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Gas is gonna go through the roof.....

Greensub

Active member
Well if you come into a thread like this one based on past news events and it's 75 pages long, chances are better then not that there is no meaningful discussion going on at the other end unless the thread is just a week or so old and has already gotten to 75 pages. As for assumptions, you don't need to make assumptions about what people say unless you don't understand the language or you know they're hiding something. For the most part though if you know the language then all you have to do is listen to what is being said and take them at their word.

Now it's becoming clear...

Well first of all there is no tone to text in a post on a forum unless you use bold, italics, underlined, larger text, etc. To distinguish some of the text as having more meaning or emphasis.
Disagree... Consider the next two statements...

"Fuck you... I hate your guts"

Vs

'your great... I love you so much"

Completely different tone between the two.

In what I said that started all this had none of that, just simple plain text on a screen questioning what you think is funny. No need to understand my online personality, I responded to your whole post because all it did was tell Spastic Gramps how funny you thought his comment was. So there was no part I was responding to that needed to be analyzed. There was no context
There was context in what he said... it's the context of the overall discussion.

since I wasn't responding to just part of a post and you haven't a clue about my online personality if you haven't talked to me personally every day for years because there are people who have and even they wouldn't assume they know all about me.
Actually what I said was "what I know of your online personality" a very limited statement. Are you assuming I said I know all about you? Or did you just not know the language? Or did you misrepresent my statement on purpose?

You claim to have been watching me for years but judging by how you respond to me either that's not true or you didn't learn much about me in all that time
Once again... assuming or misrepresenting things, I never claimed to have been watching you for years, show me where I said that. That being said... one of the first threads I came across before I even registered was your "ask an old fart" thread (great thread by the way)

Nevertheless... you seem to be making a lot of assumptions about what I mean... either that or your just not understanding the language I'm using.
 

Greensub

Active member
Oh... by the way, (and I know this is totally late for the whole hemp discussion... it just took me awhile to find the study)

What do you guys think of Hillig & Mahlberg's study on cannabis types?

[SIZE=+2] ABSTRACT [/SIZE] [SIZE=-1] TOP
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ABSTRACT
INTRODUCTION
MATERIALS AND METHODS
RESULTS
DISCUSSION
LITERATURE CITED
[/SIZE]
Cannabinoids are important chemotaxonomic markers unique to Cannabis. Previous studies show that a plant's dry-weight ratio of
Delta.gif
9-tetrahydrocannabinol (THC) to cannabidiol (CBD) can be assigned to one of three chemotypes and that alleles BD and BT encode alloenzymes that catalyze the conversion of cannabigerol to CBD and THC, respectively. In the present study, the frequencies of BD and BT in sample populations of 157 Cannabis accessions were determined from CBD and THC banding patterns, visualized by starch gel electrophoresis. Gas chromatography was used to quantify cannabinoid levels in 96 of the same accessions. The data were interpreted with respect to previous analyses of genetic and morphological variation in the same germplasm collection. Two biotypes (infraspecific taxa of unassigned rank) of C. sativa and four biotypes of C. indica were recognized. Mean THC levels and the frequency of BT were significantly higher in C. indica than C. sativa. The proportion of high THC/CBD chemotype plants in most accessions assigned to C. sativa was <25% and in most accessions assigned to C. indica was >25%. Plants with relatively high levels of tetrahydrocannabivarin (THCV) and/or cannabidivarin (CBDV) were common only in C. indica. This study supports a two-species concept of Cannabis.
Hillig (2004) used allozyme allele frequencies (excluding BD and BT) to determine that most of the 157 accessions in the Cannabis collection under study derive from two major gene pools that correspond (more or less) to previous circumscriptions of C. indica and C. sativa. The most common allele at each locus was the same for both gene pools, but significantly differed in frequency for 10 of the 17 loci surveyed. All but six accessions were assigned to the indica or sativa gene pool. Six ruderal accessions from central Asia were tentatively assigned to a third ruderalis gene pool. All of the 157 accessions were also assigned to various taxa in accord with previous taxonomic treatments and tested for goodness of fit to the genetic data. Based on these results, a working hypothesis for a taxonomic circumscription of the Cannabis germplasm collection is given in Table 1. This hypothesis represents a synthesis of polytypic treatments of Cannabis by Lamarck (1785) , Delile (1849) , Janischewsky (1924) , Vavilov and Bukinich (1929) , Schultes et al. (1974) , and Anderson (1980) . Recognition of C. sativa and C. indica as separate species is primarily based on allozyme allele frequencies, morphological differences, different geographic ranges, and the fact that putative wild populations of both species have been found within the indigenous range of Cannabis, presumed to be in central Asia, the northwest Himalayas, and western China (de Candolle, 1885 ; Vavilov, 1926 ; Vavilov and Bukinich, 1929 ; Zukovskij, 1962 ; Hillig, 2004 , in press). Putative infraspecific taxa of unassigned rank are referred to as "biotypes" pending a taxonomic revision of the genus, in progress. Chemotaxonomic support for a two-species hypothesis is provided by an analysis of flavonoid variation that detected luteolin C-glycuronide in 30 of 31 plants assignable to C. sativa, but not in 21 of 22 plants assignable to C. indica (Clark and Bohm, 1979 ).
http://www.amjbot.org/cgi/content/full/91/6/966

