Economist Predicts that the Price of Gold & Silver will Drop this Year. Is he Correct?

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Originally Posted by ILUVRP

thats one reason i keep posting that the CFTC should raise the margins on crude oil from 6% to 75% and run the funds out of crude mkt , also make all contracts that are bought delivery only , if you buy a contract you must take delivery.

you would see crude at $50-60/ba very fast.

headge funds have trillions of dollars .

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I don't think so. What you would see is liquidity in the futures market plummet, with producers and consumers finding it increasingly difficult to risk manage or hedge. Price volatility in commodities is generally known as an increasing linear function of scarcity; scarcity being defined as the inverse of inventory. A relatively illiquid futures market increases price volatility which wreaks havoc on inventory management. Futures markets for commodities play a very important and positive role in a free market especially in the realms of price discovery and price stability.

You would not see crude oil spot price drop in half from your proposals, what you would be more likely to see is massive price swings in short term periods as producers and consumers rush to lock in contracts knowing there was no guarantee of a strong secondary market after the break of any positive/negative news relevant to the market. Do not let yourself be misled into socialist type fallacies because of emotional reasons.

I basically agree with Dent, and I sure wouldn't be buying anything right now.

I expect a serious deflationary crisis - due to excessive debt... everywhere.
Think we will begin to see the downturn fairly soon.

He who holds cash will be king, imo, and there will be a TERRIFIC buying opportunity down the road a bit.


jmo

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Originally Posted by Aurave

I don't think so. What you would see is liquidity in the futures market plummet, with producers and consumers finding it increasingly difficult to risk manage or hedge. Price volatility in commodities is generally known as an increasing linear function of scarcity; scarcity being defined as the inverse of inventory. A relatively illiquid futures market increases price volatility which wreaks havoc on inventory management. Futures markets for commodities play a very important and positive role in a free market especially in the realms of price discovery and price stability.

You would not see crude oil spot price drop in half from your proposals, what you would be more likely to see is massive price swings in short term periods as producers and consumers rush to lock in contracts knowing there was no guarantee of a strong secondary market after the break of any positive/negative news relevant to the market. Do not let yourself be misled into socialist type fallacies because of emotional reasons.

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Looks like something out of a text book , there is no scarcity of crude oil , there is no scarcity of gasoline , i do hate it when people call something they don't agree with socialist fallacies.-----i will repeat ---no commodity that is controlled by a cartel should be traded on our exchanges.

what don't you understand about in america we use 400 million gallons of gasoline everyday , we export about 120 million gallons of gas everyday. to me this is like selling planes/arms to germany/japan during ww2.

read what happened to silver in the early 80's when bunker hunt and 2 others tried to control the silver market , read what the CFTC did to him. silver went from about $50/oz to about $20/oz very fast.

Name me ONE commodity that is traded on our exchanges other than crude oil being under a cartel. this effects every american more than most understand , of which i feel very sorry for.


don't you understand your saying about liquidity makes no sence because 99% of the crude contracts are never delivered , its just a game , i will repeat the defin of commodity trading is----someone that does not have the product selling to someone that don't want the product , and both sides trying to make money-----

raising the margin will just cost them more if they want to play the game , making them take delivery will kill the game.

i will tack on a link about what goldman sachs ( one of the worse ) says , also read some of the comments.

http://www.google.com/url?sa=t&rct=j...44dFUFvckdFpZA

you people wonder why gas / heating oil / diesel fuel is so high , there are companies that love money more than america , i guess the next time they need military help they should ask those they export to for help. check below.....


For the first time since 1949, the United States exported more gasoline, heating oil and diesel fuel last year than it imported, the Energy Department reported today.

Bloomberg writes that to offset weak U.S. demand, refiners exported 439,000 barrels a day more than were imported the year before. In 2010, daily imports averaged 269,000 barrels,

I specifically defined a term and you chose to ignore it completely with what was effectively a straw man. You are aware of this or you are not, either way it doesn't bode well for any future discussion.

Half of your post is completely irrelevant to the point you wish to make by the way.

There is no convenience yield in precious metals futures, speculative storage is possible. Those conditions don't exist in any other commodity futures market.

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Originally Posted by ILUVRP

Looks like something out of a text book , there is no scarcity of crude oil , there is no scarcity of gasoline , i do hate it when people call something they don't agree with socialist fallacies.-----i will repeat ---no commodity that is controlled by a cartel should be traded on our exchanges.

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It's a socialist fallacy because it involves government dictating things to businesses & people which is antithetic to free markets & liberty, it's none of government's business what commodities are traded on what exchanges, unless you believe in the socialist premise that government owns everything

In a free society, people have what we call "property rights" which allow private owners full discretion over their property & same holds true for exchanges as well as those trading on them

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Originally Posted by ILUVRP

what don't you understand about in america we use 400 million gallons of gasoline everyday , we export about 120 million gallons of gas everyday. to me this is like selling planes/arms to germany/japan during ww2.

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NationalSocialismForums is right around the corner, this is ronpaulforums so you're mistaken I think

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Originally Posted by ILUVRP

read what happened to silver in the early 80's when bunker hunt and 2 others tried to control the silver market , read what the CFTC did to him. silver went from about $50/oz to about $20/oz very fast.

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They had money, they bought silver in anticipation of inflation due to US going off gold-standard (buying gold was prohibited at the time) so what? Ron Paul has been buying gold & silver since the 70s too, & I'm sure if he had the kind of money Hunts had, he would've piled up on gold & silver as well, in fact, that's what most people here are doing right now
And it was very disingenuous of comex, they played all sorts of shenanigans as people running it were short-selling silver & they'd stake in causing the prices to fall so they played all kind of tricks like, even ceasing trading, to cause silver prices to fall, after that Volker massively raised interest-rates which was the primary determinant to keep the prices of gold & silver down after that, not to mention even a lot of central-banks dumped their reserves to say to people - hey, gold, silver, etc is useless, look, how good the toilet-paper-money is - so of course, the government had to demonize Hunt to move attention away from what was actually going on with inflation, if it had continued for a while, sooner or later there would have been cries from public to go back on gold-silver standard, Ron Paul was even on Gold Commission at the time

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Originally Posted by ILUVRP

Name me ONE commodity that is traded on our exchanges other than crude oil being under a cartel. this effects every american more than most understand , of which i feel very sorry for.

