Posted on 06/11/2008 6:56:59 AM PDT by Ron in Acreage
Anything's possible, but that doesn't seem to be a favourite, so far this crop year. China has lost some rice acreage, Austraila (formerly an important swing supplier in rice) is still way too dry to revive its rice industry, and the US crop was planted late and is losing yield potential due to the wet weather. Other nations have (temporary) surpluses, but will not, for internal political reasons, export any of the surplus.
These topics are not as simple as some posters would make us think.
When I saw your thread headline, I thought “PB Post” had something to do with more ravings from Pat Bucannon. Instead it is the ravings of a Marxist newspaper.
When we start encouraging the regulators and Congress-critters to get involved in limiting access to financial markets, those markets will just find their way to overseas markets and America will see another important role it used to have going away. Investors come in all sizes and shapes. Some are speculators and some are passive investors. They all play a role in our economy and the speculators provide liquidity for the entire system.
I just shake my head everytime I see Congress trying to “fix” something. The unintended consequences are always overlooked, ignored and under-appreciated. Henry Hazlitt’s “Economics in One Lesson” should be required reading (and rereading) for every member of Congress and for every top official in all the bureaucracies in the US government.
The Op Eds at The PB Post should be required reading for all right minded thinkers. You will see the daily Marxist rant that its readers are exposed to on a daily basis. As Glenn Beck says, blood will shoot out of your eyes. Get the duct tape.
It will also explain the idiots we put in office like Wexler, Nelson, etc.
...and if at some point the government decides the value of your property is too expensive, would it be OK for it to confiscate it?
Elsewhere in the WSJ piece are the words ...
But determining what's behind the escalation in commodity prices involves a principle to which economists universally pay lip service but in practice often ignore or forget: the distinction between nominal prices and relative (real) prices. Nominal prices of commodities are determined by the value of the currency used to stipulate them, while relative prices of commodities are determined by supply and demand - scarcity, glut and other "real" causative factors.
Fiduciary responsibility, is it? Can you say 'prudent man rule', a fixture in American fiduciary law for 175 years or so? What in the world is 'prudent' about speculating in mkts that routinely are changing 3-4-5 % per day?
This topic IS simple: pension funds have no damned business in spec mkts.
Further, unlike crude, rice is very distinctly NOT universally priced in USD, but rather in currency or currencies convenient to the buyer(s) and seller(s) of rice cargoes.
This notion that rice prices are elevated because USD is weak is so much claptrap (or another word that rhymes with 'claptrap'). Weak USD **might** be a minor contributing factor; Big Daddy in this deal is supply, supply, supply.
The WSJ article focuses on the "cumulative change in the price of rice, following months in which the gold price rose more than 10%, less than 10%, or declined, 1949-2007"
“...and if at some point the government decides the value of your property is too expensive, would it be OK for it to confiscate it?”
My property does not fuel the economy of this nation, I rent. No one is ever going to fight wars because of what is in/on my property. No, I am not saying that the Iraq War was for oil, that is stupid. I AM saying that if they had NO oil, no one would give a crap about “bringing the Iraqi’s Democracy.”
LOL, can’t help but notice that one bumper sticker is cheaper than gas at this point. I am buying one, it will be the first/only bumper sticker that I ever put on my car.
By vertical integration, do you mean that ExxonMobil should only refine the oil it pumps from wells it owns? Or that Valero needs to buy some wells?
Since the oil companies own only about 7% of the oil supply, and most of the rest is owned by sovereign governments who are in the market for selling wells, the only way for your vertical integration effort to work is to either
1. let Venezuela or Saudi Arabia buy ExxonMobil and Valero so they can vertically integrate.
2. Or, let Valero & ExxonMobil start drilling ....
The only thing vertical integration would change in this political environment is that politicians would have only one place to apply price controls that would ripple down to the well head. Of course, all that will do is shut down the wells as the owners wait for a better political climate and a better price.
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