Basically I believe they're saying that all the drug-type marijuana we smoke is Indica (even what we call sativa is now technically a subtype of indica).

Robert Connel Clarke said:
There is some new genetic based work by Karl Hillig at Indiana University, trying to work out the taxonomy of Cannabis. The main thing, is that all that Cannabis Sativa really should represent, is the narrow leaf hemp varieties from Western Europe which spread to a few other places like Chile and possibly New Mexico, and everything else should be called Cannabis Indica. I’m now using this new system - until some taxonomist changes it again!

What changed the system?

Looking at the direct gene products of cannabis. The gene technology as well as looking at cannabinoid data, THC, terpene data and other plants.

So are we smoking any Sativa at all these days?

Actually we don’t smoke sativas, it is all indicas. All the rest of the world’s hemp, drug, medical, seed and other varieties should most likely be called the indica variety. There are four different subgroups of indica that are now recognised. Cannabis Indica Biotype Afghanica is what we call Indica now. Cannabis Indica Biotype Chinensis is broad-leafed hemp from China, Japan & Korea. Cannabis Indica Spontania is from North India, Nepali, Burma. These were called the drug sativas but are now better called Cannabis Indica Indica. Cannabis Indica Caferus Anacus may represent the wild “feral” types that the other domesticated subgroups came from.

To make it easier we should just go back to what they look like. Let’s forget about where they come from. We should call what we think of as hemp from Europe, as Narrow leafed hemp. The other hemp is Chinese, Korean, Japanese and Northern Vietnam. These are broad-leafed hemp. They are not as low in THC or as high in CBD (cannabidiol) as the European ones but they are not drugs. And then you have the two drug cannabis gene pools which would be narrow leafed drug high THC varieties - Indian , Nepali, Thai, Indonesian, African, Mexican and Columbian, with narrow leafs and high THC . Afghan varieties which are now called Indica, erroneously, should be called Broad leafed drug varieties . Now of course we have hybrids of narrow and brood leafed but no hybrids of Sativa, the narrow leafed hemp. So actually the only true Indica-Sativa hybrids are hemp, and what people smoke are all Indicas.

I read this a long time ago and was reminded of it by the hemp discussion. I notice they're (or at least RCC is) also using the word hemp as a neologism as Disco pointed out

Oh yea... and gas is going to go through the roof.
 

turbolaser4528

Active member
Veteran
Gas will "go through the roof" eventually as oil demand outpaces supply.

This is a good thing, as it makes alternative energy much more lucrative.

Naturally, alternative energy sources will be used more and more until all oil is phased out. Firms will invest heavily in nanosolar, wind, geo, hydro, tesla, etc. etc.. because OIL FOR ENERGY IS UNSUSTAINABLE.

The trillion dollar a year energy industry will never collapse, it won't be the end of civilization. The market will take care of it, how long that will take is another story.


Fuck oil, we can do much better for ourselves than that for energy, way better.

