Rogers and Soros are snapping up farmland right now. These two old hands are betting that demand for food will soar, pushing up the price of arable land. This from MoneyNews.com:

Falling commodity prices aren’t bringing prices for farmland down with them. Even as the price of grain goes down, the cost of the land it’s grown on keeps going up, leading George Soros and other guru investors to bet big on agricultural land.

The fundamentals are easy to understand: Over the next 40 years the population of the world is projected to grow from 6 billion to 9 billion, hugely increasing the strain on arable farmland worldwide.

The spiking grain prices that caused food shortages and rioting in dozens of countries in spring of 2008 fell some 50 percent by December. Yet even after the correction, grain prices remain above their 20-year average, and food stocks around the world are still near 40-year lows.

“Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050,” Joachim von Braun, director general at the International Food Policy Research Institute, told Fortune Magazine.

“With limited land and water resources, this will automatically lead to increased valuations of productive land. And it goes hand in hand with water. Water scarcity will probably increase even more than land.”

“I’m convinced that farmland is going to be one of the best investments of our time,” says commodities guru Jim Rogers.

Long-suffering readers will know that we’re bullish on the PowerShares DB Agriculture Fund (NYSE:DBA). But there are a number of other ways to invest in the ag sector.

These include agricultural chemical companies such as PotashCorp (NYSE: POT) , Mosaic (NYSE: MOS) , Agrium (NYSE: AGU) and Terra Industries (NYSE: TRA). Also worth considering is farm machinery outfit Deere (NYSE: DE) and farm products company Archer-Daniels-Midland (NYSE: ADM).

• The National Association of Home Builders /Wells Fargo Housing Market index held at 16 in August for a second straight month, the group said yesterday (Monday) in a statement. Despite the weak reading, the NAHB said its members hope a recently enacted homebuyer tax credit would help the housing market regain some traction. “Builders are anticipating the stimulative effects of this legislation and are optimistic that the tax credit will give those buyers who’ve been sitting on the fence the reason they need to jump back into the market,” NAHB President Sandy Dunn said in a statement.

• Copper sales surged 8.8% in the first seven months of the year over the same period a year prior, in Chile – the world’s largest copper producer. Chile’s central bank said copper sales totaled $25.06 billion through the end of July. Total exports reached $45.62 billion through July, The Associated Press reported.

• Lowe’s Cos. Inc. (LOW) reported fourth straight quarterly profit decline yesterday (Monday) as earnings fell 8% to $938 million. However, total sales actually rose 2.4% to $14.5 billion. The company said it now expects a full-year profit of $1.48 to $1.56 a share, compared to the $1.45 to $1.55 a share it forecast in May.

• BHP Billiton Ltd. (ADR: BHP), the world’s largest mining company, yesterday (Monday) reported record annual profit and said it expects demand for commodities to remain strong. Net profit for the year ended June 30 climbed 14.7% to $15.39 billion, from $13.42 billion in the previous year. Earnings before interest and tax, was $24.28 billion, up 21%.

• Mitsubishi UFJ Financial Group (ADR: MTU) yesterday (Monday) announced it had raised its bid for UnionBanCal Corp. (UB) to $73.50 per share, a total of $3.5 billion for the remaining minority stake. The sweetened offer represents a 17% increase from the initial $63 per share bid, which UnionBanCal advisors dismissed as too low, Reuters reported.

• The Air Transport Association of America predicted yesterday (Monday) that a combination of high rates and schedule cutbacks will combine to keep more travelers at home over the coming Labor Day holiday, BusinessWeek reported. The airline trade group estimates a 5.7% decline in airline passengers from Aug. 23 – Sept. 3 for the same period a year ago.

• The New York Mercantile Exchange, owned by Nymex Holdings Inc. (NMX), declared a temporary halt in the sale of seats (or trading rights) as its members meet to vote on a proposed merger with CME Group Inc. (CME). Sale of seats will be suspended between 3 p.m. EDT yesterday (Monday) and 9 a.m. EDT tomorrow (Wednesday), MarketWatch reported.

• Brinker International Inc. (EAT), parent company of Romano’s Macaroni Grill announced it would sell a majority stake to private-equity firm Golden Gate Capital Inc., The Phoenix Business Journal reported. “Golden Gate is well-known for partnering with corporations to help grow established consumer and retail brands,” Brinker Chairman and CEO Doug Brooks said in a release.

Source: Global Investing Roundups Tuesday, August 19, 2008

Today, The Sovereign Society’s Investment Director, Eric Roseman, says France’s Groupe Danone (EPA:BN) is another excellent way to play the downturn.

The world’s largest fresh dairy company posted strong earnings last week. And it is set to benefit from a correction in commodity prices.

Food stocks are popular recommendations during economic downturns.

Another great global giant is Groupe Danone (EPA:BN) of France.

Danone’s stock plunged almost 20% in June as panic-selling engulfed global markets. Danone’s earnings, announced last Friday, were way above consensus estimates and the stock is up more than 10% in July. Danone is the world’s largest fresh dairy company with a significant market share in spring water (Evian) and a host of other products.

Despite surging input costs for the food companies this year, the majority of these giants are successfully raising prices. Consumers are still loyal to their favorite brands – even in a slowdown or recession. They won’t change their coffee brand or morning yogurt for a lower cost alternative. I expect that trend to hold true over the next several months until stocks finally muster a bottom.

Finally, commodity inflation now appears to be waning. Oil and natural gas prices are down sharply this month leading to the first severe commodity correction since last August. Other commodities, including the agricultural commodities, are down sharply, too.

Lower commodity prices for the remainder of 2008 would boost corporate earnings. It will also help the food and beverages group enormously.

