Comment by Aurornis
16 hours ago
If you try to force production and sale hard enough, the sale price can even go negative.
If your warehouse is full of peaches nobody wants, you might be forced to sell them for negative dollars to take them away. It's either that, or you pay to have the waste management company dispose of them. So the price effectively goes negative from trying too hard to force something to happen.
The price of oil going below zero during the pandemic was one of the most astounding economic events in my life. I wonder if anybody did try to instantly create some storage to take advantage of it.
If you turn all them peaches into high proof alcohol they take up significantly less space...
Similarly, in 1790s America, farmers west of the Appalachians were growing plenty of corn, but because of bad roads the only feasible way to transport it to the much larger markets east of the mountains was as whiskey. When Alexander Hamilton imposed a tax on distilled spirits, the result was a "Whiskey Rebellion" in which George Washington himself rode out at the head of an army against other American citizens.
This type of trivia is why I found Bill Bryson’s “At Home” so entertaining. Tariff on windows? People cover them with bricks. Tariff on glass? Windows made of other materials. Tariff on… well, maybe stop designing tariffs if you can’t predict the outcome!
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Super-contango