Tooearly. Re: your post on "Common Misconceptions regarding Currency and Commodity Markets ...", that you posted below:
Message 20162574
... a few thoughts.
I can't help but feel this article is slightly off-the-mark. It seems to set up a dichotomy between two distinct types of market actors: (i) "wealthy" financial institutions, governments, "huge" corporate entities on the one hand, and (ii) "savvy" free-market speculators who "perceive aberrations in value" on the other (of which George Soros is offered as an example)
Somehow, I can't believe it is structured quite so simply. Rather, I view it more a situation of economic entities (or players) whose interest it is to create and benefit from financial arbitrage opportunities in the "financial" economy, and economic players who are engaged in the production and distribution of goods and services in the "real" economy.
In a healthy, functioning, relatively stable economy, I would think the "financial" and "real" sectors of the economy would reinforce and support one another. In the current global economy, however, the "financial" economy appears to have become highly disfunctional in its relationship to the real economy.
And a BIG part of this this levered financial economy - or what Doug Noland calls "structure finance" - is precisely the leveraged speculator community. To me these guys are a symbiotic economic class to the Fed and "corrupt" financial institutions (on the whole), far more than they are white knight riding the bucking bronco of global capitalism to "perceieve aberrations in value, and provide the necessary information feedback to the world which helps bring about change". I mean, they basically represent "hot money" without borders has proven tremendously destructive to global financial stability, as various emerging market crisis in the 1990's can attest to.
Anyway, just wanted to provide M2CW.
Take care,
Glenn |
