Agtrader

[cottonpicken]

Man that guy over at agtalk pisses more people off than even me.

Quite the douche bag.

[dalek]

Have you noticed how he only posts in streaks, then his mom takes his computer away for a week or two, then she feels sorry for him and gives it back until he gets in trouble again?

[Ron]

He does have a gift doesnt he. I havent heard you as bullish lately cotton, what are your thoughts? I know canadian supply is going to drop but does that matter in the real world?

[cottonpicken]

I'm EXTREMELY bullish.

Its the time frame i'm thinking about.

The inflation/deflation debate rages on with neither side conceding defeat.

I dont want to think about the consiquences of deflation-something every deflationist can not grasp.

Quantitative easing a few short years ago would have been considered an impossibile factor because things were good.Some of us seen it as inevitable.The people that never seen it coming are now squarly in the deflationist camp,and the ones that seen it coming are in the inflation crowd.

Gold and oil will tell you which side is winning.

[charliep]

What if both sides are right and the result is stagflation? Commodities
that move higher because there is still money looking for a home.
Equity markets that struggle because of poor business profitability?
More business failures? Bond markets that crap out because of higher
interest rates? Higher unemployment? Low consumer confidence that
turns people in savers/debt reducers versus spenders? Governments
that hit the end of their tether so to speak in thinking they can spend
their way out of the recession?

[cottonpicken]

I would say that is bang on Charlie.

Some of the credit bubbles will experience deflation like housing but as the monetary base is expanded that capital will seek safety and a return.

And the only asset class that will provide this will be tangibles.

What would change all this?-18% return on investment in the bond market.

Could our economy handle that?

[charliep]

Not 100 % behind the commodity inflation by the way. Just for
discussion, will put forward the following.

Note the impact of recession on demand. Gold I will leave alone
but on the oil side, higher prices did curtail consumption almost
immediately as has the slowing economy. I have confidence in
the market to react provided no outside factor comes into play
(terrorist act, natural disaster, war, etc). I am also not so sure
how many free dollars there are out to invest in riskier activities.
Since worldcom, enron, etc., etc., etc., there is a new philosophy
to investing and risk management. The losses a year by some
commodity funds also will have an impact on decisions as we
move forward.

Commodity markets and speculative activities have come on
governments radar screen a lot. You can expect governments to
act very quickly (likely their whipping boy/scape goat) if prices
scoot higher and volatility increases - i.e. more regulation
perhaps to the extreme. No comment on good or bad but a
likely result.

My thoughts are governments can't/won't tolerate inflation.
Inflation will likely send governments to the opposite end of the
world in terms of cutting expenses/pulling back. The issue will
be you can't borrow your way out of debt and on the other side,
you can't get blood out of a stone (someone has to be making
money to pay taxes).

[cottonpicken]

I always put things in perspective by comparing numbers.

All the farmland in the US-1 trillion?(an estimate)

China's foreign currency reserves-2 trillion

All the gold ever mined-2 trillion

Obamas fiscal deficit 2009-2 trillion

Obamas new spending intatives-10 trillion

Obamas unfunded liabilities-60 trillion

Size of the derivatives market-1000 trillion

Total yearly value of US wheat,corn,soyabean production-100 billion?

Daily crude oil sales-5.6 billion

[jensend]

i think what we're seeing evidence of the past week is a slowing, shrinking economy with increased unemployment. this is happening the world over so at least in the shortterm there will be price resistance in many sectors of the economy. how long this will go on and whether or not it will roll over into inflation remains to be seen. a high rate of inflation may be good for producers over a shorter time frame but it's usually good for nobody if it goes on for more than a few quarters. then it solves itself in a painful manner.

[cottonpicken]

Inflation and "good times" do not go hand in hand.