The New Finance

Farmers are planning their current Planting mix, and it seems like Soybeans will be the major Advance this year. Contract Prices for Corn would be a bit higher, if the Markets actually wanted more Corn; this means that the ethanol industry believes it has adequate supply of Product. The major aspect here is that the ethanol industry is trying to readjust to a normal Workweek, attempting to cut Overtime as Productivity reflects Worker exhaustion at the current Overtime pace. I would expect that We will see an effort to expand the ethanol Plants’ Workforce this year. It is partially Plant desire to maintain the Price of both Corn Syrup and Corns hulls sought by Animal Feeders. The really important datum in the article was the long-term loss of 6 million acres to agricultural use, something which must be reversed within the near future else actual shortages will begin to appear.

The EU begins to feel the bite of Inflation as well, with Food prices and Energy prices leading the pack, both heavily influenced by the American failure to control Prices; obtaining American dollars through low-priced Rent (fed funds rate at 2.25%) basically leaves the two major Inflationary pressures unchallenged. I could be wrong in this prediction, but think that American Dollar inflation will hit 6% year over year for at least two months of this year. The Reserve Board should seriously rethink their current policy, because an Inflationary bite over 5% is worse than a financial meltdown, as the Inflation rate sweeps the entire economy. The destabilization of the Euro will generate added inflationary pressure on the Dollar, as shredding Currencies additionally degrade through Speculative competition.

Citigroup announces a plan to create regional banking units. This is part and particle of the above discussion, as the national organization thinks to limit poor performance to regional outlets, rather than let it affect the national format. It is only indication that national leadership has come to realize the dangers of concentration of financial leadership, and hoping to decentralize Operations, in attempts to save Profitable centers of operation; basically the desire to sacrifice 2nd-level management for poor performance, rather than to endure the onus at prime leadership levels. It does have beneficial effects, though, if regional offices are allowed to set an independent course; thereby allowing quick switch of policies, and regional screen defense of assets. The real Problem with the program is if it remains only a gimmick to switch blame impact centers, instead of actual freeing regional choice of policy; which will save the American financial markets. lgl