Archive for the ‘Revelation 6:6’ Category

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from The Daily Telegraph:

Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy   Committee to put £75billion of newly created money into the economy in a   desperate effort to stave off a new credit crisis and a UK recession.

Economists said the Bank’s decision to resume its quantitative easing [QE], or   asset purchase programme, showed it was increasingly fearful for the   economy, and predicted more such moves ahead.

Sir Mervyn said the Bank had been driven by growing signs of a global economic   disaster.

“This is the most serious financial crisis we’ve seen, at least since the   1930s, if not ever. We’re having to deal with very unusual circumstances,   but to act calmly to this and to do the right thing.”

Announcing its decision, the Bank said that the eurozone debt crisis was   creating “severe strains in bank funding markets and financial markets”.

The Monetary Policy Committee [MPC] also said that the inflation-driven   “squeeze on households’ real incomes” and the Government’s programme of   spending cuts will “continue to weigh on domestic spending” for some time to   come.

The “deterioration in the outlook” meant more QE was justified, the Bank said.

Financial experts said the committee’s actions would be a “Titanic” disaster   for pensioners, savers and workers approaching retirement. Sir Mervyn   suggested that was a price worth paying to save the economy from recession.

Under QE, the Bank electronically creates new money which it then uses to buy   assets such as government bonds, or gilts, from banks. In theory, the banks   then use the cash they gain to increase their lending to businesses and   individuals.

By increasing the demand for gilts, QE pushes down the interest rate yields   paid to holders of these and other bonds. Critics of the policy say it   pushes up inflation and drives down sterling.

The National Association of Pension Funds yesterday called for urgent talks   with ministers to address the negative impact of lower gilt yields on   pension funds. Joanne Segars, its chief executive, said QE makes it more   expensive for employers to provide pensions and will weaken the funding of   schemes as their deficits increase. “All this will put additional pressure   on employers at a time when they are facing a bleak economic situation,” she   said.

Ros Altman, of Saga, said the latest round of QE was “a Titanic disaster” that   would increase pensioner poverty. As well as fuelling inflation, she said,   falling bond yields would make annuities more expensive, “giving new   retirees much less pension income for their money and leaving them   permanently poorer in retirement”.

The MPC also voted to keep the Bank Rate at its historic low of 0.5 per cent,   another decision that hurts savers. Yesterday, protesters outside the Bank’s   headquarters smashed a giant piggy bank to symbolise the situation of   pensioners and others forced to raid savings to keep up with the rising cost   of living.

Asked about the plight of savers, Sir Mervyn said it was more important to   support the wider economy than to support them. He suggested that savers   would not be helped by deliberately pushing the British economy into   recession. Yesterday’s decision was the first move on QE since 2009, during   the global credit crisis, when the Bank injected £200 billion into the   economy.

Some analysts believe that this round of QE could be less effective than the   previous one, forcing the Bank to create even more money this time.

Michael Saunders of Citigroup, forecast that there could be as much as £225   billion more QE by next year. “I think they will do lots more QE,” he said.   “It’s both that the economy is weak but also that the MPC’s view is that QE   is not a very powerful tool, or rather it takes a large amount of QE to have   much effect on the economy.”

The Bank is supposed to keep inflation near a target of 2 per cent. Inflation   now stands at 4.5 per cent, and the Bank admitted it is likely to hit 5 per   cent as soon as this month. The Bank’s own research shows that as well as   stimulating the economy, QE pushes up prices.

Sir Mervyn insisted that yesterday’s move was still consistent with the 2 per   cent inflation target, saying that the slowing economy means inflation could   actually fall below that mark “by the end of next year or in 2013”.

The Governor insisted that the MPC’s decisions had been the correct response   to events. “The world economy has slowed, America has slowed, China has   slowed, and of course particularly the European economy has slowed,” he   said. “The world has changed and so has the right policy response.”

City traders took heart from the Bank’s move to boost growth, with the FTSE   100 rising 3.7 per cent to 5,29, its biggest two-day gain since 2008.

The Bank’s decision came after mounting political pressure from ministers   worried that Sir Mervyn was not reacting urgently enough to the darkening   global economic outlook.

George Osborne, the Chancellor, welcomed the Bank’s move, saying: “The   evidence shows that it [QE] will help keep interest rates down and boost   demand and that will be a help for British families.”

