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I was talking with some friends about why prices are getting SO EXPENSIVE. We came to the conclusion that the commodities market is driving up the price on just about any grocery item, and it sure as heck has been driving up the price of crude oil. SO...

To understand the problem one has to understand how the futures markets work. Speculators "buy" product (whether its wheat, corn, hog bellies, or oil, it all works about the same) they latter sell that product. If the price goes up, they make money; if it goes down they lose money. But they never actually take possession of the product. It’s like a checking account; you own the money in the account, but it’s not real money, just a number on a ledger.

Now in the case of oil, someone might hear that there has been trouble at an oil field, so they buy oil knowing that the supply has been decreased, and therefore the price will go up. When the price goes up because everyone else has thought the same thing, the investor sells his oil making a tidy profit. Ok here's how we clean this up...

Make the investor take delivery of any item bought on the futures market. You buy 10,000 barrels of oil, you have to send a truck and pick the stuff up, and warehouse it, and then sell it. You invest in 20,000 bushels of wheat, you bought it, and you have to take delivery. It would still enable the people who actually need to buy the product, like wholesalers who sell to companies that use the commodity, but would keep the speculative investor out of the market, and stop artificially driving up the price on everything.

I thought it was an interesting idea, I might not know what I'm talking about, but at least it sounds good.
 

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Johngoboom said:
I thought it was an interesting idea, I might not know what I'm talking about, but at least it sounds good.
Lmao! That's as honest as things get I guess. :lol:

I have no idea if this would work or not. I don't know enough about the subject.
 

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Getting those who live off of us to adopt the answers is the real problem.
 
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