OPEC sells it's oil for nearly $150 dollars a barrel while they import 3/4 of their food supply, the majority of which comes from the USA, who exports 105 million metric tons of grain per year followed by the former Soviet Union exporting only 21 tons per year, South America at 18, and Australia/New Zealand at 9. So when it comes to spare capacity, North America accounts for a whopping 68 percent of the world's moveable feast.

North Africa and the Middle East import 58 million metric tons of grain per year...In other words, their needs simply can't be met by the 2nd, 3rd, and 4th highest grains exporters combined.

So, instead of selling OPEC countries grain for considerably less than $2.00 a bushel, I think we should jack the price to over $150.00 a bushel. Can't afford it? Eat your oil or propose a reasonable compromise...I can walk to work.

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OPEC vs. CORNPEC


A problem I see is the other countries "caught in the middle", that import our grain heavily. World wide opinion (taken as a whole) of the U.S.A. would surely plummet even farther than it is now, heavy tariffs and trade wars likely.

I'm only proposing higher prices for OPEC countries, not all countries we export too. Even if they buy American grain through a second party, it's still going to cost them more than they are currently paying...and of course we would reserve the right to raise prices for said second party as well. It's our product, we can charge what we want...isn't that OPEC's justification?

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Is that possible to jack prices to only OPEC countries? I'm rather ignorant on this but am running on the assumption that grain (such as corn and wheat) was dealt through the commodities market (futures contracts) which determined the market's pricing. As an aside, the reason crude prices is rising is because of financial speculation in the market. I concede that I may not understand the whole picture though. I do understand your point though about it being our product.

Well I think it goes without saying that my proposal is an oversimplified solution lacking any detailed thought into specifics...

...but I fail to see how, short of war or "illegal" means, that an OPEC country could circumvent a tax levied on goods exported from our country to theirs.

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Contrary to popular opinion the specualation on oil markets don't affect end prices. They actually stabalize them. They allow other marketers their chances (farming interests, government owned oil companies, coal interests, whatever) to stabilize their risks.

This false blame is another example of how bad philosophy affects bad economists. These things are symptoms not causes. Historically speculators ALWAYS lose money in the whole.

The losses they incur flow to the producers and help stabilize their production, giving us more of the commodity that everyone is clamoring for. When governments get in the way it distorts this natural phenomenon and distorts markets elsewhere, making everything else , in the main, more chaotic than normal.....

Smarten up. Don't be fooled by the media. It's not speculation that drives up prices. Prices drive speculations.

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Founder of BOINC team Objectivists. Oh the humanity! Rational people crunching data!
I did NOT authorize this belly writing!

I am certainly not an economist but I "play one on TV". I think you are talking about a free market that is not cornered or being manipulated. Do you remember the silver market of the late 1970's speculators were trying to "corner the market" as they say---Silver got to $40 + per ounce. In this case buyers of silver (photography) switched to other materials and silver came out of the woodwork as everyone brought forth the wedding silver service to be melted down since they didn't like polishing it anyway.

The commodities future markets serve those well who actually take delivery of their commodity hedges --Southwest Airlines for example. Speculation may not be bad for us --but--I claim that manipulation and monopolies among the predators are bad for Capitalism. I think that speculation/ manipulation in such a vital commodity should be discouraged through less leverage for those that don't actually take delivery of their fuel contracts. Front running and other forms of illegal insider trading moves should be more vigorously prosecuted.

Here's another reason for high oil prices. The dollar has been devalued by the rest of the world. Oil about a year ago cost about 40 euros and 30 dollars. Today it costs 80 Euro's and 135 dollars. Twice as many Euros but 4 times as many dollars. The Euro is no longer worth 80 cents,

This may be because dollars are flying abroad due to massive trade deficits. We are borrowing huge sums here in the US to pay for the war and maybe some oil countries are taking payment in Euros and refusing dollars.

This is an attempt at understanding --the fix for this looks to be a long slog and some better policies. I hope we can find our messiahs in this regard.

regards to all

Bill

With 68% of all global grain exports coming from the USA and with our closest "competitor" exporting only 1/5th of our total....I'd say we pretty much HAVE the market cornered. Even if the 2nd, 3rd, and 4th largest grain exporters somehow miraculously managed to double their capacity overnight, they would still be 10 million metric tons short of our yearly output.

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Food will become one of the political and economic weapons of the 21st century, and wars over resources will take place.

