Wednesday, July 14, 2010

How you gonna keep em down on the farm

Another article on how governmental actions are impacting farmers. I want you to pay particular attention to how they are being effected by the financial overhaul. As I had previously posted in regards to the stock market, the "hedges" and "options" are being eliminated that act as insurance policies for producers. This is really important and I hope my readers will make the effort to understand what it means.

I am not taking a position against what is happening, I just want people to understand that it is a fundamental change to our nation. The good side is that it eliminates the gambling of our economy, the bad news is that it eliminates the protection for some as it acts as an insurance policy.

Some endeavours, such as being a rancher or farmer, are filled with risk. Insurance should be like a savings account that is meant to be used when the risk occurs. What has happened is that instead of buying insurance, people sold risk to others. This is the same thing that options and puts do to your pension fund. The problem is that it leads to businesses and farmers and ranchers to taking more risk on because they feel they are covered. When our stock market failed and the housing market failed the system failed.

Eliminating and/or regulating these types of "hedges" is critical. The question is what is used to replace them as our system is based on them. The answer should be regulated insurance companies that are in the business of insurance rather than risky trading. The answer will be governmental savings accounts that act as insurance.

The terms that are used in the article may be foreign to some of the readers. Take the time and look up terms you don't know or ask me in the comment section and I will try and put it in simple everyday language. Be well.

A Rumbling in the Woods

Someone has something to say about Mayor Villaraigosa. And what of his e-mails, what have they read. Seems orchestrated these attacks on the mayor. I am neither a supporter or opponent; but, it seems orchestrated to take him and DWP out.

Farming

Interesting article from the Washington Post. During the Supreme Court confirmation hearings, Kagan was asked if congress could regulate what farmers grew. She dodged the question; but, knew that this had occurred during the depression.

Everyone is focusing on her failure to answer. The bigger question for me is why did that Senator ask her the question in the first place. Does he know something that we do not, like what is coming next?