>>With governments around the globe printing confetti with abandon there is justification for gold and other commodities to rise - I do see agricultural commodities as more attractive
Pros:
Everyone has to eat.
Storage numbers are low.
Population continues to rise.
Therefore value will go up.
Cons:
Ag products produced every season, sometimes, twice a season, sometimes in green houses, all year round. Only scarce in relation to possible demand. In deep recession/depression demand has historically shrunk.
Many factors contribute to daily price changes, supply, demand, weather (hail, rain, drought), fertilizer, bugs, etc, etc.
Can not store in undisclosed location (like Chenney).
Must buy with a contract, which, has broker risk, and counter party risk
Does not store well, and takes too much volume.
Re broker and counter party risk: It was recently disclosed this week in Madoff congressional hearings, that until last April, even the biggest brokerage firms only had to pay US$150 to "insure" all their accounts with SIPC. That is not a typo. That is not $150/account. $150 to insure all the accounts of the entire firm.
What kind of insurance on billions in assets can be bought for USD 150?
I recon not much.
Of course since April, that has now changed. Its $150 and some very small percentage of the assets insured.
So, pardon me if I am not enamored with paper. |
