What is the world’s most valuable cash crop?

As with most things, it can be complicated and more nuanced to answer. However, ultimately it boils down to a few key factors: total amount planted, the rate of yield, and the revenue per unit sold. It also depends on whether we are looking at the absolute value, or the most value per acre.

The most planted crops throughout the world are wheat and maize (corn). Rice and soybeans are other key staples. However, these are all relatively low yielding and do not make enough revenue per tonne of product produced.

The highest yielding crops are sugar cane, sugar beet, and tomatoes. Sugar cane accounts for about 80% of the world’s sugar production, while sugar beet the remaining 20%.

Not surprisingly, the most lucrative cash crops from a value per acre perspective are illegal in many parts of the world. With a higher risk to grow these, there is a higher reward for the farmers. Cannabis has a value of $47.7 million per square kilometre, while coca weighs in at $37.7 million and opium poppies $6 million per sq. km.

The most lucrative legal crops include tomatoes ($1.4 million per sq. km) and grapes ($625,000 per sq. km). Interestingly, tobacco comes in the middle of the pack with a value of $277,000 per sq. km. Rapeseed (also known as canola) comes in at $60,000 per sq. km.

From an absolute value perspective, the world’s most valuable cash crop is cannabis as well. It is followed by rice, maize, and then wheat.

Original graphic from: Information is Beautiful

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Jack Lifton Says Innovation Is the Key to REE Independence

China’s geology, cost structure and disregard for environmental degradation have led to rare earth world domination. But the landscape is changing. In this interview with The Mining Report, industry expert Jack Lifton shares his vision for a world where centralized modern processing could make it possible for mining companies in the United States, Europe and Australia to start producing truly critical materials with small capex

And Another Key Approval For The Uranium Market…

I discussed last week about the municipal approval of restarts for two nuclear reactors in Sendai, Japan. With one of the knock-on items to watch for being further approval from the regional government here.

We didn’t have to wait long.

On Friday, the assembly for the prefecture of Kagoshima voted to support the local municipality in endorsing a restart of the nuclear units. Clearing one of the last hurdles for Japan’s first atomic energy capacity to come back online since the Tohoku earthquake.

Importantly, statements from the prefectural government were very supportive of nuclear. With governor Yuichiro Ito saying that “nuclear power is necessary for a while considering Japan’s energy policy.”

The decision means that–pending final safety checks–the two Sendai nuclear reactors could be operational again by early 2015. No exact timeline has currently been put forward by officials.

As mentioned in last week’s article, the restart of the Sendai reactors isn’t likely to cause a big impact on 

uranium demand. But as I anticipated, the looming restart here does seem to be acting as a rallying point for sentiment in the Uranium space

Just look at trading in the world’s most visible uranium player, Cameco. Following the announcement of the

prefectural approval, Cameco’s stock jumped 11% on Friday–closing at its highest level since mid-September.

Stocks directly exposed to the uranium price faired even better. With “ETF” firm Uranium Participation closing Friday at a 7-month high share price.

Uranium prices themselves have been less reactive–although the metal has gained $1 the past two weeks, to currently sit at $36.75 per pound, its highest level in over a year.

Despite the lack of fundamental action in the market, it thus appears the coming Japanese nuclear restart may help to bounce uranium stocks out of the undervaluations they’ve been seeing lately. And return these companies to more-normal trading multiples.

Watch now for announcements on the exact timing of the Sendai nuclear restart–and any further reaction that comes in uranium stocks as we approach that key date.

Here’s to regaining approval,

dforest@piercepoints.com / @piercepoints / Facebook

Central Planners Are In A State of Panic

Japan’s black swan flaps its wings

(What this REALLY Means & What To Do About It MT/Ed)

The central planners are in a state of fear and panic.  They are trying everything and anything to create market validation for their policies, watching with trepidation as their favored economic metrics fail to respond to all of their frenzied efforts.

