Commodity & Infrastructure Insights

Maslow’s Hierarchy of Needs is a stylized pyramid with food and shelter at the base and self-actualization at the top. Maslow wasn’t around to contemplate where ESG (Environmental, Social and Governance) aspirations sit on his pyramid, but he would likely have placed them near the summit. The people and institutions most sensitive to ESG have already satisfied the other needs on the pyramid.

Maslow’s Hierarchy of Needs is a stylized pyramid with food and shelter at the base and self-actualization at the top. Maslow wasn’t around to contemplate where ESG (Environmental, Social and Governance) aspirations sit on his pyramid, but he would likely have placed them near the summit. The people and institutions most sensitive to ESG have already satisfied the other needs on the pyramid.

The last two years have provided an empirical test of Modern Monetary Theory (MMT), the idea that a government can borrow indefinitely in its own currency with no fear of bankruptcy. Stephanie Kelton is the cheerleader for testing the limits of fiscal prudence – I reviewed her book in late 2020 (see Reviewing The Deficit Myth). MMT doesn’t prescribe limitless spending. It is axiomatic that bankruptcy in one’s domestic currency can always be avoided by printing money – having the central bank finance debt issuance – so there’s nothing insightful about that. MMT holds that the economy’s capacity to produce goods and services without generating inflation is the true limit.

The last two years have provided an empirical test of Modern Monetary Theory (MMT), the idea that a government can borrow indefinitely in its own currency with no fear of bankruptcy. Stephanie Kelton is the cheerleader for testing the limits of fiscal prudence – I reviewed her book in late 2020 (see Reviewing The Deficit Myth). MMT doesn’t prescribe limitless spending. It is axiomatic that bankruptcy in one’s domestic currency can always be avoided by printing money – having the central bank finance debt issuance – so there’s nothing insightful about that. MMT holds that the economy’s capacity to produce goods and services without generating inflation is the true limit.

Bonds also recouped their losses from the prior day. Over several decades the bond market’s sensitivity to rising energy prices has evolved. In 1990 when Iraq invaded Kuwait, threatening to cut supply of oil to the west, bond yields rose sharply. The memories of 1970s inflation caused by OPEC raising prices was still fresh.

Bonds also recouped their losses from the prior day. Over several decades the bond market’s sensitivity to rising energy prices has evolved. In 1990 when Iraq invaded Kuwait, threatening to cut supply of oil to the west, bond yields rose sharply. The memories of 1970s inflation caused by OPEC raising prices was still fresh.

The last time cotton prices were this high was 2011 – when futures breached a previously unthinkable $2 a pound. That is the highest cotton prices have ever gone on record – even above the price that cotton reached during the American Civil War. But just because cotton isn't setting records doesn't make its sudden and unexpected price surge unremarkable.

The other day my partner Henry Hoffman was commenting on what his family pays for natural gas to heat their home in Pelham, NY. Winters in the northeast US are not for everyone – your blogger misses most of the worst weather by evacuating to Florida for a few months.