Here Is a Discussion About Speculation and Asset Inflation Which Hurts Mainstreet

I posted this at Patrick.net regarding speculation and asset inflation and oil/food price inflation:

Oil and food have been inflated for years. A bell pepper costs 99 cents. And this stuff was happening before the drought got bad. Oil is always a cornered market, when it pushes up. Oil was pushed up, according to the Saudis, by investment bankers. Wikileaks uncovered the truth of this: http://www.kansas.com/news/politics-government/article1192786.html
What role Wall Street investors play in the high cost of oil is a hotly debated topic in Washington. The Obama administration, the Bush administration before it and Congress have been slow to take steps to rein in speculators. The Saudis, however, have struck a steady theme for years that something should be done to curb the influence of banks and hedge funds that are speculating on the price of oil, according to diplomatic cables made available to McClatchy by the WikiLeaks website.
I added:

Inflation is low but until very recently asset inflation has not been low. And for gasoline it still isn't low in the Western states.
The Saudis knew that the bankers were speculating and pushing the prices up. One guy cornered the cocoa market, so a group of bankers could easily corner the oil market.
If you can't see that this has been happening, especially after investment bankers were allowed to take large positions back in the 90's in commodity futures, you haven't understood anything.
We even have the case with regard to food, of West Africans suffering because Goldman Sachs speculated on food in 2007: http://www.ethicsandinternationalaffairs.org/2013/hunger-food-security-and-the-african-land-grab-full-text/ Goldman took massive positions, causing contracts to be scarce.

And Goldman even stores aluminum, affecting the aluminum price. http://www.bloombergview.com/articles/2014-11-20/the-goldman-sachs-aluminum-conspiracy-was-pretty-silly The author said this:


When we last talked about the great aluminum conspiracy, I mentioned this problem: that the price of financial, abstract aluminum -- the stuff stored in the LME warehouses and used in futures trading -- was becoming disconnected from the price of real, available aluminum that could be made into beer cans. But I said that that was not a problem for beer-can prices, because beer cans are made with real aluminum, not abstract LME aluminum. But this is a fair point! Beer-can makers don't just make beer cans. They also make financial decisions, including decisions about hedging their aluminum costs. And when abstract aluminum and real aluminum diverge, then the costs and risks of that hedging go up. And that does cost the beer-can makers.
I closed my comment here:
The point is, Iwog, that the investment banks can interfere with the markets, at best, and speculate on the markets, at worst, driving up the price and availability of commodities.
They did so badly in the last decade. And we as consumers paid through the noses. And if you don't believe speculation exists to squeeze the average guy, you are not getting the whole picture of what the Fed does and how money in the hands of bankers can drive prices up.

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