I agree with Soros there is some speculative demand in oil, probably $10-20 worth. However, for him to say that commodities are not a legitimate asset class is a pure personal opinion on his part. It is also extremely hypocritical - Soros has speculated on oil in both directions many times in the past. He has also speculated on the currencies of sovereign nations - if commodities are not a legitimate investment asset class, then currencies are not either. So, considering that Soros's comment is hypocritical, pure personal opinion, disputed by a large swathe of the financial and academic world, and in any case totally irrelevant to whether or not funds have the right to invest in commodities, I don't really see it holding much sway. Let us also not ignore Soros's comments that the oil price rise is mostly down to supply & demand factors other than speculation.
Yes I do. We all, bottom line, have our own motives, consciously or even subconsciously. Soros outside his own speciality in money making has, if anything, a record of unbalanced opinions. And it is amusing that Soros as an arch speculator should claim high oil prices will cause a recession. If there was ever a serious, planned and legislated attempt by USA and European governments to move to a wholly or largely non-oil economy, the economic stimulus would preclude any recession.
Correct me if I am wrong, but at the expiry of the futures contract, the speculator holding a contract has two choices- take delivery of X barrels of oil or sell the contract to someone who will, possibly at a loss if they aren't willing to meet their price. If you want to claim that rampant speculation is driving prices higher, you have to show me where speculators are taking delivery and stockpiling the stuff. Otherwise, they have to sell the contracts to consumers of the resource. Whats with the chart in the first post? It seems to show trading volume vs consumer demand. All it takes is one contract changing hands more than once for the former to be larger than the latter.
politicians dont care about facts, they are biased to whats convenient to them. I predict that between now and 2016 jim rogers will have to testify before congress to clarify his 'role' in 'increasing living costs of hard working americans' by promoting comm as asset class and his fund
You're onto something. Several posts ago it was asked "what's Soros motivation in this?" Well, it's kind of like a twofer. 1 deflect attention from huge specs like himself. 2 pin the blame on comm index funds which, incidentally, would nail his nemesis, jim rogers. Jim Rogers doesn't have it in for soros, but boy does soros have it in for rogers.
Yes, because members of the US House of Representatives are bastions of honesty and fonts of both financial and legal wisdom. Again, if traders were "Gaming" the market, we would see stock piling. Why is it so hard to believe that production simply hasn't kept pace with demand due to under investment in infrastructure? Or that suppliers (ie OPEC) see value in reducing supply to drive prices higher?
genius, so you're saying any price is ok since there are some fundamental factors. 150 200 300 shmuck.
Just because you are unwilling to pay it doesn't mean others aren't. Again, these "speculators", at the end of the contract period, are having no trouble finding consumers willing to buy out their contracts. If they did have trouble, prices would fall or speculators would start taking delivery. If the sky-rocketing price of liquified dinosaurs gets us to invest in some alternate/renewable energy technology, then our economy and all of human kind is better off for it (unless you are in the tiny minority of people who are Saudi princes). Why does recognizing the reality of our situation make me a "shmuck"?