AgTalk Home
AgTalk Home
Search Forums | Classifieds | Skins | Language
You are logged in as a guest. ( logon | register )

The market doesn't owe you a profit
View previous thread :: View next thread
   Forums List -> Market TalkMessage format
 
1586
Posted 9/1/2014 08:29 (#4049867 - in reply to #4049768)
Subject: RE: If we're going to get all philosophical here ......


1234 - 9/1/2014 06:36

If we're going to get all philosophical here please allow me to pontificate.
Humble Farmer, I respectfully disagree. The futures market supposedly exists to facilitate "Price Discovery" and allow producer & users to hedge production and needs. But when you look closely at its structure and function I'm not so sure I agree. Particularly when you look at the participants today and consider their individual interests. For instance originally the traders and speculators were supposed to act like insurance underwriters (Old MacDonald). But today the size & economic muscle of the money managers and speculators is three times that of the Commercial participants (producers & endusers). What started out as a simple system of hedging has become an institutionalized system of extracting money from your part of the economy.
Leaving the question of fairness completely aside, this economic system was invented by "men" and there is no legal or moral requirement that you are obligated to follow it. You can choose to but you don't have to. You and I mean you collectively (including myself) simple need to decide where the benefits are sufficient and penalties acceptable.
Let me make an analogy, slavery was an economic system that relied on a political system for its legitimacy. It wasn't a very efficient system because it required brutal coercion to maintain and the workers weren't very willing. It very well may have continued to exist today except enough people came to believe that its penalty to the many far out weighed the benefits to the few and the few could no longer impose their will on the others. Remember moral outrage very often disguises economic interest.
Enough of this.


Follows along with your post about the $20B. It has to come from somewhere. Each market will endure this at some point, Cattle in a year or so etc.... So you can enjoy it on the upside but the down is the bugger. But from an economic standpoint grains were highly undervalued for many years. Coming into the 2000's the BTU content was finally realized when oil went as high as it did. It's all tied together. Had oil stayed down at $20, NO ethanol. The value in comparison is still pretty amazing. I can heat my house for half the price of LP for the same amount of BTU's. Diesel is nearly 1/3! Remember the raw material idea!
Top of the page Bottom of the page


Jump to forum :
Search this forum
Printer friendly version
E-mail a link to this thread

(Delete cookies)