Speculators are the real terrorists

[Stalin]

If he is still alive, Obama Bin Laden must be having a quiet chuckle that the global finance industry and speculators in food, oil and other commodities are doing far more damage and change than he could ever imagine or hope to implement.

The rising food prices in North Africa and West Asia have radicalised families to the point where they have taken action. All the US lickspittle regimes are going, tottering or ready to explode.

Anyone care to comment ?

Comrade Stalin

 

[Rick]

As usual, you don't know what you're talking about. What you call "speculators" are just investors. Right now, they are pricing up scarce materials. Efficient pricing is what properly conveys through the market the information that a quantity is scarce. Foodstuffs are becoming RELATIVELY scarcer because new wealth in india and china and the rest of the emerging heartland are driving up prices through increased demand. What - you want them to go back to poverty?? They'll tell you no thanks - they've been there and done that with your socialism. As for africa, it's problems stem from its inability to form stable democracies, the rule of law, and end tribal blood baths.

Really, read an economics book.

 

[GenSeneca]

The rising food prices in North Africa and West Asia...

The rising food prices are a result of the US inflating its currency through QE2, not speculation. Oil prices are a result of speculation, supply and demand have not shifted as drastically as the price of a barrel of crude.

The command and control economy that you support would artificially set prices for such commodities and be even more disasterous. If we put Socialists in charge of the desert, there would soon be a shortage of sand.

 

[TruthSeeker]

If he is still alive, Obama Bin Laden must be having a quiet chuckle that the global finance industry and speculators in food, oil and other commodities are doing far more damage and change than he could ever imagine or hope to implement.

The rising food prices in North Africa and West Asia have radicalised families to the point where they have taken action. All the US lickspittle regimes are going, tottering or ready to explode.

Anyone care to comment ?

Comrade Stalin

I actually agree with you on something, Stalin! Armageddon must be near! The key word here is G-R-E-E-D.

You're damn right that speculators and manipulators and carpetbaggers have penetrated every corner of the commodities market and the stock market. Supply and demand aren't even in the equation anymore when it comes to explaining why commodities prices are up or down. It's all about high stakes gambling, and the bettors putting their money down on the winners AND the losers. Goldman Sachs and their mysterious executives should all be arrested, shackled, and dropped into a hole somewhere.

It's all about the swindlers artificially creating whatever "climate" they desire so they can line their pockets with cash. And while the U.S. economy crumbles, the SEC is asleep at the wheel, and they have been for many, many years.

 

[Rick]

Stop the "speculator" BS. Oil prices have been inflated for a long time because of the oil cartel. Don't like the "speculators" prices? You can crush them by driving less, combining errands into one trip, riding the bus to work, changing the oil in your car, keeping your tires properly inflated, etc etc.

The correct price of something is nothing more than what people are willing to pay for a good or service at a given instant in time. If you are willing to pay $5 for a gallon of gas, that's the correct market price.

 

[TruthSeeker]

Stop the "speculator" BS. Oil prices have been inflated for a long time because of the oil cartel. Don't like the "speculators" prices? You can crush them by driving less, combining errands into one trip, riding the bus to work, changing the oil in your car, keeping your tires properly inflated, etc etc.

The correct price of something is nothing more than what people are willing to pay for a good or service at a given instant in time. If you are willing to pay $5 for a gallon of gas, that's the correct market price.

The mysterious "oil cartel". Does this cartel include Canada and Mexico? I don't think so. Oh, by the way, Canada and Mexico are the two biggest importers of oil to the U.S. Only TWO Middle Eastern countries are in the top ten (Saudi Arabia and Iraq).

People aren't driving more. People are driving a lot less, because the economy is so bad and people can't afford to go anywhere. So why is the price of gasoline over $4.00 a gallon right now?

"Supply and demand" doesn't enter into the equation anymore.

 

[BigRob]

The mysterious "oil cartel". Does this cartel include Canada and Mexico? I don't think so. Oh, by the way, Canada and Mexico are the two biggest importers of oil to the U.S. Only TWO Middle Eastern countries are in the top ten (Saudi Arabia and Iraq).

