Saturday, July 17, 2010

The Food Bubble


The financial industry has done with commodities precisely what they did with mortgages. They changed the traditional futures market from one populated by bonafied hedgers (those trading actual wheat) and speculators (who's accounts cleared at the end of the relevant trading cycle), to a system where banks simply bought futures long, and rolled them over adding more futures contracts over time. Nothing cleared. The results were interesting to say the least.
least.

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