Tuesday, June 24, 2008

Investment in agriculture sparkles

Watching the idiot's lantern last night and who should be interviewed (on the subject of food prices and speculation) but Hugh Hendry, about whom I wrote last year. And his CF Eclectica Agriculture Fund currently ranks top out of 317 in the sector (up 35% in a year).

Of course, the poor are being hit badly (not the poor here, who aren't really poor). Hendry argues that rising food prices will encourage more (and much-needed) investment in agriculture.


John East said...

One of my favourites. He used to appear very regularly on Bloomberg and was always a breath of fresh air as the scary face predicting the upcoming depression that nobody believed could ever possibly happen, but in the last year I've only seen him on the TV once.

I suppose now that all he predicted is coming to pass and bubblevision is pulling out all the stops to keep us buying the FTSE and the DOW he's an indulgence they can no longer tolerate.

Anonymous said...

"not the poor here, who aren't really poor"

So no problem with you and your speculator friends adding a little more pain for your own benefit.


Anon, I probably have less money than you, and I teach the children of the underclass every day. The news shows us REALLY poor people; we in the UK are too used to whingeing.

Someone who didn't flunk Economics said...

Anon doesn't understand the role of speculation. Rising prices are caused by either too much demand or too little supply. Since food demand is pretty much governed by necessity, it's a supply issue. The only way to sustainably increase supply, other things being equal, is higher prices - that encourages more investment, production, and resources being put into the sector. The world cannot double its food production capability with prices at multi-decade lows, as was the case for food a couple of years ago. Higher prices will mean, in the long run, that supply soars, which will in turn reduce the prices again. Thus Mr Hendry and his ilk are doing the poor a favour by being pretty much the only people taking active steps to vastly increase the world's ability to bring food to market, over the long-term. Short-term it will cause pain, but if prices stayed low, this would not only delay the inevitable, but make the inevitable even worse when it finally happened.

The cure for high prices is high prices. Economics 101. Back to school for moral hypocrite Anon.