Oil is priced in a global market...so ultimately all oil exporters play a role.

People aren't driving more. People are driving a lot less, because the economy is so bad and people can't afford to go anywhere. So why is the price of gasoline over $4.00 a gallon right now?

"Supply and demand" doesn't enter into the equation anymore.

Gas is more expensive because the price of oil is tied to the value of the dollar...which is tanking, and thereby automatically driving up the cost of oil.

 

[nobull]

Currencies float and the US currency is the reserve currency. When you say paper money has no value that is an incorrect statement. Currency is debt.

If you are employed, you render your labors and are given currency. So that is a debt owed to you so currency is always debt. With this debt or voucher, you buy things. Your labors are exchanged.

This is not the same as gold and silver which are investments they are not debt.

With this in mind, it is possible that your debt vouchers become less valuable over time or more valuable. In low employment conditions, the employment debt doesn't lose value it becomes more valuable. For a guy buying oil, it may buy him less oil but if the guy doesn't own a car and use oil then it has no effect on him.

The key to inflation is the M1 money supply, not the speculation of dollar futures. And to date the M1 money supply is not expanding. The way this works and the only way it works if for the M1 supply to increase and how does that happen? Loans from federal reserve banks to borrowers. But as you know, credit in real estate has dried up and with high unemployment, the banks are not loaning money. So we are not inflating.

Then what is happening? Scared money has moved from the markets into bonds and into gold and silver and other commodities. We have a few strange commodities like cotton, and wheat, and sugar, and copper and beef and pork bellies etc. which have an interdependence. Corn is priced for ethanol which is stupid. Corn is used in pig and beef feed. So when one price goes up the others follow.

But that is not what we have and I will explain why. We have no shortages of supply and no increases in demand.

Look at oil for example. Since the Libyan crisis oil has move up 6% but the contract volumes have declined by 20%. So this is light volume intrinsic traders who think oil has somehow increased in value magically from 86 to 112 dollar a bbl under these circumstances.

A friend of mine used a great term for this, a flame off. This is always what you want when you are selling something to someone else. You want them to want something in a crazy way to pay crazy prices. That is how money is made trading.

The point of this is that yeah you had some wheat shortages but that was changed with winter wheat planting. Corn is going up on ethanol but that's just stupid and corn moved sympathetically with wheat not because of demand or supply but because of the intrinsic flame off.

Who caused all this? Fed policy but not their monetary policy but their back stop liquidity policies. Bernanke has made it clear, the economy will not stop due to a lack of liquidity. So as with Greenspan, liquidity spawns speculation. But its not in the stock market... its in the commodities and bond markets.

Bonds are dead men walking. Bondholders are just looking for an exit before someone shouts fire. What about commodities including gold and silver? They are certainly frothy and on the basis of what exactly... demand no, supply no. Anyone on earth can buy gold or silver and as much as they want. So it is an intrinsic flame off. Its industrial worth is negligible.

Oil has lots of industrial uses but no shortages of supply, no demand issues. In fact Japan oil demand is down more than the 2% to cross off Libya. And the contract volumes are down.

Without the interjection of news fantasy such as Libya or shutting down the gov with the amusing notion of the homeless taking to the streets... I thought they were already on the streets... I digress. But the sensational news is intended to introduce an intrinsic flame off.

Commodities are always self expunging. Take Beef in the 70s. Nixon was talking about Meat with honor... or is that peace with honor serving meat. I am not sure. But Beef prices skyrocketed. What happened? The public turned to chicken. Then what happened? Heard disease dropped and chicken became American's favorite meat an beef fell by the wayside. The same thing will happen in any speculative bubble.

Gold and silver of course are the province of the gold bugs... where rational thought goes out the window with gold fever. The glimmer, the weight... ahhhhh gold. History is littered with the bodies of gold investors. Dare I say it Gold is more useless that real estate speculation in 2007. And you remember 2005 when the cab drivers were flipping properties like flap jacks. Guess what... they are still driving cabs today and now they are buying gold and silver.

As I have said before if you honestly believe it is the end of the global economy and civilization, then gold will only make you a target for warlords who will take everything you have including your life. And we ain't there or going there.

