Author Topic: Just commodities  (Read 131278 times)

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Offline Libertas

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Re: Just commodities
« Reply #220 on: March 23, 2012, 08:58:52 AM »
Oil Conundrum Explained

"Each and every American, and especially those involved in tracking the economy, will have to remind themselves and the public that at bottom, it was the Federal Reserve that created the conditions by which we suffer, including currency devaluation and high oil prices, NOT some foreign enemy."

http://www.zerohedge.com/news/oil-conundrum-explained

This article rings true to me.  I still argue we would be better off exploiting our own domestic resources and improving refinery capacity and modernization and improving/modernizing distribution to decouple for crazy foreign suppliers, and we can definitely do without high taxation and subsidies in the entire energy sector as well.  But this article makes sense that other devaluing fiat currencies are masking the Forex market impact of Fed policy, and like a balloon getting pumped full of air, if squeezed it will follow the path of least resistance, so the air winds up in oil.  If the dollar loses reserve status the air being let out will shoot that balloon across the sky.  If fundamental changes in Fed policy occur a managed realease of this hot air might be possible.

But, the Neo-Keynesian's are in charge, so, until they can be cleaned out it will be business as usual...

Thus, back to expoiting domestic capacity.
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charlesoakwood

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Re: Just commodities
« Reply #221 on: March 23, 2012, 12:48:57 PM »

So, buy big oil or gold?

This is an excellent piece.  
I would suggest O'Reilly and others read it.

Some tangential thought bubbles aside from those relating to Barnhardt:

Quote
We don’t know exactly how much fiat the Fed has printed in that time, and won’t know until a full and comprehensive audit is finally enacted, but we do know that the amount is at the very least in the tens of trillions.

So all the counterfeiting done by the NoKos and others is a drop in the bucket and are actually an assistance to Bernie.  Why go to the trouble of redesigning our beautiful currency to its current ugliness?
-----------------------
Quote
Bilateral trade agreements between China, Russia, Japan, India, and other countries, especially those within the ASEAN trading bloc, are slowly but surely removing the dollar from the game as these nations begin to replace trade using other currencies, including the Yuan.  I believe commodities, especially oil, have been reflecting this trend for quite some time.

Rumor, Quadaffi assassinated because he was preparing for Libya and other Arab states to issue gold currency and trade oil in same.


Offline Libertas

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Re: Just commodities
« Reply #222 on: March 23, 2012, 02:35:10 PM »
Fortunately for me all I am in is gold, silver and oil.  As far as oil goes I just have to be warry of any implosion.

We heard that Daffy plan before, same one the Persian's are wanting to run now.  BRICS and others trying to end dollar dominance will be hampered unless/until other nations stop their Neo-Keynesian antics too.

Gonna be interesting either way seeing how this plays out.  The bubble could easily wind up back in PM's in an insane way.
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charlesoakwood

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Re: Just commodities
« Reply #223 on: March 23, 2012, 10:24:42 PM »

Where Did All The Money Go? Here!

                                                                                                      7725
                                                                       

Offline Libertas

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Re: Just commodities
« Reply #224 on: March 26, 2012, 07:39:45 AM »

Where Did All The Money Go? Here!

                                                                                                      7725
                                                                       

Just a rainy day fund.  I'm sure some has already been plowed back into themselves in Treasury stock.  We'll see what is done with the rest, if Obango is retained you know damn well it won't be used for expansion or modernization, it will be used for survival.
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Offline Libertas

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Re: Just commodities
« Reply #225 on: March 26, 2012, 07:41:16 AM »
http://www.zerohedge.com/news/tungsten-filled-1-kilo-gold-bar-found-uk

I tend to hold to the isolated incident theory, the PTB's would be a lot smarter in how they go about screwing over the general public.  But it is something to be aware of.  Especially if we find ourselves in a barter economy. 
 ;)
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Offline Libertas

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Re: Just commodities
« Reply #226 on: March 26, 2012, 08:30:35 AM »
We are now where The Founders were when they faced despotism.

