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With cotton prices at 140 year highs, instead of bringing their crop to market, Chinese farmers...

With cotton prices at 140 year highs, instead of bringing their crop to market, Chinese farmers are storing it, in spare rooms of their houses if need be. Without calling a top, it's worthwhile to note that nobody hoards at market bottoms. The cotton ETF (BAL) is up 14.7% in January and 148.1% in the last year.
Comments (8)
  • DVW
    , contributor
    Comments (157) | Send Message
     
    Dang it, no BAL to short at my broker. Guess I'll have to short CT futures.
    29 Jan 2011, 11:44 AM Reply Like
  • tunaman4u2
    , contributor
    Comments (2743) | Send Message
     
    Congrats Fed, this will surely bring back jobs... less demand due to increased prices
    Commodity hoarding from the rich during inflation is the same as saving & not spending during deflation.
    29 Jan 2011, 11:49 AM Reply Like
  • bmcpic
    , contributor
    Comments (150) | Send Message
     
    So its your hypothesis is that, rather than the catastrophic floods in Pakistan and Austrailia that have decreased production by almost 1/3rd, the rise in cotton prices is due to the Fed?

     

    And you equate Chinese farmers storing cotton to "commodity hoarding" by the "rich"?!?

     

    Honestly, the people on these boards can be nuts in their blame of America's central bank. Not everything is the Fed's fault.
    29 Jan 2011, 11:59 AM Reply Like
  • tunaman4u2
    , contributor
    Comments (2743) | Send Message
     
    I love the bullishness on this site
    What a huge change from 2 years ago

     

    I don't believe I mentioned cotton once, just the general theme. I don't buy the Feds excuses that all the price increases have nothing to do with them. No kidding floods, wars, crop freezes jack up prices... but there wasn't any of that around when oil went from 35 to near 90 now eh?

     

    And yes farmers who can produce "commodities" just like miners will be the rich ones as money printing increases over time.

     

    There is a lot of blame to go around my friend...
    30 Jan 2011, 07:08 PM Reply Like
  • User 353732
    , contributor
    Comments (4785) | Send Message
     
    Yet another manifestation of the dollar denominated global commodity inflation that serial QE by the FED has so willfully and successfully generated. No doubt the FED is delighted that even Chinese peasants are validating the FED strategy.

     

    Of course when observant Chinese peasants do it , Big Media disparagingly calls it "hoarding";
    when Wall St billionaires do it BIg Media admiringly calls it "taking a daring long position" or " asset accumulation by the shrewdest players" or " monetizing QE".
    29 Jan 2011, 12:04 PM Reply Like
  • nobby73
    , contributor
    Comments (1177) | Send Message
     
    Though it's easy to blame the Fed for everything, I don't think its the case here. The quantity of new credit pumped into the Chinese economy is relatively greater than the US. Now, property bubble, over extended bank credit, unaffordable housing, rampant inflation in food and basic materials has lead to attempts to impose price controls. The consequence of price controls is ALWAYS hoarding by producers, as they know they will be forced to raise prices in a short time. Now, they are attempting to raise wages faster than prices. Frankly, these are the features that can lead to disaster and can lead to inflation really getting out of control.

     

    I may be in the minority here, but I see some extremely troubling signs coming out of China right now.
    29 Jan 2011, 02:24 PM Reply Like
  • Ohrama
    , contributor
    Comments (505) | Send Message
     
    Nobby73: All you describe are due to QE (dollar printing) here AND Chinese pegging their currency to the dollar and probably their move into the world of richness (working hard and longer and getting paid more!)!
    30 Jan 2011, 06:14 PM Reply Like
  • mike mohr
    , contributor
    Comments (451) | Send Message
     
    Egypt is one of the main producers of cotton. The price will even go higher.
    29 Jan 2011, 02:50 PM Reply Like
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