Pundits are saying that this is way worse than Katrina. Corn is in so much of what we buy that rationing here in America is being considered. Will this simply make everything a lot worse? Thoughts?
12% of the corn crop has been destroyed. It is going to get worse before it gets better.
I heard on NPR that the corn loss is going to effect gas prices a little - 5 to 10 cents.
So far, it seems to be having a pronounced effect on commodity futures - my own portfolio is way up.
I imagine a rationing regime would telegraph PANIC - and have a huge psychological effect on the market and raise commodity prices across the board.
The retards in the senate need to can their ill conceived ethanol project.
I hope all of our Iowa t-peeps are doing well, btw.
[quote]Headhunter wrote:
Pundits are saying that this is way worse than Katrina. Corn is in so much of what we buy that rationing here in America is being considered. Will this simply make everything a lot worse? Thoughts?[/quote]
High corn prices could be a blessing in disguise. Prices will shift in those commodities where corn is easily replaced by some other good; ethanol, sweeteners, food, etc. The commodity with the least marginal utility that depends on corn, especially in the case of misinvestment, will be forced to liquidate first. It may actually be that ethanol is reconsidered as an energy source.
On the other hand, I am not sure what if any laws exist that force fuel producers to use ethanol or not. In this case there could be a significant rise in the price of all corn-based goods.
[quote]LIFTICVSMAXIMVS wrote:
…
On the other hand, I am not sure what if any laws exist that force fuel producers to use ethanol or not. In this case there could be a significant rise in the price of all corn-based goods.[/quote]
I think these laws will be the big problem.
I’ll fantasize that it will mean that HFCS will become slightly less pervasive. Of course whatever replaces it will probably be worse.
[quote]LIFTICVSMAXIMVS wrote:
Headhunter wrote:
Pundits are saying that this is way worse than Katrina. Corn is in so much of what we buy that rationing here in America is being considered. Will this simply make everything a lot worse? Thoughts?
High corn prices could be a blessing in disguise. Prices will shift in those commodities where corn is easily replaced by some other good; ethanol, sweeteners, food, etc. The commodity with the least marginal utility that depends on corn, especially in the case of misinvestment, will be forced to liquidate first. It may actually be that ethanol is reconsidered as an energy source.
On the other hand, I am not sure what if any laws exist that force fuel producers to use ethanol or not. In this case there could be a significant rise in the price of all corn-based goods.[/quote]
Whoaa, slow down there big buddy… The REASON corn prices are so high is because of ethanol, not the other way around. If we gave up on ethanol, as we should, corn would go back down.
OTOH, if we push this new methyl-cellulose wood alcohol we might be in business. Growing crops as fuel just seems stupid though.
Well shit… increased demand, sharply decreased supply.
Get ready for expensive corn, and everything corn goes into, including meat.
On the plus side, people may be forced to switch to grass fed meat, which is healthier. Though I doubt it.
I’m somewhat surprised that someone like Prof X hasn’t announced that the coverage of the disaster is racist, that this is getting more coverage than Katrina.
The economic consequences of the disaster are just starting. We have an economy in recessin, or on the brink. Food prices were already soaring, and a whole region now needs a bail out by the strained taxpayers. What’s next?
[quote]Headhunter wrote:
I’m somewhat surprised that someone like Prof X hasn’t announced that the coverage of the disaster is racist, that this is getting more coverage than Katrina.
The economic consequences of the disaster are just starting. We have an economy in recessin, or on the brink. Food prices were already soaring, and a whole region now needs a bail out by the strained taxpayers. What’s next?[/quote]
It’s just so inconvenient.
They should quite living in a flood plain…It’s called that for a reason. Not that I don’t pity the people, I do, but really it’s a flood plain…It’s gonna flood from time to time.
[quote]beebuddy wrote:
Whoaa, slow down there big buddy… The REASON corn prices are so high is because of ethanol, not the other way around. If we gave up on ethanol, as we should, corn would go back down.[/quote]
When one factors in a shortened supply created by flooding prices must rise independently of ethanol production.
EDIT – We must assume that the demand for ethanol will remain the same until costs are factored back in from a shortened supply of corn.
[quote]LIFTICVSMAXIMVS wrote:
beebuddy wrote:
Whoaa, slow down there big buddy… The REASON corn prices are so high is because of ethanol, not the other way around. If we gave up on ethanol, as we should, corn would go back down.
When one factors in a shortened supply created by flooding prices must rise independently of ethanol production.
EDIT – We must assume that the demand for ethanol will remain the same until costs are factored back in from a shortened supply of corn.[/quote]
The corn/ethanol market is manipulated/subsidized. There is no demand for it really. The government is trying to manufacture the demand thus causing a rise in food prices.
EDIT: And the flood only worsens things. The flood is exacerbating a human created problem.
[quote]beebuddy wrote:
LIFTICVSMAXIMVS wrote:
beebuddy wrote:
Whoaa, slow down there big buddy… The REASON corn prices are so high is because of ethanol, not the other way around. If we gave up on ethanol, as we should, corn would go back down.
When one factors in a shortened supply created by flooding prices must rise independently of ethanol production.
EDIT – We must assume that the demand for ethanol will remain the same until costs are factored back in from a shortened supply of corn.
The corn/ethanol market is manipulated/subsidized. There is no demand for it really. The government is trying to manufacture the demand thus causing a rise in food prices.
EDIT: And the flood only worsens things. The flood is exacerbating a human created problem.[/quote]
There are two causes – artificial demand and shortened supply; and one effect – increased prices. I am simply discussing the effects of damaged crops to supply and thus the prices of corn-based commodities. The demand for ethanol has no way of correcting due to regulation. The demand for ethanol is more than artificial; however, it is probably very low.
I have been watching this on the news, and I have yet to see Anderson Cooper, or Geraldo, or Soledad O’Brien at the scene in their waders whining about how “there is no help here”
This is supposed to be at the same level of Katrina, but the coverage certainly doesn’t reflect that.
[quote]skaz05 wrote:
I have been watching this on the news, and I have yet to see Anderson Cooper, or Geraldo, or Soledad O’Brien at the scene in their waders whining about how “there is no help here”
This is supposed to be at the same level of Katrina, but the coverage certainly doesn’t reflect that.[/quote]
Don’t tell the media that, it may deflate their erection.
More than one Engineer has been on record saying that Levees and pumps built to hold back the Atlantic/Gulf of Mexico are both monuments to man’s arrogance…
Mufasa
[quote]skaz05 wrote:
I have been watching this on the news, and I have yet to see Anderson Cooper, or Geraldo, or Soledad O’Brien at the scene in their waders whining about how “there is no help here”
This is supposed to be at the same level of Katrina, but the coverage certainly doesn’t reflect that.[/quote]
George Bush hates white people.