They are so far over the tips of their skis right now that there’s nothing they won’t do. They’ve summarily thrown granny under the bus because they have this idea that negative real interest rates are the cure.  The cure for what?  The massive amounts of debts and imbalances their prior policies caused.  So savers are punished in the pursuit of policy.  You know, ‘for the greater good’ and all that.

They’ve spurred the greatest wealth gap ever in US history, greater even than at the extremes of the Great Depression, apparently without the slightest concerns for Plutarch’s ancient admonition that “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.”

They’ve even gone so far in Europe as to now force negative nominal interest rates on savers, dispensing with their usual slight-of-hand of letting inflation steal from each unit of currency in their system.  When you’re panicking, there’s no time for subtlety. 

They look the other way as “someone” dumps huge amounts of gold contracts into the wee hours of the night, seeking one thing and one thing only: lower prices.  But that’s okay because the central banks destroyed price discovery a long, long time ago. First by invalidating the price of money itself (by driving interest rates to zero), and then in everything else — most importantly risk.

The Federal Reserve, the Bank of Japan (BOJ), and the ECB have decided that they want you to take your money out of your bank account and place it into the stock market.  Apparently they have models that say this is a good thing.  Or they just want you to spend it.  And to be sure that you follow their wishes, they don’t leave you any better options — and so virtually every hard asset has been targeted for price suppression.  Except real estate because, hey, you have to borrow a lot of money from the banks for that, so they encourage and cheer your participation there.

In short,

everything the central planners have tried has failed to bring widespread prosperity and has instead concentrated it dangerously at the top.   Whether by coincidence or conspiracy, every possible escape hatch for 99.5% of the people has been welded shut.  We are all captives in a dysfunctional system of money, run by a few for the few, and it is headed for complete disaster.

To understand why, in all its terrible and fascinating glory, we need look no further than Japan.

A Black Swan Flaps Its Wings 

Back in 2012, Japan was my favorite candidate to be the black swan of the year — meaning it could shock everyone and flip our reality to a new state. Of course,  this has taken longer to play out than I initially thought.

However, here in November 2014, the world finally seems to be on the verge of waking up to the inevitable financial disaster that stalks Japan.

Japan is really in no better or worse shape than the rest of the developed world. But is a few chapters further along in the story, which means it holds both explanatory and predictive power for most of the developed nations.  This is why we should study it closely.

The mystery, as always, is how so many participants are willing to pretend all is normal with Japan; merrily buying and holding Japanese yen and government debt instruments.

In a nutshell, every single monetary, economic, fiscal and demographic trend is working against the very goals that the Bank of Japan, in cahoots with the Japanese government, is trying to attain.

To make this clear, first, we’re going to sketch the outlines of predicament and then, next, examine what will happen when it all finally breaks down.

The Halloween Massacre

On Friday, October 31 2014 the Bank of Japan (BOJ) made a surprise announcement of a major new policy move that was specifically targeted to have maximum impact on the markets.

But it wasn’t a unanimous or popular decision:

The announcement specifically was that the BOJ would increase its purchases of Japanese government bonds to 80 trillion yen (up from 60 – 70 trillion) and triple its purchases of stock funds to 3 trillion yen annually.

You have to love the coded phrase used in the above article — “gave a lift to its fight against deflation” — which decoded means “they partially wrecked the yen which makes import prices go up (and which is not the same thing as the inflation they seek).”  When you wreck your currency, all you do is steal purchasing power from savers and transfer it somewhere else, in this case to those most indebted and/or leveraged — the biggest of these beneficiaries being the Japanese government and large speculators.

Also the 5-4 decision is quite telling. It indicates that this bold — or reckless — policy (depending on your point of view), is already not very popular, suggesting that it’s more of a last desperate. Patience is wearing thin.

While some still question whether the US Federal Reserve is monkeying about directly in US equity markets, there is no such uncertainty with the BOJ: it openly buys equities under the pretense that a rising equity market is somehow good for the Japanese economy.  This is a rather indefensible view, because the relative elevation of the Nikkei has nothing to do with how the economy will perform, as it’s a derivative of the economy (or is supposed to be) not a driver of the economy.