Do I know how high gold or silver can get? As high as manic depressives can get in mania I suppose. But part of investing is speculating. Not all of one's money but a tad is fun. So I look at silver and the quality of the buyer's hairdressers and cab drivers and then I factor in silver's 31 YEAR high and I think... are we in the worst shape in 31 years back when Bunker Hunt tried to corner silver? Then I think, we had one heck of a recession during Carter that dragged on through Reagan's fist two years... but somewhere in their silver collapsed. So I see similarities in time. I lived through the Carter recession and it was much worse. Volker had squeezed out all liquidity. His policies were a disaster. He and Carter together were toxic. Reagan policies countered Volker and got the nation growing again.

Here we have the opposite situation. We have an accommodative Fed with just hideous Obama political policies.

I will tell you one more thing then I am done. Commodities are far less forgiving than stocks. Multiply commodities in ETF and you can get violent 20% swings in one day when the commodities take their death tumble and THEY ALWAYS DO!!! Greed in housing speculation, greed in commodity speculation always keeps the cab driver, driving the cab and the hairdresser telling her woes to customers long after the dust of insane speculation follows.

best regards
doug

 

[Rick]

The mysterious "oil cartel". Does this cartel include Canada and Mexico? I don't think so. Oh, by the way, Canada and Mexico are the two biggest importers of oil to the U.S. Only TWO Middle Eastern countries are in the top ten (Saudi Arabia and Iraq).

Give it up. The cartel doesn't have to control the whole world's oil supply to control the price. They control enough of it that if they stopped pumping, worldwide dislocation and a depression would result. Mexico and canada are "free riders" - once the cartel sets the price, it becomes the world price, and that's what they sell it for. The acts of "speculators" ONLY have the power to drive it up further because of market effecrs ON TOP on the cartel effects, ie, in reflecting actual scarcity, as opposed to the contrived scarcity or threat of scarcity which comes from the cartel.

 

[Stalin]

As usual, you don't know what you're talking about.

Really, read an economics book.

As usual, your overweening arrogance and sense of self-righteousness has overcome your much (self-)touted intelligence.

Economics Book ? How about Graham and Dodd's 1934 text "Security Analysis"

"..In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum.[1] Speculation typically involves the lending of money or the purchase of assets, equity or debt but in a manner that has not been given thorough analysis or is deemed to have low margin of safety or a significant risk of the loss of the principal investment. The term, "speculation," which is formally defined as above in Graham and Dodd's 1934 text, Security Analysis, contrasts with the term "investment," which is a financial operation that, upon thorough analysis, promises safety of principal and a satisfactory return.[1]

In a financial context, the terms "speculation" and "investment" are actually quite specific. For instance, although the word "investment" is typically used, in a general sense, to mean any act of placing money in a financial vehicle with the intent of producing returns over a period of time, most ventured money—including funds placed in the world's stock markets—is actually not investment, but speculation.

Speculators may rely on an asset appreciating in price due to any of a number of factors that cannot be well enough understood by the speculator to make an investment-quality decision. Some such factors are shifting consumer tastes, fluctuating economic conditions, buyers' changing perceptions of the worth of a stock security, economic factors associated with market timing, the factors associated with solely chart-based analysis, and the many influences over the short-term movement of securities.

There are also some financial vehicles that are, by definition, speculation. For instance, trading commodity futures contracts, such as for oil and gold, is, by definition, speculation. Short selling is also, by definition, speculative.

Financial speculation can involve the buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives, or any valuable financial instrument to profit from fluctuations in its price, irrespective of its underlying value.

http://en.wikipedia.org/wiki/Speculators

Comrade Stalin

 

[Rick]

What you left out from your wikipedia citation:

In a financial context, the terms "speculation" and "investment" are actually quite specific. For instance, although the word "investment" is typically used, in a general sense, to mean any act of placing money in a financial vehicle with the intent of producing returns over a period of time, most ventured money—including funds placed in the world's stock markets—is actually not investment, but speculation.

