Commodity Prices
- Thread starter mikeriley
- Start date
Found this paper on the subject.
A good and quick read for anyone inclined.
https://www.bis.org/publ/bisbull74.pdf
A good and quick read for anyone inclined.
https://www.bis.org/publ/bisbull74.pdf
The rule of thumb (I think) used to be
1) that countries that export natural resources will benefit from rising inflation.
2) but countries with large debt service (e.g. $31 trillion U.S.) are at least equally handicapped by the size of the debt service (as the inflation increases).
It used to be a simple paradox: countries that were fiscally prudent would stand aside, watch the countries that were imprudent implode.
But now fiscal imprudence is all the rage.
Seems most countries are in a race to the bottom (of indebtedness).
And the winners of such a race are likely to be
1) commodity exporters (U.S., Russia, OPEC countries)
2) Authoritarians (Russia, China and U.S. a distant third place).
Most commodities have very long recovery cycles, so much complexity here.
But for sure WWII ended when one side had ALL THE FOOD AND ENERGY, and the other side had none.
FED can print dollars, but can't print any food or oil.
1) that countries that export natural resources will benefit from rising inflation.
2) but countries with large debt service (e.g. $31 trillion U.S.) are at least equally handicapped by the size of the debt service (as the inflation increases).
It used to be a simple paradox: countries that were fiscally prudent would stand aside, watch the countries that were imprudent implode.
But now fiscal imprudence is all the rage.
Seems most countries are in a race to the bottom (of indebtedness).
And the winners of such a race are likely to be
1) commodity exporters (U.S., Russia, OPEC countries)
2) Authoritarians (Russia, China and U.S. a distant third place).
Most commodities have very long recovery cycles, so much complexity here.
But for sure WWII ended when one side had ALL THE FOOD AND ENERGY, and the other side had none.
FED can print dollars, but can't print any food or oil.
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Anecdotally, WWII in Europe unofficially ended on D-Day.
German officers and troops were shocked that the Allies brought only a Mechanized Army.
No Horses were on the landing beaches.
The Germans knew that morning that all was lost.
This precipitated the attempted Staufenberg assassination of Hitler (of which Erwin Rommel was a part)
German officers and troops were shocked that the Allies brought only a Mechanized Army.
No Horses were on the landing beaches.
The Germans knew that morning that all was lost.
This precipitated the attempted Staufenberg assassination of Hitler (of which Erwin Rommel was a part)
What are the summary cliff notes from the paper on why this is happening?
There was no Bitcoin or crypto in the past either. Bitcoin has a half trillion dollar market cap. Companies with a trillion dollar market cap is also a relatively new phenomena.
The difference from the lost value of the dollar is going to be made up somewhere else. Thats just how it works.
Question has absolutely no bearing on Crypto, but referring to
Commodities and their past inverse relationship with the Dollar.
I have no idea why you're referring to Bitcoin.
It takes less than 5 minutes to read the paper,
which itself is but a cliff note.
If you're too lazy to read it, you'll probably
continue adding material that's irrelevant
to the discussion.
If bitcoin is a commodity, what do you do with it?
Commodities have historical uses.
So what doe people do with bicoin?