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To: reaper who wrote (52008)	8/30/2002 2:38:18 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 209892

reaper, I agree with you post short term. I am thinking longer term. For example in this country it has taken 25 years to accept the fact that the steel industry is not viable in our environment and we are still having one last political hurrah with that industry. Part of our steel industries problem was lousy management as they were not willing to invest capital to leap frog technology improvements as well as labor costs. My take on the food industry in this country is until the government quits economic support the marginal producers will stay in business and continue to cause supply problems. Canada, Brazil and Argentina small grains and beans are cheaper than ours in the states as their currencies play a large role in the price of these commodities. IMO, China is the next 10 pound economic gorilla. They will do what it takes to develop commodity production to meet their demands. The land mass is so large I have a hard time believing that most of the basic materials and energy they need for the expansion do not exist within the country. Developing food production is not a problem for them as it is a capital investment and infrastructure problem to solve. You could be right that industrial commodities are still in a long-term decline, but I do not expect industrial commodity producers to lose money indefinitely. I do expect some commodities purchased in this country to be more expensive in US dollars. Because of our wonderful government leadership during the last 30 years we may not import any industrial commodities 10 to 20 years from now, and we will only import finished goods. <g> I agree with you on oil becoming cheaper in the short term. The demand world wide has decreased with the economic downturn and the only reason for oil at current prices is the middle east. Long term for oil is a wild card as other parts of the world like China increase their demand for energy. I think we do know we do not have supply problems for a period of time it is just a mater of price. I am thinking of the huge tar sands reserves in Canada, but the cost of these reserves are much more expensive than middle east oil. BWDIK, Joan