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To: Beagle8U
The thing the article fails to mention is buying massive amounts with little to nothing in cash to cover the futures purchase. That drives up prices on the futures, which are then sold at inflated prices. That is what is happening today. Even Eric Bollings, who worked in that business, said that. Require real assets to cover the trades and that problem instantly goes away.

Your understanding of the futures market seems very thin. Futures trades actually smooth out the irregularities that would develop in any commodity due to seasonal, political, weather, transportation anomalies etc. When you take on a futures contract you own the product. You may make a profit or you could take a big big loss depending on the fluctuations. Since most commodity contracts are held for minutes, maybe a couple of hours, they are traded actively and the prices stay in a very close range. Go spend a day at the Chicago Board of Trade or the Merc or any of the active commodities exchanges and learn how the system works. You'll be glad you did.

Former trader

22 posted on 04/27/2012 7:31:28 AM PDT by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: Don Corleone

Perhaps you should talk to Eric Bollings about it.

If you know more about it than he does you could get your own TV show.


23 posted on 04/27/2012 8:50:02 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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