Quote:
Originally Posted by Gogar
Imagine you lived in Idaho and you grew potatoes.
To break even in your business you needed to make $1.00 a bushel. Not make money, just break even.
Then imagine that Saudi Arabia, Iraq, and then Iran had huge warehouses full of potatoes and decided to sell them for $.50 a bushel.
Then imagine that the US Government also had a huge warehouse full of potatoes and decided they didn't really 'need it anymore', because potatoes were so cheap. So they also flood the marketplace with cheap potatoes.
You go bankrupt because you can't afford to sell potatoes for $.40-.45 a bushel, and you lay off your 100 employees and sell all your tractors, and lose your land and your house.
Then some guy in the city says "I don't understand why cheap potatoes are a problem, I love potatoes! I bought 500 pounds of potatoes this week for like, $2.50!!! Awesome!
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Or u could spin it in a more reasonable, accurate and real way:
Imagine you lived in Idaho and you grew potatoes.
To break even in your business you needed to make $1.00 a bushel. Not make money, just break even.
Then imagine that Saudi Arabia, (not Iraq), then Iran had huge warehouses full of potatoes and decided to sell them for $5 a bushel. But we imported most of our potatoes from Mexico and Canada.
They formed a cartel that met and allocated maximum production shares for each country, all designed to hold back production and barely meet the demand and drive the price up.
That drove up the price
artificially and you started making money hand over fist. Life was good, you were making record profits.
But the consumer was getting screwed, crying about $2 a gallon potatoes, then $3 a gallon, then $4, then $5 a gallon. that was a lot of scratch just for a gallon of potatoes.
REMEMBER?
everyone was PISSED AND screaming about gouging, saying the gubmint should raise taxes on just you because you were making too much money on those potatoes.
Then imagine that the US Government also had a huge warehouse full of potatoes AND THEY DID NOTHING BECAUSE THE US GUBMINT HAS ABSOLUTELY NOTHING TO DO WITH THIS DISCUSSION except they take $2 out of every $5 the potato seller makes.
They are not affecting the market, and they really don't have enough to make much of a serious difference anyway. Not long term.
So the price falls back to almost where it should be, even though it's higher and the natural equilibrium would set it at.
So you have to adjust and tighten your belt and make a living on the smaller profits you survived on 10 years ago.
You could do it then, you should be able to do it now.
You have to make it on $2 a bushel when you used to make it on $1 per bushel.
Or find a different line of work if you are not good enough to compete.
Then some guy in the city says "I don't understand why $3 a gallon gas is a problem, it's still pretty expensive. I can remember when it cost 33 cents!!!!!
I wish the gubmint didn't take such a large chunk of it.
Did I mention that for the first time we could make all the potatoes we need and not have to import ANY from the middle east at all?
That was a goal of our country for 40 friggin years IIRC.
Remember, the companies this thread is getting all communistic and defending are ExxonMobil, Shell oil, BP, Phillips 66, etc.
The same companies that were
EVIL 5 years ago.
REMEMBER?