I HAVE BEEN SAYING FOR ALL TO LONG THAT THE CONTINUALLY DECREASING VALUE OF OUR FIAT DOLLARS HAS AS MUCH TO DO WITH THE PRICES AT THE PUMP AS THE INCREASE OF DEMAND IN INDIA & CHINA.
IS EVERYTHING BECOMING MORE VALUABLE BECAUSE THERE ARE LESS OF THESE ITEMS AVAIL.? ARE PRODUCTS LIKE MILK, EGGS, CHEESE, AND OTHERS BECOMING LESS ABUNDANT RESULTING IN PRICE INCREASES?
I BELIEVE NOT! IN MY OPINION IT IS THE VALUE OF OUR CURRENCY THAT IS CAUSING THESE PRICE HIKES. THE BELOW LINK IS JUST ONE EXAMPLE OF THIS THEORY:
http://www.breakthematrix.com/Federal-Reserve/Grand-Illusion-The-truth-a...
GRANTED PRICE FLUCTUATIONS ARE A NORMAL OCCURRENCE, BUT HAVE YOU EVER STOPPED TO THINK WHY EVERYTHING IS GOING UP IN PRICE WHILE THE VALUE OF OUR ASSETS SUCH AS HOMES AND DOLLARS CONTINUES TO DECREASE AT RECORD RATES?
WERE IN A NO WIN SYSTEM! THE BUBBLE IS MORE THAN BURSTING ITS ABOUT TO IMPLODE!
DO YOU KNOW THE SOLUTION TO ALL OUR ECONOMIC PROBLEMS? THE FED BANK THINKS SIMPLY PRINTING MORE MONEY!?!?! DON'T WE GET IT?!?!? IF WE CONTINUE TO PRINT AND PRINT AND PRINT ALL THESE DOLLARS WILL THERE NOT BE SO MANY THAT THE VALUE WILL DECREASE? ISN'T THIS LOGICAL ECONOMICS??? THIS ISN'T A SIMPLE CASE OF SUPPLY AND DEMAND, BECAUSE THE DOLLARS ARE NOT PRINTED FOR NEEDY PEOPLE, IT GOES STRAIGHT TO THE STOCK MARKET.
DO YOU KNOW WHAT IT MEANS WHEN HEAR ON THE NEWS THAT THE FED IS DECREASING INTEREST RATES AND EVERYONE GETS ALL HAPPY??? DECREASE INTEREST RATES = PRINT MORE MONEY.
LET US STOP AND THINK OF THE CONSEQUENCES OF A CENTRAL BANK. DO YOU UNDERSTAND THAT THE FEDERAL RESERVE BANK OF THE UNITED STATES IS A PRIVATE INSTITUTION?? DO YOU KNOW WHAT THIS MEAN??? REALLY???
THE FED IS NOT PART OF THE GOVERNMENT, IT IS A PRIVATELY OWNED BANK AS ARE ALL OTHER BANKS. DO YOU THINK THERE IS STILL GOLD IN FOR KNOX??? NO!!! THAT WAS BEFORE THE FED, NOW THAT GOLD IS IN OTHER VAULTS, THE FED BANK VAULTS. AND THESE VAULTS HAVE PRIVATE OWNERS AS STATED ABOVE, UNLIKE FOR KNOX WHICH WAS PUBLIC.
THE FED HAS IN ALL ACTUALITY STOLEN THE WEALTH OF THE NATION. IN THE PROCESS THEY HAVE LEARNED TO DICTATE BY MEANS OF INFLATION AND DEFLATION THE VALUE OF OUR CURRENCY.
--I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)
3rd president of US (1743 - 1826)
WAKE UP!!!
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I remember a couple of weeks ago, I turned on Fox News (When I need to diffuse anger about something else, I turn it on, and personally yell at the person who made stupid remarks). Anyways, the Dow was down 125 points, and they're like. 'The Market isn't bolding well today due to the fact that the dollar has continued to move down, and that oil has risen once again has rose to a new high in a one-two punch...'
Its very easy to make this correlation. As an accounting major, I saw this trend happening. However, there are other things at play with this as well.
Why would the government be allowing its currency to weaken so much? Its simple, they want conversion to be simple when they introduce the "Amero". Currently the U.S. Dollar and Canadian Dollar are about the same. However, both are continuing to decrease at a faster rate than the Peso.
When the Euro was implemented, it had two relatively stable currencies to rely on as back-up (The U.S. Dollar, and the British Pound) However, for a new "Amero" to be released, currencies must be the same, as there is no currency stable enough to back them up. (As many are actually backed by the Dollar, which is why many areas around the world are seeing such high inflation like 20-30%)
Everytime I hear the "price of oil" on the national news, I listen for the words "the value of the dollar".