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I feel sorry for people who support Ron Paul & yet oppose the very principles that he's held dear for decades :(

Cartels CAN'T DICTATE PRICES, supply & demand do - unless of course, it's a coercive monopoly/cartel, which is usually government-enforced - healthcare is a decent example, but in this case I suppose it's more like thieves than cartels

BUT nobody is forcing to buy oil (unlike healthcare would be :rolleyes:) so the more prices rise, the demand falls & they've to lower prices to make profits, it's irrelevant what prices they "want" to sell it at, they do NOT stick to their guns, they're made up of self-interested individuals who want to make profits so when prices rise they automatically produce more oil which causes supply to increase & puts downward pressure on prices

Central-planning doesn't work for same reasons, just because they're cartel doesn't mean that they cease to be self-interested individuals, no the don't; people like you who think such planned cartels can work are poster-children for the failed central-planning programs

The fact that neither cartels nor speculators control prices can be realized from the fact that oil was about $150 before the collapse & in a short while it fell to $50, where were these cartels & speculators then? Why didn't they hold the price at $150??? It's simple, the demand just fell through the floor due to weaker outlook & deflating effect

And why are they at ~$100 right now, I mean they're cartels, right? And they can charge whatever they want, right? So why $100, why not $1000? How about $10000? Million? Why aren't they doing that? How about speculators, wouldn't they make a lot of money if it went $million/barrel? So why aren't they doing it?

BECAUSE none of them dictate prices, supply & demand does! Prices are products of supply & demand! The more prices go up, the more lucrative selling becomes which increases supply & pushes prices down!

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Originally Posted by ILUVRP

don't you understand your saying about liquidity makes no sence because 99% of the crude contracts are never delivered , its just a game , i will repeat the defin of commodity trading is----someone that does not have the product selling to someone that don't want the product , and both sides trying to make money-----

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You don't understand that those 99% is what keeps liquidity, otherwise the futures market would be stale, there'd be low volumes & very little trading if only actual buyers/sellers were allowed to trade & everyone else was driven They keep the markets liquid & keep up the volumes otherwise spreads would massively increase & volumes go down & there would be wild swings in prices leading to higher costs for actual buyers/sellers

Saying speculators increase prices is like saying that X + 1 - 1 = X + 1 :rolleyes:, obviously, it equals only X, in short, when speculators buy, yes, they temporarily put upward pressure on price but they reverse the same when they square off so the net effect is nil, & that's why only the actual buyers/sellers & information about supply & demand can move prices in the long-run

So even if you get your wish of 75% margin, that's just going to drive speculators out & there will be FEWER people willing to trade at any given time, causing low volumes & low volumes mean higher spreads & therefore higher cost of trading & all you're going to get is wild swings in prices because there are only a few people willing to trade

Not to mention, you'd be asking actual buyers & sellers to unnecessarily lock more money for long periods which they could've put to better use & thereby it's only going to end up raising cost of pretty much everything in the economy

Are you part of OWS or something? I'd recommend you the communist-clique there - there you'd find a lot of people who hate on "rich evil basterds" that make money in ways that they don't understand & that's why they think it's bad because they can't do the same, seems like you suffered some losses in the futures-market & now, blaming the "those evil hedge-funds"

I'm just curious, why are you here? This movement is about personal liberty, property-rights, free markets & free trade, all of which Ron Paul stands for & for someone with the nick "I love RP", you seem to stand for almost everything Ron Paul stands AGAINST

If you really want to learn about futures & speculation then google "price discovery" & about the history of futures markets & why speculators are an important part of it

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Originally Posted by Aurave

I don't think so. What you would see is liquidity in the futures market plummet, with producers and consumers finding it increasingly difficult to risk manage or hedge. Price volatility in commodities is generally known as an increasing linear function of scarcity; scarcity being defined as the inverse of inventory. A relatively illiquid futures market increases price volatility which wreaks havoc on inventory management. Futures markets for commodities play a very important and positive role in a free market especially in the realms of price discovery and price stability.

You would not see crude oil spot price drop in half from your proposals, what you would be more likely to see is massive price swings in short term periods as producers and consumers rush to lock in contracts knowing there was no guarantee of a strong secondary market after the break of any positive/negative news relevant to the market. Do not let yourself be misled into socialist type fallacies because of emotional reasons.

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You wouldn't believe how many socialists are on these forums that have no clue about how the markets work & what property-rights mean & what Ron Paul stands for! :(

Welcome to the forums by the way, the more free marketers are here the better for the movement so that it doesn't get taken over by socialists :)

"They had money, they bought silver in anticipation of inflation due to US going off gold-standard (buying gold was prohibited at the time) so what?"

nixon dropped off brenten/woods in 1973 .

i feel very sorry for people that don't understand FREE TRADE . i see all the above BS on hannity/limpbaugh forums where the FASCIST have control.

my advice is to get out of the kool-aid (crude oil ) line . stop reading so many worthless books and learn for yourself what is really going on.

i can tell you are not a real RP believer as you do not believe in real free trade , but controlled trade , sort of like people at goldmen sucks/jpmorgan .


i guess when gas gets to $7-8 a gallon you will scratch your head and say , whow -how did this happen.

i am 74yrs old , i have seen this great country taken away from the avg american and given to big oil/banks/fed res and we will never get it back.

people 30 yrs and under think this is all normal , i feel very sorry for them.



