Posted on 07/23/2015 5:45:21 AM PDT by Enlightened1
Great news hope to see you soon. It's really hot here.
:-)
We have not repealed the business cycle and we’re due for another recession based on recent history.
Every 8 years, and it happens in a President’s last year in office.
Bush Sr 1992 - minor recession 2-3 quarters
Clinton 2000 - bigger recession, NasDaq crash
Bush 2008 - even bigger recession, housing/market crash
Obama 2016 - ? - probably worse than 2008 based on trends
And to get out of each recession has taken progressively lower interest rates, for a longer time...only now it’s 0% rates for almost 6 years and trillions in QE.
When the next recession happens the Fed will be impotent to respond.
When the price drops, they have to produce even more to make enough to pay the banks. Leveraged expansion is always a bit of a crapshoot.
The biggest manipulators of commodities are the funds. The CME was created so that farmers could sell FUTURE production of wheat, corn, pork, cattle, etc. That way they could show an accounts payable to their bank so they could buy seed, fertilizer, fuel, etc.
Also, so large consumers of those commodities could buy and lock in a FUTURE price so that they could know what their cost was down the road to produce cereal, bread, etc. Sawmills would lock in a FUTURE price of what they could sell their lumber at 2 months, four months, six months down the road.
Now, the volume bought and sold by hedge funds is 10x what is traded by end users or producers. However, the guy who usually gets screwed is the dentist in Chicago whose broker told him to buy lumber futures and he does not own a lumber yard to take delivery at.
Or as my futures broker states on all his correspondence:
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources, and other relevant circumstances. Past performance is not necessarily indicative of future results.
We call that servicing debt.
We have never been a fan of the futures trading. We are just producers who seem to be blowing in the wind as the manipulators play with greed. Corzine screwed a bunch of futures investors didn’t he?
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