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Strategies & Market Trends : The coming US dollar crisis

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To: RockyBalboa who wrote (7788)5/26/2008 9:28:37 PM
From: Elroy Jetson  Read Replies (1) of 71454
 
The problem Elroy pointed out was -

a contango situation where the near-future price of wheat is priced far in excess of the spot price plus the price of warehousing during that period of time.

As with the metals market, these two time-differed commodoties are interchangeable, apart from warehousing costs.

A market contango to that degree to the spot market is out of balance, and the difference should be arbitraged. When it is not arbitraged, the market is dysfunctional.
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