May 4, 2007 by Addison Wiggin & Ian Mathias

• BLS reports fewer jobs… but Buffett sees a bright side
• Rising prices for fruits, grains, and veggies… what’s behind “drought inflation?”
• Feds bet the price of oil will drop below $63… do they know something we don’t?
• Global oil power is changing hands… one win-win way to profit
• The e-gold indictments... new era “hawala”?
• Plus the first ever OVERTIME briefing!

The monthly employment numbers from the Bureau of Labor Statistics look grim -- even after the usual BLS numbers-fudging. They reported 88,000 more jobs in April… significantly fewer than expected. Unemployment numbers were also a bit dismal… they rose to 4.5%.

Of course, that figure doesn’t include the 1.4 million people who, according to the BLS, “wanted and were available for work and had looked for a job sometime during the prior 12 months,” but were not counted as unemployed because “they had not searched for work in the four weeks preceding the survey.”

The Dow ended the day about 40 points higher. Every talking head on the TV this morning was giggling about whether the Dow will hit 14,000 this month or next. We didn’t hear a peep about the unemployment rate. Sigh…

“There's enormous disparities in terms of how the benefits of this society have been distributed,” Warren Buffett told us in our interview last month. He may have easily been discussing today’s jobs report.

“But even those on the low end are doing far better than people… on the high end were doing 100 years ago. There are many, many things that a person earning a normal wage in this country can do and enjoy that John D. Rockefeller couldn't do and couldn't enjoy. It's a rising tide [that] has lifted the boats, but it's lifted the yachts a lot faster.”

“April was the driest month in over 100 years for many parts of Europe,” Chris Mayer wrote, following up on his water theme from yesterday’s 5.

“While the U.S. is worried about Britney Spears’ comeback tour, most of the world’s farmers are a bit more concerned about an incredibly dry spring,” says Chris. Rainfall in Germany has been 90% less than usual. In Italy, rainfall is 25-50% less than normal. The Po River, which powers hydrogenerators in northern Italy, is well below normal levels.

“It’s not just Europe,” says Chris. “Dry weather conditions also exist in the American plains and in Australia, in the Ukraine and in Russia.”

All of these countries are big grain producers. Drought has convinced many of these nations to slash production estimates, and output has fallen in some regions more than 60%. But Europe isn’t the only continent suffering. Check out this chart: Drought Conditions Across the West and Southeast

The result? “Drought inflation,” says Chris. Unless Mother Nature cuts us a break, you can expect higher prices for fruits, vegetables and grains.

And milk, too. Increased costs for livestock feed -- due to the corrupting influence of the ethanol boom -- have lifted milk costs around the nation. Dairy gurus at Penn State’s Agricultural Dept. predict a 10-20% rise in current milk prices.

What do the Feds know about oil? Or… better yet, what is it they think they know? The U.S. Department of Energy announced yesterday that the Strategic Petroleum Reserve is down 13% from a year ago. But they are suspending plans to buy approximately 4 million barrels of crude oil because prices are “too high.”

The DOE’s announcement left The 5 wondering if the spot price is coming down anytime soon. After all, there are the known knowns, and the known unknowns… and the unknown unknowns…

“The West no longer has a built-in hometown advantage in the scramble for the oil,” our oil sage Byron King told us yesterday in an exclusive dispatch. The rising and assertive “national” oil companies (NOCs) control over 70% of the world’s reserves. With nut jobs like Chavez at the helm, some have an entirely different political and economic agenda than the old guard.

Reporting from the Offshore Technology Conference in Houston, Byron tells us that countries with nationalized oil programs like Canada, Norway and Brazil have made technological and financial leaps that bring them toe-to-toe with the world’s Big Oil giants.

“Long story short,” says Byron, “Nations (which may or may not favor the U.S.) will have more oil, and more control over where the oil goes. Foreign governments will dictate our future energy prices more than ever before.”

BTW, we’ve been working with our friends at EverBank to develop a Global Energy CD. In this CD, your savings will be uniquely positioned to grow if energy prices continue to rise. It’s FDIC insured and 100% principal protected. We’ll be making a general announcement to Agora Financial readers next week, but if you are interested in this win-win Global Energy CD, e-mail or call EverBank, at worldmarkets@everbank.com or 800-926-4922.

Tell Chuck and company “Addison sent you.”

(Full disclosure: We have an ongoing business relationship with EverBank. While we may receive an advertising fee if you open an account with them, the relationship we’ve forged allows us to bring you exclusive offers, like the Global Energy CD, that you won’t see anywhere else during the limited pre-enrollment period.)

“I think that you are onto something,” one reader encouraged us. “But maybe not quite the thing you think.” Despite James Turk’s claim yesterday that the Feds are not after our gold, the sentiment persists. Our reader continues:

“First, I believe that the U.S. will ultimately move to confiscate gold, but not for a while yet. The real point to the e-gold indictments is something else.

“In Africa, the Middle East and much of Asia, there is an informal thing called ‘hawala.’ It is an unsanctioned network of moneylenders who move money across national frontiers for their citizens, or anyone else. It is as old as time and has traditionally been ignored by governments because it was too contentious an issue for the locals. Al-Qaida makes extensive use of hawala in places like the Middle East to move funds. So having an electronic form of hawala pop up on the Internet was bound to provoke the federales.’

“But let’s go one step further. Oedipus Tex may have an MBA, but he is none too ‘swuft.’ He is, however, a control freak, and so are the lulus in his entourage. It may be sinking in that this new exchange represents something that they can't control. And if the screwballs at the Fed can't control it, it is probably seen as a threat. They wouldn't like that one damn bit.”

Time’s up… but we’ve got one more thing to say… stay tuned for The 5’s first ever OVERTIME briefing

Regards,
Addison Wiggin,
The 5 Min. Forecast

Put the kids to bed… don’t look directly at the light… IT’S TIME FOR THE FIRST EVER 5 MIN. FORECAST OVERTIME BRIEFING!!!

We’re taking a few extra seconds of your time to formally invite you to one of the highlights of our year. From July 24-27, we’ll be hosting the eighth annual Agora Financial Investment Symposium in Vancouver, Canada.

If you attended last year, you’ll remember the over 30 unique stock picks you took back home. You’ll remember engaging speakers like Steve Forbes, Dennis Gartman, Doug Casey, Bill Bonner and Rick Rule. You’ll remember the deluxe accommodations at the Fairmont Vancouver and night after night of four-star dinners and perfect summer weather in Canada’s most cosmopolitan city.

We’re on our eighth year, and the Symposium just gets better and better. This year is no exception. Some of the speakers will be the same… and the stock picks equally as profitable. But we’ve added the Hon. Congressman Ron Paul, James Howard Kunstler, Nassim Nicholas Taleb and a few other heavyweights to the speaker list. Not only do you get profitable advice, but you get to chat personally with some of the most engaging writers and thinkers working today. Please make time to join us!

Click here to learn more about this year's “Rim of Fire” theme, along with more information on the Investment Symposium -- early-bird pricing is still available -- Agora Financial Reserve Members attend free.