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Comment by remexre | Hacker News Reader

Are there people treating food as an appreciating asset?

> This year I invested in pumpkins. They've been going up the whole month of October, and I've got a feeling they're going to peak right around January and BANG! That's when I'll cash in!

("Homer vs. Patty and Selma", Simpsons S06E17)

H. J. Simpson was doing this back in 1995, though to be fair he was in futures, rather than the raw asset.

I dunno, but Bill gates is buying a lot of farm land.

Sure there are, food is traded on commodities markets just like everything else.

Which works nothing like the housing market.

If government policy was designed so that the price of food was outstripping income growth, that would definitely be a problem.

why does the outcome have to be due to the design of government policy? Why can't it just be a consequence of the free interaction of people?

Because everyone told me to blame the government.

Because government policy heavily influences the price of housing, which is an essential good?

Because the government:

1. Manipulates interest rates directly affecting house prices

2. Changes tax rates depending on housing (mortgage interest)

3. Buys mortgages

4. Zones areas which can restrict or increase supply based on policy.

Yes, if they didn’t do any of these, people wouldn’t blame government policy and we’d see what a functioning market results in.

Sorry, but that's not how commodities markets work. Commodity futures are not appreciating assets and neither are the commodities themselves. The contracts have expiries and are not long-term stores of value.

Just because something is traded doesn't make it an appreciating asset. In the case of commodities, they're typically traded as risk management instruments, not something that inherently provides returns.

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