"Are you part of OWS or something? I'd recommend you the communist-clique there"

after 12 yrs in the military to help people like you so you can spout your worthless BS , everytime someone doesn't agree with them they spout the commey BS. i won't even comment on your idiot post as you really don't understand the way things should work.

please don't give your views to others as RP will lose too many votes , keep your worthless thoughts to yourself.

i will add that when goldmansucks say about 30% of the price of crude is because of speculators , goldman must be commies.

i do think there are those that like seeing crude oil price go up , as it drags gold/silver with it , therefore the price of their 30 oz of silver and .1 oz of gold go up , very sad.

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Originally Posted by ILUVRP

"They had money, they bought silver in anticipation of inflation due to US going off gold-standard (buying gold was prohibited at the time) so what?"

nixon dropped off brenten/woods in 1973 .

i feel very sorry for people that don't understand FREE TRADE . i see all the above BS on hannity/limpbaugh forums where the FASCIST have control.

my advice is to get out of the kool-aid (crude oil ) line . stop reading so many worthless books and learn for yourself what is really going on.

i can tell you are not a real RP believer as you do not believe in real free trade , but controlled trade , sort of like people at goldmen sucks/jpmorgan .


i guess when gas gets to $7-8 a gallon you will scratch your head and say , whow -how did this happen.

i am 74yrs old , i have seen this great country taken away from the avg american and given to big oil/banks/fed res and we will never get it back.

people 30 yrs and under think this is all normal , i feel very sorry for them.



"Are you part of OWS or something? I'd recommend you the communist-clique there"

after 12 yrs in the military to help people like you so you can spout your worthless BS , everytime someone doesn't agree with them they spout the commey BS. i won't even comment on your idiot post as you really don't understand the way things should work.

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I'm 27 and thanks to RP and people like you I know this is not normal. Thank you. But for the most part you are probably right about most of my age group. Just a few of us are awake.

buy the dip

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Originally Posted by Paul Or Nothing II

Cartels CAN'T DICTATE PRICES, supply & demand do - unless of course, it's a coercive monopoly/cartel, which is usually government-enforced - healthcare is a decent example, but in this case I suppose it's more like thieves than cartels

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Wow.

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BUT nobody is forcing to buy oil (unlike healthcare would be :rolleyes:) so the more prices rise, the demand falls & they've to lower prices to make profits, it's irrelevant what prices they "want" to sell it at, they do NOT stick to their guns, they're made up of self-interested individuals who want to make profits so when prices rise they automatically produce more oil which causes supply to increase & puts downward pressure on prices

Central-planning doesn't work for same reasons, just because they're cartel doesn't mean that they cease to be self-interested individuals, no the don't; people like you who think such planned cartels can work are poster-children for the failed central-planning programs

The fact that neither cartels nor speculators control prices can be realized from the fact that oil was about $150 before the collapse & in a short while it fell to $50, where were these cartels & speculators then? Why didn't they hold the price at $150??? It's simple, the demand just fell through the floor due to weaker outlook & deflating effect

And why are they at ~$100 right now, I mean they're cartels, right? And they can charge whatever they want, right? So why $100, why not $1000? How about $10000? Million? Why aren't they doing that? How about speculators, wouldn't they make a lot of money if it went $million/barrel? So why aren't they doing it?

BECAUSE none of them dictate prices, supply & demand does! Prices are products of supply & demand! The more prices go up, the more lucrative selling becomes which increases supply & pushes prices down!

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Cartels exist and they control the markets completely (especially supply and demand).

"Competition is a sin." John D. Rockefeller

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To use this method of airframe shock testing in economics engineering, the prices of commodities are shocked, and the public consumer reaction is monitored. The resulting echoes of the economic shock are interpreted theoretically by computers and the psycho-economic structure of the economy is thus discovered. It is by this process that partial differential and difference matrices are discovered that define the family household and make possible its evaluation as an economic industry (dissipative consumer structure).

Then the response of the household to future shocks can be predicted and manipulated, and society becomes a well-regulated animal with its reins under the control of a sophisticated computer-regulated social energy bookkeeping system.

Eventually, every individual element of the structure comes under computer control through a knowledge of personal preferences, such knowledge guaranteed by computer association of consumer preferences (UPC, etc.) with identified consumers (via use of credit card and later a permanent tattooed body number invisible under normal ambient light).

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The above quote was written in 1979.

The point is that you don't have to raise the price to $1,000 to make record profits (Exxon/Mobil) when you control the market.

Do you think you could make untold riches if you knew exactly when a commodity would be shocked and what affect that would have on other commodities as well? Duh. It's the same as raising the price to $10,000, or, as high as you want to raise it.

Ron Paul advocates the return to a free market, but he most certainly doesn't preach that one exists today.

Monetary policy is controlled with no oversight. Energy is controlled by regional monopolies. Supply is controlled by covert and overt installation of puppet regimes. Demand is controlled by a media cartel. Your future income has already been determined and divided.

Romney is the guy whether they have to stuff ballots, rig the electronic voting machines, black out the rest of the field from public view, blatantly lie in the media, run smear campaigns, pour money into the chosen coffers or other. Or, I'm wrong and there are "free elections" as well as a "free market". :rolleyes:

I'm astounded at anyone who believes the commodities (or any other) market is dictated by free market supply and demand... truly baffled.

the commodity markets were set up mainly so that farmers could sell their crops at the elevator ( which headges it off at the board of trade ) , then the farmer could lock in a profit on his labor/costs.

i do think all commodities except for crude and its cracks ( gasoline-heating oil ) are pretty much supply/demand controlled , there is a lot of front running going on floors of the exchanges but they are very short term movers.

overall most commodity mkts work as intended ( i do think margin rates 5-6% is too low , in 1929 stocks margin rates were 10% ) , it is not a free mkt when the supply is controlled ( sort of like the Texas Railroad Commission before OPEC ).

sometimes i think there are mitt r./ rick s. shills on this forum.

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Originally Posted by ILUVRP

"They had money, they bought silver in anticipation of inflation due to US going off gold-standard (buying gold was prohibited at the time) so what?"

nixon dropped off brenten/woods in 1973

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Obviously, you've no clue they had buying from 1970 till the cme f'cked them disingenuously

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Originally Posted by ILUVRP

i feel very sorry for people that don't understand FREE TRADE . i see all the above BS on hannity/limpbaugh forums where the FASCIST have control.