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from The Business Insider:

In an interview on the BBC (via ZeroHedge), IMF advisor Robert Shapiro said some incredibly alarmist things.

He tells broadcasters that if eurozone leaders don’t address the crisis properly we will see a meltdown as soon as later this month.

In his words:

“If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system.

We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world.

This would be a crisis that would be in my view more serious than the crisis in 2008…. What we don’t know the state of credit default swaps held by banks against sovereign debt and against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the exposure of British banks is to the Ireland sovereign debt problems.”

And Shapiro is not just some random guy living with his girlfirend.

Aside from being an advisor to the IMF, Shapiro is the co-founder and chairman of Sonecon, LLC, and was formerly the U.S. Undersecretary of Commerce. He has a Ph.D. from Harvard, among other degrees, oversaw the Census Bureau, and has been a Fellow at Harvard, Brookings, and the National Bureau of Economic Research.


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This is HUGE! 

If the international Bond market stops buying U.S. government debt then the U.S. is in serious trouble! 

Even now the U.S. Federal Reserve Bank a quasi-private institution is purchasing more U.S. Debt than anyone else, even the Chinese, because there are no longer enough buyers in the international bond market. And this is because the world has decided that the U.S. is no longer a good credit risk. But the Fed can only purchase so much debt.  

What happens is this: The U.S. Treasury holds weekly and monthly bond auctions to sell U.S. Government debt to Bond funds and foreign countries in order to get more money to fund the federal budget. In the past all of the bonds that the U.S. Treasury wanted to sell were bought by the bond funds and foreign countries, meaning the auction was fully subscribed. However now that the U.S. government has decided to increase its debt so much it has had to drastically increase the value of the bond sales,  to the point that Bond funds and Foreign countries will not buy all of the bonds, meaning the auctions are undersubscribed. A VERY BAD THING! It means the International Bond market has decided the U.S. is now a bad financial risk. And if you lose the trust of the international Bond market, your country is in deep deep trouble financially. This is actually the last step before financial collapse! 

So the U.S. Treasury has turned to the U.S. Federal Reserve and made an agreement with them, The U.S. Federal Reserve will purchase all the bonds that no one else will buy. There is a huge problem with this though: In order for the Federal Reserve to buy the bonds, it has to have the money to do it. And how does it get the money? 

And this is the BIG DANGEROUS part: The U.S. Treasury issues I.O.U.’s to the Federal Reserve, and the Federal Reserve then CREATES the money with which to buy the Bonds, because the U.S. Dollar today is an I.O.U., a debt instrument obligating the government to pay the Federal Reserve a tangible asset equal to the value of the money that the Fed issues! So what you have in actual fact is for each bond the Fed buys, what is owed for the Bond automatically DOUBLES! 

So not only do you have an automatic doubling of the debt you have massive growth in the amount of U.S. dollars in circulation which depreciates the value of the dollar drastically, and if you have added to that the fact The international Bond market will not buy U.S. Debt, it then turns into a vicious free fall of the value of the U.S. Dollar and hyperinflation. And the World would immediately stop using the dollar as the international currency of exchange, which would accelerate the dollars fall! 

The immediate impact of all of this would be similar to, but much worse than what happened to the Soviet Union after Communism fell, Their economy collapsed their government could no longer afford the massive military that they had and within 10 years they had to scrap ¾ of their military. We would within a very short time fall from being the only superpower to not having any power at all on the world stage. 

If you want to get a good understanding of the International Bind market and the power it wields you need to get this book: “The Ascent of Money” by Niall Ferguson, he is a well known history professor at Harvard.

from Reuters:

The world’s largest bond fund has gone ultra bearish on the United States, dumping all of its U.S. government-related debt holdings.

The move by Bill Gross’s $236.9 billion PIMCO Total Return fund completed last month comes in the wake of a vicious Treasury market sell-off and just days after he questioned who will buy Treasuries once the Federal Reserve halts its latest round of bond purchases in June.

Gross, who also helps oversee a $1.1 trillion investment portfolio as PIMCO’s co-chief investment officer, has repeatedly warned against U.S. deficit spending and its inflationary impact, which undermine the value of government debt and push up yields as investors demand more compensation for risk.