:dueling:
 

SpasticGramps

Don't Drone Me, Bro!
ICMag Donor
Veteran
Gas will "go through the roof" eventually as oil demand outpaces supply.
I don't think you quite understand. The price of oil today isn't based on supply and demand. It is based on currency devaluation and speculation. That's the long and short of it. This and much of the economy has decoupled from traditional economic fundamentals and theories. It's a big Neo-Keynesian circle jerk of bullshit. However, the real market will eventually override this FunnyNomics and bring everyone back down to reality.

Oil Expert Yergin: Oil Prices Aren’t Based on Supply and Demand
“Oil prices today do not reflect the world’s supply and demand fundamentals.” That, in a nutshell, is energy expert Daniel Yergin’s assessment of why today’s $80 a barrel oil prices are double that of last year’s. On Monday Reuters reported that Yergin—who was awarded the Pulitzer Prize in 1992 for his book on the history of the global oil industry entitled The Prize: An Epic Quest for Oil, Money, and Powerattributes current oil prices to the weakness of the dollar and an overriding faith in economic recovery.
Yergin, who also possesses a PhD in International Relations from Cambridge and is the chairman of IHS Cambridge Energy Research Associates, Inc., agrees with many other renowned energy experts concerning the price of oil. On November 13 HeatingOil.com reported that energy expert Jason Schenker attributes the abnormally high cost of oil to optimistic investors who trade as though the economy is rapidly recovering and oil demand is high.

Commodities trader and analyst Stephen Schork, who is known for his unorthodox opinions on oil production and consumption, also agrees that oil prices are out of sync with supply and demand. However, Schork adds an interesting psychological element to interpreting the price of oil. According to HeatingOil.com, Schork attributes the price of oil to unfounded American beliefs that other countries, especially China, have begun consuming oil at unprecedented rates. The way Schork puts it, “the idea of a billion Chinese trading their Schwinns for Cadillac Escalades—I think that is what is driving the market.”

Also agreeing that oil prices are inconsistent with the laws of supply and demand is economics professor Nouriel Roubini. Professor Roubini has warned that such high prices are dangerous to economies that are only now beginning to shake the effects of last year’s economic crisis. Roubini, who predicted the crumbling housing market and subsequent credit crisis in 2006, has argued that what recovery has been achieved is in danger and “if oil goes to $100 today, it will have the same effect on the global economy as what $147 oil had last year.”
This industry is not going to collapse entirely, but it will collapse the economy overall if the price keeps inflating. Remember 2008? As long as Bernanke is quantitative easing to infinity and destroying what's left of the dollar it will. It's a matter of when, not if and the more funny money we create the closer it gets.

The price of oil, as with almost every other commodity and asset class, is based on illusion not economic fundamentals. This is unsustainable and will burst.
 
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HempKat

Just A Simple Old Dirt Farmer
Veteran
Now it's becoming clear...

Disagree... Consider the next two statements...

"Fuck you... I hate your guts"

Vs

'your great... I love you so much"


Completely different tone between the two.

Um sorry that's not really tone. That's content. To examine tone you don't compare two opposing thoughts or phrases you compare the exact same phrase put slightly differently.

"Fuck you... I hate your guts" is obviously an expression of dislike but tone would be more like Fuck You!!! I hate your guts. The tone example obviously shows much more feeling then the first way.

There was context in what he said... it's the context of the overall discussion.

No there wasn't. The overall discussion is that of gas prices not how I spell my name. There was no context in relation to the overall discussion just in relation to my criticizing mosc0 for incorrectly stating that hemp is ruderalis. Apparently Spastic Gramps see's that as splitting hairs although it isn't. By the definition mosc0 posted, I posted and Gypsy posted. Any type of marijuana can be used as hemp but only certain kinds can be used as medical marijuana. There are breeders who sell thru Gypsy's site and strains available there that use ruderalis. I'm pretty sure they don't want someone who thinks they know it all, to ruin their business, by incorrectly associating ruderalis with plants typically thought of as containing 3% or less THC. Sure Ruderalis is what the russians used. Probably because their climate is more the climate ruderalis evolved for and it's probably all they could get a decent crop from with their short growing season. From a practical business standpoint it would be retarded to use ruderalis that grows maybe 3 feet tall when you can use something that in almost the same time grows 6 times taller. The only sane reason to use ruderalis for hemp is when the climate won't let you grow anything else.

