Yet another chart that perfectly tracks the performance of the S&P (or Fed balance sheet). Guess what it shows…
The answer – and in this case perhaps correlation and causation are one and the same…
Opium Production has reached new record highs…
With the US illegal drug market growing dramatically (as we noted here), opium supplies have surged…
Opium poppy cultivation in Afghanistan rose to a new high of more than 200,000 hectares in 2013, a 36% increase over last year, the United Nations Office on Drugs and Crime said Wednesday. The report, part of the agency’s annual survey, indicates a grave trend for the country as U.S. and NATO forces withdraw over the next year.
…
The 2013 figure represents the highest total cultivation ever for Afghanistan, surpassing the previous peak of 193,000 hectares in 2007. Total opium production reached roughly 5,500 tons, an increase of 49 percent since 2012. Opium prices fell slightly, but according to the report, the farm-gate value–the price of a crop when the farmer sells it–increased by almost a third. Nearly $1 billion of raw opium came out of Afghanistan last year, accounting for 4% of the country’s GDP.
…
The motivations behind opium cultivation are clear. In this year’s U.N. survey, nearly three-quarters of famers said they harvested the crop because of high income from little land, and 44% cited the high sale price of opium. Of the farmers in the survey who never cultivated opium, 60 percent said because it violates Islam.
And as one would expect with high supply, prices (in USD) have dropped…
One has to wonder what is driving all this demand? Perhaps it is the collapse of the middle-class and America being #1 in the world for Fear, Stress, Anger, Divorce, Obesity, Anti-Depressants...
Source: UN
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/QOWQUg3AjX4/story01.htm Tyler Durden