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I feel sorry for people like you who can't see that Paul does NOT believe in "regulation" & he'll NOT suspend oil-contracts, for the same reason he says he'd not have voted for the Civil Rights Act - PROPERTY RIGHTS

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Originally Posted by ILUVRP

my advice is to get out of the kool-aid (crude oil ) line . stop reading so many worthless books and learn for yourself what is really going on.

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Apparently, you don't believe in reading & gaining knowledge, what else to expect from a national socialist who has no idea about what Paul & free market stands for!

Do you realize that all of Paul's knowledge, his ability to predict economic collapse & everything & all his understanding of economics, all of it comes from books, if he hadn't read those then he'd have ended up like you but apparently he's much more intelligent so I suggest you go to http://www.mises.org/

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Originally Posted by ILUVRP

i can tell you are not a real RP believer as you do not believe in real free trade , but controlled trade , sort of like people at goldmen sucks/jpmorgan

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LOL you want to prevent people from sending their OWN PROPERTY (oil, gas) freely between countries, you want to "regulate" the exchanges without an ounce of understanding of why & how they work the way do & you're calling me I'm for "controlled trade" when it's YOU who wants the government to control everything :D

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Originally Posted by ILUVRP

i guess when gas gets to $7-8 a gallon you will scratch your head and say , whow -how did this happen.

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No, I won't scratch my head because I understand where the inflation is coming from & SO DOES PAUL

http://www.youtube.com/watch?v=dLGvybCr6AM

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Originally Posted by ILUVRP

i am 74yrs old , i have seen this great country taken away from the avg american and given to big oil/banks/fed res and we will never get it back.

people 30 yrs and under think this is all normal , i feel very sorry for them.

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I doubt you've even a slightest clue how Fed & banks work, let alone understanding how they raise prices of oil & everything else otherwise you wouldn't be naively claiming that cartels or speculators raise prices :rolleyes:

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Originally Posted by ILUVRP

after 12 yrs in the military to help people like you so you can spout your worthless BS , everytime someone doesn't agree with them they spout the commey BS. i won't even comment on your idiot post as you really don't understand the way things should work.

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I don't give a sh!t for your military service, I'm not a war-mongering Republican to applaud you for terrorising innocents & being a tool of the Mlitary-Industrial-Complex & you got paid for it from hard-working taxpayers' money who actually PRODUCE something goods/services rather than just destroying things, if people refused to fight unnecessary wars then so many lives & resources could be saved

You're asking for government to put reuglations on the exchanges to your fancy just because you don't understand how they work, you're asking for government to prevent people from selling their goods the way they want & you don't want to be called a socialist/communist? Are you kidding me, that's what socialists/communists believe in - government "regulating" & dictating things for the "greater good"; & Paul does NOT stand for this type of thing at all

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Originally Posted by ILUVRP

please don't give your views to others as RP will lose too many votes , keep your worthless thoughts to yourself.

i will add that when goldmansucks say about 30% of the price of crude is because of speculators , goldman must be commies.

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Ron Paul obviously doesn't believe in any of your regulationist, market-interventionist socialist/communist theories so I'd suggest you don't tell anyone you're a Paul-supporter otherwise, they'll think we're all commies too, like OWS, who believe in government dictacting the "regulations" & violating property-rights for the "greater good"

Pay attention when the black guy @4:00 starts rambling about "but but the regulations", "but but the derivatives" & Ron Paul shuts him out every time, that guy was expecting Paul to say that he'll "regulate" or ban derivatives or something like that Ron keeps bringing the issue back to government & Fed, obviously Paul doesn't believe in your regulationist anti-property-rights theories because he's smart enough to understand how regulations & government-dictatorship only leads to more trouble


http://www.youtube.com/watch?v=v_LPB9pT58U&feature=related

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Originally Posted by xFiFtyOnE

I'm 27 and thanks to RP and people like you I know this is not normal. Thank you. But for the most part you are probably right about most of my age group. Just a few of us are awake.

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Most of what "ILUVRP" is saying isn't true at all, he's actually opposing everything Ron Paul stands, please watch the videos above to understand Paul's actual positions

Of course they are speculating on oil. You want to stop it? Cut off their printing press. When money is more scarce they can't pump so much into one commodity.

" I don't give a sh!t for your military service, I'm not a war-mongering Republican to applaud you for terrorising innocents & being a tool of the Mlitary-Industrial-Complex & you got paid for it from hard-working taxpayers' money who actually PRODUCE something goods/services rather than just destroying things, if people refused to fight unnecessary wars then so many lives & resources could be saved "

spouting this kind of talk leeds me to believe you are a chicken-hawk like Dr Paul ( ex military ) was talking about. like i said if it were not for people like RP and i you would be spouting your BS in german .

i have supported RP for over 8 yrs , i don't agree with everything he says , i do agree with his closing most of the overseas bases / fed res/ much smaller goverment/get out of the middle east and stay out.

watching the video , Dr Paul was saying about the true value of things being set by the market place ( i would add not by OPEC ).

the question about diveratives , the man was partly correct , they were moving them around at 2-3% margin , the fractional system that banks/fed res uses is at 10% . even that is too low, RP did say that over leveraging was a problem , that is what i am talking about, crude oil is a booble that will NEVER get smaller when our enemies set the supply.

I WILL REPEAT FOR THE NON-BELIVERS ----NO COMMODITY THAT IS CONTROLLED BY A CARTEL SHOULD BE TRADED ON OUR EXCHANGES---

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Originally Posted by ILUVRP

spouting this kind of talk leeds me to believe you are a chicken-hawk like Dr Paul ( ex military ) was talking about. like i said if it were not for people like RP and i you would be spouting your BS in german .

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Not to budge in on you guys' argument, but there is no way Nazi Germany would have invaded the US.

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Originally Posted by Bossobass

Wow.

Cartels exist and they control the markets completely (especially supply and demand).