Actually what I said was "what I know of your online personality" a very limited statement. Are you assuming I said I know all about you? Or did you just not know the language? Or did you misrepresent my statement on purpose?

What I'm saying is you don't know me at all despite your claim of having followed my posts. I didn't misrepresent your statement at all. It is you misrepresenting things trying to suggest you know me at all, even in a limited sense.

Once again... assuming or misrepresenting things, I never claimed to have been watching you for years, show me where I said that. That being said... one of the first threads I came across before I even registered was your "ask an old fart" thread (great thread by the way)

I can't find it now but I could have sworn in another thread you said something about having followed my wanna ask thread for years.

Nevertheless... you seem to be making a lot of assumptions about what I mean... either that or your just not understanding the language I'm using.

You claim I'm making assumptions about what you've said and yet I've seen nothing from you indicating what assumptions have been made or you clearing any of them up or correcting any of them. I do see you trying to make it look like I'm assuming things since that's what I've criticized you for. I mean it's a very common practice on this forum that when someone accuses someone of something rather then simply admitting it or denying it they try and turn it back on the person accusing them of the same thing. That's the only thing I've assumed about you. The rest of it there was no need. You made a clear cut statement that you found Spastic Gramps' comment to me as funny and I made a clear cut statement back that if you think that is so funny you're standards for comedy are very low.
 
... anyone read "Crossing the Rubicon: The Decline of the American Empire at the End of the Oil Age?"

.. it is written by Michael Ruppert. He used to have a site up called "From the Wilderness"

interesting guy with a lot to say about the oil industry among other things.
 

turbolaser4528

Active member
Veteran
I guess only time will tell, but I think everything is gonna be just fine :)

kempcat, I believe you, now just calm down...

:Bolt:
 

Greensub

Active member
Um sorry that's not really tone. That's content. To examine tone you don't compare two opposing thoughts or phrases you compare the exact same phrase put slightly differently.

"Fuck you... I hate your guts" is obviously an expression of dislike but tone would be more like Fuck You!!! I hate your guts. The tone example obviously shows much more feeling then the first way.

I've always thought of that as emphasis, expression or inflection which certainly relate and contribute to tone. However I would make the argument that content contributes to the "tone of a conversation" which was the intent of my use and accepted as usage. So while I agree you haven't been adding bold, italics, underlining, or Font to add any emphasis, I would say there is still a "tone" to the argument nonetheless, tone that has been established by content as that's all there was.

No there wasn't. The overall discussion is that of gas prices not how I spell my name. There was no context in relation to the overall discussion just in relation to my criticizing mosc0 for incorrectly stating that hemp is ruderalis.
That was the context I was referring to.



What I'm saying is you don't know me at all despite your claim of having followed my posts.
You're correct... I was making an unfounded assumption that you were a level headed, friendly, reasonable person... but it appears I may be wrong.

I didn't misrepresent your statement at all. It is you misrepresenting things trying to suggest you know me at all, even in a limited sense.
I didn't misrepresent... I clearly stated...
what I know of your online personality

How can I misrepresent something like that... I didn't claim knowledge of anything other than what I personally know from from reading your posts online. I never asserted that I know anything about you other than what I've read, here.

I can't find it now but I could have sworn in another thread you said something about having followed my wanna ask thread for years.
You know, in retrospect that sounds kinda familiar... You may very well be right, It was awhile ago but I do have a vague memory now that you mention it. I don't believe I made that reference in this particular conversation which is what I meant to refer to.


You claim I'm making assumptions about what you've said and yet I've seen nothing from you indicating what assumptions have been made or you clearing any of them up or correcting any of them. I do see you trying to make it look like I'm assuming things since that's what I've criticized you for.

Actually I asked a three choice question inferring that it was one of three things...

or

1    /ɔr; unstressed ər/ Show Spelled[awr; unstressed er] Show IPA
–conjunction 1. (used to connect words, phrases, or clauses representing alternatives): books or magazines; to be or not to be.
I asked...

Are you assuming I said I know all about you? Or did you just not know the language? Or did you misrepresent my statement on purpose?

