Posted on 09/11/2006 9:18:01 AM PDT by staytrue
Commodities of all types are falling big today.
Oil down over a dollar.
Gold down 23 dollars.
Silver down a dollar.
Grains and meats are down.
sugar, cotton, orange juice, lumber down also.
Cocoa and live hogs are about even.
Politics perhaps. That is if you consider OPEC moves to be political.
The speculation angle is nonsense. It reflects a fundamental misunderstanding of the long term macro price movement.
And "overpriced" is a word that is defined by each person based on their opinion or whether they are a buyer or seller of oil.
People will only pay what it is worth to them. Sellers will always get the highest price possible. It's not that hard.
Since I'm a BUYER of oil, it is grossly overpriced. The increase in consumption in the last couple of years worldwide has not even outstripped the increase in supply. Speculation is rampant. Oh,,,,could Iran cause more trouble. Oh,,,,will OPEC cut production to keep prices high. Oh,,,,will ANWR be opened to drilling. Oh,,,,,will the hurricane season wipe Louisiana off the map due to global warming. It goes on and on.
http://www.gasandoil.com/goc/features/fex53581.htm
I'm buying a Hummer....
I'm still curious as to why this is happening...somebody know something we don't? and if "they" do, and it's for terror-related reasons...why aren't they sharing, to help keep America safe instead of worrying about their own $$ behinds alone.
It's the vast right wing computer empire. Diebold, diebold, diebold. :-)
Check the seasonal averages. Gold normally rises in September, mostly ahead of Christmas shopping and, more important, the wedding season in India.
But not this year.
For what it's worth, the price of basic energy at the wholesale level or on the commodity exchanges has just fallen over a cliff these past few days, after oscillating for month or two.
For a pretty good picture of the waterfall these past few days in gold and energy shares, see these charts by Jack Chan:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID530404
my copper stock in Phelps Dodge dropped $7.00 Ouch
Price war in Urbana,OH. All prices at $2.19, will the Clark Station go lower?
LOL! I'd like one or two of those myself. :)
Your post puts a new spin on my parents' old expression: "Money doesn't grow on trees." :)
"Price war in Urbana,OH. All prices at $2.19, will the Clark Station go lower?"
For once we can agree with the democrats theme song. Happy days are here again. The democrats may not think so, however.
Easy money out of Japan especially, and low interest rates world wide, have spawned bubble after bubble in speculative assets. Stocks cratered 5 years ago and have been sane for the last 3, as earnings have risen to justify recovered prices. Houses were next but have topped. Commodities went parabolic a little less than a year ago and are now crashing. Commercial real estate is still going for the moment, and government bonds remain the most overpriced stuff on the planet.
There has also been massive politically motivate doom mongering out there, with people trading a fine economy like it is the end of the world. It isn't, and markets will adjust and take their money.
At least some of these commodities had gotten waaay over-inflated. The commodity markets have been slumping for about 3 weeks, I believe.
LOL. And to think of all the $$ we can then spend on a real precious commodity....beer.
I think it probably had more to do with the 9-11 Anniversary and oil price/barrel down a bit. The Dow and Nasdaq finished with small gains, although declines led over advances for both, and other industries, notably home furnishings, were up. I don't know if that's a massacre.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.