| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 3/7/2006
Posts: 244
|
For intelligent discussion only..........
I can't help but wonder if all of these funds and easy ways to invest in commodities is a good idea. Sure it gives us all an opportunity to make a buck in them, but at what cost?
I believe the current estimate is that there is between a $20 and $30 a barrel investor premium in oil. It other words, if all investors sold their oil positions, oil would drop about that amount.
Gold is the same thing. Now people can buy corn, sugar, steel, nickel, you name it, it can be bought. All of this investor buying and sometimes hoarding definately drives up the cost of all of these necessary commodities.
Rising prices = inflation = higher interest rates = faltering economy.
I am NOT saying we should go back to the days when we could not own gold, but maybe it shouldn't be so easy for investors to drive up the cost of these necessities.
Thoughtful opinions are welcome...
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
investors and traders are a necessary part of a healthy comodity market. We assume risk. Most comodities traders loose any way. Comodities markets are great for companies like Hershey to hedge agains fluxuating prices in Cocoa..... I haven't got a problem with it. I'ts all normal and cyclical. bears are unavoiadable... if they were the oportunity at wonderful returns would not exist.
|
|
Registered User
Joined: 3/7/2006
Posts: 244
|
I'm not talking about companies hedging. I totally agree there.
What I am questioning is hedge funds hoarding millions of barrels of oil along with gold and other commodities.
If it were so necessary, how did we get along before it was so easy? This easy access to hoarding of commodities is a pretty recent thing.
|
|
Registered User
Joined: 9/25/2007
Posts: 1,506
|
QUOTE (Inspector62) This easy access to hoarding of commodities is a pretty recent thing.
Easy access through ETFs to the small ... typically risk adverse ... investor may be a fairly recent thing ...
But large funds are trading real contracts through commodities accounts ...
Speculators add a very needed liquidity to these markets ...
Without them ... huge price swings would occur with virtually every change in the weather ...
Why shouldn't you ... or I ... or any fund have the same right to buy or sell a comodity ... as anyone else ?
The Hunt brothers were cornering the silver market long before we had ETFs ... or hedge funds ... etc ...
I personally believe that the commodities market ... unlike the stock market ... is much more of a "pure" market ...
As ... for every dollar made ... a dollar must be lost ...
Unlike the stock market ... which is more akin to a giant pyramid scheme ...
|
|
Registered User
Joined: 3/7/2006
Posts: 244
|
As ... for every dollar made ... a dollar must be lost ...
That is not true at all. If I buy a stock for a dollar and sell it to you for 2 dollars, then you sell if for 3, who lost a dollar?
SOMETIMES it's true, but in a continuing trend it certainly is not.
|
|
Registered User
Joined: 3/7/2006
Posts: 244
|
Also, I understand your argument that investors add liquidity, you hear the same argument every day. I have heard it many, many times, I'm just not sure it's not a big lie.
Exactly how does some hedge fund hoarding millions of barrells of oil add liquidity? Convince me.
|
|
Registered User
Joined: 9/25/2007
Posts: 1,506
|
I believe that you may have misread my post ...
QUOTE (realitycheck) I personally believe that the commodities market ... unlike the stock market ... is much more of a "pure" market ...
As ... for every dollar made ... a dollar must be lost ...
Unlike the stock market ... which is more akin to a giant pyramid scheme ...
I was speaking of the commodities market ....
QUOTE (Inspector62) That is not true at all. If I buy a stock for a dollar and sell it to you for 2 dollars, then you sell if for 3, who lost a dollar?
And you simply illustrated the "pyramid scheme" ...
|
|
|
Guest-1 |