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This week in The Economist: Pork not just a U.S. problem

This week (Sept 15-21) in The Economist --

Chinese struggle with pork problem, too
-- Apparently, a huge portion of the worrisome growth in Chinese consumer prices (up 6.5% in August, year over year) can be attributed to its pork shortage. New prosperity has driven up demand for pork, causing the government to dip into its strategic pork reserve. The Economist points to the inflationary pressures such price increases bring, and suggests it could be an important topic at the upcoming party congress.

The northeast African country of Niger has rich uranium deposits that could be very alluring as the world returns to nuclear power. However, these potential riches could make the ongoing rebellion even more difficult to resolve. Add to this the rumor of Qaddafi's involvement and the U.S.'s desire to root out terrorism in the Saharan region, and this situation could be moving to the front burner.

Union negotiations are news in the U.K. as well as the U.S. There, public employee unions are chaffing at new Prime Minister Gordon Brown's praise for union-busting Margaret Thatcher. An autumn of walkouts and dissension seem to be in the offing.

The magazine has an interesting piece about the European Economic Union, questioning how well it is serving its avowed raison d' etre. The piece uses the difference in energy strategies as an example of self-serving fragmentation -- the French are set on consolidation, while other countries, led by Denmark, are determined to follow the free market strategy. In this instance, all eyes are pointed east at Russia's growing power in the natural gas and oil markets.

Finally, the magazine compares the growth in the U.S. housing values to other countries, and interestingly finds that a number of them seem to have more inflated values, including Belgium, Britain, Denmark, Greece, Spain and Sweden. However, none have lending practices as liberal as ours.

Profiting from the Chinese pork shortage

I was captivated when I read in yesterday's Wall Street Journal [subscription] that the Chinese government, in response to a growing pork shortage brought about by the country's growing prosperity, was considering tapping into its STRATEGIC PORK RESERVE. Really. Apparently, it has stockpiled frozen pork as well as pigs on the hoof against the day meat prices skyrocket.

After I quit giggling over the image, I began to wonder if our government was doing enough to protect us from similar shortfalls. I know, of course, about our huge strategic petroleum reserve, sufficient to fuel every SUV in the country for a dozen trips to Wal-Mart (NYSE: WMT). But petroleum isn't our only essential resource. Do we have a strategic beer reserve? A strategic disposable diaper reserve? And how about our supply of Starbucks (NASDAQ: SBUX) coffee? Can you imagine the riots if our supply of French roast is cut off for even a day? Don't threaten my freakin' coffee!

Of course, we aren't alone in the world in our dependence on life's essentials. One would think that Norway would have a substantial Strategic Herring Reserve. And where would Italy be without a Strategic Olive Oil and Garlic Supply? I'd guess Monaco has thousands of extra cases of Taittinger put aside, while the Saudis stockpile extra wives. Closer to home, you'd think Canada would stockpile pucks, Mexico tortillas.

If you want to take a flyer that the Chinese pork shortage might force them to shop internationally, you might look at leading U.S. pork producer Smithfield Foods (NYSE: SFD), which is taking over another large producer, Premium Standard.

I have no recommendations for plays in a puck shortage.

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Last updated: November 26, 2009: 02:09 PM

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