The writer is a former banker and author of several technical books on derivatives as well as Traders, Guns & Money, Extreme Money and the upcoming The Everything Bubble.
In 1936, John Maynard Keynes was almost forced to take delivery of an entire month’s supply of Argentine wheat bought via forward contracts after whilst speculating on the commodity’s price movements as manager of his college’s endowment. Whoops.
The famous economist contemplated storing the enormous amount of grain in the crypt of the King’s College Chapel at Cambridge, but that proved too small. Instead, Keynes cleverly avoided the problem by objecting to taking delivery on quality grounds. The delay for mandatory cleaning and inspection allowed the wheat market to recover, and let Keynes offload the shipment without ever having to physically take delivery and store it.