So that means the overwhelming majority of adults in the US are your terrorist "speculators", because they own stocks, or have them in their IRAs or 401Ks, or the people who manage their pension do.

Almost ANY investment relies on uncertainty - in fact, the return is priced into the degree of riskiness.

Really, no kidding, I'm tired of tutoring you - get a MODERN economics book and read it cover to cover. I did in college - I took Econ 101, 102, and 103, during which I read the book by Samuelson, a standard text, from cover to cover - about 900 pages. It's time for you to replace your leftwing slogans with some actual learning.

 

[TruthSeeker]

Currencies float and the US currency is the reserve currency. When you say paper money has no value that is an incorrect statement. Currency is debt.

If you are employed, you render your labors and are given currency. So that is a debt owed to you so currency is always debt. With this debt or voucher, you buy things. Your labors are exchanged.

This is not the same as gold and silver which are investments they are not debt.

With this in mind, it is possible that your debt vouchers become less valuable over time or more valuable. In low employment conditions, the employment debt doesn't lose value it becomes more valuable. For a guy buying oil, it may buy him less oil but if the guy doesn't own a car and use oil then it has no effect on him.

The key to inflation is the M1 money supply, not the speculation of dollar futures. And to date the M1 money supply is not expanding. The way this works and the only way it works if for the M1 supply to increase and how does that happen? Loans from federal reserve banks to borrowers. But as you know, credit in real estate has dried up and with high unemployment, the banks are not loaning money. So we are not inflating.

Then what is happening? Scared money has moved from the markets into bonds and into gold and silver and other commodities. We have a few strange commodities like cotton, and wheat, and sugar, and copper and beef and pork bellies etc. which have an interdependence. Corn is priced for ethanol which is stupid. Corn is used in pig and beef feed. So when one price goes up the others follow.

But that is not what we have and I will explain why. We have no shortages of supply and no increases in demand.

Look at oil for example. Since the Libyan crisis oil has move up 6% but the contract volumes have declined by 20%. So this is light volume intrinsic traders who think oil has somehow increased in value magically from 86 to 112 dollar a bbl under these circumstances.

A friend of mine used a great term for this, a flame off. This is always what you want when you are selling something to someone else. You want them to want something in a crazy way to pay crazy prices. That is how money is made trading.

The point of this is that yeah you had some wheat shortages but that was changed with winter wheat planting. Corn is going up on ethanol but that's just stupid and corn moved sympathetically with wheat not because of demand or supply but because of the intrinsic flame off.

Who caused all this? Fed policy but not their monetary policy but their back stop liquidity policies. Bernanke has made it clear, the economy will not stop due to a lack of liquidity. So as with Greenspan, liquidity spawns speculation. But its not in the stock market... its in the commodities and bond markets.

Bonds are dead men walking. Bondholders are just looking for an exit before someone shouts fire. What about commodities including gold and silver? They are certainly frothy and on the basis of what exactly... demand no, supply no. Anyone on earth can buy gold or silver and as much as they want. So it is an intrinsic flame off. Its industrial worth is negligible.

Oil has lots of industrial uses but no shortages of supply, no demand issues. In fact Japan oil demand is down more than the 2% to cross off Libya. And the contract volumes are down.

Without the interjection of news fantasy such as Libya or shutting down the gov with the amusing notion of the homeless taking to the streets... I thought they were already on the streets... I digress. But the sensational news is intended to introduce an intrinsic flame off.

Commodities are always self expunging. Take Beef in the 70s. Nixon was talking about Meat with honor... or is that peace with honor serving meat. I am not sure. But Beef prices skyrocketed. What happened? The public turned to chicken. Then what happened? Heard disease dropped and chicken became American's favorite meat an beef fell by the wayside. The same thing will happen in any speculative bubble.

Gold and silver of course are the province of the gold bugs... where rational thought goes out the window with gold fever. The glimmer, the weight... ahhhhh gold. History is littered with the bodies of gold investors. Dare I say it Gold is more useless that real estate speculation in 2007. And you remember 2005 when the cab drivers were flipping properties like flap jacks. Guess what... they are still driving cabs today and now they are buying gold and silver.