Over the last five months, worries over the ballooning U.S. budget gap estimated at $1.645 trillion for 2011, political stalemate in Washington over how to narrow it and inflationary fears have all contributed to a steep sell-off in Treasuries. The benchmark 10-year note has seen its yield, which moves inversely to price, rise more than one percentage point since early October to 3.46 percent by Wednesday’s close.

Gross expects further carnage. Just last week, he told Reuters Insider that a 4.0 percent yield for 10-year notes is a “rational expectation” if the Fed “disappears as the buyer of last resort.”

Gross, as with many other investors, has raised red flags over demand for Treasuries when the U.S. central bank ends its controversial quantitative easing program. This week, he posed the following in his widely read monthly report: “Who will buy Treasuries when the Fed doesn’t? The question really is at what yield, and what are the price repercussions if the adjustments are significant.”

Already, bond prices have taken a massive beating on that possibility and as the U.S. economy recovery strengthens. The 10-year Treasury yield hit a 9-1/2 month high of 3.77 percent on February 9, rising 40 basis points in the short period from the end of January.

Gross sold all of its U.S. government-related securities, including U.S. Treasuries and agency debt, from its flagship Total Return fund, as of the end of February 28, according to the firm’s website on Wednesday.

That’s down from when the portfolio held 12 percent government-related debt at the end of January. The last time PIMCO was this negative on U.S. government-related debt was in January 2009.

A PIMCO spokesman declined to comment. . . . .

read the full article here.

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alslo see this: WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices

from The Daily Telegraph:

Those exhorting OPEC to boost output should be careful what they wish for. The cartel card can be played once only, and it risks exposing the fragility of the global energy system if the Gulf powers are seen struggling to deliver.

Goldman Sachs suspects that OPEC has been pumping far above its agreed quota since November and therefore cannot easily raise output much without cutting deep into global spare capacity.

Jeff Currie, the bank’s oil guru, said Saudi output had quietly crept up by 700,000 barrels a day (bpd) even before the Libyan supply shock.

Assumptions that OPEC has added 1.9m bpd over the last two years are wishful thinking. These new fields have been “largely offset” by attrition in old fields.

“We believe that OPEC spare capacity has already dropped below 2m bpd. The question therefore arises how much spare capacity is left to absorb potential supply disruptions in other countries,” he said.

If this picture is broadly correct, spare capacity is already close to the wafer-thin levels that led to wild price moves in mid-2008.

The flow of Libyan oil has so far fallen by 1m bpd. This may not sound much against global supply of 88m, but oil prices are determined by levels of spare capacity once supply tightens.

Beyond a certain point, the price spiral can kick in with explosive force until the economic damage crushes demand.

Libya’s conflict has already cut spare capacity by a third. Hopes for a quick solution are fading as the country succumbs to civil war along ancient lines of tribal cleavage. A raft of new projects planned for the Sirte Basin by mid-decade will be mothballed.

Chris Skrebowski, editor of Petroleum Review, said the long-denied oil crunch is starting to bite. “We cling to the comfort blanket that spare capacity exists, but it is mostly fictional, or inoperable. If you take 2m bpd off the figure, the whole dynamic of global oil supply changes,” he said.

A Wikileaks cable cited a Saudi geologist claiming that the kingdom’s reserves had been overstated by 40pc. A second cable questioned whether the Saudis “any longer have the power to drive prices down for a prolonged period”.

Some investors see trouble. They are buying oil options contracts for $150 and $200 a barrel with expiry dates late this year, either as a bet or as an insurance against Mid-East mayhem. Barclays Capital said the options “call skew” is more stretched now that it was during the 2008 spike.

The implication is that markets are less sure this time that the crisis will blow over quickly, perhaps because the events the last month amount a strategic rupture.

The entire political order of the Middle East has effectively disintegrated, risking of years upheaval in a region that provides 36pc of global oil supply and holds 61pc of proven reserves.

Mass protest by Bahrain’s Shi’ite majority against the ruling Sunni dynasty has been a rude awakening for investors who thought oil wealth would shield the Gulf against turmoil.

“We in the West have been listening to the wrong people,” said Mr Skrebowski. “We have not been talking to the young: we missed what was happening underneath.”

Bahrain sits at the epicentre of the world’s energy system. It is a hop to Saudi Arabia’s Eastern Province, home to an equally aggrieved Shi’ite population and the kingdom’s giant oil fields.

