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Economics at the Movies - Billy Ray Valentine learns commodities
20th October 2010
A classic clip to show whenever a student asks you about commodities!
Randolph Duke: We are ‘commodities brokers’, William. Now, what are commodities? Commodities are agricultural products… like coffee that you had for breakfast… wheat, which is used to make bread… pork bellies, which is used to make bacon, which you might find in a ‘bacon and lettuce and tomato’ sandwich. And then there are other commodities, like frozen orange juice… and GOLD. Though, of course, gold doesn’t grow on trees like oranges.
Clear so far?
Billy Ray: Yeah.
Randolph Duke: Good, William! Now, some of our clients are speculating that the price of gold will rise in the future. And we have other clients who are speculating that the price of gold will fall. They place their orders with us, and we buy or sell their gold for them.
Mortimer Duke: Tell him the good part.
Randolph Duke: The good part, William, is that, no matter whether our clients make money or lose money, Duke & Duke get the commissions.
Mortimer Duke: Well? What do you think, Valentine?
Billy Ray: Sounds to me like you guys are a couple of bookies.
Randolph Duke: I told you he’d understand.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.