As I have said before if you honestly believe it is the end of the global economy and civilization, then gold will only make you a target for warlords who will take everything you have including your life. And we ain't there or going there.

Do I know how high gold or silver can get? As high as manic depressives can get in mania I suppose. But part of investing is speculating. Not all of one's money but a tad is fun. So I look at silver and the quality of the buyer's hairdressers and cab drivers and then I factor in silver's 31 YEAR high and I think... are we in the worst shape in 31 years back when Bunker Hunt tried to corner silver? Then I think, we had one heck of a recession during Carter that dragged on through Reagan's fist two years... but somewhere in their silver collapsed. So I see similarities in time. I lived through the Carter recession and it was much worse. Volker had squeezed out all liquidity. His policies were a disaster. He and Carter together were toxic. Reagan policies countered Volker and got the nation growing again.

Here we have the opposite situation. We have an accommodative Fed with just hideous Obama political policies.

I will tell you one more thing then I am done. Commodities are far less forgiving than stocks. Multiply commodities in ETF and you can get violent 20% swings in one day when the commodities take their death tumble and THEY ALWAYS DO!!! Greed in housing speculation, greed in commodity speculation always keeps the cab driver, driving the cab and the hairdresser telling her woes to customers long after the dust of insane speculation follows.

best regards
doug

You are a perfect example of somebody who believes that repeating the same inaccuracies over and over again will eventually turn them into facts.

Your "financial" world does not exist anymore, and by the time you figure this out, it will be too late.

 

[Stalin]

What you left out from your wikipedia citation:



So that means the overwhelming majority of adults in the US are your terrorist "speculators", because they own stocks, or have them in their IRAs or 401Ks, or the people who manage their pension do.

Almost ANY investment relies on uncertainty - in fact, the return is priced into the degree of riskiness.

Really, no kidding, I'm tired of tutoring you - get a MODERN economics book and read it cover to cover. I did in college - I took Econ 101, 102, and 103, during which I read the book by Samuelson, a standard text, from cover to cover - about 900 pages. It's time for you to replace your leftwing slogans with some actual learning.

blah blah blah ..the usual physics student superiority attitude...I'm so clever and you are so dumb..tiresome..

I hope to have a precise discussion of what speculation is and is not for later..my post is that money earning money is bogus - work and goods earn money.

If socialism is so bad, how come two countries that you specifically mention ..china and india..are the product of socialist ideology and planning.

Both were left basket cases when the imperialists and their lickspittles were kicked out.

And look at them now.

Comrade Stalin

 

[BigRob]

blah blah blah ..the usual physics student superiority attitude...I'm so clever and you are so dumb..tiresome..

I hope to have a precise discussion of what speculation is and is not for later..my post is that money earning money is bogus - work and goods earn money.

If socialism is so bad, how come two countries that you specifically mention ..china and india..are the product of socialist ideology and planning.

Both were left basket cases when the imperialists and their lickspittles were kicked out.

And look at them now.

Comrade Stalin

Are you are seriously attempting to argue that India and China remain true "socialist" (however you would even define that) societies?

 

[Rick]

blah blah blah ..the usual physics student superiority attitude...I'm so clever and you are so dumb..tiresome..

I hope to have a precise discussion of what speculation is and is not for later..my post is that money earning money is bogus - work and goods earn money.

If socialism is so bad, how come two countries that you specifically mention ..china and india..are the product of socialist ideology and planning.

Both were left basket cases when the imperialists and their lickspittles were kicked out.

And look at them now.

Comrade Stalin

You're so uninformed, one doesn't know whether to cry or laugh.

Under communist doctrine, the PRC languished in poverty throught the 40s, 50s, and 60s. When Deng Xiaoping became party chairman in the 70s, he unleashed the market forces through privatization of firms, encouraging free enterprise, allowing foreign investment, ending price controls, allowing free movement of labor, etc etc etc. In other words, he injected the country with a big dose of capitalism. The chinese decided to stop shooting themselves in the foot with 19th century marxism, and the result is the vastly better conditions they have now.

NO SHIIT, NO KIDDING - READ A HISTORY BOOK!!!