Join Date: Oct 2010
Location: SW Saskatchewan
Mentioned: 0 Post(s)
Quoted: 288 Post(s)
I happen to agree that paper trading should realistically be based only on actual product out there. At the very least, there should be limits. For example, having 10 times the number of contracts traded without product to back it up is subject to pure manipulation. It doesn't entertain reality, but entertains a gaming philosophy where there is winners and losers who don't even care about the quantity of actual product out there. They are trading positions.
I do understand the idea of a miller requiring a steady stream of grain to keep his mill going. But if there is no real grain behind paper, how can his mill operate? Someone is taking this risk for the miller. These days, farmers are supposed to be speculators and risk takers and hold the bottom line position of the risk. True, you can sell next years crop right now. If there is no crop next year, I am afraid you will have to go bankrupt or get a huge loan to continue to operate. Someone has to pay for that? (The farmer!)
The system has been designed to live off the farmer's products and many middle man make a living doing just that.
As I said, stock markets had a purpose at one time and gambling wasn't it! They were there to fund rather large projects (gold mines, railways, factories etc.) and were a place to raise capital in order to do that. Now these markets are totally filled with day traders (speculators) and people hoping companies do badly (selling them short). In the marketplace now, for every winner there is a loser, the difference being the commission charged and insider knowledge. That should not be its purpose - it is a sideshow that net's the insiders much of the money. The mechanisms of puts, calls and shorts do not really benefit economies. They only benefit the traders and those that live off the backs of the system. It is parasitical system!
That is one of the reasons the system crashes at times. If 99% of the speculators take a short position in the market and all prices collapse, these speculators call the bluff and the institutions fail because they can't cover what they issued! It is all fine if the market goes against the shorters, then the institutions take the money and run and no one complains or is worried. If a market holds its own, say 50% short, 50% long, they still make lots of money! Each position has money built into it so that they can never lose. Also, keep in mind that when a gambler place trades or issue such things as a 10% trailing stop loss, someone else (ie. The Institution) knows it.
They can tip the market at will if they control enough of the stock in order to force you out. Corruption at play can often be found with the help of MSM manipulation. Simply announcing that a corn borer has knocked out 50% of the crop, will create a huge backlash. If someone knows how to play it, they stand to make a huge profit.
This was said to have happened at 911. Those who knew what was going to take place, shorted the airline stocks. When the event occurred, they cashed it in. It was one of the tattle tale signs of foul play and where gambling pays off and can be optimized.
No one still has answered how markets work with durum or specialty crops. This is where there is real market place competition. The Cargills (Macmillan Family), the Bundys of the world, Patterson, Pioneer and so on have to put out a bid price. This can be a huge benefit to farmers as there is much more volatility and more reality to the market place. Notice one thing about the commodity system, a lot of these organizations are private and are not accountable to shareholders.
If the rains don't hit India, the demand increases, the supply then decreases and the price increases. That is the way supply/demand is meant to work. Why aren't farmers speculating on fertilizer futures, glyphosate futures and so on? As a bottom feeder, that is out of your hands. Competition from the various firms is all that is required! Not true?
It is not What you know, it is WHO you know that counts! Currency is a UNIT of debt - not value!
To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.