Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (72455)	12/17/2007 9:32:31 PM
From: elmatador	Read Replies (1) of 116555

When someone gets an understanding that a good is getting less available and that its demand is raising, he decides to hold that good for a given period of time and sell it next time its price increase. One can call it whatever: speculation or investment. What it does is to distort the market. That would increase the complexity of the flow of that good. Oil can be used as the case study. Thus one need a very high level of information 'refining' to come to the bottom of how really that market is. Once one has a good understanding of that market -the flow of that good- then one can play that market. Therefore the degree of obfuscation in such market (still using the oil case) is very high. Watch that: the high prices were due to Katrina, following year there was no Katrina but prices didn't go down. Big hurricane season, low hurricane season, prices still up there. Nigerians damaging oil production, summer driving season in the US. All variables changing but price steady up... We can now derive that it is speculator-driven. All the rest: Iran, OPEC meetings, Venezuela's Chavez, Iran... All part of a disinformation campaign to obfuscate the market. Food is increasing in price and speculator will rush in and start to apply the same obfuscation campaign in the flow of those goods. Watch out for the book: "Peak Food".

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