For the USA:- a long term answer to the high price of fuel (oil) will be to quickly develop, and bring on stream, the large reserves in North and South Prudhoe Bay, Alaska, and the confirmed finds under Wyoming, Colorado and Utah (to extract and treat the shale oil)as well as the Bakken Formation in North Dakota. Between these deposits the US has the potential to meet all it's internal oil needs for now and projected forwards for over the next 100 years.

The price the US motorist and trucker pays for gas and derv will partly be dependent on world oil prices and the price of extraction, refining, transport, etc, and a premium profit margin. Either way the US user of gas and derv could be much better off than Europe or the Pacific Rim users.

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It's good to be back amongst friends and colleagues

Personally, I'd like to see food used and the sole leverage and save our oil reserves for future generations, but that's the conservative in me. However, I do agree that attacking the situation from two sides would be a much more effective course of action.

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I am certainly not an economist but I "play one on TV". I think you are talking about a free market that is not cornered or being manipulated.

Bill, the market is HUGE. No one can control anyone else's involvement, nor force them to pay the price the seller wants. It's not like the market for the world's largest diamond--but even then, the owner can't make ANYONE pay the price he wants. That market, as small as it is, remains free.

The commodities future markets serve those well who actually take delivery of their commodity hedges --Southwest Airlines for example. Speculation may not be bad for us --but--I claim that manipulation and monopolies among the predators are bad for Capitalism. I think that speculation/ manipulation in such a vital commodity should be discouraged through less leverage for those that don't actually take delivery of their fuel contracts. Front running and other forms of illegal insider trading moves should be more vigorously prosecuted.

You made that "claim" previously as well. NO ONE has a monopoly on the energy market, no where near. The speculation you decry has a solid economic basis in that it provides both liquidity and a hedge against whatever the future may bring, removing it has net effect of putting upward pressure on prices--as did most of the "solutions" you mentioned earlier. That doesn't help--it drives costs and therefore prices, up.

Here's another reason for high oil prices. The dollar has been devalued by the rest of the world. Oil about a year ago cost about 40 euros and 30 dollars. Today it costs 80 Euro's and 135 dollars. Twice as many Euros but 4 times as many dollars. The Euro is no longer worth 80 cents,

This may be because dollars are flying abroad due to massive trade deficits. We are borrowing huge sums here in the US to pay for the war and maybe some oil countries are taking payment in Euros and refusing dollars.

To some extent this is true--as a direct result of the Fed's manipulation of the money supply and financing our lifestyle on the backs of the rest of the world. The solution is not MORE Fed (gov't) meddling.

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Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...

The industrialized world has built a technical civilization by exploiting sunlight that's fallen on this planet over millions of years and been stored in the forms of oil, coal, and gas. Those wells will go dry, literally and figuratively. This "stored solar" energy will do nothing but become more expensive and difficult to use. The only "simple solution" is to abandon the technology. If we don't learn to exploit other energy sources, that's the solution that will be imposed on us, and it is very simple. Painful, but simple. Offshore drilling rigs and walking to work only postpones the inevitable.

If we want to avert social and economic catastrophe, we need to transition to "real-time solar" energy sources, including wind and hydroelectric power, along with geothermal energy and nuclear fission. We need to harness nuclear fusion for power production. We humans need to manage our own population. We need to look further ahead than the next election cycle. If we can't do these things, then in the fairly near future we'll die off by the billions and those who are left will be back to throwing rocks and eating grubs!

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"Good against remotes is one thing. Good against the living, that's something else." (Han Solo)

OPEC sells it's oil for nearly $150 dollars a barrel while they import 3/4 of their food supply, the majority of which comes from the USA, who exports 105 million metric tons of grain per year followed by the former Soviet Union exporting only 21 tons per year, South America at 18, and Australia/New Zealand at 9. So when it comes to spare capacity, North America accounts for a whopping 68 percent of the world's moveable feast.

North Africa and the Middle East import 58 million metric tons of grain per year...In other words, their needs simply can't be met by the 2nd, 3rd, and 4th highest grains exporters combined.

So, instead of selling OPEC countries grain for considerably less than $2.00 a bushel, I think we should jack the price to over $150.00 a bushel. Can't afford it? Eat your oil or propose a reasonable compromise...I can walk to work.

I kinda like this approach....if OPEC can set whatever prices and production quotas they wish to control the market for their product, why should we not be able to do the same for a commodity that we have the upper hand in?

Of course, there would be much argument about the humanitarian impact of withholding or inflating the price of a food source as opposed to an energy source...

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"Freedom is just Chaos, with better lighting." Alan Dean Foster

None of you realize that it is the problem of our governments that are in the way.



None of this would be a problem if the damned governments would get out of the way.