See... I'll explain the language in this first instance of me asking you if you were assuming... or just didn't understand that when I said "what I know" I meant specifically posts of yours that I've read... or if you intentionally misrepresented my use of the phrase "what I know"

I was wondering which of the three it was... I inferred that you were doing one of the three. I still don't know the answer as you choose to ignore my question and cast it as my making a statement that you were assuming. Now I just have to make an educated guess... So I'm assuming that you misunderstood what I meant by "what I know"... I hope that it's clear now that I was referring only to things you've typed online that I have read. Although I guess it's possible that you misrepresented what I said on purpose in an effort to make a weak rhetorical point.

The second question I asked you was also a multiple choice question. I have however already conceded earlier in this post that I believe you are correct and that I did tell you in another thread something to the effect of having followed your wanna ask thread, and have also seen just general posts around the site. So I concede that particular question, you don't need to answer



[quote
I mean it's a very common practice on this forum that when someone accuses someone of something rather then simply admitting it or denying it they try and turn it back on the person accusing them of the same thing.[/quote]


It's also common that people in general do a lot of the things they criticize others for. For instance... I like to have long winded, drawn out, pedantic conversations that go off on a tangent... that's me... I don't complain when others do it (although I might laugh).

That's the only thing I've assumed about you. The rest of it there was no need. You made a clear cut statement that you found Spastic Gramps' comment to me as funny and I made a clear cut statement back that if you think that is so funny you're standards for comedy are very low.
My comedy standards are my own... thank you for your commentary.

Question... Do you realize he could make the same comment about me right now? That I'm making a mountain out of a molehill with our little dialog here. I am... I admit it.
 

Greensub

Active member
The price of oil reached more than $100 a barrel this week for the first time since 2008, based on the benchmark Brent contract, which is widely used in Europe and Asia. In the United States, the benchmark price stayed lower, about $92 per barrel on the New York Mercantile Exchange, and was falling off slightly from last week.
Each dollar increase in the price of oil translates to roughly a 2.4-cent-per-gallon (0.6-cent-per-liter) hike in the price of fuel, although many other market conditions affect the actual price that consumers pay at the pump. Bloggers and some analysts have focused on the risk of oil shock posed by a potential closure of Egypt's Suez Canal, the 142-year-old man-made waterway linking the Mediterranean and the Red seas. But energy experts say the oil market is concerned about Egypt not as a commodity route, but as a gateway to further political instability.


http://news.nationalgeographic.com/news/energy/2011/02/110201-oil-prices-egypt-suez-canal-mubarek/
 

SpasticGramps

Don't Drone Me, Bro!
ICMag Donor
Veteran
Here's a good chart that looks at the relative inflation from last year to now.
Commodities_over_past_year_2-1-11.jpg


Oil (WTI) is up 21.5% and it's going to keep going as long as we are devaluing the reserve currency.

If you want to see why Egypt and soon to be (IMO) most of the third world is rioting you can look at the top of the chart. Many commodities are up 50%+ year to year and it's only going to keep going up. The developed world will be next to take to the streets.

Bernanke's hubris is going to wreck the world. One look at the rice chart and the rice hoarding by the third world tells you all you need to know.
 

HempKat

Just A Simple Old Dirt Farmer
Veteran
I've always thought of that as emphasis, expression or inflection which certainly relate and contribute to tone. However I would make the argument that content contributes to the "tone of a conversation" which was the intent of my use and accepted as usage. So while I agree you haven't been adding bold, italics, underlining, or Font to add any emphasis, I would say there is still a "tone" to the argument nonetheless, tone that has been established by content as that's all there was.

Well you might have always thought of it as something but just because you think something is or isn't something doesn't mean you are correct.

That was the context I was referring to.

No you said context of the overall discussion. The overall discussion is gas prices, not my name or how I spell it. Apparently you have no clue what the conversation is about. Of course that's pretty obvious by the content of your contributions.

You're correct... I was making an unfounded assumption that you were a level headed, friendly, reasonable person... but it appears I may be wrong.

