Comments on: Why are commodities surging?

By: advocatusdiaboli13

advocatusdiaboli13 — Wed, 03 Jun 2009 22:32:30 +0000

Why not speculation by hedge funds and banks flush with TARP money that no one has any intention of lending in a recession? After all, hedge fund speculation in oil drove it from $80 USD a barrel to nearly $150 in a little over a year. Of course the money is going into stocks and other vehicles as well. Note the major banks are only making money on trading and not lending so that should give you a clue they are using funds borrowed from taxpayers to speculate and then them back from their winnings. Only this time, unlike the oil bubble, they are hoping for increased economic activity instead of being certain of it–so they are proceeding a bit more carefully even though they are using OPM (other people’s money) and hence have less risk.

By: f belz

f belz — Wed, 03 Jun 2009 18:11:43 +0000

We don’t need big words or many words for this. The traders see profits and would like to get the money. The US government may have to regulate commodities on a supply and demand basis and take the traders out of the market since these are life essential items. The economy is still very weak and will remain there until some true growth takes place. We need to ask ourselves if we really need Wall Street and the Traders, as all they seem to want is money off the top and do not serve a useful purpose in maintaining a steady supply at a reasonable price.

By: Steve Vickers

Steve Vickers — Wed, 03 Jun 2009 15:36:11 +0000

Just follow the institutional money, just like last year. This is whats driving the pick-up, call it artifial demand.
Not Goldman can use discount window miney to place bets on oil. Get these finance folks out of the market. They dont produce oil and they dont use oil.

By: Evie Futura

Evie Futura — Wed, 03 Jun 2009 09:31:29 +0000

Could it just be that strategic securing of long term resources is leading the price run up, and there are fundamental forces at play supporting that-

http://www.reuters.com/article/innovatio nNews/idUSTRE5521LL20090603?pageNumber=2 &virtualBrandChannel=0

The China deal with Petrobras, their involvement in securing global resources for the long term supply of their economy, in that context the run up makes sense

If that is in effect what is happening then it is self reinforcing somewhat as other nations have to counter or risk being out of supply of critical commodities

By: Hoang Thanh Nguyen

Hoang Thanh Nguyen — Wed, 03 Jun 2009 08:54:54 +0000

WHAT WILL HAPPEN TO THE COMMODITIES AND THE MARKET WHEN THE USD DOLLAR CONTINUE TO FALL?

USD DOLLAR FALLING IS NOT A BAD REASON. It would BOOST the economy since US MARKET are specialized in technology, such as HP, Computer chips and many others product.

In coming month, we will see the recovery in export, due to high demand from other countries; they have benefited high VALUE in term of currency against USD dollar and would increase from time to time. It is a good sign of recover by the end of this year if the USD dollar continues to depreciate.

It has been the last few years when Bush Administration trying to appreciate the Yen, and found impossible to do that, now they have change different tactic by depreciate the USD dollar, that mean more EXPORT GOOD and less IMPORT, that also mean their account deficit would reduce rather than OVER FLOW.

US has always been the major player around the globe, they would find this year and next year will help them over spending in import good from China since their currency has been drop over 20% against world wide.

The Chinese would lose BIG BUYER like a UNITE STATE of AMERICA; however they have go different way by negotiated with COMMODITIES producer such as GIANT BHP, RIO TINTO that they have to cut 30 to 45% in commodities price. Soon we may find GOLD will drop back to $900 and OIL would drop back go $50.

What happened if COMMODITIES, GOLD, OIL FALL, the MARKET WILL FALL WITH IT

Let see the NEXT FEW WEEKS to find out!