He predicts that Cisco's territory, which is the core of the computer network, will become a commodity whose value lies only in its ability to move bits as quickly as possible (although, to be fair to Cisco, it is a commodity that many firms would love to supply).
So Brazil transports a relatively low-value commodity using the most expensive means, lorries, which are then forced to wait for ages because the docks are clogged.
Normally a commodity trader need only put up a small fraction of the value of the commodity they are trading, meaning they can load up on plenty.
"When you have a commodity or currency whose value has grown as rapidly as Bitcoin it makes sense to hold on to it as a speculative instrument, " he said.
The most elementary principle of economics is that the value of a commodity increases with its scarcity.
But even these market prices may not reflect a commodity's true social value.
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However, possible commodity inflation and the rising value of Dollar vis-a-vis Euro may pose profit margin and pricing challenges for Heinz in future year.
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Those fears gained credibility when China shocked global markets with the report Thursday that its economy experienced a surprise trade deficit in February, as the cost of imports, influenced by surging commodity prices, exceeded the value of its exports.
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The report draws on the experience and insights of an advisory committee that included the Citi Foundation, the Skoll Foundation, Root Capital, Technoserve, and ANDE, as well as interviews with over 65 commodity buyers, investors and value chain experts.
With a commodity producer like Newmont, the value of the company is certainly tied to the price of what the company produces, and multiples also fluctuate.
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But Stein's book is fascinating (who knew there was an ostrich-feather bubble?) as well as prescient (over-reliance on credit, neglecting to diversify your assets, the belief that a commodity will never, ever lose value--sounds vaguely familiar).
What would have been the impact on commodity prices and the foreign exchange value of the dollar if the Fed had increased the money supply by a factor of eight (rather than a factor of three) in a bit more than four years?
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The commodity used as money should not lose value when it is bought and sold.
The second boost was the surge in world commodity prices, and thus in the value of Argentina's exports (and the taxes on them).
Vendors are excellent at squeezing value from well-oiled commodity technologies.
Another strategy is to add value to an otherwise price-driven commodity purchase.
This would be expected on a widespread basis, because the Terra would have a fixed, inflation proof value, due to its 100% commodity backing.
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That may seem a far cry from taking over the market (most metallocene producers now concede they will never completely dominate it), but it underscores the value that will be added to the commodity markets.
Housing is not gold-like in the sense that gold priced in all currencies tends to rise when currencies decline in value, but the historical correlation between commodity spikes and nominal housing health is very real, and was there during the Bush years for all to see.
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You need to build value on top of what has become a commodity.
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He argues that firms should no longer think of gas as a commodity business, but as one where they can add value by bundling all sorts of other services with it.
The role it sees is being the critical hardware provider, adding value to what is likely to be a commodity business by getting into software that bridges the old and new worlds, and services around a few key industries, most likely healthcare and retail.
Manufacturers can find value in Android by treating the handset as a commodity.
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This is a big step away from a commodity business, toward higher margins and more importantly, more value for its customers.
For the next 18 years, the Federal Reserve loosely followed a de facto price rule by targeting commodity prices including the price of gold and the foreign exchange value of the dollar.
Another strategy is to add value to what would otherwise be a purely price-driven commodity purchase.
The rarer the commodity, the more it will behave like real money and maintain its value during a currency debasement.
It is the gaming experience that is the commodity here and certain games will survive and thrive based on their attractiveness and value to end consumers.
Unfortunately, as the commodity markets are screaming, additional QE will do little other than to further depress the value of the dollar.
Some of the battles are easy to predict: domestic businesses v. multinationals, manufacturers v. service firms, business whose value-added is in their intellectual property v. those who deal in commodity products.
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