On Apr 12, 2012, at 2:25 PM, Doug Henwood wrote: > > On Apr 12, 2012, at 2:04 PM, Shane Mage wrote: > >> This is shameless demagogy. Kennedy doesn't even admit that for >> every speculative dollar betting on a price increase there is a >> speculative dollar betting the other way. > > Then why do markets ever move in a sustained direction? There's > never a preponderance of buyers over sellers? This would be news to > anyone who participates seriously in the things.
That prices are rising shows that at the given price there is a preponderance of buyers over sellers, just as when market prices are falling it shows that there is a preponderance of sellers over buyers at the given price. This is ABC. Markets never move indefinitely in a sustained direction. They may sustain a certain direction for a certain time--that's why bubbles occur, every bull seeking to sell to a greater fool. But in the bubble's end they crash (oil fell by some 75% after the 2008 peak). How long does the upward direction last? As long as more speculators are confident of their political "put" (the Iran embargo and war scariness--which Obama needs to maintain until November) than think that the peak has been reached. > Enormous funds have come into commodity markets via commodity funds. So commodity funds never sell ? > They're a major reason that oil and food prices have gone up in > recent years. There is no speculation in prices for eggs or sour cream. But there is soaring worldwide demand for food grains, abetted by the bipartisan subsidy program for grain ethanol and aggravated by the climate effects of global warming. These are "fundamentals," of which speculators are well aware. Crediting speculators with such long-term price rises is like crediting roosters with the daylight. Shane Mage "scientific discovery is basically recognition of obvious realities that self-interest or ideology have kept everybody from paying attention to" _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
