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Wheat spikes higher, but then retreats after news of China buying 116K tons from the U.S., the...

Wheat spikes higher, but then retreats after news of China buying 116K tons from the U.S., the largest amount since 2005. A major drought in China's main wheat-growing region has eased recently, but a short crop is still feared. JJG +0.5%, GRU -0.4%.
Comments (3)
  • Donald Ingram
    , contributor
    Comments (3481) | Send Message
     
    How can this truly add to GDP when China pays for this wheat with IOUs? - treasury notes This is how QE makes it into the economy as the Fed 'prints' the cash to pay the farmers, who in turn pay the farm machinery, fertilizer and oil companies! This is a "simplistic" look at it, but if you think about it - keep it simple.
    25 Mar 2011, 11:36 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    China buys bonds from the US economy. They need wheat, so they buy it from farmers. Unless they cash in Treasuries, the payment is made from revenue coming from Walmart sales.The farmers will re-invest that money into their farms. This is called trade and business.
    25 Mar 2011, 12:28 PM Reply Like
  • Donald Ingram
    , contributor
    Comments (3481) | Send Message
     
    Another name for bonds is DEBT.
    25 Mar 2011, 04:13 PM Reply Like
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