GET OUT OF THE WAY ....GET OUT OF THE WAY...GET OUT OF THE WAY ....GET OUT OF THE WAY...GET OUT OF THE WAY ....GET OUT OF THE WAY...GET OUT OF THE WAY ....GET OUT OF THE WAY...GET OUT OF THE WAY ....GET OUT OF THE WAY...GET OUT OF THE WAY ....GET OUT OF THE WAY...GET OUT OF THE WAY ....GET OUT OF THE WAY...

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Founder of BOINC team Objectivists. Oh the humanity! Rational people crunching data!
I did NOT authorize this belly writing!

Rush;

I have read your comments with interest but I feel that you should consider the following.

Cartel: An association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

Oligopoly: A state of limited competition in which a market is shared by a small number of producers or sellers.

Cornering the market: is where an individual or company buys up enough of a particular commodity to allow the price to be manipulated. This can be done through several mechanisms, for example buying futures contracts on a commodity then selling them at a profit after inflating the price.

Have you heard of Debeers, the Columbia Drug Cartel, the OPEC Cartel ? They are not called cartels because it sounds spiffy.

Having traded stocks and futures and having friends in the brokerage and commodities exchange (Chicago Options Boards) I can tell you that a surprisingly few people with big wads of cash and leverage can and do move markets--watch Jim Cramer --he sometimes tells you how his hedge fund does exactly that.

the Hunt Brothers, along with some wealthy Arabs formed a silver buying pool and bought up 200 million ounces- the equivalent of half the world's deliverable supply. The price of silver had moved from $2 per ounce in 1973 to $5 per ounce in early 1979 and then rocketed as high as $54 in early 1980.

I lived through the corner attempt on the Silver Market by good old Bunkie Hunt and a few Arabs--An employee of mine took a roller coaster ride on this and I remember it well .

The officials at COMEX moved to check this cornering of the silver market by raisng margin requirements. The highly leveraged Hunt Borthers were unable to meet their margin calls, and were forced to sell.

This is what I am saying about the Oil Futures market--you cannot deny what is happening at least in part. I realize that the dollar has been devalued on the world market and this is a good part of the problem as well.

What do you think ??

Anyone out there want to form a Bund and corner the market on Arugula or Frisbees ??

Regards,

Bill

The industrialized world has built a technical civilization by exploiting sunlight that's fallen on this planet over millions of years and been stored in the forms of oil, coal, and gas. Those wells will go dry, literally and figuratively. This "stored solar" energy will do nothing but become more expensive and difficult to use. The only "simple solution" is to abandon the technology. If we don't learn to exploit other energy sources, that's the solution that will be imposed on us, and it is very simple. Painful, but simple. Offshore drilling rigs and walking to work only postpones the inevitable.

If we want to avert social and economic catastrophe, we need to transition to "real-time solar" energy sources, including wind and hydroelectric power, along with geothermal energy and nuclear fission. We need to harness nuclear fusion for power production. We humans need to manage our own population. We need to look further ahead than the next election cycle. If we can't do these things, then in the fairly near future we'll die off by the billions and those who are left will be back to throwing rocks and eating grubs!

Not 1 solution you offered will help the motorist to or from work. I mean I'm a big fan of alternative energies, but I know a solar powered car isn't taking me to work on a rainy day.

Monitoring/controlling the population...intelligent people have been doing that for years. We like to call it living within our means... Are you proposing forced control over the rest? I assure you that won't be a popular decision.

As far as the implication that we will die off by the billions without changing our ways....that's just ludicrous. A brief glimpse at history will show you that humans have existed for thousands and thousands of years before the discovery of fossil fuels.

Thanx for your input, but like most lefties, you haven't offered any realistic solutions, only doom and gloom concerning our current state of affairs.

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I kinda like this approach....if OPEC can set whatever prices and production quotas they wish to control the market for their product, why should we not be able to do the same for a commodity that we have the upper hand in?

Of course, there would be much argument about the humanitarian impact of withholding or inflating the price of a food source as opposed to an energy source...

Are they any less appalled with the allegation that we started a war solely over oil?

As for me...I couldn't care less if they choose to starve rather than come to the negotiation table with a reasonable offer...and I really don't care what anyone thinks about that either. I understand that life is a competition over limited resources.

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More on cornering the Market for those who don't think it can happen and that all markets are free markets all the time. from Wikipedia:


Another recent example was that of Yasuo Hamanaka, who in 1996 attempted to corner the copper market, resulting in a loss of 1.8 billion dollars for the Sumitomo Corporation and an eight year prison sentence for Hamanaka.