Bahrain’s Al Khalifa family has sought to defuse the island’s crisis since the original crack-down, when seven people died. Yet protesters have refused to drift away, digging in at the financial hub and staging rallies outside the interior ministry. Sectarian violence between Sunni and Shia has been escalating.

What happens on the tiny island is being watched with alarm across the Gulf. The “demonstration effect” has already led to Shia protests in the Saudi oil region. Saudi police have released a Shia cleric arrested last week for demanding a constitutional monarchy.

Yet the country’s Wahabi clerics also warned against “sedition” and violations of Islamic law, while the interior ministry said all rallies were banned and warned that police would use “all measures to prevent any attempt to disrupt public order.”

The threats aim to quash a “Day or Rage” planned by cyber-protesters for Friday, allegedy swollen to 17,000. A similar event in Syria was nipped in the bud by secret police.

The world’s economic fate now hangs on the success of Wahabi repression. Any sign that the Saudis are losing their grip risks an oil shock large enough to derail the global recovery.

Nobody knows where the “inflexion point” is. Bank of America says we are already in the danger zone since energy costs as a share of global GDP have reached 8.5pc, near historic peaks.

Deutsche Bank said the outcome differs depending on whether spikes are driven by booming demand or a supply crunch. It warns that a sudden jump to $150 will abort world recovery.

Former Fed chief Alan Greenspan said economists have been “bedevilled by over the years” trying to quantity the effect of oil shocks. “We don’t know fully where all the channels are. My view is that when oil prices get up to this area and start to move up even higher, you do have to start to worry.”

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from Sky News:

A senior economist at the worldwide bank HSBC has warned of civil unrest in Britain if food prices continue to soar.

Speaking on Jeff Randall Live, senior global economist Karen Ward cautioned that the UK could experience the kind of food riots seen in other countries.

“Even in the developed world I think we have very, very low wage growth, so people aren’t getting more in their pay packet to compensate them for food and energy, and I think we could see social unrest certainly in parts of the developed world and the UK as well.”

She went on to highlight the link between high food prices and the escalating cost of crude oil.

“More and more we are seeing that some of these foodstuffs are actually substitutes for energy itself, particularly biofuels. So I think the energy markets are a significant contributor to these food price gains.”

The comments come as the United Nations warned the cost of food is now at the highest level for 21 years and set to rise further.

Food costs have gone up for eight months in a row, with the National Farmers Union forecasting the trend will continue for the rest of 2011.

The cost of basic foodstuffs has been caused by increasing demand and extreme weather destroying crops and has been partly to blame for the unrest sweeping the arabic world.

Rising prices contributed to riots across North Africa and the Middle East in the past several months that have toppled leaders in Egypt and Tunisia.

Wheat has nearly doubled in price over the past six months and rising demand has caused the cost of sugar to rise by 14% over the past 12 months.

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from The Daily Telegraph:

Governments in Tunisia, Egypt, Algeria, Morocco and Yemen have faced protests in recent weeks, part fuelled by rising food costs. Unfortunately, this is a trend that looks set to continue and probably escalate over the next two decades.

The rise of the middle classes in emerging markets, coupled with a soaring world population, underpin an increase in the price of basics such as wheat, corn and sugar.

But the situation is going to be made much worse by the scarcity of water – the most important commodity there is.

“Water remains a more problematic commodity than food and fuel: though cheap in its natural state, it is expensive to process and expensive to transport, especially in the quantities necessary for agriculture,” according to a report from a Washington-based think tank released last month.

“Past water shortages have been temporary or small-scaled; future groundwater depletion will be massive and effectively permanent.”

The Centre for Strategic and International Studies (CSIS) study looked at water as a strategic resource in the Middle East – the most water-scarce region on Earth.

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from Business Insider:

Selling government debt is a gigantic confidence game.  For decades, investors all over the globe have gobbled up massive amounts of U.S. debt at low interest rates because they believed that it was a certainty that they would be paid back and make a little bit of profit on top of it.

Unfortunately, things have changed. Confidence is U.S. Treasuries is dying, and if confidence in U.S. government debt completely collapses at some point we could literally be looking at financial Armageddon. 

Why is that so? 

Well, when the world totally loses faith in U.S. Treasuries, interest rates on U.S. Treasuries will have to keep going up until enough investors are found to buy them.  But much higher interest rates will mean much higher interest on the national debt and thus much higher federal budget deficits.  That will erode confidence in U.S. Treasuries even further.  In the end, a vicious cycle of eroding confidence and higher interest rates could ultimately lead to hyperinflation as the U.S. government and the Federal Reserve flood the system with endless amounts of paper money to try to keep the system solvent.