"Competition is a sin." John D. Rockefeller

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They're not above the market, again, if they raise prices too high then the demand falls & they make fewer profits, in fact, when prices are high, there's incentive for them to produce more & capture more profits but that act of producing more, increases supply & thereby lower prices

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Originally Posted by Bossobass

The point is that you don't have to raise the price to $1,000 to make record profits (Exxon/Mobil) when you control the market.

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Well, what's the point of having a cartel if you can't charge whatever you want? Isn't that the whole purpose of monopolies/cartels? I mean if they "control the markets" then they should be able to raise it $1000 shouldn't they? If they're making record-profits then wouldn't they be making even more record-profits if they charge $1000?

But they don't do that because they CAN'T do that because demand would collapse drastically & their overall profits would shrink a lot

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Originally Posted by ILUVRP

Do you think you could make untold riches if you knew exactly when a commodity would be shocked and what affect that would have on other commodities as well? Duh. It's the same as raising the price to $10,000, or, as high as you want to raise it.

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I'd suggest reading some Austrian Economics instead of conspiratorial garbage, Paul isn so knowledgeable about economics & politics because he has actually been reading a lot of useful stuff regarding those issues so I'd urge you to do them & you might be able to understand the market forces a lot better

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Originally Posted by Bossobass

Ron Paul advocates the return to a free market, but he most certainly doesn't preach that one exists today.

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It doesn't have to be for prices to be determined, the prices are determined by supply & demand no matter what & Paul, who has studied enough Austrian Economics to realizes just this & that's why he doesn't go on a rant about cartels "controlling the market" like many other politicians who have been for years using the cartel's name to distract from REAL cause & that's why he blames where the problem ACTUALLY is - government

http://www.youtube.com/watch?v=dLGvybCr6AM

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Originally Posted by Bossobass

Monetary policy is controlled with no oversight. Energy is controlled by regional monopolies. Supply is controlled by covert and overt installation of puppet regimes. Demand is controlled by a media cartel. Your future income has already been determined and divided.

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Fed is a COERCIVE monopoly which as I've said before is thievery backed by government, people are FORCED to use it one way or another & that's unjustified
But oil situation is very different, nobody is forcing to buy oil, if you think it's too costly then don't use it or use alternatives if you can, that will automatically put downward pressure on prices as the demand drops, they'll have to lower prices to make profits so don't conflate the two situations; one is COERCIVE, the other is not & nobody is "entitled to cheap oil" or anything else other than their life, liberty & property, it's socialists who think they're entitled to food, education, healthcare & what not just because they exist

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Originally Posted by Bossobass

Romney is the guy whether they have to stuff ballots, rig the electronic voting machines, black out the rest of the field from public view, blatantly lie in the media, run smear campaigns, pour money into the chosen coffers or other. Or, I'm wrong and there are "free elections" as well as a "free market". :rolleyes:

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Again, don't confuse issues, I've never said there's a free market, I'm merely trying to explain that irrespective of whether there's free market or not, the prices are determined by supply & demand so long as there's coercive force & the more people like you demand for more government regulation & more government coercion, the less chance there will be of a free market ever existing

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Originally Posted by Bossobass

I'm astounded at anyone who believes the commodities (or any other) market is dictated by free market supply and demand... truly baffled.

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I'm astounded at anyone who thinks central-planning works, it doesn't matter how much the cartelists plan together, ultimately they're self-interested people dictated by market-forces & they constantly try to undercut each other, the more they sell than the others, the more profits they make so they're always trying to bait buyers with a lower price than others, directly or indirectly & that's why they can't charge whatever they want

Every seller is always looking to sell highest it can while buyers looking to buy lowest & this pulling of price back & forth is what creates prices
When you sell your service, you try to secure a reasonable salary for yourself, you don't want to sell yourself too short & at the same time, you don't ask for salary that is beyond what your service is worth because then you'd price yourself out of the market

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Originally Posted by ILUVRP

the commodity markets were set up mainly so that farmers could sell their crops at the elevator ( which headges it off at the board of trade ) , then the farmer could lock in a profit on his labor/costs.

i do think all commodities except for crude and its cracks ( gasoline-heating oil ) are pretty much supply/demand controlled , there is a lot of front running going on floors of the exchanges but they are very short term movers.

overall most commodity mkts work as intended ( i do think margin rates 5-6% is too low , in 1929 stocks margin rates were 10% ) , it is not a free mkt when the supply is controlled ( sort of like the Texas Railroad Commission before OPEC ).

sometimes i think there are mitt r./ rick s. shills on this forum.

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Again, I've never said, there's a free market but it doesn't have to be, irrespective of it the prices are always determined by supply & demand, if they raise prices too much above what's optimum, then fewer people buy & profits go down & then they must lower them

And yes, there could be war-hungry Santorum supporters here who'd like to nuke those "evil oil cartels" & they expect government to "regulate" stuff & violate property-rights & use coercion against people & so on

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Originally Posted by ILUVRP

" I don't give a sh!t for your military service, I'm not a war-mongering Republican to applaud you for terrorising innocents & being a tool of the Mlitary-Industrial-Complex & you got paid for it from hard-working taxpayers' money who actually PRODUCE something goods/services rather than just destroying things, if people refused to fight unnecessary wars then so many lives & resources could be saved "

spouting this kind of talk leeds me to believe you are a chicken-hawk like Dr Paul ( ex military ) was talking about. like i said if it were not for people like RP and i you would be spouting your BS in german .

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Please try to think a little before you post

Chicken-Hawk = someone who wants wars but has never served

I don't want wars so how does that relate to me? :rolleyes:

Further, as I've said, you didn't do it for free, people are self-interested, that's the fundamental principle of free market as well as psychology so don't act like you did a favor to rest of the mankind

Further, if there weren't people producing ACTUAL goods & services in the country then military would have starved to death because government pays the military from the money it steals from the productive people in the economy who produce real goods & services, as opposed to those who simply destroy things

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Originally Posted by ILUVRP

i have supported RP for over 8 yrs , i don't agree with everything he says , i do agree with his closing most of the overseas bases / fed res/ much smaller goverment/get out of the middle east and stay out.

watching the video , Dr Paul was saying about the true value of things being set by the market place ( i would add not by OPEC ).

