Diesel and gasoline prices are set to increase by 50% in the next few months. Markets dictate the price for these commodities that drive the world's economic engine. How do I know this, a simple disabled farmer living in his mother's house in rural West Tennessee, living off SSI disability listening to only Glenn Beck and Rush Limbaugh and surfing the web for all my information?
I bought fertilizer and corn seed yesterday at my local Farmer's Co-op, that socialist organization put together by farmers, for farmers, and with farmers for the greater good of the farmer. There, I spoke to their manager who said he has trouble getting enough diesel to run their fleet of fertilizer trucks. His supplier said it is not for a shortage of fuel made here in America, but after the 2008 collapse which caused the government to print money to shore up all aspects of business, the Europeans failed to shore up their oil refineries and they all went out of production.
Now our refineries in North America are filling that void and refine oil here and ship it to the European Market and make a higher profit where prices are about $10 a gallon. Our $4 a gallon is still a bargain compared to the European price. I believe a futures bet on unleaded gasoline or diesel for next year would be a no brainer.
OK, what happens to the other commodities when fuel explodes? Input costs to plant a crop explode and the farmer will want to get his profits to cover the higher costs of planting, fertilizing, growing, and harvesting and taking a crop to market. Right now we have $6 a bushel corn. That is about 50 lbs of corn. Seems like a bargain to me and should seem like one to you also. I believe we will see $8 to 9 corn this year. Soybeans are currently trading for about $13 a bushel, and likewise I think $18 to $20 a bushel for beans is likely. Cotton is trading for about 90 cents a pound, and will probably climb to about a buck and a quarter a pound. Wheat is trading for about $5 a bushel and could go to $10 a bushel this year.
Am I right? I dunno. I have written this today and I will revisit this next year. Anyway I am not going to sell any of my crop at todays price because I am a gambler and I think time is on my side given the current financial situation in both the US and Europe. Money flying off the printing presses like bats out of that cave in New Mexico at sunset. Not to expect inflation would be just plain batty!
I have to buy some diesel for my tractors today. I think I will buy 600 gallons today, thinking it will cost me less today than it will in a couple of weeks.
And our government is helpless to intervene, the markets are driven by powerful unseen forces, but can be correctly predicted
like an earthquake with its resultant tsunami once you understand cause and effect. Infinite trillions in printed dollars over the past few years chasing finite commodities in an over crowded world of 21st century consumers. This ain't like rocket science to a North Korean. It is the force of the market, the free market.
Jackson Delano Maybolt, president, Urban Poverty Law Center
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