No you never mentioned specific traits until now so these are all new unfounded assumptions. The unfounded assumption I'm talking about is your suggestion you know me at all, even in a "limited" sense. Like right here you are making the false assumption that I might not be level headed, friendly or reasonable simply because I'm not just accepting everything you say. I have noticed in other discussions you were much friendlier, less opinionated, less snarky and overall much less of a prick when I was in agreement with you. But woah let someone say something against you and you transform into this whiney little bitch that keeps dragging irrelevent conversation on and then accuses everyone else of beating a dead horse.

I didn't misrepresent... I clearly stated... "what I know of your online personality"

How can I misrepresent something like that... I didn't claim knowledge of anything other than what I personally know from from reading your posts online. I never asserted that I know anything about you other than what I've read, here.

It's misrepresentation because it implies you have knowledge of me that you don't have. There is nothing that qualifies you as being able to gleen a person's personality from what they say. I could be in a bad mood at a time I write something and that post might reflect it. Someone reading that post might assume that is who I am when in fact it's just how I was, at a moment in time, that had nothing to do with the person making the assumption. You've already made it clear in a previous backpeddling that you haven't been following me for years. Yet you assume you know me, from posts I've written to others? Psychiatrists with degrees from medical school and who have spent years talking to patients on a regular basis and they can't tell you what a person's personality is for certain. Yet you, the wonder stoner, seem to think you can glance at a few posts and know enough to speculate on what motivates a person :rolleyes:

You know, in retrospect that sounds kinda familiar... You may very well be right, It was awhile ago but I do have a vague memory now that you mention it. I don't believe I made that reference in this particular conversation which is what I meant to refer to.

Wow so now you're saying you aren't sure of what you've said. Hopefully that means you will now fully back down from acting like you know people based on posts you've read in the past. I mean if you can't even keep track of what you've said how can you reasonably expect anyone to think you capable of judging anything, let alone something as complex as human personality?



Actually I asked a three choice question inferring that it was one of three things...

I asked...


See... I'll explain the language in this first instance of me asking you if you were assuming... or just didn't understand that when I said "what I know" I meant specifically posts of yours that I've read... or if you intentionally misrepresented my use of the phrase "what I know"

I was wondering which of the three it was... I inferred that you were doing one of the three. I still don't know the answer as you choose to ignore my question and cast it as my making a statement that you were assuming. Now I just have to make an educated guess... So I'm assuming that you misunderstood what I meant by "what I know"... I hope that it's clear now that I was referring only to things you've typed online that I have read. Although I guess it's possible that you misrepresented what I said on purpose in an effort to make a weak rhetorical point.

Well actually I answered you and pretty clearly ("you haven't a clue about my online personality if you haven't talked to me personally every day for years...") but you're refusing to accept that that was my answer to your question. There's no misrepresentation there, I'm specifically telling you that you don't know me if you haven't personally talked to me. There's nothing there suggesting you were talking about anything other then posts, I'm telling you it takes a hell of alot more then skimming over posts to know someone, even in a limited sense. Now if you are too dense to recognize that as a pretty specific answer to your question well I can't help you there's no cure for ignorance.


It's also common that people in general do a lot of the things they criticize others for. For instance... I like to have long winded, drawn out, pedantic conversations that go off on a tangent... that's me... I don't complain when others do it (although I might laugh).

So? Relevence? Are we now going to start discussing random things people in general do?

My comedy standards are my own... thank you for your commentary.

You're welcome, now see if you had just said this intially rather then trying to imply you know me at all, limited or otherwise, we could have avoid all the back and forth of the last several days.

Question... Do you realize he could make the same comment about me right now? That I'm making a mountain out of a molehill with our little dialog here. I am... I admit it.

Yeah I realize that. It's irrelevent in my opinion but yes I realize that. You did notice he was telling both of us we're beating a dead horse in post #361 didn't you?
 

BrainSellz

Active member
Veteran
Many commodities are up 50%+ year to year and it's only going to keep going up. The developed world will be next to take to the streets.

Bernanke's hubris is going to wreck the world. One look at the rice chart and the rice hoarding by the third world tells you all you need to know.
just a matter of time before that bump comes to a head.....
 

