Over the fiscal cliff?

Dec 21, 2012


Here is this week’s edition of Futures File, our weekly commodities wrap-up:

Soybeans Sink
Soybean prices collapsed by nearly $1.00 (-6.5%) per bushel during the week, hammered lower by news that China had cancelled major soybean purchases from the United States. The cancelled orders, which represented 540 million metric tons, are the largest cancellation in at least 14 years. American farmers are likely losing business to exports from Brazil and Argentina, where crop conditions are improving. Prices for January soybeans fell as low as $14.03 on Thursday, but rebounded to $14.30 on Friday as traders went “bargain-hunting” before the holiday break.
Sugar Supported by Ethanol
Sugar prices, which have been in a downward trend for over two years, may be seeing a resurgence as demand for cheap Brazilian ethanol, produced from sugar, picks up in the United States.  As a result of this year’s drought, many U.S. ethanol producers have seen profits erode as corn prices spiked.  Additionally, there are concerns that poor growing conditions in Brazil will affect Brazil’s sugar crop this year.  March sugar futures were trading at 19.26 cents per pound as of midday Friday.
Over the Fiscal Cliff?
 Financial markets tumbled on news that Congress was going on its Christmas vacation without resolving the so-called “fiscal cliff” – a potentially crippling combination of tax increases and spending cuts. Hardest hit was the S&P 500 futures market, which fell as much as 50 points (-3.5%) in the aftermath of the announcement, dropping to the lowest price since early December.
Simultaneously, gold futures collapsed to a four-month low at $1635. Prices tumbled over $60 per ounce (-3.5%) during the week, partially driven by concerns that higher taxes could decrease investor demand for precious metals.
Celebration of Christmas
Many markets, such as grains and livestock, are dominated by North American or European trade centers and have traditionally been closed or subdued during the Christmas week. As the world becomes “smaller” and markets react more to changes in currency values, crude oil prices and demand from Asia, commodity traders can be deprived of their typical trading break between Christmas and New Years. In the coming week, trading volumes are expected to be light, which can exaggerate market moves.



"...gold futures collapsed to a four-month low at $1635. Prices tumbled over $60 per ounce (-3.5%) during the week, partially driven by concerns that higher taxes could decrease investor demand for precious metals."

There ya go; profit taking. Buy on the lows.

Interest rates and the solvency of the USD ain't gonna last forever not the way these yahoos in Washington love to spend.

Who's afraid of the "fecal cliff"? Certainly not Pres. Obama who's vacationing in Hawaii.

2016 - $20T Fed deficit.

The Big Dog's back

Bring it on!


And did not the Senate and House leave before he did? They also left to go on vacation, so why pick on Obama taking his vacation AFTER they all left? No, let this economy go over the cliff since the senate and house can't seem to agree on anything but their own stupid values and won't cooperate. They are the ones who are holding us all hostage. Let us go over the cliff. It is their unwillingness to bend even a little that is the cause of this, so let us fall. We all know where the blame goes, so let us fall. It is their fault and we the people are not stupid enough to fall for their excuses anymore.


The fiscal cliff is a myth. Good Ole Ben will just fire up the printing presses and print more money to pay our bills. The myth is to create a crisis to get the American people to agree to pay more taxes, not just the rich, but everyone. How did they get all the money for TARP, bail-outs, etc? Print the money to bail out the banks and put it on the backs of the American people to pay it back with interest. Need money for Social Security and Medicare...print more money, don't raise our taxes. The whole situation is a joke, I just wonder how much longer this sham is going to continue. I blame both parties, but I mostly blame the Federal Reserve and the fractional reserve banking system. Folks, we've passed the tipping point and for anyone in Washington to say it can be fixed is lying to you. It's all political theater and artifice. You can't spend your way out of debt and you can't raise taxes because consumer spending is such a large part of our economy. Washington has shown if you send them more money they will mismanage it. Anyone have any ideas how to make it better? I've racked my brain for over a year trying to figure out they can do. The best advice I can come up with is, protect yourself and prepare for the worse.

AJ Oliver

Actually, the US is as wealthy as ever - the difference now is that the gummint is unwilling to tax the rich. The "fiscal cliff" is a myth driven by the 1% to scare us into accepting cuts to SS, VA, Medicare, etc.. The key thing to watch for is if the "reforms" really consist of shared sacrifice. If it's just still more bennies for the wealthy and the Military-Industrial-Complex (such as Simpson-Bowles), along with cuts for the rest of us - just say "NO!" We may have to hit the streets in massive numbers to stop them. BYO pitchforks.


When I listened to what the President proposed on Friday afternoon, he was pretty specific in not wanting to raise taxes on the middle class or small business. He wanted to protect unemployment and stop cuts to their funding. That was his proposal to the senate and house. He wants it done in 10 days when they get back from Christmas. He laid it squarely at the feet of both houses. I hope they pass this. If not, they are going over the cliff.

The senate and house (both Republican lead) just don't want to tax the rich and they don't get it. Let them go over the cliff, and Obama will pick up the pieces after the first. He made that pretty clear. It will all be the fault of the Republican party after Jan 1 if we do go over. I hope the Republican's realize it. After that, too bad, so sad...the rich will finally be paying their far share for the first time in quite a while. As it should be.

As for the rest...you are so right.


"Actually," the U.S. has been in an economic depression since Dec. 2007.

Tens of millions of Americans are on the entitlement programs of: SNAP, welfare, disability and extended unemployment. The numbers grow monthly.

A government "check in the mail" has become the new 1930s style soup kitchen or bread line. The effects have been hidden and the State controlled media does not make an issue out of it.


Agree: Protect yourself and your own. At the point in the future when the checks stop flowing, the SWHTF.

The Big Dog's back

Have you ever gotten anything right?


What a wacko!!!!!!!!!!!!!!!!!!!!!!!!!

Dr. Information

What are the 3 biggest debt items for our Nation. Social Security.....Defense....and Health and Human Services...aka welfare. We bring in about 5 billion a day and spend 11 billion.

Keep telling me and everyone else that this is normal and good business.......SMDH.

If any business in America ran business the way our government does, they would be belly up broke in a day. The only difference between a mom and paps place and our government is our government has this thing called the printing press.....which has kept us from drowning, but its starting to bring to much water on.

Not one person can argue that we do not have a spending issue.
Not one person can argue our dollar is weaker than ever before in the most recent history.

What will taxing the rich do? Nothing! Its like trying to kill T Rex with a red rider bb gun. It will bring in very little and then Obama will be at it again and the next people he will go after is the middle class.

We are in a NATIONAL problem, not a rich problem. Read above. Social Security and Welfare....2/3 of our biggest spending issues. If you do not reform them, we will continue to get more and more in debt.

Of course I don't expect anyone that doesn't own a business to understand simple logic. I just expect more left liberal spin.