Closely Watched Trains

FTLComm - Tisdale - March 23, 1999

We take the movement of trains for granted but every movement involves the economic consequences of commerce. This grainblock left Tisdale Monday afternoon and was fully loaded. The shipments from Harvest Valley, Louis Dreyfus and Pioneer continue at a steady pace. They all report that they would like to be moving more but the steadiness of the shipments indicate that the process continues. We often get confused about the way commodities are marketed as the price goes down or there are disruptions in the handling process as with the strike by federal employees at the West coast. However, the evidence is that the system continues to function and even if resulting in lower returns the product is being moved to market. Canadian National has begun moving 10,000 foot trains East bound to the lakehead along the CN main line from Melville to Winnipeg. This is a new development. Though the railway has had the capability of moving two mile long trains, it is not something they have been doing routinely. This year the practice has become standard operation and train crews running out of Melville are reporting that the frequency of runs is up suggesting that grain flowing through the Great Lakes, which has been slow in past years is picking up this year as the lower price of Canadian hard wheat makes it attractive to European markets who are now self sufficient in grain consumption. A more rapid recovery in the Asian economies would make a huge difference in the price of cereals and other prairie grains. The hard times in North Korea are not getting any better while both Japan and China are moving steadily toward improved prosperity. The unfettered speculation of the stock market may very well be some how interacting with Asian economies and the American bail out of the massive hedge fund might have sent a very loud signal to Japanese bankers and governments alike, as they have realised that the United States insistence on their reforming their banking system is not being practiced in New York and they are putting their "business as usual" signs back up. It was international speculation that triggered the so-called Asian meltdown and it would appear now that this external attack on Asian markets and currencies was a fickle product of over capitalisation being available and acid indigestion on the part of mutual fund controllers. The legislation now being put forth in Ottawa to impose world wide speculation taxes is an interesting response to the wild and woolly frontier of capitalism. There is considerable agreement that measures of this type are needed and would settle the world's economic conditions down and many feel that the Canadian initiative has more then a good chance of moving forward.