SpasticGramps

Don't Drone Me, Bro!
ICMag Donor
Veteran
Yeah I realize that. It's irrelevent in my opinion but yes I realize that. You did notice he was telling both of us we're beating a dead horse in post #361 didn't you?

Seriously guys? It was a stupid joke. Thank you HK for pointing out the correct information.
:microwave:
deadhorse.gif


just a matter of time before that bump comes to a head.....

Indeed. Kicking the can down the road only works until you run out of road.
 

Greensub

Active member
Is it all Bernanke in your opinion or do you see the hand of commodity speculators in it too? I heard a couple blurbs about this here and there through the Egypt story...

Wheat is up 75% in the last 12 months, corn up a little more. Coffee is up 85% and cotton a spectacular 140%.
While flooding in Australia, a drought in Russia and weak harvests in India and China are the fundamental drivers for this upwards trend, there is little doubt that investors and traders looking to diversify and capitalize on the supply shortages are moving these prices much more significantly and faster. Commodity index investment increased an estimated and whopping $80B dollars last year, bringing total long-only commodity index investment to $350B, according to Barclays. Another $30B of commodity ETF investment is also overwhelmingly long-only, as short commitment in these instruments is normally well under 5% of float.
Financial buying of commodities in indexes and ETF's, with the speed that these instruments operate, overwhelm the futures mechanisms and cause much greater volatility and overall higher prices. We've seen this roller coaster ride play itself out once already in oil, moving from 2005-2008 to $147 a barrel, only to collapse to $32 dollars in March of 2009, before re-initiating its upwards trajectory.
Whether financial investment in commodities can be absorbed by a free market or not, this kind of boom/bust cycle, now playing itself out again in other critical foodstuffs, is intensely destabilizing and threatens the order in brittle governments around the globe
And governments have been forced to play into this struggle. Increased stockpiling of basic commodities has added to the frenzy of price increases: Algeria and Saudi Arabia have doubled their usual stockpile of wheat, Bangladesh and Indonesia have tripled orders for rice.
The mechanism for halting, or even slowing down the massive money flows into financialized commodities is lacking. Small steps on position limits and transparent clearing, mandated under Dodd-Frank legislation, have seen widespread pushback from industry advocates and trading companies. Rules for the energy markets, mandated by Dodd-Frank to be in place and operating today under the Commodity Futures Trading Commission (CFTC), are at least another year away, if they are coming at all. Very little looks to be changing.
And with very little changing, we might have to get used to these street scenes in Egypt and other emerging nations elsewhere, as rage from native populations spills over from the spiking prices of simple food basics.

http://www.huffingtonpost.com/daniel-dicker/food-commodity-speculatio_b_815949.html

Somewhere I heard that there's more money invested in wheat futures than there is the wheat itself to be bought and sold.

