Food Is Gold, So Billions Invested in Farming
One of the most important metarial to human is food. And the world's needs for food will greatly increase. After that, the opportunity cost will be increased than now. Therefore, a few big private investors are starting to make bolder and longerterm bets. I think this is the one example of comparative.
Wheat, corn and soybeans are important food in the world people. However, the supply of them is enough now. Therefore, the few investors are starting to investe to other metarials because wheat, corn and soybeans opportunity costs are not bigger than the others.Huge investment funds have already poured hundreds of billions of dollars into booming financial markets for commodities like wheat, corn and soybeans. But a few big private investors are starting to make bolder and longer-term bets that the world’s need for food will greatly increase — by buying farmland, fertilizer, grain elevators and shipping equipment.
2 comments:
Not sure if I see how this is an example of comparative advantage. Might there be another economic principle at work here?
One of the interesting comments made in the article is the possibility that the food market may be in the midst of developing a bubble. Do any of you know what a bubble market is?
A bubble market is created when the market condition is boosted through high amounts of buying and the prices end up soaring through the roof unexpectedly. These are often a form of the bandwagon effect and in a long-run sort of view, these bubbles are often followed by quick sell-offs after prices begin to drop.
With investors pouring their money in the farming, I see how this could surely develop a bubble market.
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