U.S. Economic/Financial News
Hedge Funds Swarming into Wheat Speculation
Feb. 14 (EIRNS)The volume of betting on grain futures is soaring, with hedge funds rushing into trading on the Chicago Board of Trade (CBOT), and in Kansas City and Minneapolis as well. Wheat is going wild. In the week ended Feb. 8, on the CBOT, hedge funds and money managers increased their net-long positionsi.e., wagers on rising pricesby 19% to 51,787 contracts, the highest since August 2008 (according to government data available Feb. 11).
On Feb. 9, the day the monthly report of the U.S. Agriculture Department came out, showing world wheat stocks declining, wheat futures (March delivery) prices on the CBOT hit a peak of $8.9325 a bushel. This level is more than double that of last July. On Feb. 14, wheat prices shot up again in Chicago.
Washington Post: Budget Cuts Needed To Pay Interest on National Debt
Feb. 17 (EIRNS)Despite all the whining by the members of the Catfood Commission, Congressional Republicans, and Republican-in-Chief Obama, about the danger posed to the economy by "entitlements" such as Social Security, Medicare, and Medicaid, there is a budget category much more dangerous, that none of them conceive of touching: interest payments on the national debt. The Washington Post let the cat out of the bag on Feb. 17, with a headline that that interest will quadruple in the next decade, under Obama's budget plan. "The borrowing the United States did over the past decadeto pay for the 2001 tax cut, the wars in Iraq and Afghanistan, and propping up the economy during the steep 2009 downturnis coming due this decade."
"Starting in 2014," the Post writes, "net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending. Only the amounts spent on defense and Social Security would remain bigger under the president's plan." The Post continues, "The soaring bill for interest payments is one of the biggest obstacles to balancing the federal budget, pushing the White House and Congress to come up with cuts deeper than previously imagined. Unlike with discretionary spending or even entitlement programs, the line item for interest payments cannot be altered except through other budget cuts."
NASA Budget Proposals: Race to the Bottom
Feb. 15 (EIRNS)Trying to out-do each other in their race to destroy the space program, the FY12 proposals for NASA's budget from the Obama Administration and the Republicans call for severe cuts, that would continue to make it impossible for Americans to ever get out of Earth orbit.
The Administration FY12 budget proposal freezes NASA's spending at the 2010 level of $18.7 billion. This is $300 million less than the FY11 administration budget proposed last year, which was never passed. NASA, like the rest of the Federal government, is currently operating at its FY10 level through a Continuing Resolution. The Congress did pass an FY11 Authorization Act in October, which directed NASA to carry out a number of exploration programs. But that money was never appropriated.
The money that will be "saved" this year, when the Space Shuttle is retired, is allocated by the White House to increase commercial crew funding to $850 million, which is a level that the Congress will not accept. The rest is for a $1 billion "technology" development program, which Congress will also not go along with, since there is no serious mission in sight which would use new technology. For the Moon/Mars future, NASA has already told Congress that there is not enough money in the budget for a new heavy-lift launch vehicle for trips beyond Earth orbit, which Congress has mandated to fly by 2016.
The Republican budget proposal, released Feb. 11, outdoes the White House, proposing what would be a $578 million cut for FY11, contained in their bill to fund the rest of this year, after the Continuing Resolution expires in March. In addition, the bill prohibits any funds from being used to, in any way, cooperate with the country with the world's fastest-growing space programChina.