Krugman and others are missing the point, or at least missing the distinction between price manipulation and excessive speculation. If a big market player hoards in a scarce market, that’s manipulation. But you don’t need manipulation to have non-commercial investors overwhelm commodities markets. And it is hard to deny the market fundamentals of our brave new “financialized” – and still-deregulated – commodities markets.
Let’s review the basics. Some $9 trillion in trades take place in commodity derivatives, with 80-90% in over the counter (OTC) trading, outside of public scrutiny. Five banks control 96% of derivatives activity, giving a few players decisive market power. The ratio of non-commercial speculators to commercial hedgers (those with a commercial interest in the traded commodity) is by some estimates 4:1, roughly a reverse of the shares ten years ago when speculators accounted for 20% of the activity. Then, such speculators indeed provided liquidity to the markets without overwhelming them. That is no longer the case.
Commodity index funds are where the market fundamentals of speculation seem unarguable, particularly in relation to agricultural commodities. Index funds, which are typically baskets of twenty or more commodities, were created by Goldman Sachs and other financial players as a hedge against declining returns in other sectors, based on the observed tendency of commodity prices to hold their value as other assets lost theirs. Index funds generally bet “long,” on rising prices, and they hold their investments for a longer time than the typical commercial hedger. This has a tendency to push prices up, which attracts more speculative capital, which adds to the volatility.
Overall, the number of derivatives contracts increased more than six-fold between 2002 and mid-2008, as these investment vehicles became a safe haven from the subprime crisis and financial meltdown. According to Masters and White, index fund purchases from 2003-7 already were higher than the futures market purchases of physical hedgers and traditional speculators combined. Then they doubled in the first half of 2008.
It would be bad enough if speculative capital simply overwhelmed commercial hedging interests in these markets. But the speculation is actually more institutionally entrenched than that. Index funds rarely hold more than 30% of their value in agricultural commodities. In fact, in July 2008 the ratio for the S&P Goldman Sachs Commodity Index, by far the largest index fund with 63% of the market, held 75% energy futures and 10% grains futures, with the rest in minerals.
So the movement of the index funds is driven by the price of oil, itself a highly speculative market with some 70% of futures investments coming from non-commercial speculators. Under such institutionalized structures, the price of oil drives the movement of the index funds and pushes up the prices of agricultural commodities, no matter what is happening to the fundamentals of supply and demand for soybeans or corn. Worse, the index funds are mandated to keep the value of their commodities in strict proportion, so that when the prices and value of energy products go up the funds have to buy more corn and soybean futures to maintain the mandated proportions. This represents yet another institutional impetus to buying agricultural futures regardless of the market fundamentals.
What part of this picture don’t the speculation-deniers see? Finance capital now dominates commercial hedging in futures markets, index funds have become huge investment vehicles in uncertain economic times, and the index funds move with oil and minerals prices, dragging food prices along with them.
Fortunately, France, as the new chair of the G20, has made the issue a priority for 2011, and in May we’ll see the first-ever meeting of G20 agriculture ministers. Meanwhile the U.S. Commodity Futures Trading Commission (CFTC) is now in the process of issuing its proposed rules re-regulating derivatives markets, implementing some of the more promising provisions of the Dodd-Frank financial reform bill. As CFTC chairman Gary Gensler stated, “I believe that increased speculation in energy and agricultural products has hurt farmers and consumers.”
We should certainly study and debate how much of the recent price volatility owes to excessive speculation and what should be done about it. But we should stop debating whether it’s a problem. The market fundamentals of commodity market speculation seem painfully clear.
For some good overviews of the issue, see:
Food Commodities Speculation and Food Price Crises, Olivier de Schutter
Commodities Market Speculation: The Risk to Food Security and Agriculture, IATP
The Great Hunger Lottery, Tim Jones, World Development Movement
How Institutional Investors are Driving up Food and Energy Prices, Masters and White
Index Funds and the 206-8 Run-up in Agricultural Commodities Prices, Ray and Shaeffer
The State of Agricultural Commodities Markets, FAO
Reflections on the Global Food Crisis, IFPRI


http://triplecrisis.com/food-price-volatility/


I won't quote parts of it but this piece from Bloomberg on the Commodity Futures Trading Commission's progress on this is interesting... sounds like it's kind of stalled right now.



http://www.bloomberg.com/news/2011-...de-cftc-with-dodd-frank-deadline-looming.html


They can't agree on position limits (among other things) from what I gather.
 

SpasticGramps

Don't Drone Me, Bro!
ICMag Donor
Veteran
It's the commodity speculators at the massive Wall Street banks who are doing the actual trading. They are pulling the trigger that is actually sending the prices of commodities higher. However, Bernanke is supplying them with the liquidity to do it via multi-billion dollar POMO injections to the Primary Dealers everyday. The actual traders are just employed gambling addicts. Lemmings doing their job IMO.

He and the Federal Reserve System is solely responsible for the currency devaluation part of the equation. I don't know if the world can stand QE3 and mark my words it is coming. Debasing the currency is a weapon of mass destruction and even Keynes would agree. Financial terrorism at it's best.

There is no subtler, surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose.

– John Maynard Keynes
The problem with this is he is destroying the world's reserve currency. Not only will he ruin us, but he'll ruin everyone else. The Third World will obviously go first because they are the poorest and have less to loot before they start starving and revolting. When the developed world is finally bled dry we will take the streets in revolution too. Given what I've seen the US Banana Republic will be the last to figure out what is going on. We are too hypnotized with the stock market exploding and iPads.

Too little to late maybe? :dunno: We'll just have to wait and watch the show.
 
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