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Flashback to 1870 as Cotton Hits Peak .
wsj ^ | OCTOBER 16, 2010. | ADAM CANCRYN and CAROLYN CUI

Posted on 10/17/2010 10:50:32 AM PDT by george76

Cotton prices touched their highest level since Reconstruction on Friday, as a string of bad harvests and demand from China spark worries of a global shortfall.

The sudden surge in prices—cotton has risen as much as 56% in three months—has alarmed manufacturers and retailers, who worry they may be forced to pass on higher costs to recession-weary consumers.

The December cotton contract hit $1.1980 a pound minutes after the opening of trading on the IntercontinentalExchange on Friday. It is officially the highest price since records began back in 1870 with the creation of the New York Cotton Exchange.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; News/Current Events; US: Alabama; US: Mississippi; US: Texas
KEYWORDS: cotton

1 posted on 10/17/2010 10:50:34 AM PDT by george76
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To: george76
The Panic of 1873 is an interesting event.

Railroads had expanded too rapidly after the Civil War -- due in part to government practices making risky ventures seem like a good idea. Vast amounts of capital became tied up in vehicles which were not likely to show a profit for a long time. Parallels to our housing crisis should be obvious.

In addition, coinage legislation related to gold and silver damaged the money supply and ushered in an era of deflation. Agriculture and mining interests took a hit.

Jay Cooke's bank went under and started a chain reaction of failed banks. In Britain the panic began a period called the "Long Depression" which lasted 20 years and basically ended Britain's global dominance (WWI eventually put the final nail in British dominance).

Much of what we see today is a repetition of what has come before. Japan is often held up as a recent example of a long depression and a fall from economic power. It's a good example, but not the only one.

2 posted on 10/17/2010 11:06:06 AM PDT by ClearCase_guy
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To: ClearCase_guy

Well said.

The federal money printing will have several negative impact for decades to come.


3 posted on 10/17/2010 11:13:24 AM PDT by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
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To: george76
Can't we print some more Kennedy Dollars (US notes), in this case , I wouldn't mind the consequences.
4 posted on 10/17/2010 11:34:32 AM PDT by yesca (..belief is the enemy)
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To: george76

The government says there’s no inflation, but prices are going up every day. Now the price of jeans and t-shirts may go up. Big deal. What bothers me is all the city boys crying about the poor, stupid, undeserving cotton farmers finally making a profit. Boo-hoo.


5 posted on 10/17/2010 11:39:01 AM PDT by ozzymandus
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To: ozzymandus

The government lies


6 posted on 10/17/2010 11:52:52 AM PDT by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
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Comment #7 Removed by Moderator

To: Retread1945
It's not so much that cotton is the foundation of all international trade -- it clearly isn't. On a global scale, cotton is a fairly insignificant item. But keeping an eye on commodities can be insightful. Gold is up. Cotton is up. Oil is up. The US is printing money like its going out of style and we are trying to convince ourselves that inflation isn't a problem.

Do we really understand what we're dealing with? Are we experiencing Deflation? Are we experiencing Inflation? I don't think the experts can make up their minds -- which is a scary thing all by itself.

8 posted on 10/17/2010 12:24:09 PM PDT by ClearCase_guy
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To: yesca

“Can’t we print some more Kennedy Dollars (US notes), in this case , I wouldn’t mind the consequences.)”

US Notes have nothing to do with Kennedy. US Notes are/were the fiat Greenback Issue of the Lincoln administration issued to finance the Civil War (They generated pure inflation and resulted in the suspension of the gold standard for many years).

US Notes continued to be issued as a distinct currency series until the rival Silver Certificate was abolished in 1964. After that US Notes were absorbed into the Federal Reserve Note issue, there being no difference in the two.

You actually are getting your wish for “printing more US Notes”. That is exactly what the Fed has been doing with Quantitative Easing, flooding the money supply with excess reserves. The consequences are the inflation you are seeing in food, energy, and commodities. If large dollar holders lose faith in the future value of their dollar holdings we may be subjected to something much worse than what we are now experiencing. The gold price is telling us how people are betting on the future of the dollar.


9 posted on 10/17/2010 1:03:53 PM PDT by Pelham (Islam, the mortal enemy of the free world)
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To: ClearCase_guy

” Are we experiencing Deflation? Are we experiencing Inflation?”

Eric Janszen of iTulip says we are experiencing both. That the larger economy should be seen as two economies, something along the lines of the productive economy and the finance economy. The productive economy of fuel and goods is experiencing inflation, the finance economy of mortgages and investment is experiencing deflation. Over the last three or four decades the finance economy had come to dominate the larger economy bringing along a series of asset bubbles. That is coming to an end and we are going through a painful restructuring of the larger economy that is going to bring about a lower standard of living in America.


10 posted on 10/17/2010 1:12:59 PM PDT by Pelham (Islam, the mortal enemy of the free world)
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To: Pelham
Ok, I have a $5 US note (red ink) from that time, I thought it was something different.

How 'bout we make the silver Kennedy Half Dollars coins?

They'd be like a $10 dollar bill now, eh?

I miss the "ping" sound our coinage made when you flicked it in the air (when it was silver).

11 posted on 10/17/2010 1:46:53 PM PDT by yesca (..belief is the enemy)
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To: george76
Here in Alabama the cotton is pressed in the field into what's referred to as a cotton module, which uses a machine similar to a giant garbage truck press. They wind up looking like this:

Right down the road from me less than half a mile away there sits about forty or so of these cotton modules. Each one weighs about 10 metric tons, which is equal to 22,000 pounds. 22,000 times $1.198= $26,000+ each!!!!!

That's a LOT of high cotton!

12 posted on 10/17/2010 2:03:32 PM PDT by Alas Babylon! (Those who expect to reap the blessings of freedom must-like men-undergo the fatigue of supporting it)
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To: Jet Jaguar; NorwegianViking; ExTexasRedhead; HollyB; FromLori; EricTheRed_VocalMinority; ...

The list, ping

Let me know if you would like to be on or off the ping list

http://www.nachumlist.com/


13 posted on 10/17/2010 5:14:12 PM PDT by Nachum (The complete Obama list at www.nachumlist.com)
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To: Nachum

Ping me if the North crosses an inch of the Mason-Dixon.

Thanx!


14 posted on 10/17/2010 5:17:02 PM PDT by bayouranger (The 1st victim of islam is the person who practices the lie.)
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To: bayouranger

“Ping me if the North crosses an inch of the Mason-Dixon.”

ROFLMAO! :)


15 posted on 10/17/2010 6:54:46 PM PDT by Diana in Wisconsin (Save the Earth. It's the only planet with Chocolate.)
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To: Alas Babylon!

Price one of those machines and $26,000 won’t seem like so much.


16 posted on 10/18/2010 11:30:48 AM PDT by ozzymandus
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