Homestead mailing list

[bob ford <bobford79 AT yahoo.com>]

Backwardation:

Backwardation is a futures market term: the situation in which, and the 
amount by which, the price of a commodity for future delivery is lower than 
the spot price, or a far future delivery price lower than a nearer future 
delivery.

Don, I think this (the concept above) is what we are looking at with 
shipping/commodities.  In your other post, you wrote that the country could 
be headed for cliff's edhe faster than we anticipated.  I am worried that you 
might be correct...........bobford


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--- On Sun, 11/9/08, Don Bowen <don.bowen AT earthlink.net> wrote:

> From: Don Bowen <don.bowen AT earthlink.net>
> Subject: RE: [Homestead] BDI showing big commodity deflation, I think
> To: bobford79 AT yahoo.com
> Date: Sunday, November 9, 2008, 3:42 PM
> > I fogot about the refineries--you are right.  what do
> you think this
> > means, for most of us.  Do you think things will get
> really, really, cheap
> > as companies go bust and ships have to offload.  With
> that followed by
> > little supply, thus driving prices back up, even
> higher than before?.
> > What commoddities/products will it most affect?   
> 
> Deflation, inflation, hyperflation, where is it heading?
> 
> There is a chance of hyperflation because of the world is
> awash in money
> right now but that money is being circulated.  Banks are
> holding on to it
> rather than lending it out because they do not trust the
> borrowers.  Borrows
> are in trouble with excess inventory so they may drop
> prices to clear the
> inventory.  Flip a coin, the next few months may very well
> be much more
> interesting than the last.
> 
> Much of the recent commodity price declines are from
> several sources.  The
> rise of the US dollar is but one and that seems to have at
> least paused.
> World wide demand for production materials such as copper
> is declining
> reducing prices to clear inventory.  The speculative bubble
> has deflated
> requiring holders to sell.  
> 
> Oil prices have become an important part of some greed
> based economies and
> as such there are attempts to reduce production to drive up
> prices.  Russia
> has not has the anticipated success when they dropped
> export duties on oil.
> 
> I remember a conversation this last January where I said
> that things may
> muddle through unless the layoffs start.  Well they have
> started, the U6
> measure is now 11.8, one year ago it was 7.9.  I also
> remember saying that
> if we were still talking about the falling economy this
> coming January, hold
> on to your hat, the ride was going to get nasty.
> 
> In many ways I feel sorry for Mr. Obama.  He has a tough
> job ahead and he
> may not be able to pull it off due circumstances way beyond
> his or anyone
> else's control.
> 
> Don Bowen  KI6DIU
> http://www.braingarage.com/Dons/Travels/journal/Journal.html