Natural Gas Plunge

[errolanderson]

Sure seems everything is sky rocketing! And to fast! When is the rocket going to run out of power? It's going to come crashing down and it ain't going to be good

Yup . . . .

[biglentil]

As price inflation runs real interest rates become more and more deeply negative. Its like pouring gas on the fire to be able to borrow much below the rate of inflation. The 🚀 can run until the dollar becomes confetti. All that backs the dollar is confidence in its purchasing power. That confidence is quickly waning. Next stage dollars become like hot potatoes as no one one wants to hold them long. As the expectation that goods will become more expensive tomorrow become assumed by the masses, price inflation becomes a self fulfilling prophecy. Consumers begin to say I better buy today because it will be more expensive tomorrow, and dealers say I have to raise my prices in anticipation of my restock being more expensive tomorrow. In Weimer Germany for example husband's would run their salary to their wives to spend it as quickly as possible. Also retailers would charge 50% premium on taking a cheques because by time the cheque cleared it had lost 50% of its purchasing power. One famous story nearing the end of the 6month hyperinflationary cycle a robber stole a wheel barrow full of money and dumped the money on the street as the currency was nearly worthless

[TOM4CWB]

Interesting that Yara lost 40% production capacity in the EU because of the shortage of NG. 100's of $m lost this year vs big profits last year. things are messed up for more than just farmers!

Cheers

[errolanderson]

Crude oil is the key lead in this inflationary push. But crude prices could also turn on-a-dime. Past history has shown this in-spades . . . .

Not all sectors are feeling the price joy.

Real estate is extremely vulnerable to a correction.That alone can blow the inflation candles out. Asia real estate is now starting to melt down.

The tech sector, clock is ticking with fallout in China. China’s economy may be at the beginning of prolonged economic weakness, measured in years.

Cow prices hit a 2021 low this past week. Hogs have ruptured, likely now oversold. Corn and soybeans remain in an overall downtrend.

Wait for the eventual discounts at the retail sector. Consumerism will come under attack. Extreme debt loads take no hostages . . . .

Central banks are hooped, no more silver bullets. Money printing days are numbered (IMO).

Inflate, inflate, inflate, until you can’t . . . .

[macdon02]

Keep in mind, commodities are inverse to bonds, so the higher your grain prices, the more toxic it is to govt debt. The better it is to become a saver rather then a borrower. My sources say this doesn't end till 2024 at the earliest. So how high can interest rates rise in the mean time? Im not the least bit worried about the economics of inputs. Finding the line in the beginning of a drought cycle that could last 8 years, similar to the 30s or 1870s, is going to be much tougher. Im definitely lowering yields expectations from the previous 10 years. Higher rates, higher inputs, higher cop, higher cost of borrowing. I'm expecting a doubling of breakeven, at minimum. I can't wait till real inflation kicks in and all those that have benefited from zirp are on the losing end. We aint seen nothing yet. Google "contagion" and speculate where the massive amounts of $ regulated into holding govt debt after 08 will flow...... unrealized gains are about to be taxed so equities will like clockwork sell off on year end. The passive investor is going to need to learn schtuff.

[shtferbrains]

Interesting that Yara lost 40% production capacity in the EU because of the shortage of NG. 100's o1f $m lost this year vs bi110g profits last year. things are messed up for more than just farmers!

Cheers

$1100 Urea and Brandon was down for a refit in September.

Make more on less.

I would be afraid to stop a production plant for fear some parts might come up unavailable.

[ajl]

Spoke with a fertilizer dealer yesterday about gypsum fertilizer on solonetzic ground and discussed general fertilizer prices and availability. He did not think that there would be much price erosion on urea from the $1100 level until after seeding. However, he did remark that their urea shed was getting close to full so was not concerned so much about supply. I wondered why a urea shed would be close to full on Oct 25. To me it looks like there will not be any shortage of N next spring and the current price is well above market if urea sheds are getting close to full now. I am concerned about phosphorous.

[Kraut]

They stayed high enough long enough so sask residents got a rate increase in heating their homes.

SaskEnergy still the cheapest rates in Canada

[Guest]

SaskEnergy still the cheapest rates in Canada

well, theres something sask. party did for us

[biglentil]

Central banks are hooped, no more silver bullets. Money printing days are numbered (IMO).

Inflate, inflate, inflate, until you can’t . . . .

If deflation results like you say that would mean they can print dollars to infinity without consequence. That's nonsense there is no such thing as a free lunch. They can inflate until the dollar becomes more valuable as fuel to heat a home or is a cheaper alternative to wallpaper. There is nothing new under the sun and it's never different this time. Cash ain't king, cash is trash.

[errolanderson]

Coal prices in China are now off nearly 25 percent since early October. This almost appears classic, speculators are frothing about inflation right at its peak?

If selling spreads into crude oil, this could trigger a more broad-based setback in global commodity prices. We’ll all know soon . . . .

[Hamloc]

Coal prices in China are now off nearly 25 percent since early October. This almost appears classic, speculators are frothing about inflation right at its peak?

If selling spreads into crude oil, this could trigger a more broad-based setback in global commodity prices. We’ll all know soon . . . .

On Reuters: “China coal prices notch worst week since May on govt intervention.” I would it would be difficult for China to do the same thing to oil as it doesn’t export oil nor does it control enough of the resource. I still think European and North American government policy will keep the oil market strong.

[jazz]

If you dont have a portion of your portfolio in FF, you are going to miss out on the biggest supercycle in the history of peoplekind. LOL

[sumdumguy]

What is FF?

[ry0972]

FF + Fossil Fuels, Eg oil and gas producers, coal and uranium as well.
Refiners, pipelines, exploration and mining/drilling companies, etc.