“Your theory fails to account for the fact that commodities are up across the board, across the globe. That cannot be explained by supply and demand alone, and especially in a weak economy - just as the runup in the price of silver in the early eighties was caused by the Hunt brother’s speculation. “
I’m just talking about the latest run-up in oil prices. Overall, it’s more than obvious that the reason prices are souring on everything is the simultaneous printing of dollars, Yen, and Euros. Basically, if you double the supply of fiat currencies, without doubling the economic output to match, prices will double...which is exactly what’s happened here, and to a lesser extent in Japan and Europe.
I know, the last thing we want to do is blame the governments we all elected...since that is blaming ourselves...but that is the case here.
But commodities are up across the board - so it is not just supply and demand in one commodity. Your theory has to fit the larger facts, which it does not.
I know, the last thing we want to do is blame the governments we all elected...
Do you even read the posts before responding to them? I put a large part of the blame on governments and central bankers. Central bankers are printing money so that governments can keep spending willy-nilly. Governments have loosened requirements for margins and position limits to allow rampant speculation to the point of market manipulation like we saw with the Hunts 30 years ago. Speculators are simply responding to the opportunities and motivations presented to them by governments and central banks. I don't blame them, but I also don't accept the status quo as anything that is desirable. In a way, the commodities run-up is a form of global tax that is hedging financial institutions from the impacts of quantitative easing. And it is sticking it to consumers right in the shorts, and introducing widespread uncertainty into the economy, which we don't need now.
What needs to change is that the central banks quit printing so much money and that margin reguirements are raised and position limits imposed. To consumers, they don't care why the cost of living is going up, they just know that it is - and for billions, it isn't just about more expensive gasoline, it is the difference between a subsistance diet and starvation.