Faith in U.S. Treasury bonds is absolutely critical if the world financial system is going to continue to operate in a stable manner.  In the post-World War 2 era, U.S. Treasuries have been largely viewed as the absolutely safest investment out there.  So if there comes a point when the market for U.S. Treasuries completely collapses, it is going to cause unprecedented financial chaos.  The worldwide derivatives market, which is already highly unstable, would almost certainly implode.  Credit markets all over the globe would seize up.  Global trade would quickly grind to a standstill.

This isn’t going to happen overnight (hopefully).  Rather, the loss of confidence in U.S. Treasuries is something that is likely to take months or even years to play out.  But once that confidence is gone, it is not something that will be able to be rebuilt easily.

Think of it this way – once you drive a car off a cliff, is it easy to reconstruct it? Of course not.

Well, that is where we are headed with U.S. Treasuries.

The Federal Reserve is flooding the system with new dollars, Barack Obama and the U.S. Congress seem poised to pass a new tax deal which does not include corresponding spending cuts which will cause U.S. government budget deficits to become even more bloated, and there is a tremendous lack of faith both in U.S. political leaders and in the Federal Reserve at this point.

The rest of the world is losing faith that the U.S. government is going to be able to handle all of the debt that it has accumulated.  We may be approaching a “tipping point” soon

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from AFP:

Economists peddling dire warnings that the world’s number one economy is on the brink of collapse, amid high rates of unemployment and a spiraling public deficit, are flourishing here.

The guru of this doomsday line of thinking may be economist Nouriel Roubini, thrust into the forefront after predicting the chaos wrought by the subprime mortgage crisis and the collapse of the housing bubble.

“The US has run out of bullets,” Roubini told an economic forum in Italy earlier this month. “Any shock at this point can tip you back into recession.”

But other economists, who have so far stayed out of the media limelight, are also proselytizing nightmarish visions of the future.

Boston University professor Laurence Kotlikoff, who warned as far back as the 1980s of the dangers of a public deficit, lent credence to such dark predictions in an International Monetary Fund publication last week.

He unveiled a doomsday scenario — which many dismiss as pure fantasy — of an economic clash between superpowers the United States and China, which holds more than 843 billion dollars of US Treasury bonds.

“A minor trade dispute between the United States and China could make some people think that other people are going to sell US treasury bonds,” he wrote in the IMF’s Finance & Development review.

“That belief, coupled with major concern about inflation, could lead to a sell-off of government bonds that causes the public to withdraw their bank deposits and buy durable goods.”

Kotlikoff warned such a move would spark a run on banks and money market funds as well as insurance companies as policy holders cash in their surrender values.

“In a short period of time, the Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees. All that new money could produce strong inflation, perhaps hyperinflation,” he said.

“There are other less apocalyptic, perhaps more plausible, but still quite unpleasant, scenarios that could result from multiple equilibria.”

According to a poll by the StrategyOne Institute published Friday, some 65 percent of Americans believe there will be a new recession.

And the view that America is on a decline seems rather well ingrained in many people’s minds supported by 65 percent of people questioned in a Wall Street Journal/NBC poll published last week.

“It is true: Today’s economic problems are structural, not cyclical,” argued New York Times editorial writer David Brooks.

He said the United Sates is losing its world dominance much in the same way the British Empire began to crumble more than a century ago.

“We are in the middle of yet another jobless recovery. Wages have been lagging for decades. Our labor market woes are deep and intractable,” Brooks said.

Nobel Economics Prize winner Paul Krugman also voiced concern about the fate of the fragile economic recovery if voters return the Republicans to political power.

“It’s hard to overstate how destructive the economic ideas offered earlier this week by John Boehner, the House minority leader, would be if put into practice,” he wrote in a recent editorial.

“Fewer jobs and bigger deficits — the perfect combination.”

The Wall Street Journal, usually more favorable to Boehner’s call for tax cuts, ran a commentary from another Nobel Prize-winning economist — Vernon Smith — that failed to provide much comfort for readers.

“This fact needs to be confronted: We are almost surely in for a long slog,” Smith wrote.

