Handbasket Report — Deflation

One of the key points of deflationary times is that stuff gets cheaper and cheaper as sellers lower prices in order to entice buyers. Another key point is these potential buyers hold out longer and longer, hoping for even lower prices. If you’re a buyer, this sounds great, doesn’t it?

But ever wonder who’s on the point of the short end of this stick?

This’s from the “Fields of Grain and Losses,” published in the NY Times on Nov. 20, 2008:

In this lonesome stretch near the Texas border, farmers are getting an early taste of a deflationary world. They have finished planting next year’s winter wheat, turning the fields a brilliant emerald green. But it cost about $6 a bushel in fuel, seed and fertilizer to put the crop in. That is $1 more than they could sell it for today, and never mind other expenses like renting land.

Oh, yes, I can see that this’s going to be a mild recession. I can see good times a’comin’!

Have a Happy Thanksgiving!

Cassandra

P.S. Here’s another nice tidbit from Bloomberg dated Nov.21:

The Baltic Dry Index, a measure of shipping tariffs for commodities, fell 1.4 percent yesterday, its biggest loss since November 4.

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