Blockbuster growth of JBS in its second half century of operation sends off alarm bells in Washington. Senator Kohl of Wisconsin calls on Department of Justice to block increasingly dominate presence of JBS in the US.

Reading the report from the Wall Street Journal, one could get the impression that JBS SA of Brazil is simply a well-run family business taking advantage of opportunities currently present in the international beef processing market. Under this scenario, Senator Kohl's efforts to block JBS acquisitions in the US look like blatant protectionism to aid US meat packers and cattle farmers. What we are really witnessing however are the gyrations of government operatives intervening in what little is left of a free market.

José Batista Sobrinho and his family are not some local butchers who have simply made good on the sweat of their brows on their way to becoming the world's largest meat packer. The secret of their pending domination of both the world and US beef processing markets is revealed in these two paragraphs late in the WSJ article:

Swift & Co., which traces roots to the 19th century, had been struggling with its beef business for years. In December 2006, Immigration and Customs Enforcement officials raided Swift plants in six states, arresting more than 1,000 workers. Swift estimated that the incident cost it about $50 million. In January 2007, Swift announced it was considering a sale.

JBS had been interested in the company for years. At least two other big meat companies, Cargill and Smithfield Beef, also expressed interest in buying it. In May 2007, JBS agreed to buy it for about $225 million, plus the assumption of $1.23 billion in debt. In order to complete the deal during the U.S. credit crunch, JBS turned to Brazil's government bank for $600 million of equity financing, which left the bank with a 13% stake.

Before anyone applauds the U.S. government for exercising one of its few constitutionally authorized functions when it stormed into the Swift packing plants to arrest company employees who had entered the U.S. illegally, try to name one or two other major businesses in the U.S. that have had federal officials coordinate raids on their facilities spread across several states. With dozens of major U.S. corporations is the same boat as Swift, was Swift just the unlucky one in the draw to make an example out of someone? Perhaps. Curious minds may wander however... 

[As is well known, during the reign of George W. Bush, the federal government has done next to nothing to punish companies who subsidize their labor costs (with other people's money) by employing people who have entered our country illegally. Perhaps the only notable exception to the gross lack of effort by federal authorities were the dramatic Christmas season December 2006 raids at Swift. These occurred just as the move to pass the McCain-Kennedy amnesty bill was heating up. In a single swoop, the raids removed nearly 1300 illegal aliens from the Swift payroll. Only five months later, the two holding companies who owned Swift concluded their deal to sell off the company to JBS SA of Brazil. Who, one might ask, were these two holding companies who got raided likely right in the middle of negotiations to sell off one of their market plays?  Apparently not important for you to know as far as the main streammedia have been concerned. For the curious however, the two privately held companies were HM Capital and Booth Creek Management. These companies just happen to be owned by George W. Bush's former baseball business partners, who remain on his current lists of friends and campaign donors. We swear we don't make this stuff up.]

Whatever the ultimate purpose of the raids, Swift has ended up on the chopping block, with JBS poised to be the winning butcher ... courtesy of a $600 million dollar line of credit from Brazil's central bank. Where is this $600 million coming from? Like all central bank money — from thin air. It is always easy to look like a business genius when you have access to fresh counterfeit money. What JBS SA has is an option rarely open to family run cattle farms and meat packing plants unless they are on the approved list of winners. 

Of course, market giants like Cargill can also tap into new money from our own central bank, the Federal Reserve. At the moment, though, our (sic) FED is a bit distracted and likely can't be bothered with which company controls the beef production market in a country of vanishing borders. Then there is the other problem — besides any involvement by Bush family cronies. Why would our FED create new money to counter action under-written by one of its best customers? Try as he might to pretend he is fighting for America's cattlemen and ranchers, at some point someone is going to show Senator Kohl the data table showing Brazil as the the fourth single largest holder of FED brokered U.S. treasury bills (a position Brazil has obtained by nearly doubling its holdings over the last year).

Like many issues in this world, we best start to understand things when we follow the money.

Taking this path usually brings us to this conclusion: The way back to both national and personal independence starts with abolishing our central bank. Use our JBS Capwiz system to tell your congressman now to support Ron Paul's bill to abolish the FED. Show the Washington insiders that the JBS they should be most worried about is based in Wisconsin not Brazil... or Denmark.   

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