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News: June 2021 Commodity Musings

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When I'm sitting in the shed late at night, I often end up in a musical, Google wormhole fuelled by a diet of Jaffa Cakes and Rooibos tea listening to old rock music. Hence, when Rise by Public Image Limited from 1986 came on the radio, the words, "anger is an energy", sung by the Sex Pistol's John Lydon, jumped out at me (later the title of his autobiography that's well worth a read btw) which pretty much tells it like it is.

With those words in mind, how much energy is wasted on conspiracy theories, feeding like cannibalistic, oxygen vampires on perceived injustices today?

Linking it to the commodity theme, I wonder if we could harness this so-called energy (maybe a blended energy based on different outputs from a variety of ages?) or would that fall foul of the multitude of restrictions on energy trading that exist today? "It's not the right sort of energy!" "Are we sure we know the source of this energy?" "My sister's neighbour's best friend's cat-sitter's energy is derived from non-organic substances."

You know what I mean ...

Going along this theme I have no problem on checks and balances which are necessary to ensure the validation of any commodity flow and relative counterparties involved, but what is sufficient? There seems to be a feeding frenzy, like a waddle of penguins let loose in a fish farm, where there are points to be scored by finding a reason for a transaction, financing or trader to be refused by a financier. Currently, there is a fear factor focussed on fraudulent documentation but maybe we should focus on the integrity of the people behind the company being lent to instead of the documents?

Warren Buffet famously said, "risk comes from not knowing what you're doing." This rush to standardise templates for all aspects of the CTF world risks a new generation of financial providers becoming excellent box tickers who have never seen a bag of coffee, copper cathode, or barrel of oil in a warehouse, terminal or vessel in their life, being asked to put together documentation for senior management to opine on. If your data isn't great and your intelligence on the ground is lacking, (in my humble opinion), it doesn't bode well for a good lending decision.

Anyway, enough ramblings from me. I'm off to Echo Beach, far away in time. I'll be back with some grey-haired musings in July.

alan-gordon-commodity-musings-image-3 Alan Gordon