What was the point of the additions? Just a reason to add another couple of pennies to the price at substantially less than the actual cost of the extra ingredients. And so began my introduction to the concept of adding value. We see this all the time in commodities. The conversion of raw materials to final products for consumption with the addition of “magic ingredients”, processes and time/effort/logistics etc…
How do you put a value to this process and are some producers and traders making excessive monies out of these transformations as is suggested by the media? As always, the market decides what may be excessive giving buyers/consumers the option to switch allegiance if the price isn’t right. As my old Economics teacher Mr Gaskell used to say to every question I asked him “It’s all about supply and demand dear boy”.
My first job in the banking world was checking documents in the LC department, probably not the most exciting job but an excellent grounding in the commodity world and a stepping stone to other things. I was a big fan of the sanctity of a LC as an irrevocable guarantee of payment subject to confirming documents. Now however, Banks are using LCs as a means of non-payment by finding a “discrepancy” and using it as a pretext for avoiding their payment obligation because their customer has disappeared, lacks funds, or has gone bust, is very frustrating. It’s an act of bad faith and inherently responsible for destroying some of my younger dreams. Could this possibly lead to LCs no longer being the go-to security instrument? Methinks that’s an ongoing discussion for next month.
At a press conference in 1986 Ronald Reagan said, “The nine most terrifying words in the English language are “I’m from the government and I’m here to help”. Thirty-six years on this is truer than ever. The lack of trust individuals and corporates have in Government(s) and authority today is at an all-time high with the MSM helping to fan the flames by constant rumour, speculation, and opinion. How do we combat this? Do your own research, have a mind of your own, and be prepared to challenge any fact quoted to you. The truth is harder to find than a pint under £4 in the City.
In these troubled times I’ll leave you with the profound thoughts of Martin Fry and ABC