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Hello Kosmicjack, welcome to the discussion. You get no argument from me on the matter of the oil bubble. The crash is going to hit hard when speculators finally run out of money to drive prices up. Like all man-made movements in the commodities market, this too shall crash. It's the financial instability that will come from this that we should be worried about. Whole corporations could crash, which would spike unemployment.
Before that happens, transport costs associated with food and medicine will go through the roof. How many people has this already hurt? We don't know. All we can say is that we're in for a lot more damage. All I can hope for is a change in the commodities culture and some reforms in the loose laws that allow this situation, in the first place.
Mr Soros warned that the oil bubble would not burst until both the US and Britain were in recession, after which prices could fall dramatically. "You can also anticipate that [the bubble] will eventually correct but that is unlikely to happen before the recession actually reduces the demand.
Mr Soros warns Britain is facing its worst economic storm in living memory, dwarfing those of the 1970s and early 1990s, with a housing slump and serious recession. He said: "The dislocations will be greater [than in the 1970s] because you also have the implications of the house price decline, which you didn't have in the 1970s."
The warning undermines predictions that Britain will suffer only a brief and relatively painless recession, unlike the precipitous dives of previous years. Mr Soros also warned that the Bank's inflation report represents a "Faustian pact", obliging it to keep interest rates high to control inflation, even as the economy is starting to slump. "You had the nice decade," he said. "Now that is over and you are in a straitjacket."
Would punitive taxes really work? I'm enclined to say no. Legal reforms can be undertaken incrementally, which would allow predatory speculators to get the message. If they didn't change their ways, they'd get nailed.
Here's one more reason to avoid punative taxes. As an author, I can make some money, or none. I can also make a million dollars if enough people like my work. Your punitive taxes would burn me, AND those rascally speculators.
WHAT YOU NEED TO KNOW
--The food and oil crisis is caused by runaway speculation.
--Runaway speculation was caused by total de-regulation, and by the regulators (CFTC) being in on the scam.
--After the sub-prime mortgage meltdown, the criminals (banksters, hedge fund managers, etc) moved into the commodities markets.
--To restore sanity, we must regulate all commodity exchanges worldwide, and we must increase margin requirements for commodity traders. (That is, we must demand that players put up a lot more money, and take on a lot more risk).
--We need not discuss the weak dollar (which plays a role) or rising demand from China, India, etc. Our immediate priority is to re-regulate the commodities markets NOW, and stop this insane bubble from metastasizing further. We absolutely must get food and oil prices under control.
Otherwise the USA is .ed for a depression, and much of the world is .ed for famine.
German farmers have refused to deliver milk to dairies since last week, with more than half of Germany's 100 or so large processing plants blockaded by tractors and other vehicles.
Farmers in the Netherlands, Belgium, Luxembourg, Switzerland and Austria have joined them.
Prices paid to European Union farmers for milk have fallen about 30 per cent in six months while production costs are up 8 per cent.
Its just not the price of oil that is being artificially driven up. I understand that farmers in the EU are going thou some pain just as Kiwi farmers did when free market reforms were introduced here. Ultimately time will prove me right or wrong. If milk prices don't pick world wide after the EU is thou its trauma then New Zealand will be in big trouble economic wise. If the market bottoms out of the backbone of the NZ economy along with rising fuel and living costs then we have had it.
I don't think socialism will be the remedy. The current administration has failed to enforce the law, which has played some role in the current speculation spiral. Add to this the fact that laws have not changed to reflect the changes in economic environment and circumstances.
Because it will be to their political benefit, I expect the Democrats to investigate, reform, and enforce as needed. I'm probably not going to like the results, but even I will be surprised if they don't do SOME of that.
These are the political leaders who would be willing and able to make a compromise between increasing supply and preserving the environment. Such a compromise should be along the lines of allowing off shore drilling while preserving National Parks and other areas which are on land.
So far the dumbest idea I have read is to increase taxes in order to confiscate "excessive" profits from the Oil company's. Such would only lead to a higher cost being passed on to the consumer in one form or another.