Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Food Bubble (2010)

theglobalrealm.com

Post reply on HN
Print view View original

91–100 of 125 posts

Re: The Food Bubble (2010)

#91

Post by forensic »

sammathews wrote: post #64
forensic wrote: post #31

Earlier quoted context omitted.

This community is exactly the type of testosterone-driven money-obsessed community that would create a Goldman Sachs Commodity Index that will cause starvation, and then absolve themselves of responsibility due to some free market arms-length ideology. It's not a coincidence that you're disturbed by the comments. Wall Street entrepreneurs and Silicon Valley entrepreneurs are fundamentally very similar in mindset and…

I could not disagree with you more. SV Entrepreneur types, as a generalisation, are more like the farmers in this article selling there wares than the WS Bankers. Sure people are money obsessed but they do it either by being profitable or by selling equity in value creating businesses. I think the Google slogan of "Don't be evil" is the best summation of the average tech entrepreneur these days, generally because the…

I think "Don't be evil" is a slogan of tech employees, not tech entrepreneurs.

I single out Hacker News as being psychologically different from normal software engineers. The focus on Hacker News is money, and many people here see profit as inherently virtuous. Social darwinism, eugenics, authoritarianism, and other extreme right political views are overrepresented on Hacker News, and given surprising amounts of leeway considering the swiftness with which other views are scrubbed away here.

Re: The Food Bubble (2010)

#92

Post by gsmaverick »

bubbleRefuge wrote: post #83
OstiaAntica wrote: post #43

Earlier quoted context omitted.

This article is basically shooting the messenger. The roiling agricultural commodity prices in the last decade were largely the result of dollar currency devaluation by the Federal Reserve. The same patterns occurred across other global commodities like copper and oil.

Disagree. The fed does not devalue currency. They set interest rate policy on reserves aka the federal funds rate. Biggest factor in supply and demand for a currency is fiscal policy. Second biggest factor is trade balance and the desirability of foreigners to save the given currency.

Increasing the money supply devalues the currency even if that's not the intended goal; that is basic economics.

Re: The Food Bubble (2010)

#93

Post by dantheman »

Cushman wrote: post #68
Tloewald wrote: post #66

Earlier quoted context omitted.

There's an old economist joke that goes like this: What happened whe the Soviet Union gained control of the Sahara desert? For five years, nothing, then a shortage of sand. It seems we can replace Soviet Union in such jokes with Investment vehicles.

I don't see any reason to distinguish them. A free market means a free market. When one monolithic organization with access to controlling capital makes its goal not to preserve the freedom of the market, but to extract value from the rest of the market for itself and its shareholders, that's not a market. That's a centrally planned economy. The bankers have turned Communist oligarchs in all but name.

Actually you are incorrect, a free market is one in which people voluntarily interact for mutual gain, i.e. it is not coercive. If their is government interference then it is not a free market, cornering a market does not make it any less free if done solely through voluntary trade.

Re: The Food Bubble (2010)

#94

Post by Cushman »

dantheman wrote: post #93
Cushman wrote: post #68

Earlier quoted context omitted.

I don't see any reason to distinguish them. A free market means a free market. When one monolithic organization with access to controlling capital makes its goal not to preserve the freedom of the market, but to extract value from the rest of the market for itself and its shareholders, that's not a market. That's a centrally planned economy. The bankers have turned Communist oligarchs in all but name.

Actually you are incorrect, a free market is one in which people voluntarily interact for mutual gain, i.e. it is not coercive. If their is government interference then it is not a free market, cornering a market does not make it any less free if done solely through voluntary trade.

So if I'm born into a world where someone has cornered the market on, let's say, food, and their perfectly rational strategy is to choose not to sell food to anyone who competes with them, I'm not any less free to compete than if one person didn't get to make that decision?

Get outta here with that.

Re: The Food Bubble (2010)

#95

Post by prodigal_erik »

OstiaAntica wrote: post #43
ramanujan wrote: post #12

I usually don't do this, but this article is long. The summary (tl; dr) is as follows: 1) Large institutional long investments in a certain type of wheat future (Chicago soft red winter) started crowding out the real customers of physical wheat, such as bakers. 2) Because wheat varieties are moderately fungible/exchangeable, the downstream bakers started to use a different brand of wheat (Minneapolis hard red spring)…

This article is basically shooting the messenger. The roiling agricultural commodity prices in the last decade were largely the result of dollar currency devaluation by the Federal Reserve. The same patterns occurred across other global commodities like copper and oil.

