S.E.C.: Santa Expropriates Commodities ~ The Risk Averse Alert

Wednesday, January 09, 2013

S.E.C.: Santa Expropriates Commodities

The merit of my thesis projecting an attempt to perpetuate consolidation of physical and financial assets, and so sustain the Japanese experience of the past 20+ years in limbo, this simultaneously venturing to avoid either a Great Depression redux or, on the other end of the spectrum, Weimar-mania, seems reasonably substantiated by commodity price action since the world's summer 2011 awakening to reality that, the trans-Atlantic banking system's addiction to bailout will not soon end...


$CRB weekly

Further substantiating my thesis appears the SEC deigning commodity price manipulation an acceptable practice in a world awash with scammers impeccably schooled in the mechanics of free markets. Cornered commodities markets certainly make for potential, perpetual profit machines reliably kept under the radar. Truth is when you have cornered a market your ability to move prices in both directions effectively is assured.

Yet one thing that might become rather obscured is the extent to which the global physical economy is likely to continue contracting. Since 2011 the CRB index might be seen presenting a fairly accurate sense of the physical economy's atrophy at the alter of a well-liquified, yet functionally impaired banking system. Commodities funds toying with supply likely will cloud future efforts to glean such conclusions. Additionally, tightened supplies could make for heightened price volatility, as well. Thus, too, operations driving producers into the ground might be more easily run, and so hasten availability of assets to be grabbed for pennies on the dollar, this via no less plainly fraud-rife ventures seeking quick fixes lending backing to today's mountain of trash with discounted physical assets whose assumed potential earnings power could raise appearances of the trash heap's sustainability.

Still, challenges facing new found, developing capacity to corner commodities markets might be expected to materialize from a growing mass of formerly viable entities thrown to the wolves during ongoing rationalization of what is cruelly called "excess capacity." How much of this might be mitigated through affairs promoting mass murder, though uncertain, all too likely will be of no small consequence, and a growing threat to be sure.


Word on the Street
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