Online Pandora

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Re: Just commodities
« Reply #227 on: March 26, 2012, 09:53:16 AM »
Speaking of commodities, I was just informed that oil is not traded (as a commodity) in the way grown/harvested items like wheat and oranges are.

Aside from the fact that some are grown, some are drilled, some are mined, what's the difference?
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Offline Libertas

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Re: Just commodities
« Reply #228 on: March 26, 2012, 10:59:29 AM »
Aside from ETF's, I presume you are looking to actually invest in oil directly you need to go through a broker, which means buying on margin (and subject to margin calls of all sorts) on the purchasing of monthly contracts.  So by not traded per se, it is because of the purchasing of contracts that give you the right to buy or sell crude oil.  The liquidity of the oil market is substantial.  The big buyers in the industry are the only ones who take physical delivery, I have not heard of anyone getting stuck with 1000 barrels dropped off at their residence!
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Online Pandora

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Re: Just commodities
« Reply #229 on: March 26, 2012, 01:09:15 PM »
Aside from ETF's, I presume you are looking to actually invest in oil directly you need to go through a broker, which means buying on margin (and subject to margin calls of all sorts) on the purchasing of monthly contracts.  So by not traded per se, it is because of the purchasing of contracts that give you the right to buy or sell crude oil.  The liquidity of the oil market is substantial.  The big buyers in the industry are the only ones who take physical delivery, I have not heard of anyone getting stuck with 1000 barrels dropped off at their residence!

No. I'm not talking about me investing in oil.

I said that oil was a commodity and was told the following:  "but it's NOT like wheat and sugar, or other grown/harvested commodities".

So, I'm axing, how is it not?  ^^  I mean, other than it cannot be eaten.


 
"Under certain circumstances, profanity provides a relief denied even to prayer." - Mark Twain

"Let us assume for the moment everything you say about me is true. That just makes your problem bigger, doesn't it?"

Offline Libertas

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Re: Just commodities
« Reply #230 on: March 26, 2012, 01:23:46 PM »
Aside from ETF's, I presume you are looking to actually invest in oil directly you need to go through a broker, which means buying on margin (and subject to margin calls of all sorts) on the purchasing of monthly contracts.  So by not traded per se, it is because of the purchasing of contracts that give you the right to buy or sell crude oil.  The liquidity of the oil market is substantial.  The big buyers in the industry are the only ones who take physical delivery, I have not heard of anyone getting stuck with 1000 barrels dropped off at their residence!

No. I'm not talking about me investing in oil.

I said that oil was a commodity and was told the following:  "but it's NOT like wheat and sugar, or other grown/harvested commodities".

So, I'm axing, how is it not?  ^^  I mean, other than it cannot be eaten.


 

Apart from the obvious, most people can buy the raw item (sugar, wheat) but not crude oil.
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Offline Alphabet Soup

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Re: Just commodities
« Reply #231 on: March 26, 2012, 01:28:01 PM »
Aside from ETF's, I presume you are looking to actually invest in oil directly you need to go through a broker, which means buying on margin (and subject to margin calls of all sorts) on the purchasing of monthly contracts.  So by not traded per se, it is because of the purchasing of contracts that give you the right to buy or sell crude oil.  The liquidity of the oil market is substantial.  The big buyers in the industry are the only ones who take physical delivery, I have not heard of anyone getting stuck with 1000 barrels dropped off at their residence!

No. I'm not talking about me investing in oil.

I said that oil was a commodity and was told the following:  "but it's NOT like wheat and sugar, or other grown/harvested commodities".

So, I'm axing, how is it not?  ^^  I mean, other than it cannot be eaten.


 

Apart from the obvious, most people can buy the raw item (sugar, wheat) but not crude oil.

Why not? What stops you?