I rarely hear that.
Even among the candidates when they tell me how they are going to "fix" the problem...
This is a crucial discussion. I agree totally with Ken: watching things unfold will be interesting and very important. Very interesting, and super important! After we watch the unfolding, I think we should break the matrix...take decisive action, end injustice in our world.
I'm sure glad we had this discussion on global warming in monetary theory. THIS IS VERY GOOD.
qubano123, I normally don't comment on formatting, because Il ike to get lost in content, but in your case, I must say that your posts are very difficult to read because of your use of all caps. Can you consider normal capitalization principles for future posts? I would love to engage in discussions with you regarding your opinions, but I can't handle the all caps posts...
simply put--I WORK IN CAPS
i do this on my schedule and typed this as a spure the moment thing.
i see no reason to judge ones use of capitolization istead of the content there of.
thank you for your insight, i appologize for the eye sore and i hope you will reconsider evaluating the content
With respect, I didn't judge your use of capitalization. I merely suggested considering the use of normal cse sensitivity when posting because of the difficulty of reading words, sentences, and paragraphs that adhered to an all caps format. Nothing more, nothing less. (It's not just a personal thing, but also something that has been studied and wirtten about in typography courses for print and web media). In addition, it is also considered better forum ettiquette to not post in all caps.
Having said that, I will give consideration to your work being done in all caps and the spur of the moment musing. I would never want to be one who is considered to be a stifler of creativity or thought. Time permitting, I will copy/paste your content into Microsoft Word to convert the capitalism into something that I find to be more readable in the future because like I said before, I would like to engage in discussions with you because you do make some interesting points.
and your suggestion was adhered to. i am here for the same reasons you are, to engage in discussion on certain topics. IMO the discussions here should be somewhat intellectual in nature, if my use of CAPS limits that i have no problem adjusting.
hope you enjoy the read sorry to busy to convert myself i think you can tell from my grammer and typos that im rushing....i hope this does not cause the same effect.
All caps is often seen as and used for "shouting" on web forums.
A entire post in caps looks angry to many, and is forbidden on many sites.
Yes those are obivous, honestly it was so early not to mention how tired i was this morning...that i just typed away with out a care.
Randy P.
“Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense.”
-Buddha
not disagreeing with you but I keep trying to hammer home the fact that how can the 5-20% annual monetary inflation show up as 300-600% increases in commodities in the past 5 yrs.
Index Speculators...thats how.
Yes, our wonderful government is asleep at the wheel again and taking part in this massive ripoff of the American consumer.
http://www.breakthematrix.com/node/8674
http://hsgac.senate.gov/public/_files/052008Masters.pdf
Politicians ALWAYS try to blame speculators at times of economic
upheaval and price shock. It's their prelude to introducing price
controls and the concomitant shortages and black markets, as
a cure for problems they've already created, often deliberately.
After intervening in the supply and demand balance through
various coercive acts, they seek to blame others to justify further
coercion.
If a whole bunch of people enter a free market with a dollar bearish
bias, there will admittedly be an upward impact on prices. Those sheep
may get shorn buying something that's already overbought, but in any
case the price will move to a place where the greatest number of
transactions will occur, in REAL time. This will occur even in the face of
manipulative intervention, if it's profit seeking. This organic market
principle does allow for cycles of boom and bust, greed and panic, to
occur on all time frames.
Say oil prices are too high. No problem there, right? All those guys sitting
on a big quantity will become highly motivated to sell some, a lot in fact,
and quickly too, before somebody else does it and knocks down the price
with his "foolish greed". So our protagonist does it first, and being right
will find he has to offer his oil at much lower prices to move any volume.
Finally he finds that he's knocked the price by a dollar a barrel to move
most of his one hundred contract position, and this was his entry point. The
price drop has scared a number of recent buyers, and they're starting to
unload now though and the price continues to drop so our hero slowly starts
to buy back his former position at lower prices, knowing that lunch hour
will soon be over and the heavy hitters will be back on the floor, and the
larger trend is still up.
On all time frames, the cure for high prices is high prices. A free, liquid,
transparent market has always been the most efficient means of price
discovery. Somehow, people prefer to trust the word of someone who says
what they want to hear. In this case that would be blaming a group of people
whose work is not widely understood, except as being somehow evil and like
gambling.(Speculation is trading risk, gambling is trading artificially created risk.)
That's talking about a free market. In the oil market we have a cartel
controlling supply in an inelastic commodity, one in which a small drop in supply
can cause a huge rise in price. Measures need to be taken to break any
cartel.
