the expense of decreased acreages for other agricultural products.
3. People in China and India are increasing their living standards.
4. World inventory of grains is at the lowest level in 60 years.

More specifically, I asked what the agricultural producers are doing in response to this problem. He told me that the existing big players are investing the profits into bio-tech to enhance their edges and profit potentials, and they are not expanding the planting acreages dramatically (since it will be to their disadvantage of increasing the supply). I obviously knew about all the above factors last year, but I was more concerned about the future going forward. Unfortunately, the answer that I got was not what I wanted to hear. I told my friend that without increasing food supplies, there may be famine. And his response was that famine will only be in the third world countries.

Well, yes, I know. I didn’t go further on my comments. But that was just what’s on my mind.

Back in 1985, when I was in my early teens, there was a music song that touched me deeply. It was “We are the world”. It made me feel very sad to know that there are people dying of hunger, and going to bed with an empty stomach. And I still remember that it was the first time that I learned about this African country Ethiopia from the song. And that there were some 100 singers who tried to raise money for the hungry people. “We are the world, we are the children….” That was the lyrics from the song. And I couldn’t agree more.

I only hope that we don’t see that happen. But we are indeed crawling towards it, if not happening already. Look at the headlines:
Rice Jumps to Record, Corn Near High as Demand Outpaces Supply.
Fear of unrest mounts as hunger spreads.

(US-exported) Inflation is hitting many foreign countries much harder. One day however the inflation may comes back to US soil with revenge (through currency exchange rate).

The most effective way to solve these problems is not really raising lots of money which will simply cause a different way of food distribution, but rather raising lots of food supply. Food inflation is the harbinger of all inflation. The future does not bode well for paper money. I only hope that farmers will be doing an excellent job for everyone else.

Many states have primaries today. A reminder for everyone to go out and vote.

And you know whom I’m going to vote for, Ron Paul obviously.

Just this weekend, I drove by a bunch of Ron Paul supporters rallying around a shopping mall. I was so excited that I decided to join them on spot. Ron Paul probably has the most number of unpaid volunteers campaigning for him, and count me in too. All of my time support plus $500+ more in donation are only for one reason: I love America, and I’m going to vote for him so that US dollar will not crash under exponetially increasing fiscal deficits. A crashing US dollar will bring so much inflation to USA that it will literally destroy all the middle class people.

Yeah, I know. Ron Paul doesn’t have much chance (this time around). But it is even more important for all the Ron Paul supporters to come out and make their views be known.

Who is my second choice? Not sure yet. Maybe Obama? But I only hope that all of those political energy that Ron Paul has revived will continue well after the conclusion of 2008 Republican primary.

It’s time for America to change.

Naysayers will be wrong.

The patriotic supporters of Ron Paul have joined hands and broke a new record in US history for the biggest donation day online. Today is the tea party day.

Ron Paul is certainly the most knowledgeable candidate on economics, and have debated with Bernanke several times. He is probably the best candidate that you can vote for, for a long term bullish US stock market.

Alright, I will be going back to my regular personal finance/stock market blogging.

Folks,

Five hours left on the celebration of Tea Party 2007. Ron Paul and the supporters have raised over 4 million dollars in the last 17 hours. It’s really not too late to join this Ron Paul movement. And it is never too late to be part of the American History. We are making history today, and will surpass previous record of 4.3 million dollar.

If you don’t know who Ron Paul is, you’d better find out now. The Ron Paul supporters will have close to 100% voter turnout, while all the rest of candidates will be as apathetic towards politics as before. Why are Ron Paul’s supporters so enthusiatic about him? There must be some good reasons. Don’t be agnostic and apathetic anymore. Stand up, and save the country together. Even if Ron Paul does not make it all the way, collectively we stand together and make our voices heard TODAY.

I have made my third campaign contribution today, and ‘m going to make my fourth campaign contribution once more today. The average contribution size by Ron Paul supporters ranges from $80 to $150. And obviously I myself have not exceeded the cap of $2300 for a single candidate yet. The small amount of money from the mass of people have spoken. No one can raise 4 million dollar plus alone. We must all stand up and fight.

Last call to donate at Ron Paul’s site to be part of today’s American History. No, we the Ron Paul supporters, are not crazy. We are so patriotic and so in love with USA. We care so deeply about the fellow citizens that we are willing to spare our money for an idealistic purpose that may seem to be impossible, but yet becoming more real as days go by.

P.S. You can see the donation curve here. Click to see the latest update:

Today is the day of Tea Party 2007. Donate something or any amount to Ron Paul’s campaign.

There is a silent revolution going out there. In less than 8 hours today, from midnight till about now, 1.2 million dollars have been donated already. I hope that collectively we can break 4.3 million, which was the previous record set on November 5th.

Be part of the history in the making. Buy a cap, or some campaign material. If Ron Paul makes it all the way through, you bet that you can sell your precious good on Ebay for a lot more.

