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As World Becomes Zimbabwefied, Cotton Futures Surge 17% In One Month
One of the benefits of America finally seeing what Zimbabwe went through as it entered hyperinflation, ignoring for a second that the Zimbabwe stock market was the best performing market, putting Bernanke's liquidity pump to shame, is that very soon everyone will be naked, once companies finally realize they have no choice but to pass through surging input costs. And while some may be ecstatic by the S&P's modest rise YTD, it is nothing compared to what virtually every single agricultural product has done in the first month of 2011. To wit: Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton.... up 17.08%. That's in one month!
The chart below shows various commodities performance YTD. This is just the beginning. We are curious what happens when rice goes up 100% in 2011... That is only about 30 limit up sessions.
And cotton...
As a reminder, here is how the Zimbabwe stock market performed in 2008. We are heading right there.
From Businessweekly, October 22, 2008
While
markets across the world have been crashing, the Zimbabwe Stock
Exchange has being seeing record gains as citizens turn to equities to
protect their money from the country's hyperinflation.
The
benchmark Industrial Index soared 257 percent on Tuesday up from a
previous one day record of 241 percent on Monday with some companies
seeing share prices increase by up to 3,500 percent.
But
before Wall Street traders start packing their bags and heading south,
they should bear in mind that these figures are just another
representation of Zimbabwe's collapsing economy and are almost
meaningless in real terms.
Zimbabwe, once a regional breadbasket,
is staggering amid the world's worst inflation, a looming humanitarian
emergency and worsening shortages of food, gasoline and most basic
goods. Inflation is at 231 million percent, but some experts put it more
at about 20 trillion percent.
"Why leave money in the
bank?" asked Emmanuel Munyukwi, chief executive of the Zimbabwe Stock
Exchange at a seminar on the doing business in Zimbabwe on Tuesday.
"People
are forced to come on the stock market. They believe that after hard
currency, the stock market is the only viable option where you can get a
bit of a return," he said.
Zimbabwe's stock exchange,
established in 1896, is one of Africa's oldest and the fourth largest. A
securities commission has been established and it is hoping to follow
in the footsteps of other countries like its neighbor South Africa and
list as a company.
There are 19 stockbroking firms in Zimbabwe
and 90 percent of investors come from institutions, asset managers or
pension funds. About 8 percent of investors are individuals and only 2
percent are foreigners. This is in comparison to about a decade ago when
foreigners made up about 30 percent of investors.
Munyukwi
expressed his dismay at the "gross economic mismanagement" by the
Zimbabwean government which has led to the collapse of the economy,
however, the stock exchange was managing to survive despite the harsh
environment.
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yes...but gold and silver down.
This permits the Fed and other top pols to say hey the great inflation indicator is saying no inflation.
If the POG goes apeshit, people will realize.
Optimistically this is the great reset where all the excesses of the last ten years are addressed. This inflation right now or one off adjustment as the optimists like to see it is necessary for our muddle through. Muddle through looks pretty.good compared to the alternatives. We need some really good productivity numbers soon. I think this race between the core inflation and gdp is exciting.dont you? If there is real sustained inflation it will spill over to the core eventually. So far so good for us in the usa. Hanging by a thread is no fun considering the politicians we have, but we are still hanging. Gold will get its chance to.shine when we have real honest to.god inflation. Right now this is.just commodity sturm and drang if i spelled my german correctly. Ben is going to call your bluff you inflation monster. He thinks you are a real pussy and all show and no follow through. Lets see if you are strong enough to lift the core. Otherwise i remain unimpressed.
Troll:
I will pay you to remove the period key from your keyboard.
US Dollar Index punches through 77. We kick ass at this race to the bottom stuff. Brent through 102 going the other way.