That being said, I strongly object to the recent rule change that allows
the limits on position size to be exceeded by banks hedging (non-exchange
traded)derivative contracts in the futures markets. That opens the door for
the biggest entities, the central banks, to trade without risk, and move
commodity prices wherever they want with their infinite supply of fiat money.
The limit is only the destruction of whatever currency they use for this. Even
in this situation, the current price is always the right price for now. I don't
think the central banks will use this new power for anybody's good but that
of their secret world government.
Alan Greenspan called derivatives "Financial weapons of mass destruction."
Sound like somebody's plan now? He was also the guy who strongly touted
adjustable rate mortgages at a twenty year interest rate low. "Bubbles" they
call him, over on gold-eagle.
Those who trade without risk are not speculators, in the broader sense. Even
hedgers, like farmers, are taking a risk, even if it's one of less profit exchanged
for a smaller downside. Blaming specs is a form of shooting the messenger,
and doing anything about it is simply punishing everybody by screwing up
price discovery.
New specs entering a market don't represent new demand, because they're not
end users (using the non-hedger definition of speculator). Ultimately supply and
demand control price, and excessive price bias by anyone will result in losses.
There will be gains for those with clearer understanding.
The rule changes proposed(Page8) in the Senate document you posted are fine by me.
Number one is simply consumer protection for pensioners, two I strongly endorse, and
number three is good but could be sidestepped(Note that the directors of Barrick Gold
are not mine operators, but all bankers. Any surprise that they're massively short? The
controllers naturally want to make their fiat look good, and have suppressed gold for
years to do it.)
Ending the markets for index trading and/or other finance market is a mistake generally
because it only serves to reduce liquidity in the markets generally, which increases
the bid ask spread. The main reason for introducing stock index futures and stock futures
was to reduce spreads in their associated option markets, which was accomplished.
Also, traders became easily able to buy or sell whole industry groups or market indices.
Good stocks were bought safely in risky times by the ease of hedging with short index
positions. The apparent rising complexity of the financial markets actually serves to
bring about much lower transaction costs and greater liquidity in all the finance markets,
and create more diverse opportunities for risk reduction and arbitrage trading as a reward
for facilitating the others foregoing.
Commodity markets generally serve to dampen broad price swings in consumer prices,
since they allow middlemen to hedge price risk, as well as farmers. The speculators who
take the other sides of those trades lose money as a group. A small percentage makes
money over long time periods. The public is benefited because price levels are reduced on
balance, through a competition driven distribution of hedging gains by the supply chain.
It's important for the government to act to limit coercion in the finance markets, but there
is a need to consider possible unanticipated consequences. Having position limits in
commodity markets is key to their existence and beneficial role. Someone with infinitely
deep pockets can otherwise come in and take a huge amount of money from all market
participants and establish dictatorial control over prices. Producers and consumers are
both likely to be hurt. That 'someone' is our central bank, the only entity with infinite
dollars at its disposal. It recently seized control of the CFTC, formerly an SRO under the
SEC. This is ominous.
They formerly controlled security prices through the working group on financial markets,
which operated in secret, but this allows them to clobber markets abruptly in huge ways
at any moment. It really makes you wonder what they intend.
"Testimony of Michael W. Masters:
If Congress takes these steps, the structural integrity of the futures markets will be
restored. Index Speculator demand will be virtually eliminated and it is likely that food
and energy prices will come down sharply."
Fine, try it. If the current price levels are correct, they'll be supported through the
futures markets. People remain free to participate in the futures and securities markets,
where stock, debt, fund, index, futures, and commodity positions are easily accessed.
Trading is NOT recommended. Consult your advisor.
a hard time trying to figure out just where you stand on this subject.
The bottom line in my opinion is to close these loopholes immediately and raise margin requirements. This is not price controls.. All that is going on here is much like the technology speculation that happened in the 90's and ended up with the nasdaq losing 75% of its value.
I seem to think that you are of the firm belief that these prices are justifiable at these levels. I strongly disagree. Once again even 20% monetary inflation does not justify 300-600% increases in commodities pricing.
Don't forget the fact that the big money was looking for a new place to go after the tech crash and the bankers and hedgers saw an opportunity in the commodities index's to exploit for there own selfish gains. I been watching it for about 7 years now and all the while every single investment letter has been saying jump on the commodities bandwagon... sound familiar?
As you say there will be consequences to limit speculation but as Masters said and most traders know these markets were not designed for massive speculation. They we designed basically for people in the business to hedge future supply/demand for the long term benefit of the industries... speculation up until 5 yrs ago was a tiny part of this and the majority of em lost. Now that its at times a majority, the losses will be huge and you suggest that these consequences are bad, and just what has a 500% increase in the price of a bbl of oil been ?? good?? ... Massive correction is under way... Just watch it happen. fair value for oil 60-70 bbl..coming soon... to 90 by years end.