After all, once a stock has been launched into the stock market, all that happens when a stock moves up and down is that money flows from one set of trading accounts to some others as people buy and sell.  By buying equities, the BOJ has effectively said it wishes transfer an even greater amount of money from its accounts to others.

It’s merely a gift to current holders of Japanese equities, which is a subset of the Japan population. Again not a terribly defensible, rational or fair policy. But there you have it.

Immediately on the news of this next round of wealth transfers and money printing, the Nikkei index leapt 1700 points and the yen plunged:

The virtual lockstep nature of the falling yen and rising Nikkei tell us that we are living in an age of massive and rampant speculation where financial markets react in concert to the newly-unleashed liquidity floods.   

All that matters in today’s “markets” is how much more money the central banks are going to throw into the system.  That’s all the gigantic speculators care about, and fundamentals and long-range issues are not even remotely near the top of their list of important trading variables.

Unfortunately, like most market moves these days, the recent plunge in the yen and the rise in the Nikkei provide few useful clues as to Japan’s actual current and/or future economic prospects.

What This Really Means

Okay, it’s time to face some unpleasant facts.  Ignoring the market gyrations because those have pretty much lost all of their true signaling capabilities, the most recent move by BOJ governor Kuroda smacks of sheer desperation.

It’s important for all of us frogs sitting in this nice pot to recall that even five years ago such a move by the BOJ would have been utterly shocking. It would have commanded our thoughts and actions for weeks to come. But today, like the rest of the world, I’ll bet you’ve already lost it into the din of other accelerating events barely a week later.

That Kuroda, just one man, can bet so much on an untested and radical experiment is mind-boggling. If he succeeds, he gets to claim honor and success.  If he fails he ruins the 3rd largest sovereign economy in the world, along with its inhabitants’ future dreams, for a very long time. How can such power be entrusted to a single person?

Unfortunately, this gamble cannot succeed over the long haul, and he has to know this. So perhaps he’s simply focused on keeping things hanging together until he leaves office. 

Here’s how the ever-colorful David Stockman described the Halloween Massacre:

Yes, my fellow frogs who share this increasingly warm bath with me, Kuroda’s move is pure madness.  The BOJ has jumped the monetary shark and we need to keep that firmly in view as we make our decisions about where all of this is headed, and how likely it is to create a future financial accident of global and unprecedented proportions.

Bloomberg’s Willaim Pesek described it this way, and I think quite accurately:

If I lived in Japan, I would, under no circumstances, ever keep my money in yen. If you live there, get out of yen as much as you possibly can.  Your central bank has said it wants to destroy the yen and their actions confirm this so they are apparently quite serious about doing exactly that.

Imagine if the Federal Reserve was monetizing $3 trillion a year, which pencils out to some $250 billion a month(!).  A proportional amount of money is being dumped into the Japanese financial system under the new policy.

And so naturally, stocks rose and the yen fell, which makes some (twisted) sense. But gold fell heavily on the news, which makes no sense at all from a fundamental standpoint. However, it makes all the sense in the world if you understand that extreme central bank policies cannot tolerate even the slightest whiff of challenge. 

Rising gold prices would signal doubts about the central banks’ course of action. Conversely a falling gold price signals utter faith in the central planners. And so a falling gold price is what we get (but true demand for gold and silver demand another matter entirely).

The reason for all of this extreme central bank panicking and fear, we’re told, is because Kuroda has a white whale he seeks, which has ‘2% inflation’ stenciled on its side. 

But inflation is not what central banks actually seek, even though the press consistently tells us that’s what they want. Inflation is not a cure for anything and the banks know it (and our press really should know it by now, too).

Instead what the central banks desperately want, and know the banking system and over-extended governments need, is negative real interest rates.  That is, they want to force upon savers the condition where their saved money is getting a lower rate of interest than the rate of inflation, which is what we mean by a negative realreturn.