Offline Libertas

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Re: Just commodities
« Reply #232 on: March 26, 2012, 01:31:10 PM »
Aside from ETF's, I presume you are looking to actually invest in oil directly you need to go through a broker, which means buying on margin (and subject to margin calls of all sorts) on the purchasing of monthly contracts.  So by not traded per se, it is because of the purchasing of contracts that give you the right to buy or sell crude oil.  The liquidity of the oil market is substantial.  The big buyers in the industry are the only ones who take physical delivery, I have not heard of anyone getting stuck with 1000 barrels dropped off at their residence!

No. I'm not talking about me investing in oil.

I said that oil was a commodity and was told the following:  "but it's NOT like wheat and sugar, or other grown/harvested commodities".

So, I'm axing, how is it not?  ^^  I mean, other than it cannot be eaten.


 

Apart from the obvious, most people can buy the raw item (sugar, wheat) but not crude oil.

Why not? What stops you?

A sh*tload of money!!!

http://crude-oil-sellers.com/buy-and-sell-crude-oil-most-profitable-way-to-do-it/

And this doesn't even begin to touch our regulatory environment!!!
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Offline Libertas

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Re: Just commodities
« Reply #233 on: March 26, 2012, 01:32:18 PM »
Also, isn't the minimum purchase 1,000 barrels?
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Re: Just commodities
« Reply #234 on: March 26, 2012, 01:40:06 PM »
Aside from ETF's, I presume you are looking to actually invest in oil directly you need to go through a broker, which means buying on margin (and subject to margin calls of all sorts) on the purchasing of monthly contracts.  So by not traded per se, it is because of the purchasing of contracts that give you the right to buy or sell crude oil.  The liquidity of the oil market is substantial.  The big buyers in the industry are the only ones who take physical delivery, I have not heard of anyone getting stuck with 1000 barrels dropped off at their residence!

No. I'm not talking about me investing in oil.

I said that oil was a commodity and was told the following:  "but it's NOT like wheat and sugar, or other grown/harvested commodities".

So, I'm axing, how is it not?  ^^  I mean, other than it cannot be eaten.


 

Apart from the obvious, most people can buy the raw item (sugar, wheat) but not crude oil.

Why not? What stops you?

A sh*tload of money!!!

http://crude-oil-sellers.com/buy-and-sell-crude-oil-most-profitable-way-to-do-it/

And this doesn't even begin to touch our regulatory environment!!!

Aside from the money. 

As I understand it, crude pumped anywhere simply adds to the world's available supply -- a figurative pool of oil -- subject to the usual laws of supply and demand as regards cost.  Speculators buy "futures" based on what they *think* the price will be in the future.  As I further understand it, oranges, wheat, sugar are all other commodities bought and sold the same way.  Bad world crop, less orange juice, higher price -- supply and demand and speculators, just the same as oil or wheat.

Do I understand correctly?  In words meant for a three-year old, please, if I haven't.

"Under certain circumstances, profanity provides a relief denied even to prayer." - Mark Twain

"Let us assume for the moment everything you say about me is true. That just makes your problem bigger, doesn't it?"

Offline Libertas

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Re: Just commodities
« Reply #235 on: March 26, 2012, 02:09:28 PM »
Aside from ETF's, I presume you are looking to actually invest in oil directly you need to go through a broker, which means buying on margin (and subject to margin calls of all sorts) on the purchasing of monthly contracts.  So by not traded per se, it is because of the purchasing of contracts that give you the right to buy or sell crude oil.  The liquidity of the oil market is substantial.  The big buyers in the industry are the only ones who take physical delivery, I have not heard of anyone getting stuck with 1000 barrels dropped off at their residence!

No. I'm not talking about me investing in oil.

I said that oil was a commodity and was told the following:  "but it's NOT like wheat and sugar, or other grown/harvested commodities".

So, I'm axing, how is it not?  ^^  I mean, other than it cannot be eaten.


