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Post by Glenn on Feb 13, 2011 11:47:21 GMT -6
View from another (and very reasonable thesis, I might add):
>>The energy resources are there to avoid this...easily. It's a matter of implementation. Horizontal drilling will give the world more time to find an alternative to petro-based energy. It's going to cause a long plateau and perhaps gradual rise in CL production. More importantly, 1000s of tillion CF of NG is going to be freed up for global consumption.
IMO the final commodities to make dramatic gains during this secular commodity bull will be agricultural, certain base metals (iron, copper, etc) and silver/gold. BTW, I think the agricultural price bull ends within 2 years of the US abandoning its corn for ethanol policy. I think NG makes this policy unnecessary and arguably bordering on evil (Egypt, etc).
This post may not be popular but trying to see the future with complete objectivity apart from the crowd is important to success at investing.<<
The bolding was mine.
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Post by Deleted on Feb 14, 2011 6:04:04 GMT -6
So, you think the "dramatic gains in the agriculture commodity sector" haven't occured yet?
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Post by Glenn on Feb 14, 2011 7:33:29 GMT -6
Cattle markets are the most precarious ag commodity.
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Post by Deleted on Feb 15, 2011 16:14:21 GMT -6
yes, it would be nice to actually have a bull market in cattle. Preferrably, one that includes the cow/calf sector.
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Post by smnherf on Feb 16, 2011 6:33:53 GMT -6
The idea of ethanol causing the riots in Egypt is totally bogus. IF an investmet firm sent me propaganda like that while trying to get me to invest in a NG company, it would seriously damage their credibility with me. Who is the source?
Something to think about then. If converting corn to ethanol is evil, then isn't the govt paying a landowner to plant their farm to grass and not use it for anything even worse. No jobs are created, and very little economic activity from that.
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Post by Glenn on Feb 16, 2011 7:57:18 GMT -6
Those are individual thoughts from friends of mine. No investment firms. I invest my own money in my own account and have done fairly well with it. Take the thoughts for what they are worth. Nothing to you, something to me. I say let the people be the judge. Saying those thoughts are by an investment firm is setting up a straw man argument.
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Post by Deleted on Feb 17, 2011 15:21:20 GMT -6
IMO....it is all about the cheap US dollar. Commodiy inflation remains as long as the US govt(federal reserve) can come up with ways to keep the economy afloat with cheap money.
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Post by George on Feb 17, 2011 15:27:19 GMT -6
I normally vow to stay out of these kind of discussions, but I'm very much convinced that the "CHEAP" U.S. Dollar is going to get a LOT cheaper in the coming years.
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Post by Deleted on Feb 17, 2011 15:36:45 GMT -6
Probably....too much debt and unemployment. Be happy the riots aren't in US streets. US agriculture has always steppedup to increase supply when demand jumps and we haven't hit any production plateau in ag production. A few years ago a poster on another site was saying ethanol demand would cause us to "run out of corn". haha More likely we'll be swimming in it one of these days.
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Post by smnherf on Feb 18, 2011 9:12:56 GMT -6
Those are individual thoughts from friends of mine. No investment firms. I invest my own money in my own account and have done fairly well with it. Take the thoughts for what they are worth. Nothing to you, something to me. I say let the people be the judge. Saying those thoughts are by an investment firm is setting up a straw man argument. Trust my I have no interest in setting up a straw man argument. I won't waste my time with that. One of the main reasons I come on discussion boards is to get a gauge on what is going on in other parts of the country and even other parts of the world. Either Hereford operations, commercial ranchers, farmers, whatever. When I don't agree with some issues, I want to find out what makes people think the way they do. Maybe I am wrong and I would like to learn from them. With that being said, If this thesis as you said is "very reasonable" I am interested in the reasoning.I would like to know how you and your friends came to this thesis. What information are your using to arrive at this conclusion? Did your reasoning include the fact that there was a major droguht in Russia that shorted the world of hard milling wheat or the result of the flood in Australia? Did you factor in that the Chinese economy grew 9.5% percent in 2010 and that their appetitie for energy and food is going up with it. In fact they have gone from a major corn exporter to a major corn importer the past couple years on top of being the worlds largest importer of soybeans. Did you take into account the effect of the value of the dollar and what that is doing to the american consumers ability to compete with the rest of the worlds consumers for the same food? I need to go but I will say as an investment strategy as to the commodities boom, don't look to the ethanol program as a guide to the end to the agriculture boom, look at when the fed starts to raise interest rates as your cue. You could end the ethnol program tomorrow and sure the market would fall, but I guarantee the acres planted would fall probably by 10 million acres too and I would bet the grain price would be back soon. |
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Post by smnherf on Feb 18, 2011 9:16:19 GMT -6
Probably....too much debt and unemployment. Be happy the riots aren't in US streets. US agriculture has always steppedup to increase supply when demand jumps and we haven't hit any production plateau in ag production. A few years ago a poster on another site was saying ethanol demand would cause us to "run out of corn". haha More likely we'll be swimming in it one of these days. So true, the old saying of high prices cure high prices is true. If ethanol was the chief architec of higher food prices like so many claimed in 2008 then why did the price of corn fall so much and get so low in 2009 and 2010 while ethanol production climbed? |
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Post by Glenn on Feb 18, 2011 9:24:11 GMT -6
Helicopter Ben won't be raising rates anytime soon. Look for QE3 this fall or winter. I have considered everything you mentioned and more.
I have my biases and you have yours. You however seem unwilling to look at yours and just want to look for every other possible reason for Corn to be $7 a bushel. Whatever the reason, it is what it is and we will all adjust. Don't be surprised however if the ethanol subsidy gets pulled to see the rug pulled from under corn prices as well. Droughts in Russia, Floods in Australia be damned.
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Post by smnherf on Feb 18, 2011 9:36:06 GMT -6
Helicopter Ben won't be raising rates anytime soon. Look for QE3 this fall or winter. I have considered everything you mentioned and more. I have my biases and you have yours. You however seem unwilling to look at yours and just want to look for every other possible reason for Corn to be $7 a bushel. Whatever the reason, it is what it is and we will all adjust. Don't be surprised however if the ethanol subsidy gets pulled to see the rug pulled from under corn prices as well. Droughts in Russia, Floods in Australia be damned. My biases are based on personal knowledge or what I believe are reputable sources. I am more than willing to be convinced that I am wrong because if I am wrong, I probably should sell the he!! out of this cron market real soon. If you think you can have 3.50 fuel, 10.00 wheat, 13.00 beans, and still have 3.00 corn and 1.19 fat cattle, it isn't remotely possible. |
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Post by Glenn on Feb 18, 2011 9:46:03 GMT -6
I don't know, but if I was sitting on silos full of corn, I'd sure as hell sell it all at $7.
Could it go higher? Yes.
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