I1L2T3 Posted July 15, 2012 Share Posted July 15, 2012 Very interesting http://www.telegraph.co.uk/earth/energy/fuel/9401934/Was-the-petrol-price-rigged-too.html We are just starting down the road of working out exactly what the banks have been up to. We will come to realise that almost every commodity be it raw materials or foodstuffs has become financialised. Everything you rely on in your daily life has been financialised. The price for nearly everything you buy is influenced by bankers. Everything can be traded. Everything can be leveraged. Everything can be used for speculative activity. We might get upset at the idea that we've been conned at the petrol pump for years. But imagine if you were poor that the price you paid for your food was influenced by price volitailty due to speculative casino-style trades on foodstuffs. It begins to get altogether more serious. Everybody needs to wake up to this. Link to comment Share on other sites More sharing options...
anywebsite Posted July 15, 2012 Share Posted July 15, 2012 The problem isn't that markets exist, we need them, it's about the rigging of these markets. Casino style trades are good as long as the taxpayer doesn't cover any possible losses & the dice aren't weighted. Link to comment Share on other sites More sharing options...
I1L2T3 Posted July 15, 2012 Author Share Posted July 15, 2012 The problem isn't that markets exist, we need them, it's about the rigging of these markets. Casino style trades are good as long as the taxpayer doesn't cover any possible losses & the dice aren't weighted. Markets are fine. Of course we need them. Financialised markets are ok too for certain commodities. But for almost almost everything to be financialised and subject to leverage and speculative trade is not good - you can date the serious rise in this to the 1980s with deregulation, 'big bang' etc... Link to comment Share on other sites More sharing options...
anywebsite Posted July 15, 2012 Share Posted July 15, 2012 Markets are fine. Of course we need them. Financialised markets are ok too for certain commodities. But for almost almost everything to be financialised and subject to leverage and speculative trade is not good - you can date the serious rise in this to the 1980s with deregulation, 'big bang' etc... It is necessary, especially for basic commodities that we rely on, like food. What's your alternative way of setting prices? Selling grain futures helps farmers plan & fund their crops for example. Bankers, investors & speculators, doing their jobs properly help the markets to operate more efficiently, it means suppliers always have a buyer & buyers always have a supplier. It's when too few people have too much power & they collude with each other to fix markets that problems happen. The bankers should all be competing with each other fairly, not doing secret back room deals with each other to fix the markets in their favour. Excessive regulation of markets can cause even more serious problems, with things like food that can mean that people starve because of it. We have enough regulations to deal with the problem, they just haven't been enforced properly. Do you have any specific pre-1980s regulations that you'd like to bring back? Link to comment Share on other sites More sharing options...
I1L2T3 Posted July 15, 2012 Author Share Posted July 15, 2012 It is necessary, especially for basic commodities that we rely on, like food. What's your alternative way of setting prices? Selling grain futures helps farmers plan & fund their crops for example. Excessive regulation of markets can cause even more serious problems, with things like food that can mean that people starve because of it. Very few foodstuffs were traded in financialised markets until relatively recently and if you read my post properly you will notice I said it's ok for certain foodstuffs. But perhaps even that is academic now - the whole process has been hijacked by bankers and hedge funds for speculative trading. They'll trade anything. And they can trade just about anything. Link to comment Share on other sites More sharing options...
I1L2T3 Posted July 15, 2012 Author Share Posted July 15, 2012 It is necessary, especially for basic commodities that we rely on, like food. What's your alternative way of setting prices? Selling grain futures helps farmers plan & fund their crops for example. Bankers, investors & speculators, doing their jobs properly should help the markets to operate more efficiently, it means suppliers always have a buyer & buyers always have a supplier. It's when too few people have too much power & they collude with each other to fix markets that problems happen. The bankers should all be competing with each other fairly, not doing secret back room deals with each other to fix the markets in their favour. Excessive regulation of markets can cause even more serious problems, with things like food that can mean that people starve because of it. We have enough regulations to deal with the problem, they just haven't been enforced properly. Do you have any specific pre-1980s regulations that you'd like to bring back? People are starving now. Financialisation has not improved food (or water) security. Link to comment Share on other sites More sharing options...
anywebsite Posted July 15, 2012 Share Posted July 15, 2012 Very few foodstuffs were traded in financialised markets until relatively recently and if you read my post properly you will notice I said it's ok for certain foodstuffs. But perhaps even that is academic now - the whole process has been hijacked by bankers and hedge funds for speculative trading. They'll trade anything. And they can trade just about anything. Relatively recently? Relative to what? https://en.wikipedia.org/wiki/Commodity_market The fact that they can & will trade anything is a good thing, as long as they're all competing with each other. It helps to set more stable prices & ensure a more consistent supply. The problem is when they collude with each other to fix markets. "It's OK for certain foodstuffs" makes you sound like Castro. Link to comment Share on other sites More sharing options...
Obelix Posted July 15, 2012 Share Posted July 15, 2012 People are starving now. Financialisation has not improved food (or water) security. And state control and regulation of the grain markets meant that the USSR and China never ever had shortfalls of grain or rice now did it... Link to comment Share on other sites More sharing options...
Nagel Posted July 16, 2012 Share Posted July 16, 2012 And state control and regulation of the grain markets meant that the USSR and China never ever had shortfalls of grain or rice now did it... The price of oil was driven down by the USA in the mid to late Eighties in order to destroy the economy of the USSR and it worked. The USA asked or applied pressure on Saudi Arabia to increase oil production to drive down the price of oil. It ended up at $6 a barrel, current prices are $100 - $120 a barrel. At the same time the US had increased the pace (and expense) of the nuclear arms race with the introduction of cruise missiles in Europe. The USSR's main source of income was oil and with no money coming in because the oil price had collapsed they couldn't keep up in the arms race and their economy collapsed. So ended the USSR. I also lost my job at the same time as I work in oil drilling and at $6 a barrel there was no work for anyone as all new drilling dried up. Link to comment Share on other sites More sharing options...
Jag82 Posted July 16, 2012 Share Posted July 16, 2012 I am amazed that so many seem to be amazed. Link to comment Share on other sites More sharing options...
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