It's good to have a reserve.
At the corporate level just-in-time was a financial engineering fantasy foisted on the world by all the best academics and other experts. Slower inventory turns are a small price to pay for a bit more security, especially at the nation-state level.
From EurActiv, March 13:
Trade disruptions, climate change, conflicts, are bringing renewed interest in Europe to be ready for emergencies
E.R. is a typical, middle-aged son of the Brussels bubble with a high level of education, a family and a good job. The uncertain times now shaking the world led him to start storing food and medicines in his home.
“Because you never know,” he said. "I want to arrive to a 72-hour stock, but please don’t name me in the article.”
Preparing for a few tough days is not uncommon in rural areas, where shops may be far away. It is also widespread in Eastern Europe, where generations experienced shortages during the Soviet Union's rule, and in Finland, which is on alert for potential Russian aggression.
But even after the sudden shock of the Covid-19 pandemic five years ago, the desire to keep a backlog of meals is unusual in a metropolitan area at the heart of Europe, where urbanites enjoy supermarkets with full shelves.
“We have observed a marginal increase in food storage in Europe since last year,” Christopher Hegadorn, assistant professor of global food policy at Sciences Po, told Euractiv. He is also lead organiser of the Food Alert initiative, a policy analysis project aiming at strengthening food systems.
Some businesses have noticed what may be a growing trend.
“We can see a clear trend of increased purchases of food for emergency preparedness,” said Magnus Karlsson of the Swedish company General Prepper, one of the biggest European stores selling supplies for those wanting to be prepared in case of emergencies.
“We can clearly see that most orders come from consumers and companies in larger cities,” he added.
Despite an increase in the practice of food stockpiling at home, few people are willing to talk about it openly. Euractiv found several individuals who stockpile food at home, but none wanted to talk about it openly.
“They will make fun of me,” E.R. said in explaining why he wanted to not be named.
People who store food at home feel guilt, as “the media was very negative about stockpiling during the pandemic, ” said Bethany Benker, a senior lecturer in Sociology at West England University.
Nevertheless, she highlights a difference between stockpiling, which features long-term thinking and resilience, and hoarding or panic-buying, which contains "elements of emotionality and irrationality.”
“Even in people that are very sympathetic to hoarding behaviours of food, there is an understanding that it is sort of an emotionally based behavior,” she said.
Stockpiling is also practiced by countries, said Yari Vecchio, a researcher in agricultural and food economics at the University of Bologna.
“It follows a historical pattern wherein governments seek to safeguard essential commodities” in uncertain times, he said.
China, the stockpiling giant
Far from Brussels, one of the first moves decided by Chinese leaders last week in reaction to the tariff war triggered by US President Donald Trump has been increasing the budget for food stocks....
....MUCH MORE
Which leads us to storage, a topic of abiding interest:
- "The Effect of Futures Markets and Corners on Storage and Spot Price Variability".
- Storage: Very Important To Roman Emperors and Commodities Market Manipulators
- To Create A "1%" In A Social Hierarchy You Don't Need An Economic Surplus, Just A Storable Form Of Wealth
- The Golden Age of Commodities Market Manipulation: Corners, Storage and Squeezes
These days however, to purloin that wealth, you don't even need to be dealing with storables:
How to Manipulate Non-storable Commodities Markets
Remember, the spectrum runs from storage to hoarding to market corners.
And corners in commodities refers to physical, you can't corner a commod
by simply buying futures or forwards, you also have to take up the
physical supply.
Conversely, squeezes are accomplished in the futures..
A couple decent papers on this aspect of the abundance theory are:
"Large Investors, Price Manipulation, and Limits to Arbitrage: An Anatomy of Market Corners" and
"Market Manipulation, Bubbles, Corners and Short Squeezes"
The only way to combat abundance is with artificial scarcity, i.e. manipulation....
Moi: The fortuitous timing and incredible run of warehouse equities, 2019 - 2022:
Tuesday, October 26, 2021
Buying Warehouses In Europe and China
It was rather lonely in 2019 when we were pitching warehouses and cold storage facilities but by December 2020 we were posting stuff like:
Real Estate: "Logistics market is hot, but is a bubble forming?"
It's always nice to see a sector you've been babbling about for a couple years finally referred to as a bubble.
And finally, Mr. Carlin:
