Skjellifetti

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  • Investing in Currency ETFs: Irony of the 'Bail-Out' Mentality
    No need to jump to conspiracy theory explanations. The congres... looks like a simple bug in the Seeking Alpha codebase. I suspect that it is trying to treat any set of characters that contains a "/" as part of a URL and simply chopping off the display of the extra characters which would not matter if the the string really was the text displayed in an html anchor tag. Look at morgan77's post where the link text becomes /ec... for an example.
    Jul 16 13:27 pm |Rating: 0 0 |Link to Comment |View article
  • Two Moves to Make as the Fed Inflates the Commodities Bubble
    "It’s fairly clear to me that concerted speculation by hedge funds and pension funds is what’s been pushing up oil prices."

    Then perhaps you would be kind enough to explain the mechanism that is making this happen. If there is a bubble, this implies that current supply is greater than current demand at the current spot price and therefore someone must be buying and storing the excess supply. Show me who is buying the excess supply and where they are storing it.

    On the other side of the coin, there are a number of factors that have reduced the supplies of many commodities (problems in the Nigerian oilfields, lack of investment in Venezuelan and Mexican fields, power shortages in Chile and South Africa, etc.). At the same time, demand is not falling.

    Commodity prices are not being driven by speculators. Simple supply and demand is fully capable of explaining the current high prices. Claims that speculators are driving the prices is a classic example of a wishful thinking logical fallacy. Gosh, if we could just make those evil speculators go away, we could be back in 25 cents per gallon heaven just like in my youth. Better learn to deal with reality, because high prices are going to be around until we can develop alternatives.
    Jul 02 12:56 pm |Rating: 0 0 |Link to Comment |View article
  • Commodity Conundrum Solved: The Hidden Parameter in Interest Rates
    This just looks like a restatement of the classical economic theory used to explain finite resource extraction rates. If you are the owner of a finite amount of a resource sitting in the ground, at what rate should you mine the resource in order to maximize your long-run discounted profits? If you sell a marginal unit today, you can put the proceeds in a bank and earn an interest rate r. If you hold the unit in the ground, and sell it tomorrow, you have lost r unless the price of the unit increases by the same amount. All that the author is saying is that interest rates have a powerful effect on the owner's decision to sell the marginal unit today or tomorrow. Polaris and Georealist are quite correct in that the demand curve is the other half of the equation and is necessary for understanding why tomorrow's price may not be the same as today's. Shalom is correct, too, in that extraction costs change through time as does demand since higher prices are a powerful incentive for developing substitutes for any product.
    May 01 16:17 pm |Rating: 0 0 |Link to Comment |View article

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