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Do we have national strategic reserves of such resources? I know we have a lot, here is a short list: https://en.wikipedia.org/wiki/Category:Strategic_reserves

Do we have national strategic reserves of such resources? I know we have a lot, here is a short list: https://en.wikipedia.org/wiki/Category:Strategic_reserves_of_the_United_States https://en.wikipedia.org/wiki/Category:Strategic_reserves_of...

eru 5y ago
Those government-run reserves always seem a bit silly to me. There's nothing special about the reserving business that normal private sector companies can't do. (Especially if you abolish anti price gouging laws.)
- thelittleone 5y ago
  wouldn't strategic reserves (government controlled) provide security and control assurances that the private sector could not provide?
  - eru 5y ago
    The private sector is perfectly capable of providing security? Private sector entities store and handle valuable stuff all the time. (Government) control is another issue. Obviously, a government run scheme would be under more government control. Though laws are perfectly capable of controlling private sector entities, too.
    - piva00 5y ago
      Security is not profitable until a crisis hit, why would a private company in the JIT business world care about the security of a society if it's not profitable until it is? That's exactly how you get price gouging...
      - eru 5y ago
        Price gouging is exactly what makes security profitable! That's very similar to how peaker plants work. See https://en.wikipedia.org/wiki/Peaking_power_plant https://en.wikipedia.org/wiki/Peaking_power_plant
        voakbasda 5y ago
        Isn’t price gouging with security called a protection racket?
- deleted 5y ago
  [deleted]
- otterley 5y ago
  If they could do it, we would have let them. But due to market failures throughout the course of history, we have learned to apply hysteresis to markets by stockpiling reserves and offering price supports in times of oversupply. The alternative is boom and bust cycles, which is fine for some markets like cryptocurrency and tulips, but bad for food and other necessities.
  - eru 5y ago
    What kind of market failures are you talking about? Robust futures markets are perfectly capable of protecting producers and consumers from price fluctuations (and help stabilize prices as they do so). Similarly for long term contracts between consumers and suppliers.
    - otterley 5y ago
      Futures markets and long term contracts don’t help people eat. You can’t eat food that doesn’t exist due to droughts, floods, freezes, fires, or pestilence.
      - eru 5y ago
        Neither can the government produce food out of a vacuum. So?
        piva00 5y ago
        That's why... They stockpile.
        eru 5y ago
        Stockpiling is a rather straightforward operation. In addition, the benefits of stockpiling are both rivalrous and excludable. Ie stockpiles are not a 'public good'. So the private sector is perfectly capable of stockpiling, too.
- dehrmann 5y ago
  When companies often last less than 50 years, they have no interest in preparing for events that happen every 50 years. If they did, it only makes it more likely that a competitor would out-compete them.
  - eru 5y ago
    You might remember Warren Buffett offering a billion USD to people who could perfectly predict something called 'March Madness'. I don't know the details, but it seems to be some kind of American sporting event, and getting everything right was exceedingly unlikely. You can buy bespoke insurance for this kind of thing. See https://en.wikipedia.org/wiki/Prize_indemnity_insurance https://en.wikipedia.org/wiki/Prize_indemnity_insurance By your logic, Warren Buffett should have been able to buy spend just a dollar or so to buy insurance against someone getting everything right, shouldn't he? After all, the chances were exceedingly small and competition would have driven down the insurance premium?

eru 5y ago

Those government-run reserves always seem a bit silly to me. There's nothing special about the reserving business that normal private sector companies can't do. (Especially if you abolish anti price gouging laws.)

thelittleone 5y ago
wouldn't strategic reserves (government controlled) provide security and control assurances that the private sector could not provide?
- eru 5y ago
  The private sector is perfectly capable of providing security? Private sector entities store and handle valuable stuff all the time. (Government) control is another issue. Obviously, a government run scheme would be under more government control. Though laws are perfectly capable of controlling private sector entities, too.
  - piva00 5y ago
    Security is not profitable until a crisis hit, why would a private company in the JIT business world care about the security of a society if it's not profitable until it is? That's exactly how you get price gouging...
    - eru 5y ago
      Price gouging is exactly what makes security profitable! That's very similar to how peaker plants work. See https://en.wikipedia.org/wiki/Peaking_power_plant https://en.wikipedia.org/wiki/Peaking_power_plant
      - voakbasda 5y ago
        Isn’t price gouging with security called a protection racket?
deleted 5y ago
[deleted]
otterley 5y ago
If they could do it, we would have let them. But due to market failures throughout the course of history, we have learned to apply hysteresis to markets by stockpiling reserves and offering price supports in times of oversupply. The alternative is boom and bust cycles, which is fine for some markets like cryptocurrency and tulips, but bad for food and other necessities.
- eru 5y ago
  What kind of market failures are you talking about? Robust futures markets are perfectly capable of protecting producers and consumers from price fluctuations (and help stabilize prices as they do so). Similarly for long term contracts between consumers and suppliers.
  - otterley 5y ago
    Futures markets and long term contracts don’t help people eat. You can’t eat food that doesn’t exist due to droughts, floods, freezes, fires, or pestilence.
    - eru 5y ago
      Neither can the government produce food out of a vacuum. So?
      - piva00 5y ago
        That's why... They stockpile.
        eru 5y ago
        Stockpiling is a rather straightforward operation. In addition, the benefits of stockpiling are both rivalrous and excludable. Ie stockpiles are not a 'public good'. So the private sector is perfectly capable of stockpiling, too.
dehrmann 5y ago
When companies often last less than 50 years, they have no interest in preparing for events that happen every 50 years. If they did, it only makes it more likely that a competitor would out-compete them.
- eru 5y ago
  You might remember Warren Buffett offering a billion USD to people who could perfectly predict something called 'March Madness'. I don't know the details, but it seems to be some kind of American sporting event, and getting everything right was exceedingly unlikely. You can buy bespoke insurance for this kind of thing. See https://en.wikipedia.org/wiki/Prize_indemnity_insurance https://en.wikipedia.org/wiki/Prize_indemnity_insurance By your logic, Warren Buffett should have been able to buy spend just a dollar or so to buy insurance against someone getting everything right, shouldn't he? After all, the chances were exceedingly small and competition would have driven down the insurance premium?