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So you think he's too stupid to not realize that OPEC exists?

When he says "markets", OPEC IS part of the market & he understands that no cartel can charge whatever they want, they're bound by supply & demand & competition of self-interests amongst themselves otherwise he'd have had a rant about "those evil oil cartels" but he doesn't because he doesn't believe in that MYTH peddled US government to take people's attention away from REAL PROBLEM which is government & Fed, which rightly points out

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Originally Posted by ILUVRP

the question about diveratives , the man was partly correct , they were moving them around at 2-3% margin , the fractional system that banks/fed res uses is at 10% . even that is too low.

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Did he say "ban the derivatives"? Did he say "regulate the derivatives"? NO, his point was that it's excess of credit created by Fed is THE PROBLEM & if you deal with that then there's no need to ban or "regulate" the derivatives & plus, just let the risk-takers fail if they make wrong choice, just as they should keep the profits if they make the right choice

He understands derivatives in any market are essential tools to manage risk & hence "regulating" them or banning them will disturb market-equilibrium & therefore it's important to focus on the CAUSE aka government & Fed

He even brought Sarbanes-Oxley to say that it was bad move to bring in that "regulation" & therefore, there should be no "regulations" on derivatives either - if you make fraud you'll be brought to justice, if you make losses then you bear them - simple as that

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Originally Posted by ILUVRP

I WILL REPEAT FOR THE NON-BELIVERS ----NO COMMODITY THAT IS CONTROLLED BY A CARTEL SHOULD BE TRADED ON OUR EXCHANGES---

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And I will repeat for those believe in the MYTH that no cartel can dictate price, only the supply & demand can dictate it & that's why they sell it at $100, if they could charge more sure they would but they simply CAN'T DICTATE PRICES

And again, government has no right to tell any exchange what they can put on their exchanges unless you believe in socialist/communist belief that government owns everything & everyone & has a right to dictate to everyone An exchange is private property & the owners are free conduct their business as they please just as Paul defended business' right to put up "whites only", "blacks only" or whatever because IT'S THEIR PROPERTY & so long as they aren't violating anyone's life, liberty & property, that should be fine
And no one is "entitled to cheap oil", or anything else other than their life, liberty & property; just like government shouldn't be able to tell you how to live in your house or how much you should sell your goods for, they shouldn't be able to tell that to others

since opec started ( full strength 1973 ) i have seen them lower production many many times when the price of crude oil gets below what opec thinks it should be ,( thats a free mkt ? ).

i am saying they can do what they want with their crude oil ( i would rather see them herding goats ) , i just don't think any commority that has supply controlled by a cartel should be traded on our exchanges. how can that be so hard to understand.

let the FREE market set the price , not opec/goldman sucks ( that said about $30/b of the crude price is because os speculation ) and others .


what you said about the goverment not being able to tell the exchanges what they can sell/put on "their" exchange , have you ever heard of CFTC ,
there are some things that do need to be regulated , like RP said if they break the LAW put them in jail.

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Originally Posted by ILUVRP

overall most commodity mkts work as intended ( i do think margin rates 5-6% is too low , in 1929 stocks margin rates were 10% )

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So are you talking about a commodity market, or its futures market? And are you under the impression that futures are analogous to equities? Because you don't invest in anything in a futures market, you make guesses about what the actual spot price will be at another time. Speculators in a commodity futures market don't compete with producers and consumers and really can't affect the price unless convenience yield does not exist, which only occurs in precious metals. The only commodity futures market where speculators can possibly affect actual prices are really gold and silver.

To see your comments on oil futures is akin to listening to a drunk ramble about how umbrellas cause floods. It may seem so at first if you have no knowledge of how rain works, have never experienced it, and have never seen umbrellas. You start out on a normal sunny day and see an increasing number of people carrying these odd contraptions along with them. All of the sudden a light drizzle starts but you don't really notice it, but many of these people open their umbrellas. Soon a downpour comes, and you are soaking wet. All you have seen is people opening umbrellas BEFORE the heavy rain started, so you come to the conclusion that those umbrellas were the cause of the rain.

Now I'm glad you have a strong opinion, but before you share it and misinform people I wish you would just take the time to objectively study futures markets and understand them, that is all. Personally I wouldn't wish the negatives of increased price volatility in crude oil markets on any end user, but that is just me, perhaps I care too much for the fortunes of the little man.

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Originally Posted by Aurave

So are you talking about a commodity market, or its futures market? And are you under the impression that futures are analogous to equities? Because you don't invest in anything in a futures market, you make guesses about what the actual spot price will be at another time. Speculators in a commodity futures market don't compete with producers and consumers and really can't affect the price unless convenience yield does not exist, which only occurs in precious metals. The only commodity futures market where speculators can possibly affect actual prices are really gold and silver.

To see your comments on oil futures is akin to listening to a drunk ramble about how umbrellas cause floods. It may seem so at first if you have no knowledge of how rain works, have never experienced it, and have never seen umbrellas. You start out on a normal sunny day and see an increasing number of people carrying these odd contraptions along with them. All of the sudden a light drizzle starts but you don't really notice it, but many of these people open their umbrellas. Soon a downpour comes, and you are soaking wet. All you have seen is people opening umbrellas BEFORE the heavy rain started, so you come to the conclusion that those umbrellas were the cause of the rain.

Now I'm glad you have a strong opinion, but before you share it and misinform people I wish you would just take the time to objectively study futures markets and understand them, that is all. Personally I wouldn't wish the negatives of increased price volatility in crude oil markets on any end user, but that is just me, perhaps I care too much for the fortunes of the little man.

