Monday, June 14, 2010
(click on image to enlarge)
There actually is an "Efficient-market hypothesis." Underlying all the garbage about milk pricing is a belief held by some but, promoted by many, that the "market" is run by ultimate wisdom.
In looking at the import/export data, which in the big picture shows the U.S. is exporting quite a bit of dairy at fairly high prices,there are some little gray details hidden in the back corners.
Take the MPC trade with Singapore. Maybe Singapore has a use for MPCs so exporting to Singapore might make some sense. But, do we have a use for MPCs from Singapore? The gray color in the graph represents the whole gray area, some of which is entering the American diet.