Wednesday, April 30, 2008
Why I'm on the Lefty Blogroll
Theory:
Practice:
Juxtaposition of old quote and current news shamelessly stolen from John Maxwell. More context:
Personally, I expect gold to rise some more, but I think it's looks toppy short term. Of course, I also thought that when gold was selling at $550 two years ago. Full disclosure: I own 200 shares of CEF. Wouldn't want to be accused of trying to drive up the price of gold without acknowledging that any increase in the price of gold adds to my vast personal wealth.
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
Adam Smith
Practice:
Vast amounts of money are flooding the world's commodities markets, driving up prices of staple foods like wheat and rice. Biofuels and droughts can't fully explain the recent food crisis -- hedge funds and small investors bear some responsibility for global hunger.
Der Spiegel
Juxtaposition of old quote and current news shamelessly stolen from John Maxwell. More context:
The "hot money" that has fled the collapsed real estate bubble is now moving into the commodities bubble, and that includes food. "Hot money" is an influx of speculative capital in search of high rates of return, quickly moving from one market to another. It moves, however, not because the products are better (the traditional justification for price-setting according to "free market forces") but because the speculative "spread" is better. Money is invested not in making real goods and services but simply in making more money. Food prices are being driven by speculators, and today that includes ordinary investors like you and me, who can now gamble in agricultural futures through ETFs that have opened up a lucrative market formerly available only to big investment players.
...
If you want to invest in the commodities boom without driving up the global prices of food or fuel, buy gold.
Personally, I expect gold to rise some more, but I think it's looks toppy short term. Of course, I also thought that when gold was selling at $550 two years ago. Full disclosure: I own 200 shares of CEF. Wouldn't want to be accused of trying to drive up the price of gold without acknowledging that any increase in the price of gold adds to my vast personal wealth.