We wrote about this extensively as a process in this article about the Fed purposely attacking savers. But the mechanism and rationale is the very same for the BOJ as it is for the Fed..

Briefly, when running this program of financial repression the BOJ (and the Fed, et al.) do not care if inflation is 6% and bonds are 4%, or if inflation is 2% and bonds are 0%, as both offer negative real interest rates. Negative real rates serve to confiscate purchasing power from the general population and transfer it to other parties.  Those parties include the big banks. But perhaps that’s just another happy coincidence in the game that central banks and bankers like to play with us which they call ‘heads we win, tails you lose.’

But let’s not be fooled. By the time a central bank Is behaving as recklessly as Japan, it’s time to edge towards the exit, because the chance of a flash fire in the building has grown uncomfortably high. That is, instead of providing comfort, these most recent moves should invoke greater worry for those of us alert enough to see them for what they are: acts of panic.

There’s just no other way to interpret the equivalent of $3 trillion of thin-air money besides an overt act of desperation.  No, things are not okay.  Yes, the risks for a disaster are growing.

Whether we call this the largest bond bubble in history, “reckless”, “mad” or “insane”, Japan has truly jumped the monetary shark. There’s no way back and no way forwards that will be pain-free and this terrifies the BOJ.  The best advice I have is that when you see your central bank panic, you should panic too and avoid the rush.

In Part 2: What Will Happen When Japan Breaks, we delve into the only questions that really matter: When will it happen? And how deeply painful will it be?

And last, but certainly not least: How much of the rest of the world’s financial system will come crashing down with Japan’s because they are all so interlinked now?

Click here to access Part 2 of this report (free executive summary; enrollment required for full access)

As the Banking Cartel continues to push the paper price of gold lower, the Comex experienced another large withdrawal of gold from its inventories.  The largest withdrawals came from the vaults at HSBC and Scotia Mocatta.

In just one day, 321,650 ounces of gold were removed from the Comex:

As we can see from table, 196,764 oz of gold were removed from the HSBC’s vault and a total of 85,584 oz were taken off Scotia Mocatta.  The total 321,650 oz removed represents 36% of the total gold in the Registered Category.  The Registered category is gold that is available for delivery into the market.

Furthermore, JP Morgan only has 577,937 oz of gold remaining in its vaults.  A few weeks ago, JP Morgan experienced a ONE DAY removal of 321,500 oz from its warehouse stocks.  This is not a trend JP Morgan can afford to continue.

Furthermore, total Comex gold inventories fell nearly 2 million oz since its high of 10 million ounces at the end of August.  This is a 20% decline of total gold warehouse stocks in just three months.

Gold Paper Price Smash During the Swiss Gold-Backed Franc Referendum

Right now the Swiss are voting on whether to back their Swiss Franc with gold.  The voting takes place throughout the month and will be tallied on November 30th.  It’s no coincidence that the paper price of gold is being smashed during this important Swiss vote, that if passed, could be a huge LOSS for the BANKING CARTEL.

Of course, there are no REAL MARKETS anymore as every thing is being rigged by the Fed and Central Banks.  Before the Fed took control of the markets in 2008, the Stock markets and the precious metals all declined in the same fashion.  However, today we see a totally disconnect.

The Dow Jones hits another high today, while gold and silver hit new lows.  Furthermore, the king base metal, COPPER is down 8% from its high of $3.27 in July to $3.02 today.  However, SILVER is down 28% from $21.5 in July to $15.5 today.  Thus, silver is down more than three times than copper in percentage terms.

The world will wake up one day to realize the BIGGEST PAPER PONZI SCHEME in history will go the same way as BERNIE MADOFF.  Right now, the Banking Cartel has the world convinced that the only way to survive is to continue investing in the largest ponzi scheme in history.

Unfortunately, all PONZI SCHEMES BURST.  And, when this one finally goes MADOFF, it will end a way of life for most of those who thought DIGITS in an account were wealth.

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