Grain shipments are being stalled out due to the credit crisis now.
The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.Repeat this for any other major commodity: Grain, rice, food, basic supplies, oil, gas. The credit crisis is causing breakdowns in the supply chain, leading to shortages on the way, and along with a trashed dollar: the perfect recipe for hyper-inflation.Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.
"There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit," said Bill Gary, president of Commodity Information Systems in Oklahoma City. "The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."
It will be a bitter winter.
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