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Source link: http://archive.mises.org/18969/bad-peanut-harvest-but-you-didnt-need-to-know-that/

Bad peanut harvest but you didn’t need to know that

November 3, 2011 by

Peanut butter prices are suddenly soaring with 40% increases, due to an apparent crop problem. As Hayek might observe, there is no reason to know why we need to conserve if the price signals are working properly.

{ 7 comments }

Moultrie November 3, 2011 at 9:19 am

‘ …. if the price signals are working properly. ”

The Federal government has been manipulating peanut prices for a very long time… to deceive and over-charge American consumers.

World market price of peanuts ain’t affected much by the weather in Georgia & Alabama. But U.S. peanut Tariff-Import-Quotas ensure that Americans suffer from such local weather variations.

Joshua November 3, 2011 at 9:31 am

This is an interesting angle to tariffs I hadn’t considered before. One more way they harm.

Thanks for the comment!

Don Lloyd November 3, 2011 at 10:57 am

When I clink on the link, I get a story on MF Global, and nothing to do with peanut butter prices.

Regards, Don

Julien Couvreur November 3, 2011 at 1:02 pm

Regarding adjusting prices, do you have any insights into the Switzerland situation from a few weeks ago? NPR was running a segment on Planet Money. It observed that the Switzerland currency was increasingly popular with investors (safer than dollars), but that local prices didn’t adjust down (as the currency became more demanded) and Swiss people suffered lower purchasing power as a result.

boniek November 4, 2011 at 6:11 am

Have you heard that recently Swiss central bank flooded market with Swiss francs in effort to reduce exchange rates particulary with euro? May have something to do with lowering of purchasing power.

Michael November 6, 2011 at 5:21 am

Prior to the Swiss central bank devaluing the CHF Swiss would have had greater purchasing power… that is if they were to import a good themselves through the internet.

However there is no reason why a higher CHF would have produced lower prices for goods supplied by Swiss retailers and wholesalers, as I’m sure you know the price of goods is not determined by the cost of goods but rather by the value people are willing to pay.

Real prices for producers importers certainly would have dropped though.

Michael A. Clem November 4, 2011 at 11:51 am

That’s the trouble with the marketplace, in a sense. When it works, no one really realizes what happens. If they understood what happens, they wouldn’t be trying to fight capitalism and incorporate socialism instead.

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