A few stories involving Nature’s Fury currently in the news…Earthquakes & Droughts & Hurricanes & Typhoons, oh my!
“A swarm” of several hundred earthquakes, the strongest measuring a 5.5 magnitude, were centered east of San Diego near California’s border with Mexico on Sunday afternoon but caused little damage, seismologists said.
Sunday’s shaking in Southern California’s Imperial Valley was the most activity recorded there since the 1970s, according to U.S. Geological Survey seismologist Lucy Johnson.
“We are having a swarm,” Johnson said. “We expect thousands of events (like this) over several days.”
The insurance industry faces its biggest ever loss in agriculture as the worst drought to hit the US in more than half a century devastates the country’s multibillion-dollar corn and soybean crops, triggering large claims.
…Agricultural economists at the University of Illinois estimate the drought will trigger this year gross indemnities of roughly $30bn, with an underwriting loss of $18bn. Of that, the US government would shoulder around $14bn, while private sector insurers are likely to face a loss of $4bn, they said. Standard & Poor’s, the rating agency, put the losses of the private sector a notch higher at $5bn.
“The US drought is indeed a ‘catastrophic’ event,” Gregory W Locraft, insurance analyst at Morgan Stanley in New York, wrote in a recent note to clients, adding that it “is likely the largest [insurance] crop loss in history.”
Note from Andrew: The complete Why Prep Series has now been consolidated HERE.
Last week in Why Prep, the Introduction we briefly discussed the fragility of the status quo and clarified that preparedness is not about getting ready for the ‘end of the world’… it’s about building the skills, resources and resilience to endure the transition periods following dramatic financial, environmental, societal or individual life changes. If you haven’t read the introduction yet, I recommend that you read it before continuing by clicking on the hyperlink near the start of this paragraph..
Today we’re going to take a look at some current and historical situations and events that are/were much more survivable (financial and otherwise) for those that took the time to prepare. For brevity’s sake I have chosen a small sampling of the historical examples available and have chosen not to include many areas of perpetual warfare (Cyprus, Rwanda, Sri Lanka, Palestine/Israel, Northern Ireland, etc.).
Note: The links included go to articles or preselected internet searches (to make results more timely) in case you’re interested in doing additional reading on that subject. For convenience, these examples are listed by continent although many of the events/situations spanned multiple continents. Continue reading
The Department of Agriculture said 1,016 counties in 26 states are natural disaster areas.
I speak with farmers nearly every day and those that were able to get a crop to stand this year are now watching it wither away. Ranchers are even having to feed hay in the middle of summer rather than being able to rely on pasture. Trouble for farmers, trouble for ranchers, trouble for consumers at the grocery store.
Record heat across the country this week could lead to record drought…
Already the U.S. Department of Agriculture is predicting that food prices will rise by as much as 3.5 percent starting later this year and into 2013… beef prices will rise as much as 10 percent…
…Already, the corn crop is down 20 percent from last year and the concern is that it will deteriorate to match the 1988 “monster drought” losses of 30 percent…As much as 75 percent of the food products in grocery stores use corn as a key ingredient.via Record Heat Could Lead to ‘Monster Drought’ – US – CBN News – Christian News 24-7 – CBN.com.
A well stocked pantry isn’t just prudent…it’s a hedge against increased food prices. Additionally, remember that drought pricing isn’t the only price pressure on foodstuffs…there will likely also be inflation caused by the expected next round of Qualitative Easing (digital money printing).