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i have traded commodity , futures as you want to call them for about 35yrs , look at the yellow pages for futures brokers and let me know how many you find , then look for commodity brokers , i do know the difference.

what misinformation have i expounded , saying that any commodity ( futures you want to call it ) that is controlled by a cartel should not be traded on our exchanges , i would feel the same about corn-wheat-beans or any other commodity that was controlled by a cartel . i do own USO stock ,so i am sort of headged , most are not.


wouldn't it be great if our farmers had a cartel ? if you want to see a free market , look no farther than the american farmer , i was one of them also .

i did sell corn/wheat/soybean futures ( forward months to you ) of 1/3 my crops.

please don't preach to me , we will see who is correct about this issue in time .

ILUVRP, I don't understand, why do we need time to see who is "correct"? Are you making a prediction? Did I? I was under impression we were discussing the nature of futures markets specifically that of crude oil. They are understood today.

Also, how does owning an index tracking fund hedge you against anything? What exactly are your positions, whereby holding USO, your risk is hedged? Or are you using the word hedge in the same manner that it is used in hedge funds, where they don't actually hedge but just use with massive leverage to increase a position?

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Originally Posted by Aurave

ILUVRP, I don't understand, why do we need time to see who is "correct"? Are you making a prediction? Did I? I was under impression we were discussing the nature of futures markets specifically that of crude oil. They are understood today.

Also, how does owning an index tracking fund hedge you against anything? What exactly are your positions, whereby holding USO, your risk is hedged? Or are you using the word hedge in the same manner that it is used in hedge funds, where they don't actually hedge but just use with massive leverage to increase a position?

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what i meant by time will tell about crude oil futures is that it is said now goldman-jpmorgan are 80% of the crude trading , we will see how it washes out, who are they trading for ? their own accounts? the Saudi royals , but i guess there are forum members here that would think its ok , its a free market trade , its not free trade .

as far as my being headged with USO ( i own 100shs) , it follows the price of WTI crude , it is about 1/3 the price of crude oil , that is if crude moves $1/ba , uso moves about 33 cents, i just feel a little better when i fill up my gas tank. but like i posted before i am sure there is people on the forum that hold phy silver/gold ( as i do ) , that are in a way headged as gold/silver will go up along with crude futures as it is a big inflation driver.

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Originally Posted by ILUVRP

since opec started ( full strength 1973 ) i have seen them lower production many many times when the price of crude oil gets below what opec thinks it should be ,( thats a free mkt ? ).

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Again, who said it's a "free market", I didn't! I'm just saying whether there's one or not, prices are determined by supply & demand & those "evil cartelists" are nothing more that a group of self-interested individuals & hence they necessarily undercut each other to maximize their profits

And sellers always lower production if they can't get enough profits on their sales, they take that money & put it elsewhere where they'll get better returns, this is markets' way of rationing goods, when prices increase somewhere, sellers increase production to capture more profits & thereby increase supply & put downward pressure on prices

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Originally Posted by ILUVRP

i am saying they can do what they want with their crude oil ( i would rather see them herding goats ) , i just don't think any commority that has supply controlled by a cartel should be traded on our exchanges. how can that be so hard to understand.

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Firstly, whether oil is there on US exchanges or not, doesn't make much of a difference to global supply & demand scenario so prices will still be dictated by supply & demand, it's just that US might lose some jobs & profits as the traders move to some other exchanges outside of US

Secondly, it's IRRELEVANT what you or I think the exchanges "should" do, it's their property & they've a right to list whatever products they want to list & saying otherwise is like arguing from socialist/communist standpoint that government owns everything & everyone in its country & therefore it can dictate to everyone

And saying "our exchanges" is like me calling your farm "our farm" & asking for government regulation on what you can do on it or what you can grow on it - it's ANTI-PROPERTY-RIGHTS

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Originally Posted by ILUVRP

let the FREE market set the price , not opec/goldman sucks ( that said about $30/b of the crude price is because os speculation ) and others .

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Again, you clearly don't understand speculation, speculators are buyers AND sellers at the same time, when they enter they push the price up but the effect is reversed when they sell back to sqaure off & take profits
As I've said, saying that speculators increase prices is like saying X + 1 - 1 = X + 1, which simply isn't true because X + 1 - 1 = 0 so net effect of speculators is zero

Prices on futures only rise in conjuction with global supply & demand & that's why the really big moves, up or down, happen when technical or fundamental factors come into play, otherwise markets spend most of its time just trading in a "range" because there's no information for to move drastically up or down

Just because speculators want higher prices does NOT mean they'll get it because the ACTUAL buyers mayn't be willing to pay that much which will put downward pressure on demand & oil & price will fall, IRRESPECTIVE of what speculators or cartels want

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Originally Posted by ILUVRP

what you said about the goverment not being able to tell the exchanges what they can sell/put on "their" exchange , have you ever heard of CFTC ,

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Let's see, we've good ol' Patriot Act & now NDAA which allow government to kill & imprison Americans without due process so that should be fine & dandy too, right? :rolleyes:

Just because bad governance exists, does NOT legitimize what they do so I'm sure Paul will get rid of CFTC too along with truckloads of useless "regulators" bureaucracies like the education, energy, food & drugs departments & all that useless waste of taxpayers' money

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Originally Posted by ILUVRP

there are some things that do need to be regulated , like RP said if they break the LAW put them in jail.

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"Regulation" is PRIOR RESTRAINT & freedom & prior restraint DON'T go together
Just like anti-gun people want to "regulate" or even ban guns but that's prior restraint because you're punishing someone even though they've not violated anyone's life, liberty or property - it's simple, everyone should be able to access guns while those who use them to violate others should be punished but disallowing them or "regulating" them is anti-freedom

And no, RP doesn't consider trading or exchanges allowing oil-contracts as "breaking the law", the only "law" he believes in is that people shouldn't violate others' life, liberty & property so he wouldn't support government dictating & "regulating" anyone who's merely exercising their property-rights

The problem is that most people equate "freedom" with "freedom to use government to do what they THINK is right" & then everyone is trying to do just that & everyone is less free & that's why the world is so f'cked up; but true freedom can only be had if people are willing to recognize that others also have the same freedoms to life, liberty & property

you seem to be a very smart person , but you are so wrong on this one.

i hate it when OPEC/big specs/headge funds pi$$ on my head and tell me its raining.

i am not a trump fan but on this one i agree with him ;

-----The leaders of OPEC are "sitting around their table, setting the price of oil and laughing at us because we have no leadership," real estate mogul Donald Trump told CNBC Tuesday

That includes U.S. ally Saudi Arabia, whose Prince Alawaleed bin Talal recently told CNBC the price of oil won't exceed $100 a barrel. Crude oil is currently at around $108.