I have never felt so strongly about a particular presidential candidate. There is simply no other candidate that will come close in intellectual power and integrity than Ron Paul’s.

Let us all be part of the great American History in the making.

This is a reminder that there is the last money bomb for 2007 this Sunday on Dec 16, 2007. I have pledged myself to donate $100 or more on that day at TeaParty07.com. But even if you just donate $5, that’s a mass democracy in action. Stand up and join together. Don’t let the big wallstreet and corporates to take over our government.

A money bomb for Ron Paul is a way to garner media attention to create the most donation per calendar day. This is to combat the deliberate disregards from the traditional media. On the previous successful money bomb in November, Ron Paul raised about 4 million dollar in a single day, breaking the records for all presidential candidates. I didn’t know about the November money bomb, and didn’t participate in it. But I expect that this December money bomb will make new history. Be part of the this history in making by donating just $5 or $10 here.

The biggest reason that I stand behind Ron Paul is because of his fiscal and foreign policies. This country has gone too far and too long in the wrong direction, and it’s time to down-size the big government and streamline the operations without wasting even more taxpayers’ money. Ron Paul’s understanding and his actions behind the fiscal and foreign policies are unparalleled and unmatched by ANY presidential candidates. I have registered myself as a Republican (converting from a Democrat) so that I can vote in Republican Primaries next year in California. I hope you will also join me because the future of this country is at stake.

If you are a citizen, you should love this country. If you love this country, you should support your presidential candidate. Be PATRIOTIC. Don’t be apathetic. Donate what you can, and take a stand, and vote. A democracy without participation is the same as having no freedom of voices. The big money and corrupted political power fosters and grows from the apathy of every voter. Ron Paul is one of the very few candidates that garner all grassroot supporters from all walks of lives. Be part of it.

I am sickened by Paulson and Bush’s bailout plans. On the other hand, I know that this subprime/negative ARM mortgage problem is a bigger hole than anyone can imagine. Florida, orange county in California, Montana, and more pension funds and money market funds will be hit one after another. The cover-up and blow-up will only come at the last minute, which is too late for you or anyone to do anything about it.

In any case, let’s look at some details of the plan from the available news from Bloomberg:

1. The covering period is origination from Jan 1st 2005 to July of 2007, and resets in Jan 2008 to July 2010. This will cover majority of the mortgages, except the early adopters in 2004. It even covers the people who have already reset, for example with a 2-year ARM reset between Jan/Jul 2007.
2. To be eligible, borrowers must be less than 60 days behind the payment, and have LESS than 3 percent equity in their property. Also, the borrower must have a FICO score of 660 or below. Now everyone is going to go out and start defaulting on every credit card to lower their FICO score. And take out a home equity loan to go below 3% LTV, putting that cash elsewhere. How smart the plan is! Talk about moral hazards.
3. The result of the bailout is a freeze on rates (I’m still not clear on whether it’s payment or interest rate or both), or refinancing into another mortgage, possibly (or I should say most likely) back by Federal Housing Administration loans. Certainly FHA will pick up many of the junks from big banks and write them off through taxpayer’s money.

Now the biggest issues with the bailout as I see it is best put forth by Scott Simon, head of mortgage and asset-backed bond investing at Pacific Investment Management:

“The things that make the U.S. mortgage market the capital-market success that it is are property rights and the sanctity of contracts, so they have to be careful to not damage either one of those.'’

And Republican Mike Castle of Delaware was daring enough to propse to offer a safe harbor clause from legal liability to mortgage servicers.

Based on the details that I gather, it appears that the bailout will be done by mortgage servicers probably through brute force, without even gaining consents from the mortgage bond investors. That is just NOT good. That is violating property rights and contract laws. The US government (especially the head of FDIC) is debasing the very foundation of this country (not to mention a debasing US dollar). How can government intervene into a private contract, and decide who is going to be benefited, and who (all the renters, conservative home buyers, and mortgage bond investors) will be hurt, or have their rights/properties taken away?

Certainly, this bailout plan is really intended for banks and financial institutions, so that they can keep valuing their mortgage holdings at a higher artificial unreal price. In the meantime, all the $US dollar holders and majority of the citizens will get screwed by even higher inflation to come, so that the housing prices can be stabilized at a nominal inflation-non-adjusted prices. Basically, US government is trying to prevent a normal deflationary cycle after an abnormal inflationary housing cycle (created by Greenspan’s ultra-low interest rates). Of course, such inflationary actions will simply exhibit itself later in more inflation later in whatever hot money decides to chase afterwards.

