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  #81  
Old 29.08.2011, 16:22
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Re: Should I buy gold or should I buy land?

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The recent attempt to terminate both the ethanol subsidies of $.45 a gallon and the $.54-per-gallon import tariff on Brazilian sugar-based ethanol by the Senate failed because it was an amendment attached to a bill that was doomed to failure anyway. Both will cease on December 31 automatically, ending 33 years of subsidizing the ethanol industry; however, food prices are likely to stay high anyway. The main reason is neither the subsidy nor the tariff, but the mandate by the government requiring gasoline refiners to continue to increase their usage of ethanol when blending their gasoline products. Under the 2007 Renewable Fuels Standard, the United States is required to use 12.6 billion gallons of ethanol this year, increasing to 15 billion in 2015, and 36 billion gallons by the year 2022.
Its more likely the exports of ethanol to Brazil that is doing the damage.In any case, with the third largest corn crop in history expected, theres not much more than can be done. Hoppy s dream of lower corn production will only lead to even higher food prices and that aint good for anyone.
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  #82  
Old 29.08.2011, 16:27
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Re: Should I buy gold or should I buy land?

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So what are the potential pitfalls on investing in corn?
None, the US cant export as much next year if they are going to reach their ethanol targets. The price of ethanol needs to rise though to cover the loss of subsidies. Thats not currently priced into the market the Dec11 futures are higher than Jan12's.... Makes no sense as the subsidies end on Dec 31st.

The US has no stock piles of corn left. It will be gone by Feb2012. Do the math.
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  #83  
Old 29.08.2011, 16:38
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Re: Should I buy gold or should I buy land?

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None, the US cant export as much next year if they are going to reach their ethanol targets. The price of ethanol needs to rise though to cover the loss of subsidies. Thats not currently priced into the market the Dec11 futures are higher than Jan12's.... Makes no sense as the subsidies end on Dec 31st.

The US has no stock piles of corn left. It will be gone by Feb2012. Do the math.
Its not quite that simple of course, exports can be replaced by alternative origins such as black sea and europe(better crops) south america production arrives on mkt in march and some wheat feeding substitution in the usa. Also remember that spec traders represent about a usd1.00/bushel in the price so if the macros get screwed up as they are expected to, then the spec community wont be waiting for the last 50c in the price.
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  #84  
Old 29.08.2011, 16:40
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Re: Should I buy gold or should I buy land?

What happens if someone finds a massive deposit of gold that can be economically mined?
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  #85  
Old 29.08.2011, 16:41
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Re: Should I buy gold or should I buy land?

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Its not quite that simple of course, exports can be replaced by alternative origins such as black sea and europe(better crops) south america production arrives on mkt in march and some wheat feeding substitution in the usa. Also remember that spec traders represent about a usd1.00/bushel in the price so if the macros get screwed up as they are expected to, then the spec community wont be waiting for the last 50c in the price.
Most futures are reliant on US delivery though. Youre talking about supplies. Im talking about futures prices. But in theory youre correct. But then what happens to soybean prices? Its going to get ugly.
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  #86  
Old 29.08.2011, 16:43
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Re: Should I buy gold or should I buy land?

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What happens if someone finds a massive deposit of gold that can be economically mined?
In 10 years it will hit the market.....

We do gold projects in DRC. Even in a country with no laws its hard to get permission and zoning to get a mine set up. Id give it minimum 7 years. But probably more.
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  #87  
Old 29.08.2011, 16:43
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Re: Should I buy gold or should I buy land?

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Most futures are reliant on US delivery though. Youre talking about supplies. Im talking about futures prices. But in theory youre correct. But then what happens to soybean prices? Its going to get ugly.
Soyabean s actually have a much worse situation than corn, they dont need corn to drive their motor. Massive demand from PRC over the last 5 yrs has only partially been offset by increased south american production, but the simple fact is corn is in the headlines for now and beans aint. If anything long bean calls for mid next year should be the way to go.
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  #88  
Old 29.08.2011, 17:32
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Re: Should I buy gold or should I buy land?

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He who lends the farmer to buy his seed and his fertilizer and his fuel controls the farmer
If push comes to shove you can grow food without fertilizer and you can use your own seed but you can't grow it without land.

Land is in limited supply. Anybody with the know-how can start a fertilizer plant.
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  #89  
Old 29.08.2011, 17:35
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Re: Should I buy gold or should I buy land?

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If push comes to shove you can grow food without fertilizer and you can use your own seed but you can't grow it without land.
So where would you get your seed from if you had no land
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  #90  
Old 29.08.2011, 17:39
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Re: Should I buy gold or should I buy land?

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Corn prices could rise dramatically. I don't invest, in stocks I just don't believe in it on moral grounds.
so you don't have a pension fund?
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  #91  
Old 29.08.2011, 17:40
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Re: Should I buy gold or should I buy land?

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so you don't have a pension fund?
Its that old addage, how do you get a small pension fund? Start a large one and entrust it to a pension fund manager..........
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  #92  
Old 29.08.2011, 17:42
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Re: Should I buy gold or should I buy land?

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so you don't have a pension fund?
God forbid you put money into the bonds of these companies or leave money at the bank so they can lend it to these companies. Credit markets are more guilty than the equity markets.
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  #93  
Old 29.08.2011, 21:55
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Re: Should I buy gold or should I buy land?

Just incase anyone wants to see the historical data, see the charts attached.

Gold Vs. US Home Prices from 1890 until today.

Gold Vs. The Economist Intelligence Unit Agro Food Price Index from 1910 until today.
Attached Files
File Type: pdf Gold Vs. Other Hard Assets.pdf (137.4 KB, 221 views)
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  #94  
Old 29.08.2011, 22:16
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Re: Should I buy gold or should I buy land?

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Just incase anyone wants to see the historical data, see the charts attached.

Gold Vs. US Home Prices from 1890 until today.

Gold Vs. The Economist Intelligence Unit Agro Food Price Index from 1910 until today.
would be more impressive if they could spell "houses" correctly
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Old 29.08.2011, 22:24
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Re: Should I buy gold or should I buy land?

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would be more impressive if they could spell "houses" correctly
Sorry dude, I didnt have that much free time to check the spelling Didn't realize people would be paying attention to the grammar.
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  #96  
Old 29.08.2011, 22:27
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Re: Should I buy gold or should I buy land?

I wish I was troubled by this question. Off the top of my non expert head, I'd say both. Just to be safe.
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  #97  
Old 29.08.2011, 22:29
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Re: Should I buy gold or should I buy land?

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Sorry dude, I didnt have that much free time to check the spelling Didn't realize people would be paying attention to the grammar.
The graph says sell gold & buy US houses.
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  #98  
Old 29.08.2011, 22:34
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Re: Should I buy gold or should I buy land?

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The graph says sell gold & buy US houses.
Or buy agriculture
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Old 29.08.2011, 22:38
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Re: Should I buy gold or should I buy land?

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I wish I was troubled by this question. Off the top of my non expert head, I'd say both. Just to be safe.
FYI, during hyperinflation land loses 95% of its value in real terms, gold loses 30% of its value, and food gains 140% in real terms..... At least previously in Germany, Greece, and Hungary.

Im not a believer in hyperinflation, but thats just incase you are a believer.
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Old 29.08.2011, 22:38
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Re: Should I buy gold or should I buy land?

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Or buy agriculture
When gold was below $1000 Warren Buffet said that you could own all the gold in the world or for the same price you could own all the Farm land in the US, 10 x Exxon Mobil's & have a trillion $ of cash left over.
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