The Quick Takes Pro blog by Michael Kahn, CMT about anything that might affect your portfolio.
Tuesday, September 14, 2010
Is this good?
With all the talk of zero inflation, I find it interesting that corn (above), wheat, sugar, coffee, cotton and, of course, precious metals are all in strong rising trends. Cotton (below) should be especially troublesome for the deflationists.
It's one of the downsides to globalization that many commodity prices remain stubbornly high. But demand in terms of real final sales is just not there in the West. The losers though are businesses not consumers. If I've lost my job and coffee prices go up I'll switch to tea. But what does Maxwell House do when coffee prices are high but there is no demand at home?
My wife just corrected me on the Maxwell House example. Apparently, they are using this opportunity to squeeze the competition as they are the only producer offering sales promotions now. The real reason to have a lot of cash on the balance sheet is to survive the Great Recession and maybe knock the competition for a loop.
SilverGoldBull is a very trusted precious metals dealer. You will be provided with bargain, up-to-minute prices and they will make sure your precious metals arrives to your door discreetly and fully insured.
5 comments:
It's one of the downsides to globalization that many commodity prices remain stubbornly high.
But demand in terms of real final sales is just not there in the West.
The losers though are businesses not consumers. If I've lost my job and coffee prices go up I'll switch to tea. But what does Maxwell House do when coffee prices are high but there is no demand at home?
They get squeezed like a bean.
I'll give up medicine before coffee.
True story from a late trader friend:
From 2008 - How much will you pay for gasoline for your car?
Answer - as much as it takes
My wife just corrected me on the Maxwell House example. Apparently, they are using this opportunity to squeeze the competition as they are the only producer offering sales promotions now.
The real reason to have a lot of cash on the balance sheet is to survive the Great Recession and maybe knock the competition for a loop.
Talking about commodities always makes me hungry.
SilverGoldBull is a very trusted precious metals dealer. You will be provided with bargain, up-to-minute prices and they will make sure your precious metals arrives to your door discreetly and fully insured.
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