"I have many friends in Saudi Arabia and other countries and they can’t believe what they’re getting away with," Trump said. "They can’t believe how stupid we are. We don’t need Saudi Arabia."----------

me : if goldman sachs is correct and spec's trading is about 30% of the price of crude prices , i would think OPEC ( with their control of production is worth another 20% , whoo , that makes crude true value about $55/ba , gasoline $1.70 a gallon.

OTR truckers get about 6 mpg diesel , at 60 mph that about $43 a hour ( that only the fuel ).

farm tractors/combines use about 8 gal of fuel a hour on avg , thats about $35/hr.

this great country is in big trouble , no matter what you or i think " free trade " is.

to trumps saying that opec is laughing at us , i would add so is goldmansucks.

i do not in no way blame big oil and never have as the are just doing their job for their shareholders.

[QUOTE=Paul Or Nothing II;4237758]

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Again, don't confuse issues, I've never said there's a free market, I'm merely trying to explain that irrespective of whether there's free market or not, the prices are determined by supply & demand so long as there's coercive force & the more people like you demand for more government regulation & more government coercion, the less chance there will be of a free market ever existing

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2 things: 1) You're putting words in my mouth. When did I call for more intervention? 2) You're contradicting yourself. Which is it, supply and demand or coercive force? You can't win both sides of an argument with pretzel logic.

Demand is created and supply is controlled. There is no free market, thus there are no free market controls.

Look at the housing market. The massive infusion of 2% money coupled with the complete erasure of underwriting. What was the result? Where the hell was supply and demand in that equation? Demand was created and supply was controlled by artificially low interest rates.

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I'm astounded at anyone who thinks central-planning works, it doesn't matter how much the cartelists plan together, ultimately they're self-interested people dictated by market-forces & they constantly try to undercut each other, the more they sell than the others, the more profits they make so they're always trying to bait buyers with a lower price than others, directly or indirectly & that's why they can't charge whatever they want

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Again, this is based on what data?

Central Planning works... for Central Planners.

Can you name a Federal Reserve System stock holder who's hurting? Which of the Too Big To Fail banks took a haircut in the 'meltdown'? Exxon's the largest publicly traded company in the world with profits that are 3 times those of WalMart. And you honestly believe that's because they constantly struggle to undercut their competition?

Please get hold of a history book that has its focus on Anglo-American influence in the Middle East regarding oil and especially since WWII. When you see any evidence of a free market in play, bring it to this discussion.

Bosso

If he has a silicon brain capable of processing the data that arises from countless human interactions... he may or may not be correct.

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Originally Posted by Bossobass

2 things: 1) You're putting words in my mouth. When did I call for more intervention? 2) You're contradicting yourself. Which is it, supply and demand or coercive force? You can't win both sides of an argument with pretzel logic.

Demand is created and supply is controlled. There is no free market, thus there are no free market controls.

Look at the housing market. The massive infusion of 2% money coupled with the complete erasure of underwriting. What was the result? Where the hell was supply and demand in that equation? Demand was created and supply was controlled by artificially low interest rates.





Again, this is based on what data?

Central Planning works... for Central Planners.

Can you name a Federal Reserve System stock holder who's hurting? Which of the Too Big To Fail banks took a haircut in the 'meltdown'? Exxon's the largest publicly traded company in the world with profits that are 3 times those of WalMart. And you honestly believe that's because they constantly struggle to undercut their competition?

Please get hold of a history book that has its focus on Anglo-American influence in the Middle East regarding oil and especially since WWII. When you see any evidence of a free market in play, bring it to this discussion.

Bosso

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Again, none of what you're saying is relevant, it's a FACT that supply & demand dictate price & when prices rise, sellers, be it a cartel or whatever, they raise production to take advantage of high prices & more profits to be made, this is FUNDAMENTAL argument for anyone who believes in workings of the market, it's the socialists & central-planners who disregard market's tendency to dictate prices
And central-planning works for central-planners when they can FORCE people, nobody forces anyone to buy oil & that's why they can't raise prices too much because then fewer people will buy them & then fewer profits will be made

And you people keep talking "controlled supply" but then why don't they "control it" more to raise it to $1000 or $10000 or $million per barrel, it's ridiculous! I urge to read this book, it's not very complex or lengthy & you'll understand the market-factors lot better, this exactly kind of stuff that Paul actually understands & that's why he doesn't go on rant about cartels, speculators or whatever - http://www.hacer.org/pdf/Hazlitt00.pdf

http://www.youtube.com/watch?v=tDwKOA_E1ms

Look at the chart below, prices in gold-terms have been there and thereabouts for DECADES, it's dollar that's depreciating, government & media PROPAGANDA just keeps harping about cartels & speculators to distract from the MAIN ISSUE - the depreciating dollar

OIL priced in gold

http://pricedingold.com/charts/Crude-1950.png

http://pricedingold.com/charts/Crude-2006.png

NATURAL GAS priced in gold

http://pricedingold.com/charts/NatGas-2007.png

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this deflationary crisis

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^thats when you know to stop reading

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Originally Posted by Pennsylvania

^thats when you know to stop reading

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Actually, there will likely be deflationary pressures before anything else because of low lending by banks due to weak market-sentiment & that shrinks the moneysupply but I think Bernanke will try to re-inflate more & more as he actually believes that inflating was the solution to Depression so in the short-run, deflation can happen, depends on how quickly Bernanke reacts & how much he reacts