On June 28, 2006 the CFTC filed papers indicating its belief that BP traders illegally cornered the U.S. propane market.[1] The CFTC and the Department of Justice later agreed to allow BP to pay a fine over $300 million in return for dropping the civil suit and the criminal investigation.[2]

BP stands for British Petroleum.

Bill

More on cornering the Market for those who don't think it can happen and that all markets are free markets all the time. from Wikipedia:


Another recent example was that of Yasuo Hamanaka, who in 1996 attempted to corner the copper market, resulting in a loss of 1.8 billion dollars for the Sumitomo Corporation and an eight year prison sentence for Hamanaka.


On June 28, 2006 the CFTC filed papers indicating its belief that BP traders illegally cornered the U.S. propane market.[1] The CFTC and the Department of Justice later agreed to allow BP to pay a fine over $300 million in return for dropping the civil suit and the criminal investigation.[2]

BP stands for British Petroleum.

Bill

Well, I really look at stuff like this from a more logical perspective.

So you have $100 trillion in stock. That "stock" is totally dependent on the economy and a buyers willingness to purchase your intangible possession.

Whereas I actually have the bushel of corn and all the leverage that comes with it, including the ability to eat it or make it into a fuel alternative if no one wants to pay my asking price.

Hunger is a motivating factor, and I understand what I'm endorsing here...I'm saying I don't care.

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Rush;

I have read your comments with interest but I feel that you should consider the following.

Cartel: An association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

Oligopoly: A state of limited competition in which a market is shared by a small number of producers or sellers.

Cornering the market: is where an individual or company buys up enough of a particular commodity to allow the price to be manipulated. This can be done through several mechanisms, for example buying futures contracts on a commodity then selling them at a profit after inflating the price.

Bill, I don't know what to tell you, a free market doesn't mean people don't try to make money on it--it means you are free to buy or not, as you wish. If the price is too high, because someone else bought a lot, don't buy. None of those people above can force you to buy their products. Ever.

I mean, if they could, why don't they just charge a million dollars a barrel? Or 500 dollars a barrel, say, tomorrow?

Have you heard of Debeers, the Columbia Drug Cartel, the OPEC Cartel ? They are not called cartels because it sounds spiffy.

You seem to be confused about people manipulating prices of things they own, with whether the market is free or not. You see, you don't have a right to diamonds, illegal drugs, or oil at a price you can afford. Those people own their diamonds, drugs, and oil--and OF COURSE they try to push the price up! They have every right, just as you, speculators, other producers, et cetera, try to push the price down. If your reaction to other people having things you need is to severely limit your own production, put upward pressure on prices, and add layers upon layers upon layers of costs, regulation, and bureaucracy, to your own production, therefore further limiting supply and driving costs and therefore prices, up--well, that's just stupid and self-defeating.

If you use your own gov't to further destroy your position, you have no one to blame but yourself. Begging for MORE gov't, after the fact, that's nearly insane.

Having traded stocks and futures and having friends in the brokerage and commodities exchange (Chicago Options Boards) I can tell you that a surprisingly few people with big wads of cash and leverage can and do move markets--watch Jim Cramer --he sometimes tells you how his hedge fund does exactly that.

He has every right to buy those things. He has every right to sell them at whatever price he wishes. You do not have to buy it, no matter what he charges. And the higher the price goes, the more people who buy electric cars and solar panels...

the Hunt Brothers, along with some wealthy Arabs formed a silver buying pool and bought up 200 million ounces- the equivalent of half the world's deliverable supply. The price of silver had moved from $2 per ounce in 1973 to $5 per ounce in early 1979 and then rocketed as high as $54 in early 1980.

I lived through the corner attempt on the Silver Market by good old Bunkie Hunt and a few Arabs--An employee of mine took a roller coaster ride on this and I remember it well .

The officials at COMEX moved to check this cornering of the silver market by raisng margin requirements. The highly leveraged Hunt Borthers were unable to meet their margin calls, and were forced to sell.

And your point is what? That massive gov't intervention could have prevented this? They only way that would be true is just to fix prices. That would solve everything, right??

This is what I am saying about the Oil Futures market--you cannot deny what is happening at least in part.

No, but you cannot sacrifice liquidity in order to prevent people from trying to make money on their investments. The net result causes far more problems than it would solve, because it puts upward pressure on prices. You cannot, at every step of the way, put upward pressure on the prices of anything, and then, when prices go up, expect that MORE upward pressure on prices will help bring them down. It will not.

I realize that the dollar has been devalued on the world market and this is a good part of the problem as well.

---

Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...