Barometer's and thermometer's

[jrsiajdranch]

Patriot. I am glad I am not all wet this morning! I would be frozen for sure!  The extension cord to the feed wagon tractor got unplugged so I am waitng a few hours to feed some of the cattle as that tractor won't start.

I am not afraid or worried. I know who keeps me and protects me and it is not the federal goverment or ME! 

That being said I just wanted to get some folks to stop thinking that the ecomoics of the farm economy are based solely on the supply demand fundementals or the ethol mandate. What we have going on is inflation pure and simple!   Given the fact that we are not going to have a shortage of corn.  We are not in a demand driven market that justifies the price of grains.  SHould it be higher? yes. But the level it should have raised to was to eliminate discriminatory use.

But instead what we have is an inflation driven bull market not a demand driven one. 

[RayN]

"Given the fact that we are not going to have a shortage of corn."  Maybe not of $6.00 corn (which remains to be seen), but for sure a shortage of $4.00 corn.  I guess I'm not following your thinking.

[NDf]

If corn and beans aren't in demand driven bull markets tell me what would happen if  China would stop buying beans and cancel previous orders and the government would stop ethanol in its tracks. The price of both would drop like a rock. Could prices be higher than justified yes but I think it has more to do with over speculation than inflation. The reason we aren't going to run out of corn is that prices are going up if the price would of stayed at $4 we easily coul have.

[jec22]

Now I believe the markets are supply and demand driven.  BUT....since the board of trade is in Chicago...does a Bears win, mean a move to upside and a Bears loss a correction down?

[redrotor]

I believe a Bears loss was already factored into the market.

[Palouser]

I'll give you a B+ for mental effort, but I think you're all wet. All the factors you mention have their place but the relationships are HIGHLY conditional.

No, the money supply is not necessarily a cause for inflation, that's why I'm curently refinacing a house at 4.5%. Why? Because there is plenty of money that would like to get that return. The speed money circulates is a major cause of inflation - and money is not circulating very fast right now. Some hope to get a better return on commodities - because we have a supply concerns. It's for sure there are few other areas of the economy where money can get a sure return. The consumer has been hurt and changed their ways - many forced to. Nothing like the 70's when the consumer and economy were hot - NOT JUST COMMODITIES - which were driven by real shortages. There are great quantities of money out, but the circulation here is poor. In different parts of the world it is the same AND different for varying reasons.

Don't measure inflation by the commodity issue alone. After all, say copper, is actually being used in great amounts - it's not just money chasing it.

I believe you show signs of wanting an ideology to be proved out and you are looking at everything that will support that view. I'm not sure it will work that way.

[jrsiajdranch]

A b+!  Not much inflation in your grade scale!  Well the issue is that as you look at things you view them as a fudamentals driven mkt. I say that the mkt. is being driven by gov. intervention in a managed mkt. What does it mean?

I think that selling for any reson other than cash flow is your biggest rik. After you sell you had better buy inputs as they willl be higher for as inflation kicks in.  Don't you think that the rise in interest rates that are coming head on won't they just cause more inflation?  Don't you think interest is headed higher?

[jrsiajdranch]

RayN Welcome to the board!  Sorry I have been busy so I haven't had a lot of time to post. What I meant was that according to the Corn carryout we are not running out of corn.  Yes you are right we might be all out of $4 dollar corn but we might have a huge surplus of $7. 

[jrsiajdranch]

China won't quite buying from us for one readon.  THe currency play makes our beans cheap to them. THe real is actually stronger against their currency so it hurts China to buy from brazil. 

And if ethol stops then guess what? Gas is goin thru the roof. so I thi8nk the Gov. created the monster and now the monster controls the master. Excellent reason to keep gov. and business seperate.

[jrsiajdranch]

The bears were this years make believe team!  At least this way Obama won't be at all the super bowl hoopla!