Wednesday, June 15, 2022

The Great California Exodus... to MEXICO: Thousands flock south of the border to escape the crippling cost of living under Biden and Governor Gavin Newsom

Thousands of Californians are fleeing to Mexico amid the soaring cost of living in the golden state. Americans taking advantage of work from home are reaping the benefits of US salaries, while living off Mexico's cheaper lifestyle.

Others are living in Mexico, while commuting to work in the US. But critics have argued that the influx of Americans in cities south of the border has begun to price out local Mexicans.

It comes amid a wider exodus of Californians to other states across the US, including Texas, Washington, and Arizona.

Many feel forced out by rocketing inflation in the golden state that has gas, grocery, and living costs soaring under Governor Gavin Newsom.

'I would say at least half are coming down from California,' Darrell Graham of Baja123 Real Estate Group told CNBC while speaking about the real estate trends he has seen.

'Suddenly the cost of taxes, the crime rates, the politics, all the things that people are unhappy with in California are are coming down to Mexico.

Travis Grossi, a content creator who moved to Mexico in 2020, paid $1,600 a month for a one-bedroom apartment in Hollywood, while in Mexico his rent became $850 per-month for two bedrooms, three bathrooms, a shared pool, and 24-hours a day security.

'We were able to cut our budget in half, which allowed us to really focus on our careers and the things we wanted to do artistically without having to just hustle, and hustle, and hustle, every day, every week to just meet the bare minimum,' Travis Grossi, told CNBC.

Monthly rent in Mexico can average as little as $430 per month, while rents can average as high as $1,500 north of the border in San Diego.

The population of California continues to shrink, as residents flee the state's high cost of living and rising crime.

California's population declined again in 2021 for the second consecutive year, state officials said in May, the result of a slowdown in births and immigration coupled with an increase in deaths and people leaving the state.

Critics point to the steady stream of people leaving California as an indictment on the state's policies, which are set by Governor Gavin Newsom and his fellow Democrats in the state legislature.

About 280,000 more people left California for other states than moved here in 2021, continuing a decades-long trend.

With an estimated 39,185,605 residents at the end of the year, California is still the most populous US state, putting it far ahead of second-place Texas and its 29.5 million residents.

But after years of strong growth brought California tantalizingly close to the 40 million milestone, the state's population is now roughly back to where it was in 2016 after declining by 117,552 people this year.

Though the life is good for California ex-pats living in Mexico, the trend has begun a process of gentrification that is pricing out local Mexican citizens who aren't paid in US dollars.

'Certain neighborhoods are now becoming too expensive for Mexican citizens to live in because most of the time people that are actually buying the property developments are being able to do so because they either make money in US dollars, or because they are working remotely,' said Ariel Ruiz Soto, a policy analyst at the Migration Policy institute.

Exactly how many Californians have relocated to Mexico have not been documented, but as of 2019 it was estimated that at least 1.2million Americans lived in the country.

The trend comes as average cost of a gallon of gasoline in the US has risen to $5.014 as grocery costs saw the highest surge in a year since 1979.

Gas prices are up $1.94 from this time last year, spiking 50 cents in the last month alone, according to the AAA Gas Price Index.

The national average passed the $5 mark for the first time in history over the weekend, and President Biden deflected blame for soaring prices to Russia once again.

Meanwhile the cost of groceries rose 11.9 per cent from this time last year, the sharpest increase the country has seen since Jimmy Carter was president.

The Labor Department's report on Friday showed the consumer price index jumped one percent in May from the prior month, for a 12-month increase of 8.6 percent - topping the recent peak seen in March.

The new figures released on Friday suggested the Federal Reserve could continue with its rapid interest rate hikes to combat what has been coined 'Bidenflation,' and markets reacted swiftly, with the Dow shedding around 600 points.

Markets continued to drop during early trading on Monday, as fears of a recession grow stronger.

The runaway inflation rates are hurting American wallets outside of the gas station, most notably at the grocery store.

Grocery costs have increased at staggering rates, and are expected to only keep climbing as the crisis continues.

The price of eggs has risen 32% and poultry is up 16.6% since the year began, following a bird flu outbreak in January that killed off roughly 6% of commercial chickens.

Embargoes against Russia have also led to increases in the prices of grain-based foods, while fats and oils are up 16.9%, and milk is up 15.9%.

As inflation-borne production costs climb, producers and retailers alike have indicated that they will be forced to continue hiking prices.

Overall, global oil prices are rising, compounded by sanctions against Russia, a leading oil producer, because of its war against Ukraine.

In addition, there are limits on refining capacity in the U.S. because some refineries shut down during the pandemic.

The combined result is seeing the cost of filling up surging, draining money from Americans who are facing the highest rate of inflation since 1981.

Surveys show that Americans see high inflation as the nation's top problem, and most disapprove of Biden's handling of the economy.

