Thursday, August 05, 2010

Big price jump following next crop report

The next major USDA international crop report is due August 12, 2010. Watch for a big jump in prices thereafter ... surprise to the upside folks (unless you are a humanitarian, in which case you'll consider it as a crash to the downside) ...

The classic definition of inflation, as I remember it from my college days, is "Too much money, chasing too few goods." Most concerned with inflation these days have all the argument on the "too much money" side of the equation - does it arise from monetary issues, or fiscal imprudence? They totally forget the other side of the equation, because it rarely is the problem - the "too few goods." Watch for this to be the difference in the coming years, as agricultural production declines ("too few goods") begin to become part of the "new normal".

Quote of the day:

Global warming will be the most important investment issue for the foreseeable future. But how to make money around this issue in the next few years is not yet clear to me. In a fast-moving field rife with treacherous politics, there will be many failures. Marketing a “climate” fund would be much easier than outperforming with it.
- GMO's Jeremy Grantham

As a side-bar note, I get tired of dealing with dum-dums who, for reasons of mental and emotional convenience, want to continue denying global warming. The comment forum is open as always, but if you disagree with what real, professional climate scientists say, please take it up directly with them. If you have a stunning piece of scientific evidence that disproves one side or the other, don't waste time on my channel, write a paper, get it peer-reviewed, and then published in a reputable journal.

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JW The Confused Capitalist

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