Devaluation of the dollar shouldn't have been a problem for foreigners who want to buy wheat. They would have had more favorable exchange rates (their own currencies would have appreciated) that would have covered the higher USD-denominated wheat prices.

Re: The Food Bubble (2010)

#96

Post by tsotha »

bubbleRefuge wrote: post #83
OstiaAntica wrote: post #43

Earlier quoted context omitted.

This article is basically shooting the messenger. The roiling agricultural commodity prices in the last decade were largely the result of dollar currency devaluation by the Federal Reserve. The same patterns occurred across other global commodities like copper and oil.

Disagree. The fed does not devalue currency. They set interest rate policy on reserves aka the federal funds rate. Biggest factor in supply and demand for a currency is fiscal policy. Second biggest factor is trade balance and the desirability of foreigners to save the given currency.

"Debase" is probably a better word than "devalue" in this context.

Re: The Food Bubble (2010)

#97

Post by tsotha »

te_platt wrote: post #11
capnrefsmmat wrote: post #7

Earlier quoted context omitted.

According to the article, the bubble did indeed burst: > Then, like all speculative bubbles, the food bubble popped. By late 2008, the price of Minneapolis hard red spring had toppled back to normal levels, and trading volume quickly followed. Of course, the prices world consumers pay for food have not come down so fast, as manufacturers and retailers continue to make up for their own heavy losses.

Thanks, I must have skipped over that part. Also I was able to find a good chart at http://www.wikinvest.com/futures/Kansas_City_Wheat_Futures The article still isn't clear (at least to me) on who took the losses for the speculators.

The same people who always take the losses - speculators. Some of them are the same people who bid the market up; some of them are people who foolishly bought at the top.

Re: The Food Bubble (2010)

#98

Post by megablast »

viandante wrote: post #54

I just don't get the point. You buy something if you expect its price it is going up. If the price is going up, it means there is higher demand. If there is higher demand, it means somebody does actually need more food (think of China and India). I think the whole point of this article sounds a bit ideologic. Also, again, no really good data to prove his point.

You buy something if you think the price will go up, but this also makes the price go up. If a whole bunch of people think a commodity will go up, and start buying up, this will drive the price up a lot. A commodity does not have to change it value, or for there to be an increase in demand for the price to go up, all it needs is some speculation that it will go up, and a whole bunch of people looking to profit.

Re: The Food Bubble (2010)

#99

Post by tsotha »

randomdata wrote: post #78
justincormack wrote: post #47

Earlier quoted context omitted.

Prices are back up. Not quite up to the peaks of 2008 but not far off. http://www.indexmundi.com/commodities/?commodity=wheat&m...

Speaking as a farmer, these are the prices required to remain profitable. I'm sure it wasn't covered here, but prior to 2008 we were seeing numerous farmer protests against the destabilization of our food sector. And then, all of a sudden, the prices rose. Maybe it was purely coincidence with investor actions, but I have always felt it was something else. Though it raises some interesting ethical questions. Is it bet…

At some point the farmers have to turn a profit. Maybe not every year, but most years. Otherwise some percentage of farmers will get out of the business and do something else. The price will rise until it becomes profitable.

Over the last few decades the real problem has been food is too cheap. First world governments are subsidizing food production to the point that a farmer trying to grow rice in southeast Asia can't compete with imported rice shipped from California. So that farmer moves to the city and gets a job making Nikes.

When there's some disruption in food production thousands of miles away all of the sudden people are starving because everybody is making shoes instead of growing food.

Re: The Food Bubble (2010)

#100

Post by tsotha »

BrainScraps wrote: post #22

It is a bit disconcerting to me that commenters here are fascinated by the technical analysis of this system and appear quite oblivious to the problem of starving human beings. Perhaps I am not intellectual enough to appreciate the empathy hiding behind this analytical ruminating about the problem - but I wish that I got the impression that there was more reaction happening than "Wow, what an interesting phenomenon i…

>It is a bit disconcerting to me that commenters here are fascinated by the technical analysis of this system and appear quite oblivious to the problem of starving human beings.

Your emoting and four bucks will buy a cup of coffee. It's not going to help anyone eat.

You have to understand what's going on before you can make things better. So yeah, how the "moving pieces fit together" matters more than how much anybody cares.

Post reply on HN