You’re in luck today, because this is one of those moments where the book stops being theoretical and starts talking back to the real world.
Before we even get into the book club, I want to flag something that just happened. Two of the largest miners on the planet, Glencore and Rio Tinto, are talking about merging. They tried to do this back in 2014. It didn’t happen then. Prices were lower. Ironically, it was probably a better time to do it.
Now prices are down more than 40 percent this year, and the fear is a supply glut.
And that word—supply—is the enemy.
The Wall Street Journal article lays it out plainly, but you wouldn’t really hear it unless you’d been reading Benjamin Graham. Producing iron ore is still highly profitable, even at lower prices, which is exactly the problem. Because Glencore thinks Rio and BHP are on the wrong path by ramping production even higher.
Why?
Because higher production kills prices.
So the logic is simple and uncomfortable: acquire the competitor, restrict output, shore up prices. Capital discipline, they call it. Which really means shutting things down, keeping supply tight, and letting prices breathe.
But of course that creates a political problem. Shut down mines and you lose jobs. Especially in places like Australia. So now you’ve got economics on one side and politics on the other, and this is exactly the tension Graham is writing about.
And that’s why today’s reading matters.
Laissez-faire collapses under stress, but restriction never becomes a permanent solution anyone is happy with. So governments keep intervening anyway—not just in war, but in peace, not temporarily, but continuously.
And that brings us to the part Graham actually wants to talk about next: storage.
Because if restriction doesn’t work and dumping doesn’t work, maybe conservation does.
And here’s where history gets interesting.
For most of human civilization, surplus wasn’t a problem. It was a blessing. Individuals stored it. States stored it. Kings were the state, and their wealth was literally piles of consumable goods.
Ancient Egypt had a superintendent of granaries as a top official.
Rome ran massive public grain reserves, feeding the city with imported wheat and free rations. At one point, 291 public granaries held seven years of supply.
France under Louis XIV, the Revolution, Napoleon—everyone stored grain.
Early Virginia law literally required households to keep a barrel of corn.
And then Graham flips the perspective.
Centuries ago, surplus was dangerous because it was kept off the market by speculators. Today surplus is dangerous because it’s dumped onto the market all at once.
Same commodity.
Opposite problem.
And then he drops the most unsettling example of all.
Joseph.
The biblical hero of foresight and planning.
Except when you actually read the details, Joseph wasn’t just planning. He was speculating. The weather forecast was kept secret. Grain was bought cheap during the fat years. Sold back at exorbitant prices during the lean years. Pharaoh ended up owning the money, the cattle, the land, and eventually the people.
Storage created stability—for the ruler.
That reframe changes everything.
Which is why this book club isn’t about finding a trade today. It’s about learning how to observe slowly.
We’ll keep taking it one day at a time.
Hope you have a wonderful, powerful afternoon.
