Socretazz: If food production declines as precipitously as you believe it will prices will increase and production will respond. That's the thesis of the article: when credit conditions normalize the downturn in commodity production will give rise to higher prices and increased production. The real issue is getting credit conditions to normalize. Right now the inability to get trade letters of credit has caused a 95% decline in the Baltic Dry Index and is ruining the dry bulk shipping and container subsectors of the shipping industry. Presumably, when conditions get drastic enough increasing prices will spur normalization of credit conditions.
@CIWC: Bubbles and Supply Shocks [View article]
If food production declines as precipitously as you believe it will prices will increase and production will respond.
That's the thesis of the article: when credit conditions normalize the downturn in commodity production will give rise to higher prices and increased production. The real issue is getting credit conditions to normalize. Right now the inability to get trade letters of credit has caused a 95% decline in the Baltic Dry Index and is ruining the dry bulk shipping and container subsectors of the shipping industry. Presumably, when conditions get drastic enough increasing prices will spur normalization of credit conditions.
Commodities: Bubble or Wall of Worry? [View article]