My holiday kicked off about a week earlier than the holiday of students in my classes. Since on holiday, I manage to get up at 7.30 am or so. Getting up at 7.30 am or so means getting up quite late for me, but plenty early for students. A couple of students queried me why I get up that early. I filled them in that I’m very fond of getting things done slowly. Getting things done slowly takes stress out of your life. I relayed to them that I need about forty five minutes in the bathroom for…..you know…..A pile of these forty five minutes go by in the shower. The shower’s a bloody marvellous spot to mull things over.

Mulling the commodities markets over a little, that’s pretty much what I was up to very recently in the shower. Lashing out at evil speculators in soft commodities (read food) has panned out to be the favourite flavour of the month. You know the old saw. It’s rehashed every day. Speculators in soft commodities make the price of food go through the roof. They first dabbled in high tech stocks. They then diddled in dodgy mortgages. And they presently push the price up for wheat and rice and…..Yet does all this hype add up? It doesn’t hold water for me.

First, let’s kick off by setting the record straight. Whilst the thundering herd dabbled in high tech stocks and afterwards in dodgy mortgages, savvy investment advisers zeroed in on the then dull commodities markets. At that stage, the thundering herd hadn’t yet materialised on the horizon of the commodities markets. Second, let’s clarify concepts. Speculating and manipulating don’t stand for the same sort of thing. Speculating means lawfully pursuing profits. Manipulating reflects the unlawful variety. Please don’t confuse these concepts.

Third, let’s have a blush at supply and demand. Demand for commodities across the board - including food - has dramatically stepped up due to emerging economies joining the party. My present stomping ground China serves as a case in point. Demand going north has coincided with supply going south, partially because of unhelpful weather conditions. That alone does explain plenty, at the very least to me. Fourth, except the chronically ignorant almost everybody’s aware that the US dollar is tanking mightily. There seems to be a pattern in the broader scheme of things. When the dollar does some cratering, stuff that you can drop on your feet does some climbing to the stars. Stuff that you can drop on your feet includes gold and silver as well as soft commodities.

Concluding Thoughts

All this sprang to my mind in the shower. The shower’s a choice spot to do some thinking. If memory serves it was Warren Buffet who dropped the remark that there’s no substitue for thinking. I’ll continue to let you know what goes on in my shower.

* More Articles on Living in China
* Real Estate in China
* Banks in China - Worldwide Banking Directory
* Universities in China - Colleges & Universities listed by Country
* Embassies and Consulates of China