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| are more dangerous than standing armies. Thomas Jefferson.
http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html
http://www.investmenttools.com/thefed/fed_funds_rate.htm
If you check out these websites you will note the lower lows in fed funds required to keep this economy on the rails.
Deduct the inflation rate to determine the Real Cost of money.
Someone posted the other day, the thought Mr. Bush will not want to leave office with the economy in a shambles & that he will pull all levers necessary –bar the expense to future generations to do such. I think that is right on the mark.
My opinion is not worth any more than anyone else on this forum but I do notice a great deal of interest in producer selling crops two years down the road. While this may be a sound strategy, I am just beginning to work some calculations on demand and world supply alternatives for 2010. While I have not yet reached to point of any sound conclusions yet, there is one other thing also which bothers me and that is related to past experience. It always seems when ag producers do something en masse’ –it sometimes has been wrong.
In my mind, if we face a short term train wreck, it is most likely to happen in the next 6-16 months & I view the banking crisis as one element and China as the other should they overdo their controls to slow their economy.
Last night and early this morning, I spent a lot of time reviewing our seasonal relationships in grain and the relationships between grains and oil seeds. No conclusions there yet either, but these markets may be on the verge of creating different profiles due to the bio products.
Between the expense of the war, and soon rebuilding our defense arsenal & giving away $$$$ & politicians in a panic mode, (really panic if the stock market fails again) we could pump a lot of dollars into this thing. This is an election atmosphere & in my mind it will be give, give & please don’t ask any detailed questions. Should we ever reach the point (negative fed funds???) & the tax collections decline….the fat lady may then sing, but that could be quite a ways down the road yet & someone will have come up with a new way to glue this thing together.
If I were a producer at this point, and not wanting to tie up capital in futures trading, I would adjust to using option strategies & when these strong prices are experienced, learn to use puts on strength (or write calls & while more interest risk, you do have inventory & earn the premium) which permit some flexibility when prices decline sharply but yet retain a strong undertone with the possibility of again making new highs.
As someone posted yesterday, one day does not make a trend, and I for one, being long beans & wheat & short corn am just going to wait a couple of more days to watch how the world digests these activities. Patience is sometimes a good thing.
Edited by SeniorCitizen 1/24/2008 12:57
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