There is very little for sale in Zimbabwe. The store shelves are bare. Only Shona scupture is available to buy. The people don't beg for money, they beg for your shoes that are on your feet. When you make local friends they usually give you their address so you can mail old clothing back to them. In 1923 Gemany as hyper inflation kicked in, the store shelves were bare too. So, I'd say from personal experience that bare shelves and closed stores are a sign of hyperinflation. That's something you wouldn't expect, but I see lots of stores closing around SF Bay Area, bare shelves at Target, shopping centers are closed, and huge vacant auto malls. Simularities to Zimbabwe are here.
I live above Woodside so I get on to HWY1 a lot and cruise the coast.
Amazingly light traffic and easy parking, plus almost never a wait for a table at pretty much any restaurant you choose, practically any day of the week.
It is nice in a slightly unsettling way.
Hey, i lived on Skyline, right near that famous french Restaurant with the crazy view.
What a drive that road was.
Mmmhhh, memories....
Good for you Andy.
ORI
is that the popular bicycle ride for all the weenies?
Yes it is.
Also, Alice's restaurant at 4-corners.
Nothing beats trying to enjoy a good meal on a warm summer day, surrounded by sweating Lance-wanna-be's.
It is destruction of every other economy in the world before our own. Thank you Helicopter Ben! Hitler would most definitely be proud.
Hopefully the Agflation probem is getting attention in Davos.
Learn to swim
How about stop ranting for a moment and start assessing the whole picture not just parts of it ?! How can there be inflation without mass money distribution (money in everybody's pockets, not just short-circuited in a fed - pds - stock/commodity market and treasury loop) ?! Who is going to push prices up AND keep them up/rising ? Look at personal income, savings and most importantly ppi vs. cpi ; somebody is swallowing the most part of the 'inflation' and it is not the final demand. Also look at what happens with the aggregate demand when prices are going up, but not the incomes and we've already seen a few earnings reports that show us exactly that, so margin compression is a more likely scenario atm, followed by a decrease in demand at a producer level. To keep the illusion alive OBG will have to spend more and more trillions with an ever increasing negative marginal effect. This is going to end very bad. In the meantime I would not recommend anyone to short anything, just don't participate. Things will take care of themselves without your 'help'. This is a corrupt, centrally managed, plutocratically owned system and you really have to let them play by themselves (otherwise you''l get ****ed either way).
Already have my chair, hot cocoa and snacks in a good spot on the curb, waiting for the parade to start.
BTW: 'fucked' is a perfectly aceptable adjective 'round here.
Looks like all those guys taking out millions of dollars in loans to buy stuff are having the last laugh. They are mortgaging their houses and buy cotton and sugar futures with 10x leverage. They're making out like bandits!
And then they pay back the banks with worthless Dollars. I wish I had been this smart.
Hey y'all, I'm one of the British peasants that his having his shirt stolen at the moment, not a trader, just an average Jo with a spread betting account that doesn't really know what he's doing. Wondering if these soft commodities are a good place to bet on price rises to hedge against my money losing it's value. First I thought I'd turn a quick buck by betting on stock market collapse round 2. Then that didn't happen, lost a couple of grand trying to choose the top only to get run over. So then tried gold, only to keep getting whipped by unpredictable u-turns for no reason. Are soft commodities manipulated by the Bernanke>Primary Dealer>HFT rapists too, or do they still respond to fundamentals??
Yes its lonely in the Deflationist's Lounge
Never underestimate the replacement power of equities within a hyperinflationary, Zimbabwe-esque spiral.
Buy, buy, Buy = Get rid of FRN's as fucking FAST as one CAN.
Dow 50,000 here we come! (Riots in the streets don't matter...)
The only thing driving up commodity prices worldwide are speculators armed with cheap money provided by central bankers and super fast computers. This is causing a havoc in the lives of rest of the population and pushing them towards poverty as they can no longer afford the basic necessities of life.
The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss. It is similar to rounding up maximum sheep before shutting the doors of the slaughter house
Regulators are either hand in glove with the banksters or are too slow to react and take ages to identify and take measures to solve the problems.
Total ban on speculation and the reinforcement of Glass Steagall Act is strictly required to bring relief to the man on the street.
http://www.marketoracle.co.uk/Article24581.html