Ken-
The cure for high prices is the free market's response to high prices: more production, less
consumption.
The rule changes proposed are fine. The pension funds do need to be protected from a forced
liquidation, and the unrecoverable losses that would entail, perhaps by being grandfathered
as a group in being allowed to maintain their current level of futures contracts and shares in
replicating funds.
The title,"Stop Index Speculation" , I object to. It's misleading, and propaganda, in it's implication
that speculation itself is the cause of high prices. Restricting free markets excessively is like burning
down the grocery store to cure high prices. Food still gets produced and eaten. There may be a
temporary supply disruption. Prices will be generally about the same but with much higher volatility
and appropriate transaction costs.
Leave margin requirements alone. Margins are simply a safety factor so exchanges can be assured
of recouping intraday losses and are calculated based on price volatility. Raising margins can
produce short term downswings, but ultimately the supply demand balance in the real world
controls. Persons who speculate with disregard for this lose. Consumers benefit from that loss.
Increased margins are simply passed along to consumers.
In an economic world flooded with numerical disinfo, namely government numbers, thankfully
it's no one's calling to judge if prices are too high, who's not willing to make a financial commitment
based on their opinion. Among people raised under socialism, like Americans, it's popular to look
for villains and cry for government to cover up the symptoms of its past misdeeds, usually excess
money printing. They've also been intervening in the markets since the '87 crash, so the mess you
want covered up now has been a long time building.
The current price is always justified. If people as a group really felt otherwise they would vote
with their dollars out of self interest, and prices would move to the new correct level. Even Soros
has a tough time moving markets with his gum flapping; wealth has been concentrated in fewer,
more adroit hands(The means by which this occurred has less to do with acumen than favoritism.)
Oil prices got high because of a cartel. Controlling prices would just lead to a shortage and
rationing, but not motivate additional supply.
The only justifiable government action in markets is to stop coercion. Trading position limits are
justifiable for that reason. Cartels are dealt with in the physical world usually, by market or other
forces.
http://futuresource.quote.com/charts/charts.jsp?s=CL%20N8&o=&a=D&z=800x5...
As I write this crude's at trendline support. The moment of truth. I hope you're right that it's
gonna crash. Beware of false breakouts, especially at times of low liquidity, like lunchtime or
the week after a margin increase..
Trading is NOT recommended. Consult your advisor. Especially not a bear put spread.
In response to Ken, Free market will fix many if not majority of the issues. I am sorry if i have been unclear on this issue but i will not concede to any one position over another. As established before there are many many issues at play here and my intentions were to discuss them as such.
Randy P.
“Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense.”
-Buddha
Very well put, we must restore clarity to so many parts of our society these days, the market is a main one. You also raise a good point that people need to stop believe what they are told and make reason out of the almost always ill-spoken statments so many come to proclaim.
Randy P.
“Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense.”
-Buddha
WE CAN ALL AGREE, THERE ARE MANY FACTORS AT WORK HERE. AS STATED IN THE FIRST LINE OF MY POST IMO THE DEVALUATION OF THE DOLLAR GOES HAND IN HAND WITH MANY OTHER FACTORS ONE OF WHICH I REFERECED TO BE INCREASE OF DEMAND TO INDIA AND CHINA, BUT THERE ARE MANY OTHER FACTORS INTO PLAY....ALTHOUGH INMHO THESE ARE THE 2 MOST INFLUENTIAL ONES.
THE SUPPLY AND DEMAND ARGUMENT I HEAR ALL THE TIME AS THE REASON FOR RISING FUEL COSTS. WHAT MY POST REALLY MEANT TO DISPLAY IS THE FACT THAT MORE THAN FUEL IS GOING UP, ITS EVERYTHING. AND PEOPLE CHOOSE TO IGNORE THAT FACT THEN SIMPLY EXPLAIN THE ASTRONOMICAL FUEL JUMPS ON SUPPLY AND DEMAND.
I JUST WANT PEOPLE TO OPEN UP TO THE WIDER SPECTRUM OF CONTRIBUTING FACTORS THAT ARE EATING AWAY AT OUR VALUE AS A NATION DAILY.
all agree... It all goes hand in hand my friend :)
I would also like to add that the CFTC can easily eliminate these loopholes that the banks are using to buy into the markets way over limit. From what I hear they been scouring the trading floors and something is going to go down soon with respect to this. I am sure they are simply firing a warning shot right now. It will be interesting to watch how this all unfolds.