Things Financial - 14 Oh Crap!

Earlier in my writings I had pointed out that the Bible says that money is for protection. Now looks like it would be good time to have some. If you don't have any then start to working on getting some and/or saving some.

There has been a disturbance in the Middle East that has resulted in the cutting off of approximately 1/3 of "internationally traded" fertilizer. What portion of the total fertilizer market "1/3 of internationally traded fertilizer" is, remains a bit of a mystery to me. There is certainly domestically produced fertilizer in many countries. That said, there won't be as much to be internationally traded as there was.

Fertilizer is used to grow food crops for people as well as food crops for...well...for food - pigs, chickens, cows and such eat a lot of the crops grown in North America.

Many people have noticed increasing food prices in North America since 2020. In our part of the world the price of food has been increasing at a faster rate than general inflation. That is going to continue to be the case in the next year or so, or perhaps for the foreseeable future.

Urea & ammonia based fertilizer exports from the Middle East got cut at the beginning of March 2026. There would have been some stockpiles in the countries where these things were needed and there would have been some ships in transit. I'm going to guess that shortages would have started to appear in importing countries at the beginning of April. Assuming a 4 month growing season, food shortages will start to appear around the beginning of August. More people (as the population continues to grow) trying to get their share of less food means higher prices for those who have money and hunger or starvation for those who don't have money.

You can also expect to see increased migration of economic refugees from poorer countries as people seek food or the means to acquire it.

The government to our south seems to have indicated that that country doesn't want or need Canadian potash fertilizer which, until the present day, they have been buying at a rate of about 1,000,000 tons per month. They only produce about 5% of the potash they consume. Where will they import their fertilizer from? Or will that government allow crops to come in short? Or to fail?

The USA has been a net food exporter for many years though the reports I read say that the balance of exports to imports is shrinking. If the USA stops exporting, or starts importing, this will be an added strain on the world food economy.

Remember, in a time of inflation the dollars (or pesos) you have won't go as far in the future as they will today.

So, what to do?

First, don't panic. I'm just a guy at a desk, not an economist, food trader or seer. I don't have any special knowledge or access to hidden information. I write about money as a hobby. Take my advice with a grain of salt.

Food isn't going to disappear. We live in a rich country. Food will just get more expensive while the quality and variety will decrease.

So if you don't know how to cook, learn. Someone you know cooks; ask them to show you.

If you have the ability to can, pickle or preserve foods remember, prices are lowest during harvest season. Stock up while prices are relatively low.

Next, if food shortages do happen it would be a good idea to have some backup. Most governments recommend that people keep a 3 day supply of shelf-stable food in the house as a buffer against natural disasters. Not a bad idea. Some religious groups suggest 7 days. Some prepper groups suggest a year or a life-time's worth. I'm not a prepper so I do think there is such a thing as too much. Something as simple as storing an extra 10Kg bag of rice, a half dozen cans of fish or meat, some dried fruit and frozen or canned vegetables will keep a person on their feet for a month. Perhaps not very happily, but at least moving.

If you have a yard think about planting a garden. Fresh vegetables are better than anything that you might get from a can. Gardening also helps you realize just how much work farmers go through to produce the food that you eat every day. I've always found that digging in my tiny garden makes me appreciate where my food comes from.

Concluding:

Try to save some money.

Learn to cook.

Buy food during harvest season and preserve what you can.

Get and save a reasonable stock of non-perishables.

If you have space, plant a garden.

Good luck.

Things Financial 13 Bad Language and Finance

I speak English. I guess that you do too, since you're reading this. English is my first and primary language, I don't know if that's true for you also. Even for native speakers, English can be an inexact language and that can create confusion. Confusion when talking about financial topics can lead to traps for the unwary.

Financial professionals (like many other professionals in many other jobs) will use words that, in the financial context, have a different meaning than when they are used in "normal" conversation. These folks may also have words and abbreviations that don't occur outside of financial conversations. A good resource to consult for meanings of words, as used in financial context, is Investopedia.

https://www.investopedia.com/financial-term-dictionary-4769738

Investopedia is an American site and so will contain references to some financial items as well as investment & account types that aren't available in Canada. That's fine. The word definitions will be the same. To find out about Canadian investment types you can check the Canada Revenue Agency (CRA) website. A brief overview of common accounts and the CRA web address can be found in Things Financial #5.

So how about bad language in every day life?

In ordinary conversation people may say things that are not strictly true. Something that I hear now and then is a person saying that they paid a bill, like a utility bill, with a credit card. Some credit card companies even encourage this practice and this language. The credit card company is not doing this for the customer's benefit.

Since this column is about language the first thing I'll point out is that no one pays a bill with a credit card. That is bad wording that can lead to poor reasoning. The bill is not paid. The debt has been transferred from one creditor to a different creditor. You still owe the money.

If you transferred your power bill to VISA and then mentioned to your spouse that the bill had been "paid," he or she would be justified in thinking that the debt had been wiped away, not merely delayed. Now your spouse is working with bad information and the upcoming VISA bill is going to be larger than expected. Such language makes financial planning more difficult than it needs to be.

Now some bad language in advertising:

I was in a shopping mall a few months back and walked past a telecom company kiosk. A large poster proclaimed: "You can have it all! And more!"

Hmm?

Of course you can't have more than "All." There is nothing more than "All." By definitions "All" is all there is. Advertisers get away with such a false claim by arguing that the claim they made was so outrageous that no reasonable person would ever believe it. (This is a real, legal defence that has been successful in court.) I think that the acceptance of such an argument allows unscrupulous companies or people to take advantage of customers who are either "unreasonable" or who lack the knowledge & background to understand that the claim is "outrageous."

If a salesman offers you a 'financial security' that guarantees a 15% yearly profit would you know if that was "reasonable" or "so outrageous that no reasonable person would believe it?" A lot of people don't have the background to be able to tell. But I'll tell you that in today's market it is unreasonable. Very probably a set up for a scam.

In finance (and in life) if someone offers you something for nothing or a whole lot for very little you should suspect dishonesty.

Another example of bad language in finance: Reverse Mortgage

Just be aware that there is nothing "reverse" about this arrangement. It's just a mortgage. It's arranged a little differently but it's still just a mortgage. Normally a bank lends you, say, 90% of the value of the house then you make payments that reduce the banks interest and increase your equity in the house. Eventually you own all of the house and the bank owns none.

In the "reverse mortgage" case the bank lends you, say, 50% of the value of the house then every month, rather than taking cash payments the bank takes another piece of your home equity. When the time comes for you to sell or move out of your home the whole mortgage comes due and you have to pay back what you borrowed plus compound interest - all in one chunk.

After all is done, and if real estate spikes upward, you might wind up with a decent payout. Not enough to buy a new house, of course, but something. If you're unlucky, or there's another housing collapse like 2008, you could walk away with nothing. In my opinion it's a big gamble to take with the biggest asset that most families own.

Keep your eyes and ears open for examples of Bad Language in daily life. It can cause misunderstandings in personal interactions and also cause costly grief in financial transactions.