A top UK economist scolded the Federal Reserve Bank on Sunday, suggesting that the current inflation could have been avoided but for the naivete, or arrogance, of the central bankers who dismissed rising prices as temporary.


The federal government is sitting on 22 million acres of farmable land during a global food crisis. Biden should tap it.

The federal government continues to pay farmers not to farm on some 22 million acres of farmlands that are a part of the voluntary Conservation Reserve Program, established in 1985 to address soil erosion and other environmental impacts caused by farming, even as the global supply crisis, the war in Ukraine and bad weather are all combining to reduce global agriculture production in 2022, threatening starvation in the third world.

In any given year, before the Covid supply crisis or the war in Ukraine, 9 million people were already starving to death each year, according to global health estimates by the United Nations and the World Food Programme.

Now, that crisis could get even worse, as global wheat production is taking a major hit, according to the latest data by the Department of Agriculture in May: “Global production is forecast at 774.8 million tons, 4.5 million lower than in 2021/22. Reduced production in Ukraine, Australia, and Morocco is only partly offset by increases in Canada, Russia, and the United States. Production in Ukraine is forecast at 21.5 million tons in 2022/23, 11.5 million lower than 2021/22 due to the ongoing war.”

Recently, wheat has been particularly hard hit, with U.S. wheat production down 15 percent since 2019, from 1.93 billion bushels in 2019 to 1.64 billion in 2021, according to data compiled by the U.S. Department of Agriculture.

According to a March Department of Agriculture release on prospective plantings, 2022 will be the fifth lowest area planted since 1919: “All wheat planted area for 2022 is estimated at 47.4 million acres, up 1 percent from 2021. If realized, this represents the fifth lowest all wheat planted area since records began in 1919.”

Just on June 7, Peter Sands, the executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, told Reuters that the current global food crisis could kill just as many people as Covid. To date, almost 7 million people have died globally from Covid.

Sands warned: “Food shortages work in two ways. One is you have the tragedy of people actually starving to death. But second is you have the fact that often much larger numbers of people are poorly nourished, and that makes them more vulnerable to existing diseases… It’s not as well-defined as some brand new pathogen appearing with distinctive new symptoms. But it could well be just as deadly.”

Meaning, millions more could starve — more than usual — if global agriculture production does not soon catch up to demand.

So, what are we doing about it? On May 11, President Joe Biden told the nation that U.S. farmers were “expanding production and feeding the world in need” this year. But so far, Biden only pointed to a federal insurance program to incentivize farmers in the short term to engage in double cropping, whereby fields are planted twice in a season and harvested early.

That might help. But what about the 22 million acres that the federal government is sitting on as a part of the U.S. Department of Agriculture’s Conservation Reserve Program? Why aren’t we tapping that as is already allowed under federal law?

Specifically, 16. U.S.C. section 3833(b)(1)(B)(i)(I)(cc) allows the Secretary of Agriculture to allow for farming on lands in the Conservation Reserve Program when there is a drought or another type of emergency: “The Secretary… shall permit certain activities or commercial uses of established cover on land that is subject to a contract under the conservation reserve program if… the Secretary… includes contract modifications … without any reduction in the rental rate for … emergency haying, emergency grazing, or other emergency use of the forage in response to a localized or regional drought, flooding, wildfire, or other emergency, on all practices, outside the primary nesting season, when… the Secretary … determines that the program can assist in the response to a natural disaster event without permanent damage to the established cover…”

We have all of the above. There’s a drought in the southwest United States presently. There’s too much rainfall in North Dakota. There’s also the overall global supply crisis and the war in Ukraine.

Overall U.S. agriculture production has been down, with planted acres recently peaking at 319.3 million acres in 2018, according to data compiled by USDA. In 2019, amid flooding, it was down to 303 million acres planted, 310 million acres planted in 2020 during Covid and 317 million acres planted in 2021.

And that is far below the level of farming that used to take place here. Acres planted actually peaked in 1932 at 375 million acres planted. That was right before the Dust Bowl of 1934, which drove planting down to 339 million acres planted before recovering to 361 million acres planted in 1935.

Then, with the advent of suburbs, agriculture production took further hits in the 1960s, when annual land planted was down to less than 300 million acres. It experienced a resurgence in the 1970s and then peaked again at 361 million acres planted in 1981.

Those numbers took a big hit, though, after the 1985 Conservation Reserve Program was established. In 1985, before the program took effect, 353 million acres were planted. In 1986, that number immediately dropped to 338 million acres planted. And in 1987, it was down to 315 million acres planted.

If there ever was a valid basis for President Biden and the USDA to take exception to the Conservation Reserve Program, this is it. These farmlands should be planted before it is too late. My worry is that we will look back on this situation in a year or so and ask, “Why didn’t we plant more?”




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