 

Apart from the obvious, most people can buy the raw item (sugar, wheat) but not crude oil.

Why not? What stops you?

A sh*tload of money!!!

http://crude-oil-sellers.com/buy-and-sell-crude-oil-most-profitable-way-to-do-it/

And this doesn't even begin to touch our regulatory environment!!!

Aside from the money. 

As I understand it, crude pumped anywhere simply adds to the world's available supply -- a figurative pool of oil -- subject to the usual laws of supply and demand as regards cost.  Speculators buy "futures" based on what they *think* the price will be in the future.  As I further understand it, oranges, wheat, sugar are all other commodities bought and sold the same way.  Bad world crop, less orange juice, higher price -- supply and demand and speculators, just the same as oil or wheat.

Do I understand correctly?  In words meant for a three-year old, please, if I haven't.



Short answer is yes.

With the oil industry you have to be careful with terms like available supply, but yes, the crude oil brought to market (new deliveries) can be traded/hedged using many of the same vehicles as available with other commodities but in terms of scale and ability to transact physical ownership, oil is cost prohibitive for "average" investors who have to rely on ETF's and industry stocks to make oil plays.  Also, since oil is used in more applications than fuel there is not always a direct relationship between oil prices and byproducts.  I would also add that due to weather and such, crop-based commodities are more supply dependent, but all commodities share many of the same risks that affect their supply, transport, regulation and risk insurance and industry nationalization - all of which impact their pricing.
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Online Pandora

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Re: Just commodities
« Reply #236 on: March 26, 2012, 02:16:42 PM »
Thank you very much.

Now, about this:

"With the oil industry you have to be careful with terms like available supply ...".

Okay, why?
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Offline Libertas

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Re: Just commodities
« Reply #237 on: March 26, 2012, 02:31:10 PM »
Thank you very much.

Now, about this:

"With the oil industry you have to be careful with terms like available supply ...".

Okay, why?

There is quantifiable reserves below ground, there are barrels ready for shipment (staged for sale), there are barrels shipped (bought, now out of market but soon to be in productive use as gas, diesel, other chemicals and petroleum products), and then there are things like the SPR which being bought and stored for future refining is off-market in terms of availibilty (unless foolishly released for sale on the open market by stupid Presidents wanting to look like they are doing something).  So the stuff that is available to bring to market (available supply) is mostly the stuff yet to pump out, as everything loaded is filling an existing demand for that delivery date.  Since most producers know what their average daily output is and how long it takes to load a tanker, the scheduling process is predictable.  But things like crazy people blocking the Strait of Hormuz can threaten to slow deliveries and that uncertainty would send turmoil through the markets, messing with not just current deliveries but more importantly future deliveries which could see a spike in prices that send buyers scrambling to lock in a futures contract before the rise goes viral.  Others may gamble to wait to see if the dust settles soon if they get froze out of contracts at a reasonable price.  Since much of the price acts as a pass-thru to ultimate consumers (you and I) it tends to be what it is is what it is.
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Online Pandora

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Re: Just commodities
« Reply #238 on: March 26, 2012, 02:48:25 PM »
Thank you again, Libertas.  (See! I can do this!)

"There is quantifiable reserves below ground ... "

Wouldn't a new "strike" add to those known reserves, increasing the amount of the pool?  Wouldn't a large addition cause the overall price to drop?

"Under certain circumstances, profanity provides a relief denied even to prayer." - Mark Twain

"Let us assume for the moment everything you say about me is true. That just makes your problem bigger, doesn't it?"

charlesoakwood

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Re: Just commodities
« Reply #239 on: March 26, 2012, 03:51:46 PM »

Also, those quantifiable reserves are not what the government refers
to when they use the term reserves.  When they speak of reserves they
refer to those fields which are producers as defined by them.  Therefore,
when they speak of reserves the amount will be significantly less than
the actual amount of reserve oil.