Central Perk: 28 nov. 2013

joi, 28 noiembrie 2013

Mish's Global Economic Trend Analysis

Cotton Balls Go Rotten; Bale of a Tale of State Planning

Posted: 28 Nov 2013 10:25 AM PST

Two years ago China amassed half the global supply of Cotton with huge price supports in an effort to encourage more cotton production. China "succeeded".

Farmers produced, and the state paid more for cotton than farmers could get elsewhere. Worldwide supplies soared, but the cotton was withheld from the market.

China's Cotton Policy "Success" Story

Bale of a Tale of State Planning

Please consider China Cotton: Bale of a Tale

It is never easy to put a positive spin on buying high and then selling low. Then again, the cotton that China plans to start selling from its vast state reserves this week, at a price below what it paid for this year's harvest, might be rather hard actually to spin, period. Cotton can go brittle if stored for a long time. The China National Cotton Reserve will be auctioning bales that came off farms in 2011.

Still, what a marvellous monument to state planning has been created, even if the buying programme might finally end overall next year. China started its stockpiling to encourage farmers to plant cotton when prices looked set to go south two years ago (price volatility threatened a crisis for the nation's cotton industry). But it has ended holding about 10m tons, or more than half of global inventory. It is now considering direct subsidies to cotton farmers instead.

Australia took a decade to get rid of every last thread of its wool reserves after ending its own farmer support policy in 1991. In the process, the farming industry suffered plenty of damage. But free-market innovation won out over state control in the end. The Australians probably made the fine merino wool in your suit. Not to spin a tale, but perhaps a similar process can work for the Chinese.

State Central Planning

In autumn of 2011, a clothing importer told me the price of clothes was about to soar because of a huge shortage of cotton. Clothing prices rose a few percent, but nothing like what many expected.

But there never was a cotton shortage. Rather there was huge accumulation of cotton by China at ridiculous prices. So now, what to do with it?

If China holds on to the cotton long enough, the matter will take care of itself as the "cotton balls go rotten".

Money does not go rotten in the same way, but rotten results from Fed and central bank money manipulation policies are eventually headed this way. Centralized state planning of anything never works over the long haul.

Huge boom-bust bubbles in housing and the stock market are proof enough.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Happy Thanksgiving!

Posted: 28 Nov 2013 09:14 AM PST

Happy Thanksgiving to you and your loved ones!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Background Actor Fails
There’s no sport in killing a lion like this..
"Fat Star" Octa 8x SST-90 Colossus Led Flashlight

Background Actor Fails

Posted: 28 Nov 2013 07:19 PM PST

These background actors have no idea what they are doing.

The guy who has no idea how brooms work:

This guy who definitely just fought a ghost:

These fierce warriors performing in their brutal fight:

And these guys too:

This guy that is pretty sure he was just kicked:

Whoever that stormtrooper in the back is who didn't realize there was a DOOR THERE:

This guy who has no control over his arm movements:

This little kid who wanted everyone to look at…something.

This woman who is unsure of how cutting food works:

This dude who doesn't know how he even ended up where he is:

This guy THROWING AN ACTUAL DOG INTO THE WATER:

That dude back there who literally is just standing there with his pants open:

That girl in the back who doesn't realize you aren't supposed to stop running and just look at the camera:

This guy who really thought it was important to fall and roll over:

This guy, who finally realized he'd just been shot:

This guy who looks a little too jolly to be running into shark-infested waters:

And this cat who clearly will never work another day in his life:

There’s no sport in killing a lion like this..

Posted: 28 Nov 2013 06:03 PM PST

The post about Melissa Bachman is till getting a lot of attention and comments. Here is an interesting story about lions and why it is not cool to kill them.