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Veteran Contributor

Re: Barometer's and thermometer's

JR China buys foreign grains for a completely different reason than the currency rate. They buy them to feed their people. They may purchase some form SA or US depending on the exchange rate that week but in the long run they cannot stop buying and no one else has enough to support their needs, I would be more interested in knowing how many new combines, tractors, and planters are being delivered to China. If they can modernize and double their production that would reduce their foreign purchases and slow our export demand.

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Senior Contributor

Re: Barometer's and thermometer's

Don't take my grade to heart.

 

But as for fertilizer and the like I believe there are fundamental global needs in the market for higher prices. Production around the world is expanding, especially, again, in developing countries. I can't attribute higher prices for that to monetary policies in the US. Demand in the market an devaluation of currency are not the same thing.

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Veteran Contributor

Re: Barometer's and thermometer's

In Reagonomics, higher interest rates were not inflation but the cure to inflation.

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Veteran Advisor

Re: Barometer's and thermometer's

SWO you are right the reason China buys is to feed it's people. The reason China buys from us is because they have incentive to buy because of the currency relationship. I will also acknowledge that they are buying now from us because to get them from Brazil is very difficult.  But when they are available to them again whatch how the currency play dictates who they buy from.

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Veteran Advisor

Re: Barometer's and thermometer's

Pal I respect your opinion.  It is worthy of weighing all options and opinions right now. 

 

Demand in the market are not the same you are right. And while there are real demand issues as well as supply issues that cause world demand to increase. Look at it like this:  IF the dollar wasn't worth 30% less than two years ago what would fertilizer cost to us?  So the world demand is worthy of a price increase but is it enough to double nh3?  I say no that is a function of our weak dollar. 

 

So now are you saying I got graded on the curve?

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Veteran Advisor

Re: Barometer's and thermometer's

Red Rotor hows things in Packer land? Are you gonna go to the big game? Or just sit at home and watch?

 

While Reagen gets the blame for the huge interest rate hikes they topped at 20% ( prime peaked at 21.5%)  In June of 81 hardly enough time for Reagen to have been the major influence in the rate hikes.

What Reagen did was to slow the prinitng press which caused the slowing of monetary volocity which lowered inflation which brought down commodities.

Here is something about paul volker

http://en.wikipedia.org/wiki/Paul_Volcker

 

I wasn't able to get that link to work so ttry this.

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Veteran Contributor

Re: Barometer's and thermometer's

Continuing with the traders mood.  The correction will last longer if the Packers beat the Steelers.  If the Steelers win, I would expect the following Monday to be to the upside. Kinda of fun watching to see if any of these 'out there' theories hold water.

Overall, nothing has changed.  Out here is my corner of the world, more and more bins are empty or soon will be...much ahead of schedule.  Alot of grain will be sold to pay the rents due March 1.  Much more than in the past, many rents are 100% due on March 1.  With rents now greater than many farm land payments of past years...a big chuck of change is needed.  The prepays I did to pay for seed, chemicals and fertilizer are now  as much as my total operating expense was a few years ago.

I like the idea of having a 'winter sale' on grains...keep the demand coming. 

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Senior Contributor

Re: Barometer's and thermometer's

No, Reagan had little to do with it. Volcker, hired by Jimmy Carter, arbitrarily raised interst rates and let the economy crash into a wall to 'reset' it. You will find that Reagan's term had higher deficits and added more to the debt.

 

The one thing Reagan did do to partly offset increased deficit spending was to 'reform' the tax code. That essentially raised taxes and increased revenues.

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