USDX

[cottonpicken]

Boarder-you may prefer this site for all your quotes and charts.

http://www2.barchart.com/mktcom.asp?code=BSTK

The cando moves with the euro but at a greater pace in relation to the usdx.

Pars-i dont know what oboma has planned geo-politically

Bluefargo-All commodity transactions are performed in dollars.This creates a demand for dollars.The oil market alone is 80 million barrels a day.This has been going on a long time and has allowed the u.s to expand the supply of dollars without experiencing the effects(hyperinflation).

Now the fun part.

When the world sees the usdx as pieces of paper they may deside to convertt those pieces of paper into something else,and they sure wont be looking to purchase new pieces of paper.

Why does this matter?

The us government will have nobody to buy its debt.
It will be further monetized.i.e-printed money buying debt.

I am still undescided as to how the carry trade that has devolped with the dollar will play out.

[cottonpicken]

What does this mean the joe blow farmer?

Twenty dollar wheat,nobody ever asked WHY the speculators drove the price that high.

The end of the dollar is why.

[bluefargo]

Thanks Cottonpicken

Good understandable explanation. I appreciate it.
Ever thought about writing a book "Economics for Dummies"

[cottonpicken]

Todays action should show everyone that there are greater forces at work than simple supply/demand theories.

[cottonpicken]

Thats not an 18 month high.
That is an all time high.

[poorboy]

Cotton,

So what is your take on the CDN $? As the US$ turns into a weaker item it causes commodities to rise in US$ and the CDN$ to get stronger. So is selling canola today in CDN$ going to net the same value as selling in CDN$ in a couple months time. Ie. will canola stay static because as the canola value climbs in US$ it is offset by the stronger CDN$.

Trying to think of how this is going to effect canadian farmers. My impression is that I will end up with almost the same price. Should we be forward selling canola and wheat because of the oversupply situation, or keeping it all unpriced in the bin because of the huge influx of money into commodities?

Always interested to read different opinions and ideas and like to have the reasoning behind them.

Thanks for sharing your opinions with us and trying to explain them.

[cottonpicken]

There is a slight offset as the cando rises but it is not as bad as some make it out to be.

First of all everything imported becomes less expensiveto us.

Second the rise in commoditie prices will not be proportianal to the rise in our dollar.

Third our governments are making every mistake in the book economically so that will help keep a lid on the dollar.

Fourth as much as people consider us a commoditie currency-we really are not.We are a consumption based economy and most canadians are about to get kicked in the nuts.Probably not western canadians.

Expect western sepertism to become a major issue when the transfer payments of western canada into hongcouver and chinaonto and quebec***** city become OBSCENELY RIDONKUOLOUSLY HIGH.

[poorboy]

So Cotton,

You are expecting commodities to rise faster in price than the dollar will climb to offset it? Just making sure that I am following your thoughts correctly.

The stimulus money that the CDN gov't has been pumping into our economy is going to slightly weaken our $ against other world currencies.

So are you thinking we are heading into a deflationary time or an inflationary period? I assume that interest rates will hold low if we are deflationary, but will climb significantly higher if inflation is coming.

I am thinking that with the "kick in the nuts coming to average canadians", that we are going into a deflationary period.

In simple terms, what would your outlook be for western canadian ag? Should we be very careful and if we have debt on floating interest rates start locking them into long term fixed interest rate mortgages? Or is it the idea time to expand the farm and borrow money for land and/or machinery because of the increasing value for commodity prices?

With the reduced sales world wide and factory slowdowns, why is the demand for oil still so high? I would assume that if things stay economically tough that gov't will stop making ethanol and bio diesel inclusion in fuels mandatory and that will cause oilseed values to drop.

Not sure if we are at the next step in the Great Depression chart, or at the next step up for the great commodities rally.

[Hopperbin]

Poor boy one thing is for sure, our banks have more to gain by foreclosing on us than loaning us more money. Haven't you ever been to a credit union meeting where the topic of losses come up from farmers going broke? There aren't any, when a farmer goes broke they gain. So today is not likely the day to start borrowing too much money. Is your crop even off? Have you sold it yet? Are your imputs bought for next year?

[cottonpicken]

The first questions-you only need to re-read my post.

What a guy should do-no advice his choice,not going to give anyone a scapegoat,standard business rules apply.

Everybody seems to forget here that the seventies was a rescession.