Yellow Pea Chart

[wheatking16]

To answer my own question, isn't that exactly why the log chart would be more appropriate?

If money supply growth is compounding every year, then even if inflation was constant, then 2% of a trillion is a lot less than 2% of 10 trillion ( to pull numbers out of thin air), so on a linear chart, the pattern will be exponential, and the left end will be lost/ overwhelmed by the right end, even though the magnitude of the moves may be the same.

Good point.

Log charts are more effective at displaying relative moves.

[wheatking16]

I always like looking at visuals like those charts. Quick snapshot. Now if I could just remember the events that caused the highs and lows.

Nothing down the drain if people appreciate your work.

Maybe if there was an indexing function to it all?

I get people/ farmers say these are high prices, but if all the factors are taken into account, are they really high prices?

As an example , what is 6 dollars wheat from 1974 worth, indexed to today? 25-30 bucks a bushel.

Some thoughts to consider.

The interaction between commodity prices and inflation is complex.

My thesis is that inflation has little impact on commodities.

Perhaps an increase in money supply has kept the price of food relatively inexpensive.

I suspect a paper has been written on this subject; although I have not looked for one.

Please share if you find one.

I remember looking at a 100-year downward sloping Real Price of Wheat chart during which time the USD and CAD lost more than 90% of their purchasing power.

However; I tend to think that the increase in money supply and subsequent access to capital has accelerated investment in technology increasing food production relative to the increase in demand.

Technological advancements have a remarkable way of minimizing the impact of inflation on commodities.

Consider the recent technological advancements in ag that have increased yields and allowed for the expansion of the original Canola and pea production areas.


Something to consider.

[bucket]

Consider the recent technological advancements in ag that have increased yields and allowed for the expansion of the original Canola and pea production areas.

Interesting comment.

Technological advancements have made half tons worth $100,000.

You see where I might be going with this?

[wheatking16]

Consider the recent technological advancements in ag that have increased yields and allowed for the expansion of the original Canola and pea production areas.

Interesting comment.

Technological advancements have made half tons worth $100,000.

You see where I might be going with this?

It is complex.

A few years ago, my brother spec'd out a new Ford with the same specs and technology as his 2002.

I believe a new truck was $2000 more.

He is on here, so maybe he can add to this.

[Rareearth]

Royal Lapage says 2022 housing price increases to be 15% ( and housing starts down 2%)

Movie theatres are full

We are very fortunate to have protein and pet food markets, ethanol, and maybe bio diesel in regina soon.

I think ive seen somewhere global population growth is near zero. Its damn difficult to be a market maker - paper or physical commodities

[Landdownunder]

Perhaps an increase in money supply has kept the price of food relatively inexpensive.

Need more info behind this statement interesting

[AlbertaFarmer5]

It is complex.

A few years ago, my brother spec'd out a new Ford with the same specs and technology as his 2002.

I believe a new truck was $2000 more.

He is on here, so maybe he can add to this.

Us farmers like to complain about the deflation of our products relative to everything else.

But I'd say that automotive manufacturers have us beat. With the exception of this very recent price increase, they have been selling increasingly better, more reliable, safer and more efficient, product with more features and creature comforts and better warranties, and meeting ever increasing government regulations since the beginning of the industry, and still doing it with prices that routinely underperform inflation.

There is no apples to apples comparison. And if you could still get a vehicle as basic as it was in 19xx, it probably wouldn't much more than it did then.

[sumdumguy]

Reliability Trade-Off

[sumdumguy]

True AF5. Quality and reliability of vehicles, ATV’s, ski-doos is evident. But the trade-off is that it is so easy for manufacturers to add some “tech advancements” that take away our ability to repair our own vehicles, tractors, machinery. Guess we can’t have it both ways. RV’s for example, they will have us by the short ones. Computers will run everything. The other day I read somewhere that the self-driving computer in a Tesla locked at 140, fix that,eh?

[wheatking16]

Perhaps an increase in money supply has kept the price of food relatively inexpensive.

Need more info behind this statement interesting

I am not a monetary policy expert; however, this is my high-level understanding of how this applies to agriculture.

This is a very simplistic explanation of my thesis.

Perhaps someone can add or correct me on some of these points.

An increase in money supply was required to finance WWI resulting in most countries abandoning the gold standard.

The printing of money with the increased availability allowed for increased capital expenditure, credit, etc.

The war accelerated an incredible technological revolution that increased efficiencies in flight, motorized travel, medicine, communications, etc.

For example, at the beginning of the war, the French with the "greatest military of the world" dressed in similar uniforms and employing the same tactics as Napoleon's armies 100 years prior were literally massacred by the Germans dressing in grey blending into the landscape with superior weaponry.

It can be argued that the technological advancements would not have been possible or happened as quickly with the gold standard system of the day.

Each government required more currency than was available with the increased supply driving investment.

I apply this concept that the increase in money supply is/was necessary to drive investment in ag technology and the associated efficiencies in production exceeding relative food demand growth.

Access to more money leads to more investment leading to more technology leading to more production.

In essence, the money supply has grown at a faster rate than population growth.

As an aside.

My buddy tells me the most profitable year on their farm was 1918.

They had a $40,000 profit and could buy a house for $800.

That is how I see it.