The whole bailout plan and most of Greenspan’s past actions are MORAL HAZARD. That is the reason that our capitalistic society is getting more and more speculative year after year, and that the speculation fireworks are rising to ever higher height, and also dropping to ever deeper abyss. Capitalism with moral hazards created by government bailouts is no longer a free enterprise market. When a risky bet no longer has the risks because of government bailouts, everyone becomes (and wants to become) a speculator. This is the society that we lives in. And the caution from fiscal conservatives is always penalized by the lost gain (due to inflation).

As I have said earlier, the real loser when the housing bubble bursts is really everyone. And our losses are not just financial due to loss of purchasing power because of higher inflation, or reduced benefits or credit interest rates in our pension or bank accounts. Our biggest loss for a society as a whole throughout the bubble process is that we have all become speculators in the long term. And when everyone becomes a speculator, nobody can gain from speculation.

P.S. Thanks to Keith at HousingPanic, I vicariously release all of my resentment through reading his blog. I wouldn’t want to go that far like in his blog at least verbally here on my blog. But I certainly agree with him on many of his well-made points.

I just got my new hat, and I love it. In fact, I’m obsessed with it. Here is the picture of it.

I’m wearing the hat everywhere I go. It’s so unlike me. I’ve never wear a hat constantly in my life. But I’m doing this to support the country.

Initially, when I tried to make my first donation, and found out that it is not tax-deductible, I really hesitated, especially knowing that Ron Paul may simply not make it to the final race. But then, I still went ahead.

Then I made my second donation doubling my amount of financial support. Then I spent about $27 for this hat (including shipping), expensive by my frugal nature. Then at the morning assembly of my kid’s school, I finally understood why I’m doing what I’m doing. It’s the pledge to the flag:

I pledge Allegiance to the flag
of the United States of America
and to the Republic for which it stands,
one nation under God, indivisible,
with Liberty and Justice for all.

Yes, I truly believe that Ron Paul will bring a better future for this country. And I love this country where I was not born, but lived for the last 15 years with all of my heart. And I am going to show it, not just by money, but also by voting in Republican primary, and in the daily actions of my life.

So even if Ron Paul will not make it to the 2008 presidential ballot, so be it. But I’m not going to be apathetic about the whole thing.

Rather, I’m going to stand up and fight for a better future for USA. Fight for the soldiers to come back home. Fight for the middle class people who may suffer from the yet-to-come inflation. FIGHT.

Yes, Ron Paul (and I) may lose with great possibility. But at least, deep down in my heart, I know I’ve tried my best in my own way to help this country go back to the right track.

Will you join me to love this country, even if you don’t agree to support the same candidate?

Here is some latest YouTube video on Ron Paul if you’re interested.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.

click here for full text from telegraph.co.uk.

For the best interests of global economy, I think a gradual devaluation of $US is the best. However, US keeps wanting to revalue Reminbi at a much faster rate. I don’t know how much these Congress man think, but revaluation of Reminbi is equivalent to increase inflation in the US. Increasing inflation means US needs to keep higher interest rate. And higher interest rates mean less economic growth and lower stock prices.

I personally think that what China is doing with Reminbi is smart. Although most likely the policy is more beneficial to Chinese, the fate of Chinese and American are really tied together in this global economy. Making your creditors mad most likely won’t do you any good.

Again the spectre of heightened inflation is there again from the threat of China, adding onto a long list of reasons of why inflation in the US will go higher for the forseeable future. So whatever you invest in, make sure it can be inflation-proof somewhat. Otherwise, whether it’s an energy-driven inflation (due to peak oil or emerging world demands), or monetizing the heavy US debt and all the social programs, or an inflation driven by US dollar devaluation, or the need for higher inflation to reduce the absolute magnitude of collapsing housing price from Shiller’s housing price curve, or inflation caused by decreasing agricultural labor or any other minimum wage jobs due to increased immigration enforcement, etc. I think you get the picture.

Inflation does nothing to the people without savings, since they don’t have any savings to be depreciated. Inflation usually makes the rich even richer because they are always positioned at the front of inflation curve, whether it’s their assets or their salary. But for the people in the middle class as a whole, they tend to get poorer because the wealth is transfered to the rich people or foreign countries. Make sure you are not one of them.

The fanfare on Paris Hilton going to jail was all over the TV. Just when I thought everyone is equal before law, Mr. President Bush again demonstrates how executive branch of the government has gone excessive. Libby, an aide of vice president Cheney, was sentenced to two and half years of prison term plus $250,000 fine because he leaked Valerie Plame’s CIA identity. But President Bush relieved Libby from his prison term, and left the fine intact.

Coining the term WMD to cheat the legislative branch of Congress into going into Iraq war, overriding the decision from judicial branch on the prison term, stripped away the basic human right for detainee on habeas corpus, and with the help of legislative branch of Congress, passing a law to grant himself all immunity from war crimes (see the video below):

The president of USA is becoming like almost an emperor now. The three branches of the government: executive, legislative, and judicial are supposed to have a proper check and balance. It looks like our country is nowhere close to where the founding fathers have envisioned.