And it seems such pessimism has even filtered into the IMF, which warned on Friday that high levels of national debt and a still shaky financial sector threaten to derail the global economic recovery.

“The foreclosure backlog in US property markets is large and growing, in part due to the recent expiration of the home buyer’s tax credit. When realized, this could further depress real estate prices.”

This could lead to “disproportionate losses” for small and medium-sized banks, which could in turn “precipitate a loss of market confidence in the recovery,” the IMF warned.

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from Bloomberg:

Wheat rose in Chicago after Russia, the world’s third-largest grower, extended a ban on grain exports into next year, raising the prospect of higher food prices that already have sparked riots in Mozambique.

Wheat for December delivery rose as much as 1.5 percent to $7.2475 a bushel, advancing for a third day and taking this week’s gain to 4.3 percent. Russia, suffering from its worst drought in at least a half century, started an export ban Aug. 15 that was scheduled to end Dec. 31. Prime Minister Vladimir Putin said yesterday it wouldn’t be reviewed until after the next harvest and Agriculture Minister Yelena Skrynnik said Russians are hoarding staples.

“Russia was for the last couple of seasons a very large part of the world export market and now all of sudden they disappeared,” said Keith Flury, a grains analyst at Ratzeburg, Germany-based F.O. Licht. “This is kind of the new fundamental shift that not everybody was really ready for.”

Wheat traded in Chicago, a global benchmark, as much as doubled since June as Russia’s drought, flooding in Canada and parched fields in Kazakhstan and the European Union ruined crops. Higher prices, combined with rallies in corn, rice and livestock, are increasing concern of a return to the food crisis of 2008, which sparked riots from Haiti to Egypt.

Residents of Mozambique’s capital, Maputo, were on strike for a second day yesterday in a protest over higher food and utility prices. At least seven people have died in clashes with police and another 280 injured, Cabinet spokesman Alberto Nkutumula said yesterday.

Prices Peak

While prices have jumped, they’re still a long way off the peaks reached in 2008. Then, wheat reached a record $13.495 and rice rose as high as $25.07 per 100 pounds in Chicago. Rice for November delivery closed yesterday at $11.43. A United Nations’ index of 55 foods rose to 175.9 points last month, 18 percent below the 214 points recorded in June 2008. The world’s poorest nations will spend 37 percent less on cereal imports this year than at the peak, according to the UN.

World wheat stockpiles are expected to be 174.8 million metric tons in the 2010-11 season, comprised of local marketing years, according to the U.S. Department of Agriculture. That’s 40 percent more than in 2007-08.

Wheat for December delivery was 8.5 cents, or 1.2 percent, higher at $7.2225 a bushel on the Chicago Board of Trade, as of 12:15 p.m. in London. Prices rose as high as $8.68 Aug. 6. Milling wheat futures for November delivery climbed 0.5 percent to 230.75 euros ($296) a metric ton on NYSE Liffe in Paris.

Corn for December delivery rose 0.1 percent to $4.48 a bushel, after earlier reaching $4.49, the highest compared with intraday prices since June 2009. Soybeans for November delivery advanced 0.7 percent to $10.165 a bushel. Rice for November delivery gained 0.9 percent to $11.53 per 100 pounds.

Russia produced 61.7 million tons of wheat last year, the largest crop after China and India, according to the International Grains Council.

Special Meeting

The United Nations’ Food and Agriculture Organization will hold a special meeting of its intergovernmental groups on grains and rice on Sept. 24 in Rome.

Russia accounted for 14 percent of the global exports of wheat, flour and related products in the year to June 30, according to the USDA. “We can only review lifting the ban on grain exports after the next year’s crop is harvested and we have clarity on the balances,” Putin said in Moscow yesterday.

“So far we are not declaring any crisis, it’s premature,” Abdolreza Abbassian, senior grains economist at the FAO, said. “But we are not saying it’s not a tight situation. It’s a very tight situation.”

Speculators including hedge funds increased their net-long position, or bets on higher prices, in Chicago wheat futures by 9.9 percent in the week ended Aug. 24, according to U.S. Commodity Futures Trading Commission data.

World wheat production will reach 645.7 million tons in the 2010-11 season, the USDA said last month, reducing its previous forecast of 661.1 million tons.

Germany’s grains harvest fell 12 percent to 43.8 million tons this year after “extreme weather,” the country’s Agriculture Ministry said today.

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