Source: Even During a Recession, Everyone Still Has to Eat

Sadia’s profits and shares are soaring in the midst of our historic bull market in food. The stock reached a new high this week… and Tom Dyson’s International Strategist readers are up 41% on the position.

Sadia’s big rise is an example of a trend we expect will last many years… a trend of higher living standards for billions of people who – once beaten down by the communist and socialist policies of the 20th century – are on the road to free-market living. The people of Eastern Europe, Brazil, India, and Asia now have a greater means to eat more protein, drive automobiles, and sit on comfortable furniture. Find niches inside this trend, and you’ll make an investment fortune.

Source: A Slam Dunk way to Invest over the Next 50 Years

But that’s just the way globalisation works. We have nothing against it, but neither would we mind if there were less of it. Which raises the big question: is the leveraged planet becoming even more leveraged…or less so?

Ah, dear reader…this is where inflation and deflation make common cause. They both deleverage the world…reducing the value of debt – either by defaults or by lowering the real value of the debt itself. That is the real story in the financial markets…and in the housing market: leverage is being marked down. A residential mortgage worth $200,000 two years ago may be worth only $150,000 now, for example. Bear Stearns – worth billions a few months ago – is now worth peanuts.

Inflation takes leverage down too. All those US dollars held abroad (and at home, for that matter)…all those dollar-denominated Treasury bonds…all those dollar denominated I.O.Us – they all lose value as inflation increases. Just take those two trillion odd dollars outside America. Every one of them is a claim against US assets – land, houses, tractors, food, stocks, buildings, you name it. And as inflation takes prices upwards, each of those dollars falls to the ground…it will buy less of what the US has to offer.

We have been talking about the battle raging between inflation and deflation. But this is one way to win, no matter which side comes out ahead. Want a sure bet? Bet on deleveraging. How do you do that? There are many ways. Sell the industry that provides leverage, for example – the financial sector. Sell Wall Street on rallies, in other words.

Yesterday was a good day to sell. After having gone up more in a single day than the entire value of the Dow in ’29, it was time to take profits. And that’s what investors did. The Dow sold off a little.

Gold, meanwhile, gave investors a buying opportunity. At $887, we’re not saying that that is the best price this correction will offer…but it wasn’t bad. And many buyers decided to take advantage of it. Gold rose back to $900.

Now let’s look at the US economy itself. Ah…so many foreclosures…so little time.

Food up 9%. Houses down 11%. What’s an upside down homeowner to do but walk away? According to yesterday’s USA Today, so many are walking away in Denver that it is producing an ‘Exodus’ of Biblical proportions. Some neighbours have one out of eight houses in foreclosure. City-wide, the total last year was one out of 32.

Where do these people go? They rent, naturally. Rental vacancy rates have fallen from 10% two years ago to 5% today

Meanwhile, from Manhattan come two bits of conflicting news: apartment sales are down to an 18-year low…but prices are at an all-time high. Buyers are holding back, in other words…but sellers hold out too – for more money.

Across the nation, repossession filings are up 93% from last year. And as we saw yesterday, food stamps are up big time. But there really aren’t any “stamps” any more. Now, the food comes via plastic, a type of credit card that can be used – theoretically – only for buying food. In practice, nice shopkeepers in bad neighbourhoods take the card and give back cash at steep discount. Say a $10 charge for 7 bucks worth of cash to buy life’s real necessities – liquor, cigarettes and gas.

It’s all going according to plan, as we see it. The empire is rolling over. Now, in its advanced, decadent phase, the imperial government must provide bread – in the form of plastic food stamps…and circuses – in the form of national party conventions, elections and foreign wars. The combination settles the public…and distracts them. They become docile, subservient, willing to stand in line to protect themselves from make-believe threats …and ready to put up with any nonsense, no matter how grotesque, absurd or faithless.

In the latest financial news comes word of new proposals to “regulate” Wall Street…and new initiatives to “save” homeowners. The free market is out. ‘Public responsibility’ is in.

Treasury Secretary Paulson:

“I think you will continue to see flexibility as we learn and go forward,” changing his tune from last month when he said proposals to use government funds were a “non- starter.”

Why are they a starter now? People come to believe what they must believe when they must believe it, is our observation. Both private citizens and the government too have taken on obligations that they can’t possibly fulfil. Since it cannot be paid, the debt must be made to disappear. The world – or at least most of the Anglo-Saxon part of it, must be de-leveraged. So, people must believe in a fantasy about how the government will “bail out” the homeowners… and how the Fed will “rescue” Wall Street.

How could they perform such miracles? When a man cannot pay for his house, can the feds make the mortgage disappear? When Wall Street has blundered –forgetting to sell its cheesy debt before it started to stink – what can the feds do about it? All they can do is to spray some deodoriser around the room.

Still, the voters have been conditioned by television, public education, and maybe something in the water; people will believe anything. And what they need to believe now is that the feds can somehow ease their hurt. This will make it possible to shift the debts that cannot be paid onto the government, where they will not be paid.

Among all the great debtors in the USA, circa 2008, only one has the power to pay its debts – no matter how large they are. Only one has printing presses that turn out pieces of paper with pictures of dead presidents on them. And only one can trade bad debt for political favour. That one is, of course, the US federal government…lender of first, last, and holiday resort.

Already, the Fed has taken onto its balance sheet some $30 billion in smelly collateral from Bear Stearns…and billions more from other financial institutions. That is just the beginning. Somehow, the whole shebang of mistakes, misjudgments, greed-stoked miscalculations will end on the shoulders of the US Treasury…on the backs of US citizens…and dollar holders all over the world.